Successful dismissal of an entire claim pursuant to Section 57 of the Criminal Justice and Courts Act 2015 despite the Claimant establishing liability
JG v Newport City Council [2019]
The phrase “Fundamental Dishonesty” is now well known to Defendants and their insurers in respect of personal injury claims and the enactment of Section 57 of the Criminal Justice and Courts Act 2015 provides a further weapon in a Defendant’s armoury.
Prior to the commencement of the Act, a Claimant who intimated a genuine claim which was either tainted with fraud or related to a fraudulent claim would be awarded damages for the genuine element of their claim, but would be penalised in costs. This applied even if the Court had found that the Claimant had dishonestly supported the fraudulent claim.
The enactment of Section 57 substantially changed that position and provides that if a Court finds that a Claimant is entitled to damages in respect of a claim, but finds (on the application of the Defendant) that it is satisfied, on the balance of probabilities, that the Claimant has been fundamentally dishonest in respect of the primary claim or a related claim, the Court must dismiss the entire claim, unless it is satisfied that the Claimant would suffer substantial injustice.
The Council, and its insurers, represented by Dolmans, was recently successful in utilising Section 57 when dealing with this recent case.
Background
The Claimant’s claim arose out of an accident during her employment as a school cleaner. It was the Claimant’s case that she had slipped and fallen, whilst she was carrying out her duties, on water which had been deposited by a colleague.
Proceedings were issued in January 2017. The Claimant alleged that she suffered serious, lasting injuries to her left knee as a consequence of the accident and relied upon medical evidence from Mr Richard Evans, Consultant Orthopaedic Surgeon, who reported that the Claimant was “In constant pain in her knee … […]. Her knee is uncomfortable as soon as she weight bears. The maximum she can walk is 5 to 10 minutes. She has to walk with the aid of a single walking stick”.
The Claimant’s claim was initially pleaded up to £50,000, although at the initial Costs and Case Management Conference, the Claimant’s Solicitors successfully applied to have this increased to £310,000; the Claimant’s case being that she had been unable to return to work, had been left disabled on the labour market and had ongoing restricted mobility and independence.
Liability position
The circumstances of the Claimant’s accident were in issue, although our investigations were hampered by a lack of witnesses. There were no witnesses to the Claimant’s accident and the members of staff who attended upon the Claimant in the immediate aftermath were no longer employed by the Local Authority and/or were not prepared to provide witness statements. Ultimately, the only witness to give evidence on behalf of the Local Authority was the former School Bursar, who was the Line Manager of the Cleaning Supervisor at the school at the material time. Much of her evidence, however, was hearsay.
It was accepted that if there was water present which had been deposited externally by a colleague, then the Local Authority would be vicariously liable for their actions.
Medical evidence
Permission was sought at an early stage for the Local Authority to obtain their own medical evidence. Mr Pemberton, Consultant Orthopaedic Surgeon, examined the Claimant on 19 December 2017 and reported that the Claimant informed him that her knee “Will still give way on her. It is painful intermittently […]. Prolonged periods of standing on her feet increases her pain […]. She … still mobilises with a stick when indoors […]. She walks outdoors and indoors with a stick at all times […]. She can operate a washing machine …, but her husband has to hang the washing out as there are steps at the back of her home which she cannot negotiate whilst carrying washing”. The Claimant had walked slowly into the examination room with a right sided limp and had even used the stick when crossing the examination room (which took around three steps).
Both medical experts, therefore, accepted that the Claimant had sustained a significant injury to her knee, which required reconstructive surgery. There was no dispute that for a period of at least twelve months after the accident, up until the date of surgery and for a period thereafter, the Claimant was significantly disabled and had a permanent loss of function in her knee. In due course, this was the position which was set out in an initial Joint Statement prepared by the medical experts.
Surveillance evidence
Due to the lack of direct liability evidence and the opinion of the medical experts, the Local Authority did not appear to be in a strong position. However, inconsistencies between the Claimant’s account of the accident and contemporaneous documents completed at the time caused us to have reservations regarding the veracity of the Claimant’s claim.
Detailed internet and social media investigations were carried out. A Facebook page belonging to the Claimant suggested that the Claimant was working for a wedding planning business and that she was the owner of a company which offered floral arrangements for weddings, for sale or hire. Photographs and videos located online also suggested that the Claimant had attended a number of wedding fayres as an ‘employee’, or certainly as a representative, of a wedding planning business.
