the personal injury and clinical negligence blog

A collaboration between Rebmark Legal Solutions and 1 Chancery Lane

New law - fundamental dishonesty in PI claims

The government brought into force last week a new law preventing claimants from recovering damages for personal injury when they have been fundamentally dishonest, unless it would cause substantial injustice. In the case of Summers v Fairclough Homes Ltd  [2012] UKSC 26 the claimant was injured in an accident at work and claimed more than £800,000 from his employer. Surveillance revealed him to have grossly exaggerated the effect of his injuries. At trial he was found to have fraudulently misstated the extent of his claim but the judge declined to strike out his claim and awarded £88,716. The defendant appealed and the Supreme Court held that it had jurisdiction to strike out the claimant’s statement of case but that it would only be done in exceptional circumstances, not least as the judgment on liability amounted to a possession for the purposes of the ECHR. The claim was not struck out. Section 57 of the Criminal Justice and Courts Act 2015 looks as though it would have changed the outcome of Summers dramatically. Here are some of the ingredients and likely problems: ‘fundamental dishonesty’ - the defendant has to prove on the balance of probabilities that the claimant has been ‘fundamentally dishonest’  - a concept which the courts have been grappling with since its introduction in CPR Part 44.16(1) as an exception to the rules on qualified one way costs shifting. Considerable uncertainty remains as to the difference between ‘dishonesty’ and ‘fundamental dishonesty’. ‘primary claim or a related claim’ – the fundamental dishonesty must be ‘in relation to the primary claim or a related claim’. It will be interesting to see how far the courts will go in construing ‘a related claim’ which is defined at s.57(8) as “a claim for damages in respect of personal injury which is made (a) in connection with the same incident or series of incidents in connection with which the primary claim is made, and (b) by a person other than the person who made the primary claim.” ‘application by the defendant’ - the court cannot dismiss the claim under s.57 unless an application is made by the defendant for its dismissal. ‘substantial injustice’ – the court ‘must dismiss the primary claim’ unless satisfied the claimant would suffer ‘substantial injustice’ if it were dismissed. Again, it is not clear what the difference is between ‘injustice’ and ‘substantial injustice’. How is a judge to decide? Would the depriving a claimant of £88,716 amount to a substantial injustice? It is likely that the courts will want to give very careful thought to the needs of the injured claimant (care, economic etc) and consider how well they will be met in the event that the money is not paid over. What will happen to claims for gratuitous care which a claimant is supposed to hold on trust for the providers of that care? They may have nothing to do with the claimant’s dishonesty and yet might find themselves deprived of thousands of pounds for the hours they have given. I anticipate that a large body of case law will quickly grow up around this section. Recording damages – the court must record the amount of damages it would have awarded the claimant and then deduct them from the amount it would otherwise have awarded the defendant in costs. The dismissal of the claim under s.57 must be taken into account in a sentence handed down in any subsequent criminal proceedings S.57 only applies to claims issued after 13th April 2015. Mr Summers may well have been £88,716 poorer had this section been enacted prior to the issue of his proceedings. It will be interesting to see how often section 57 is pleaded and what the courts make of the concepts of ‘fundamental dishonesty’, ‘substantial injustice’ and ‘related claims’.

Fraudlent claims and contempt of court: if you can't do the time ...

  Regular readers of this blog will have come across several posts dealing with allegations of fraud or exaggeration.  Indeed, allegedly fraudulent accidents appear to be occupying an ever increasing proportion of the court’s time.  The recent decision of Spencer J in Homes for Haringey v Barbara Fari and Piper Fari therefore serves as a stark and welcome warning to any budding fraudsters.   Mrs Fari brought a claim for personal injury after tripping outside her home, seeking compensation of £750,000.  According to her witness statement, Mrs Fari was left with severe pain and significantly limited mobility, such that everyday tasks were difficult for her to perform.  Her schedule of loss included a substantial claim for care from her husband, which would allegedly be required for the rest of her life.  Mrs Fari had provided such an account of her disabilities to her medical experts, and Mr Fari also produced a witness statement in support of his wife’s claim. Unfortunately for Mrs Fari, Homes for Haringey arranged for video surveillance.  The results painted a very different picture.  Mrs Fari was filmed going about her daily activities without any real difficulty, and it was apparent that she did not require any such care and assistance from her husband.  In light of the surveillance evidence, Mrs Fari’s claim was struck out in October 2012 on the basis of her “gross exaggeration”. Homes for Haringey subsequently brought committal proceedings against Mr and Mrs Fari.  Mrs Fari argued that she could not read or write, that she had signed her witness statement and schedule of loss without understanding their content, and that her medical experts had misunderstood her. Mr Fari claimed that he signed his witness statement without reading it.  Unsurprisingly, these arguments held little sway with the court.  It was held that those documents must have prepared on the basis of instructions, and Mr and Mrs Fari were in contempt of court for their serious and deliberately false representations.   Passing sentence last week, Spencer J held that those who made false claims had to expect to go to prison.  Mrs Fari had argued that the Article 8 rights of her dependant children would be affected should she be sentenced to imprisonment.  Those submissions were rejected, and Mrs Fari was sentenced to 3 months imprisonment.  Mr Fari was sentenced to suspended sentence of two months’ imprisonment for his role in the claim. This will undoubtedly be welcomed by insurers, and clearly demonstrates that the courts will protect the public interest and adopt a robust stance against those bringing such exaggerated claims.   

