Is Judgment obtained by fraud capable of being set aside?

It is certainly a rare and niche set of circumstances when a judgment is obtained by fraud, and the allegedly innocent party accordingly seeks to set aside the same. That said, it is not one in which Ellis Jones haven’t seen or been instructed in on various occasions before, and at present is topical action following the High Court’s recent decision in Rashed v Deane [2025] EWHC 3201 (KB).

Background

This judgment arises from the Claimant issuing proceedings in libel after complaining that a handful of the Defendant’s LinkedIn posts were defamatory. The full facts of the case can be read here.

In response, the Defendant filed his Defence which would later be struck out, and judgment was entered in favour of the Claimant for monetary damages, an injunction preventing repetition of the complained defamatory allegations, and costs.

After obtaining judgment, the Claimant set out to enforce the same against the Defendant and successfully obtained an order for sale of the Defendant’s property.

The Defendant then filed an application to set aside the underlying judgment (the “Application”).

The application

The Application asserts that new evidence had become available that was not available at the time of trial and that the Claimant obtained his judgment by fraud, including “the submission of forged bank documents, forged signatures and false testimony”.

The Defendant argued that CPR Rule 3.1(7) empowers the Court to revoke the judgment on the ground that fraud is alleged, and that this case demonstrated exceptional circumstances to do so.

CPR Rule 3.1(7) provides:

In opposition, putting aside that the Claimant disputed such allegations of fraud and that he contested that the Application relies on new evidence, the Claimant submitted that in any event the correct procedure here was not to seek the set aside of judgment, but instead for the Defendant to bring a separate claim for fraud.

The Court proceeded on the basis that, at this juncture, the Court is not required to consider the merits of the Application. Rather, the first hurdle in which it is tackle is determining whether the Court has jurisdiction to hear the Application within these proceedings at all.

Decision

In its analysis of both parties’ arguments, the Court noted that as held in AIC Limited v Federal Airports Authority of Nigeria [2022] UKSC 16, the principle of finality of a final order is at its highest, and that in this case the principle of finality of the judgment in Rashed should carry significant weight.

The Court also appreciated inter alia Flower v Lloyd [1877] 6 Ch D 297 and Takhar v Gracefield Developments Ltd [2019] UKSC 13 which underpinned the principle of finality. Indeed, in Takhar, the Court explained the correct procedure for challenging a judgment obtained by fraud as follows:

Turning to Kuwait Airways Corpn v Iraqi Airways Co (No 2) [2001] 1 WLR 429: 

Here, the Court noted that irrespective of whether pursuant to CPR Rule 3.1(7) final orders have been set aside in the past in rare cases, that does not affect the “established, and more suitable, alternative” procedure by pleading a separate claim for fraud.

For what it is worth, in its judgment the Court did however sympathise with the Defendant in that this alternative common law procedure may prove more disproportionate.

The Defendant’s Application was ultimately dismissed.

Comment

For some, Rashed may appear to be a straightforward judgment with few key takeaways, but there are some points that deserve closer reflection.

It is easy to see how someone who is adamant that they are a victim to judgment being obtained by fraud, and can adduce convincing evidence in support, might think that said judgment ought to be set aside, or at least have the merits of its application and evidence determined. Indeed, as commiserated by DHCJ Guy Vassell-Adams KC in Rashed: “I can see from the Defendant’s perspective that referring the case back to Master Eastman seems more proportionate, as a first step, than being required to issue a fresh claim.”

However, instead, it is well-established that one must first plead a separate claim of fraud, before setting out to set aside the associated judgment. Although, as we all know so well, the lapse of time spent between issuing a new cause of action and having it determined at final Trial can easily take over a year. Meanwhile, whilst the potentially genuine victim sets out to prove its innocence in the matter, the victim will no doubt be facing and suffering from enforceable action of which, in some cases, may not be entirely rewindable. Therefore, Rashed demonstrates a clear example of why taking action to set aside judgment, especially when challenging on grounds of fraud, must be taken swiftly and with strategical care.

The principle of finality is another key theme. As we had previously observed in another article (Is a judgment on admission capable of being revoked?), the finality of final orders when balanced against the Court’s inherent powers under CPR Rule 3.1(7) is evidentially weighty, understandably, if only in the interests of justice. It is also clear that only after carrying out this balancing exercise and in rare cases of which are of exceptional circumstances will the Court exercise its discretion under CPR Rule 3.1(7) to revoke or set aside a final order. So, what circumstances ought to amount to the Court concluding that such powers should be exercised? It seems that such matters are highly fact dependant and determined on a case-by-case basis. In which case, as there is when determining whether to set aside judgment entered in default, ought there to be a more established process and test in determining whether to exercise powers under CPR Rule 3.1(7)?

How can Ellis Jones help?

Ellis Jones has significant experience in dealing with applications seeking the set aside of judgments, entered in default or otherwise.

Please do get in touch with our Dispute Resolution team on 01202 525333 or by emailing resolution@ellisjones.co.uk if you need advice with such an application.