Within the initial Witness Statement served in support of her claim, the Claimant confirmed that one of her hobbies was “crafts” and making fabric flowers, which she hoped to make money from in the future. She indicated that her friend ran a wedding business and she was planning on asking her if she could sell her fabric flowers as part of that business, but the Claimant did not suggest, even when we specifically addressed the issue with her by way of a Part 18 Request for Further Information, that she had earned any money or was ‘employed’ to any extent in the wedding business at this time.
A decision was made to arrange a period of surveillance of the Claimant, and the Claimant was initially surveyed over a period of two days in February 2018, six weeks after the Claimant had been examined by Mr Pemberton.
The surveillance evidence was a game changer. The Claimant was seen walking outside her property, where she navigated a set of steps, without a stick and without any apparent difficulty at all. The Claimant was seen to spend two and a half hours cleaning her car, which involved her repeatedly bending and carrying a bucket of water around the car and up and down the front steps to her property. The Claimant was seen manoeuvring a wheelie bin from the roadside at the front of her property, up her front steps, before returning to collect her neighbour’s bin. She was seen to do all of this without any obvious impediment.
The following day, the Claimant was seen walking down the steps of her property to her car, without a stick, this time carrying a dining chair in front of her. She loaded and unloaded the chair into her car, again without any obvious impediment to her mobility and without using a stick.
The surveillance evidence raised significant questions about the extent of the Claimant’s recovery. Upon receipt, an Advice was sought from Counsel as to whether the evidence was sufficient for the Defence to be amended to plead Fundamental Dishonesty. In the meantime, arrangements were made for a further period of surveillance to be carried out. It was considered that if evidence could be obtained that the Claimant was also working in some capacity, this would significantly bolster the overall strength of the evidence.
The second period of surveillance was deliberately timed to coincide with a major local wedding fayre event. Confirming our suspicions, on 29 April 2018, the Claimant was filmed attending the wedding fayre event and was not only seen carrying boxes and other items from a car into the wedding fayre venue, but was also filmed inside the premises seemingly taking part in the wedding fayre as a representative of her friend’s wedding business. Throughout the footage there was, again, no evidence of the Claimant using a stick.
By this date, the Claimant had served an Updated Schedule of Loss, which maintained her significant claim for past/future loss of earnings and care based upon her accounts to the medical experts. As soon as the surveillance evidence obtained on 29 April 2018 was received, we immediately disclosed it to the Claimant’s Solicitors, together with the footage obtained in February 2018 and the documentary evidence found on the internet. We put the Claimant’s Solicitors on notice that we were seeking Counsel’s Advice to amend the Defence to plead fraud/fundamental dishonesty and invited the Claimant to discontinue her claim.
We provided a copy of the surveillance footage to Mr Pemberton, who confirmed that the evidence was “strikingly at odds” with how the Claimant had presented her medical condition to him six weeks earlier. With that confirmation, an Amended Defence was served upon the Claimant’s Solicitors on 13 June 2018. Having received no substantive response from the Claimant’s Solicitors, an Application seeking permission to rely upon the surveillance evidence was made.
Our Application was heard by His Honour Judge Jarman QC at a Pre-Trial Review on 22 June 2018, ahead of a Trial listed for 26 and 27 July 2018. The Claimant’s Solicitors informed the Court that they had not had the opportunity to obtain the Claimant’s instructions on the surveillance evidence and submitted that the Claimant would not have the opportunity to deal with/respond to the evidence in advance of the Trial.
His Honour Judge Jarman QC accepted that for the Claimant to have the opportunity to deal with the surveillance evidence, the Trial date could not stand and, on that basis, refused the Local Authority permission to rely upon the surveillance evidence, as, despite its apparent significance, it had been served too late. We immediately sought permission to appeal the decision.
The appeal
The Appeal was heard by Mr Justice Birss on 11 December 2018, who upheld HHJ Jarman QC’s decision and dismissed the Appeal.
The Claimant’s triumph, however, was very short-lived. In an interesting turn of events, Mr Justice Birss queried as to whether, in circumstances where the original Trial date had had to be adjourned to allow the Appeal to be heard, the appropriate step to now take was to make an Order admitting the surveillance evidence into proceedings.
Counsel for the Claimant submitted that this would amount to an abuse of process, and whilst Mr Justice Birss had some sympathy for the Claimant’s position, he noted that, on the face of it, the surveillance evidence seemed to falsify the Claimant’s evidence in the proceedings. Mr Justice Birss, therefore, allowed the evidence to be admitted into the proceedings as the Claimant now had as much of an opportunity to deal with the evidence as she could ever need. The Local Authority was also granted permission to rely upon the Amended Defence.