Lights, Camera … Appeal!

    It’s Channel 4’s fault!   Was it just coincidence that on 10 July, the day after “The Murder Trial” was first screened on television, the Court of Appeal (Recording and Broadcasting) Order 2013 was published?   Or that yesterday (17 July) saw the release of the Crime and Courts Act 2013 (Commencement No 3) Order 2013 which, amongst other things, permits the Lord Chancellor by order to enable the making and use of films and other recordings of proceedings in courts in England and Wales?   Nick Holt's documentary concerned the retrial of Nat Fraser for the murder of his wife, Arlene, in Scotland. Mr. Fraser had already been tried and found guilty but in 2011 his conviction was quashed by the Supreme Court and the Channel 4 film followed his retrial.   Compressing a five week trial into two hours was always going to be challenging. Six remote cameras were placed inside the courtroom in Edinburgh with the consent of all the parties including Mr. Fraser who was re-convicted for the murder of his wife whose body has never been found after she went missing in 1998.   The public can already watch proceedings in the Supreme Court. The new Order sets out the conditions under which broadcasters in England and Wales will be able to film in the Court of Appeal later this year.   Currently, section 41 of the Criminal Justice Act 1925 makes it an offence to film in court and section 9 of the Contempt of Court Act 1981 makes it a contempt of court to record sound in court except with the permission of the court. The new Order provides that these provisions do not apply where the conditions in the Order have been satisfied. There is power in the Order to prescribe the types of hearing that can be recorded, what part of the hearing can be recorded and who can record a hearing. There is also power to set out when the recording of a hearing in the Court of Appeal can be broadcast and what content is permitted in a broadcast.   In “The Murder Trial” I thought Mr. Fraser's defence team did a pretty good job on his behalf. However, dramatic compromises were still necessary. These included the action in the court room being interspersed with shots of isolated forest tracks and a soundtrack clearly chosen to ratchet up the tension and anxiety.   Personally, I get all the tension and anxiety I need just by being in the Court of Appeal but when drafting my next skeleton argument, I will definitely give some thought to the music to go with it … just in case!          

Faking it – lies, fraud exaggeration and abuse of process

In a truly Phyrrhic victory for the Defendant, the Supreme Court has just handed down a judgment overruling Ul-Haq v Shah and Widlake v BAA. In Fairclough Homes v Summers [2012] UKSC 26 the Supreme Court held that it is open to a judge to strike out a fraudulently exaggerated claim on grounds of abuse of process, even after judgment on liability and where it is possible to assess the damages to which the claimant would otherwise be entitled. But the Supreme Court considered that it would only be appropriate to do so in very exceptional circumstances. The circumstances of this case were not exceptional enough and the case should not be struck out.


The Fashion for Fraud

It is a fact of life for the personal injury lawyer that fraud will raise its ugly head from time to time whether one acts for claimants or defendants.  I have observed an interesting shift over the decade I have been in practice.  Ten years ago judges seemed not only uninterested in suggestions of fraud, but many appeared to find the concept positively distasteful.  I have had judges make frankly bizarre findings about what your average person can be "mistaken" about, in order to avoid finding them liers...More...

Fraudulent personal injury claims and contempt of court

 Mrs Justice Cox has reminded us of the test and standard to be applied in applications for committal for contempt of court arising out of allegedly fraudulent personal injury claims.  In Montgomery v Brown [2011] EWHC 875 the Defendant made a range of allegations that C had lied about a substantial loss of earnings claim.  Mrs Justice Cox confirmed the test that a person is guilty of contempt of court if, in legal proceedings, he interferes or attempts to interfere with the administration of justice. Putting forward a dishonest claim, suppressing documents which should be disclosed and making false statements of truth were all examples of contempt. The court had to be satisfied, to the criminal standard, that the statements made by C were false, that he knew them to be false when he made them, that at the time they were made they would have, if persisted in, been likely to interfere with the course of justice in some material respect and that he knew that they would be likely to so interfere (Kabushiki Kaisha Sony Computer Entertainment Inc v Ball (Contempt of Court) (2004) EWHC 1984 (Ch) applied).   On the facts, contempt was not made out; however the case is a useful reminder of the test to be applied and the standard it must be proved to.