In England and Wales, the ability to set aside judgments obtained by fraud reflects the principle articulated in the 70-year-old decision of the Court of Appeal in Lazarus Estates Ltd v Beasley [1956] that “fraud unravels everything”.
Whilst the burden on those bringing claims to set aside judgments on the basis of fraud is high and successful claims remain rare, 2025 saw a number of claims commenced and decided on the basis of this legal doctrine.[1] This includes proceedings commenced by Lee Castleton (a former sub-postmaster and one of the most prominent individuals affected by the British Post Office scandal[2]) against Post Office Ltd (the Post Office) and Fujitsu Services Ltd on a number of grounds, including that a prior judgment (from 2007) was obtained against him by fraud.
The recent activity in this area serves as a reminder of the delicate balance the court must strike between the finality of judgments and the need to rectify injustice. This GT Alert provides a recap of the relevant case law and looks ahead to the next step in Mr Castleton’s claim following a decision from the court on case management further to a hearing on 23 January 2026.[3]
Case Law: A Recap
Both the court and the applicant must have been deceived for a judgment to be set aside on the basis of fraud. The relevant requirements were summarised by Aikens LJ in Royal Bank of Scotland plc v Highland Financial Partners LP [2013] EWCA Civ 328 at [106]:
- there must have been a ‘conscious and deliberate dishonesty’ in relation to the relevant evidence given, action taken, statement made or matter concealed, which is relevant to the judgment which the applicant is seeking to set aside;
- the relevant evidence, action, statement or concealment must be material; and
- the materiality of the new evidence should be assessed by reference to its impact on the evidence supporting the original decision, not its impact on what decision might be reached if the claim were to be retried on honest evidence.
Since 2013, the doctrine has been considered at the highest levels of the courts of England and Wales, including by the Supreme Court in 2019 in the leading authority of Takhar v Gracefield Developments Ltd & Ors [2019] UKSC 13.
Some of the key takeaways from recent case law are as follows:
- Balancing the principle of finality: There are two important but competing considerations at play in setting aside judgments for fraud: the need for finality and the need for justice. In Finzi v Jamaican Redevelopment [2024] 1 WLR 541 the Privy Council affirmed the importance of “new” evidence as opposed to evidence already known to the claimant at the time of the settlement or judgment. Where the evidence relied on is not new (in the sense that it was not obtained following the relevant judgment or settlement), the claim (to set aside the judgment) is likely to be found to be an abuse of process except where there is a good reason which prevented or significantly impeded the use of the evidence in the original action.
- No reasonable due diligence threshold: The Supreme Court unanimously allowed the appeal in Takhar, finding that it was not necessary to show that the fraud could not have been uncovered with reasonable due diligence in advance of obtaining the original judgment. Lord Kerr indicated that the court may, however, exercise discretion as to whether to hear the application if: (a) fraud was previously raised at the original trial and new evidence as to the existence of the fraud is introduced to further the case for setting aside the judgment; and (b) a deliberate decision was taken ahead of the original trial not to investigate the possibility of fraud, even if it was suspected. This principle was recently applied in Federal Government of Nigeria & Anor v Williams [2025] EWHC 1096 (Comm).
- No need for fraud to be the operative cause: In Royal Bank of Scotland plc, Aikens LJ defined material for the purposes of the second limb above as meaning that the new evidence shows that the previous relevant evidence or action was an operative cause of the court’s decision to give judgment in the way it did. That it is necessary only for fraud to be an operative cause, not the operative cause, has been repeated in recent case law (see for example Park v CNH Industrial Capital Europe Ltd (t/a CNH Capital) [2021] EWCA Civ 1766 applying Takhar).
- No need for a re-trial of the issues: In Tinkler v Esken Ltd [2023] EWCA Civ 655, the Court of Appeal reiterated that it was not necessary for the court to re-try the issues decided by the original judge. In that case, Sir Geoffrey Vos MR reiterated that materiality is a high hurdle to meet and that the operative test was key, specifically that the task for the judge is to assess whether the new evidence impugns the judgment, whether it shows that the previous evidence or concealment was an operative cause of the original decision or would have entirely changed the way in which the first court approached and came to that decision.
- A new action alleging and proving fraud is required: The decision in Rashed v Deane [2025] EWHC 3201 (KB) serves as a reminder that, as Lord Sumption explained in Takhar, an action to set aside a judgment for fraud is a cause of action requiring a new claim to be commenced, and not a procedural application. The general power under CPR 3.1(7) to revoke an earlier order of the court cannot be used here.
- A judgment against a party not complicit in the fraud can still be set aside: In The Estate of Euan Mcintyre Lindsay (deceased) and another v Outlook Finance Ltd (in liquidation) and another [2025] EWHC 3100 (KB), Kerr J found that the court could exercise its equitable jurisdiction to set aside a judgment, even where the other party to the proceedings was not itself guilty of the fraud, i.e. a judgment does not have to have been granted in favour of a guilty party in order for it to be set aside. Although there was no direct precedent on this point, Kerr J found that protection of the integrity of the legal process was pivotal, and therefore the test of Aikens LJ in Royal Bank of Scotland plc was directed at the impeached judgment and not the parties.
More on the Horizon
We will watch Mr Castleton’s claim as it progresses in 2026. In addition to asserting that the 2007 judgment was obtained against him by fraud, Mr Castleton is also seeking orders that the resulting bankruptcy order made against him be set aside and that a 2019 settlement deed entered into as a result of a separate group litigation action against the Post Office be rescinded or avoided, also on the basis of the Post Office’s fraud. As well as declarations and orders from the court, Mr Castleton also seeks damages. These include damages on the basis that the Post Office maliciously caused his bankruptcy by pursuing the claim and subsequent enforcement actions against him, despite the disproportionate costs that doing so would incur (which Mr Castleton had no realistic prospect of being able to pay), and for the improper purpose of deterring other postmasters from challenging the reliability of the Horizon IT system in civil proceedings.
At the early 2026 hearing, the court decided in favour of a split trial, so it will first determine whether the terms of the 2019 settlement deed preclude Mr Castleton from pursuing his claims. Should Mr Castleton be successful and his claim proceeds to full trial, the case has potential implications for other postmasters who are in a similar position to Mr Castleton. We may see important reminders from the court about the necessary hurdles to overcome to succeed in setting aside a judgment obtained by fraud, and we will be following with interest.
Conclusion
Whilst the underlying principles required to set aside a judgment on the basis of fraud are well-established, the number of cases reaching the Court of Appeal and Supreme Court in recent years indicates there is still scope for debate around this doctrine and how it will be applied in the specific circumstances of each case.
Where individuals are involved, the impact of a judgment obtained by fraud can be life-changing (as Mr Castleton’s case has shown), and the damages subsequently sought can reflect loss of earnings, mental distress and reputational damages, among other things.
*Special thanks to London Litigation Paralegal Francesca Neagus ˘ for her valuable contributions to this GT Alert.
[1] This GT Alert focuses on the setting aside of domestic judgments, and there are differences when considering the rules that apply to foreign judgments.
[2] As a reminder, the Post Office scandal concerns the wrongful prosecution of hundreds of sub-postmasters for fraud as a result of errors in the Horizon IT system.
[3]Castleton v Post Office Ltd & Anor [2026] EWHC 158 (Ch) (30 January 2026)