We felt certain that the Claimant would now consider discontinuing her claim.
Evidence - post-surveillance evidence
Contrary to our expectations, the Claimant maintained, and continued to pursue, her claim. In essence, the Claimant’s case was that what was seen in the surveillance evidence was three of her ‘good days’. She maintained that she was not an employee or agent of her friend’s wedding business, and she had not earned any money from either that business or her own business selling floral bouquets.
The medical experts prepared an Updated Joint Statement. Mr Evans continued to support the Claimant’s case and maintained his original position, although he accepted that the Claimant was seen to be doing more in the surveillance footage than when he had assessed her, such that it appeared that the Claimant would be able to carry out some degree of manual activity for three or four hours a day as a cleaner.
Mr Pemberton maintained that the surveillance evidence was strikingly at odds with how the Claimant had presented her medical condition to him, and indicated that such a variation in the Claimant’s presentation could not in any way be attributable to day to day variation in symptomology. In his view, there was no clinical explanation for the discrepancy seen, other than to conclude that the Claimant had deliberately and consciously exaggerated her condition to him for the purpose of gain.
The trial
A Trial was listed for 16 to 18 December 2019 before Her Honour Judge Howells.
In advance of the Trial, the Claimant made an offer to settle her claim in the sum of £75,000, but a decision had been made by this stage that the case would be defended to Trial and no offers of settlement would be considered. We notified the Claimant’s Solicitors of the position and put them on notice of the potential risks to the Claimant should a finding of fraud/fundamental dishonesty be made against the Claimant, including prosecution for Contempt of Court. The Claimant’s Solicitors, however, were undeterred.
The Claimant attended each day of the Trial, using a walking stick in and around the Court room.
The Claimant was vigorously cross-examined with regards to the circumstances/mechanics of her accident. Despite the issues regarding the Claimant’s credibility, HHJ Howells accepted the Claimant’s account of her accident and that the allegations of negligence/breach of duty against the Local Authority had been made out. Accordingly, the Local Authority was held to be vicariously liable for the negligence of their employee. The Claimant had established her claim.
However, HHJ Howells found the Claimant’s evidence in relation to the surveillance evidence unsatisfactory. She shared Mr Pemberton’s incredulity in relation to the Claimant’s presentation and found that the surveillance evidence left her with the ‘inevitable conclusion’ that the Claimant was significantly exaggerating the extent of her symptoms.
In relation to her earning capacity, the Claimant’s evidence was also found to be entirely unconvincing and unsatisfactory. It was accepted that the Claimant had failed to respond to the number of opportunities we had provided to her to explain her earnings situation, and the Claimant’s lack of candour threw into very grave doubt the Claimant’s honesty and integrity as a witness.
The Judge was, therefore, satisfied that we had presented cogent evidence to the Court that the Claimant had, on the balance of probabilities, been dishonest, and that this was fundamental dishonesty. As there was no suggestion that the Claimant would suffer ‘significant injustice’ if Section 57 were applied, the Claimant’s claim was dismissed in its entirety.
The provisions of Section 57 require the Court to assess the damages that the Claimant would have received had she been successful in her claim. HHJ Howells assessed quantum and indicated that, absent her dishonesty, she would have awarded the Claimant the sum of £83,500.
Comment
This was a very long running claim, with many twists and turns along the way. Despite a lack of strong liability evidence, a robust stance was taken to the claim from the outset and maintained throughout, despite the apparent lack of concern or acknowledgement by the Claimant’s Solicitors as to the impact of the surveillance evidence. We gave the Claimant and her representatives every opportunity to understand our concerns regarding the exaggeration of the Claimant’s claim and of her potential, but undeclared, earnings, however these were not heeded.
Through detailed internet investigations being carried out, leading to a period of surveillance, a potential fraud was discovered. In the absence of the surveillance evidence, the Local Authority would have approached this case on the wrong basis.
It was acknowledged by HHJ Howells that the dismissal of the Claimant’s claim was a draconian step in a case where it was accepted that the Claimant had suffered a significant injury for which the Local Authority were liable. However, it was made clear in the leading case of London Organising Committee of the Olympic and Paralympic Games (in liquidation) v Haydn Sinfield [2018] EWHC 51 that the creators of Section 57 intended for it to be used to act as a deterrent to dishonest Claimants who wanted to exaggerate their claims.
Our successful Application for the dismissal of the Claimant’s claim pursuant to Section 57 resulted in a significant saving for the Local Authority, not only in terms of the assessed damages of £83,500, but also in relation to the Claimant’s costs which were budgeted at over £100,000.
