Fundamental dishonesty in a £Multi-million PI claim

February 12, 2019

In a recent case, Andrew Lawson pleaded a detailed Counter schedule of loss to raise concerns about the honesty of the Claimant who had presented a massively increased claim for future loss of earnings at £6.6 million pounds, just three months before trial.

The Claimant worked as an osteopath in Leeds and he had sustained a hip fracture after tripping over a paving stone on a footpath which was on the property of the Defendant. The Defendant relied upon the McGeown defence, so liability remained in dispute. The evidence in support of the McGeown defence was though unlikely to withstand scrutiny at trial. The Claimant’s claim for future loss of earnings had increased from an original £350,000. There was no doubt that the Claimant  had suffered significant orthopaedic injuries and it was agreed by the orthopaedic experts that he would need a hip replacement within the next five years and subsequent replacements thereafter. The Claimant claimed that his ongoing symptoms prevented him from working full time as an osteopath for humans and animals. He now alleged that he would have continued working to aged 80.

Initially, the Claimant claimed for his loss of earnings post accident. This would have been uncontroversial save that the Defendant had discovered that he was, for unrelated reasons, actually suspended from practice by the General Osteopathic Council from April 2014 to February 2015. It was a while before the Claimant acknowledged this fact in his claim. However, the Claimant maintained that in spite of his suspension he still could have worked providing alternative therapies. An analysis of the regulators records in combination with the accounts presented by the Claimant in support of his alleged earnings claim raised the issue of dishonesty. This head of loss was the bulk of the claim and was therefore without doubt, ‘fundamental’.

The Claimant had personally signed the statement of truth in all of the versions of his schedule of loss and continued to assert his future losses in his witness statements. Surprisingly, the Claimant has served no supporting witness evidence from clients or colleagues and had not been able to secure the permission of the court to deploy expert accounting evidence at an earlier stage. His own orthopaedic expert provided no express support for the claim as now pleaded. The Claimant presented his own projected income figures for the massive future loss of earnings claim. There was no doubt that the Claimant, in his own subjective view, considered the claim to be genuine.

Faced with such an unusual scenario, Mr Lawson received instructions to draft the Counter schedule of loss and challenge the credibility of the claim. The claim was issued in 2017.

The first issue with seeking to rely upon  section 57 of the Criminal Justice Act 2015 is the gateway provision of 57(1)(a) which requires the Claimant to be entitled to damages in respect of the claim . If liability was not established at trial, the Act cannot apply. Hence, it was likely that liability would be resolved on the morning of the trial with a modest reduction for contributory negligence. Then, the Defendant would be in a position to seek a finding under section 57(1)(b) that the Claimant had been ‘Fundamentally Dishonest’ in the presentation of his loss of earnings claim.

So that left the attack upon the Claimant’s credibility. Can someone who subjectively and genuinely believes the veracity of their claim be nonetheless dishonest? The answer, of course, is yes, and mr Lawson placed reliance upon the decision of Ivey v Genting  Casinos Limited (2017)UKSC 67, as reinforced, in the case of LOCOG v Sinfield (2018) EWHC 51.

In Ivey, Lord Hughes helpfully explained the common law test of dishonesty as, “When dishonesty is in question the fact finding tribunal must first ascertain (subjectively) the actual state of the individual’s knowledge or belief of the facts. The reasonableness or otherwise of his belief is a matter of evidence (often in practice determinative) going to whether he held the belief, but it is not an additional requirement that his belief must be reasonable. The question is whether it is genuinely held. When once his actual state of mind as to knowledge or belief as to facts is established, the question whether his conduct was honest or dishonest is to be determined by the fact finder by applying the (objective) standards of ordinary decent people. There is no requirement that the defendant must appreciate that what he has done is, by those standards, dishonest.”.

Based upon these authorities, Mr Lawson was able to plead that despite the Claimant’s honest and genuinely held belief in his loss of earnings claim (it does not matter legally whether such a belief was reasonable), nonetheless, when viewed objectively his conduct in presenting and pursuing the loss of earnings claim without proper evidence was dishonest or, alternatively, at least reckless as to whether he was being dishonest.

Further, in accordance with the guidance from Mr Justice Julian Knowles in Sinfield, the Defendant need only prove, “…that he has thus substantially affected the presentation of his case, either in respects of liability or quantum, in a way which potentially adversely affected the defendant in a significant way, judged in the context of the particular facts and circumstances of the litigation.” Presenting a claim that had increased by over £6 million pounds a few months before trial was likely to fulfil the aforementioned test, especially since the test is ‘potentially adversely affected the defendant;’ not that it does affect the Defendant.

Hence, Mr Lawson invited the Court to find ‘fundamental dishonesty’ and to strike out all aspects of the Claimant’s claim, including his uncontentious personal injury claim under s.57 (2) of the Criminal Justice and Courts Act 2015. The Defendant would also seek its costs on the indemnity basis under CPR r.44.16. – disapplying QOCS protection.

Clearly under pressure from Mr Lawson’s arguments outlining fundamental dishonesty, only a month before trial, those Instructing Mr Lawson allowed the Claimant to accept a nuisance offer of £25,000, a figure far less than the value of his general damages claim alone. This represented 0.3% of the value of his claim according to the most recently served schedule of loss.

Andrew Lawson was instructed by James Lee, Associate, in DWF’s Catastrophic and Large Injury Team in Liverpool.

DWF have produced a more detailed article about the case, which can be read here.

Litigation Futures have also covered the case.