Double Compensation and an Application for Strike Out and QOCS Disapplication: Smith v Baird Clothing Menswear Limited & Ors (2018)

BC Legal has recently been successful in removing QOCS protection in a (NIHL) claim where the Claimant sought damages for injuries which had already been compensated 7 years prior to service of the Claim Form.

The Claimant’s Solicitors were instructed in 2015.  In 2017, proceedings were served on the Defendants, along with the Letter of Claim.  In the Particulars of Claim, medical report and Part 18 responses, the Claimant claimed to have only attributed her hearing loss to excessive occupational noise exposure in 2015.

Although the insurers on risk for the Defendants were unaware of the claim at the pre-litigation stage, once the proceedings were received, their records showed that the Claimant had pursued an identical claim, in 2010, against 2 of the 4 Defendants to the present claim.

What is more, even though details of the earlier claim were missing from the Claimant’s medical records, archived claim documents revealed that the Claimant had undergone a medical examination and hearing test in 2010 and the Claimant’s date of knowledge was traced back to 2005.

It was confirmed by the 2010/2011 claim documents and the Solicitors that dealt with her initial claim in 2011, that the Claimant received a costs inclusive settlement of £6,000, in respect of her earlier claim. The Solicitors that dealt with the initial claim advised the Claimant’s newly instructed Solicitors that the Claimant had received £1,350 in compensation, out of a £6,000 all-inclusive settlement. The Claimant later denied receiving compensation, but this was irrelevant, as evidence of her earlier claim and her dishonesty was exhibited in court documents.

In January of 2018, BC Legal, instructed by the 2nd Defendant, made an application on behalf of all 4 Defendants, seeking:

  1. That the Claimant’s claim against all the Defendants be struck out subject to CPR 3.4(2)(b) as the proceedings are an abuse of process and further due to the Claimant’s dishonesty.
  2. The Claimant do pay the Defendants’ costs of and occasioned by this application.
  3. The Claimant do pay all of each Defendants’ costs of the entire claim.
  4. That Qualified One Way Costs Shifting be disapplied in this matter under CPR 44.15(b) that the proceedings are an abuse of the Court’s process and further under CPR 44.15(c)(i) due to the conduct of [the] Claimant.

At 3.30pm on 19 April 2018, the day before the application hearing, the Claimant filed a Notice of Discontinuance. In witness statements filed that same afternoon, the Claimant stated that she had ‘forgotten about the earlier claim’ when she completed the Part 18 replies and signed the Particulars of Claim.  It was clear that the Claimant’s Solicitors had no knowledge of the earlier claim until the application was made, as they directly questioned the Claimant on this issue and she denied bringing a claim in the past.

On the day of the hearing, the Defendants made a joint application to adjourn the hearing and stated their intention to make a further application to set aside the Notice of Discontinuance and continue with the original application to strike out the claim and recover costs.  The matter was adjourned to a further hearing, on 25 June 2018, wherein the Claimant was ordered to personally attend and give oral evidence. The costs position was reserved with the court, specifically to consider whether a wasted costs order should be applied to the costs of the hearing, on 20 April 2018.

Following the hearing, the Claimant personally made an offer to the Defendants of £10,000 for their costs incurred to-date, in an attempt to avoid having to attend the later hearing, in June of 2018. However, 24 hours after the offer was made, it was inexplicably withdrawn. No further offers were made before the relisted hearing, on 25 June 2018.

In the interim, the court ordered the Claimant’s Solicitors to file a witness statement confirming what steps had been taken in the 3 month period between the filing of the Defendants’ application and the Claimant’s Notice of Discontinuance being filed; why this was left until the day before the hearing? The ensuing statement revealed that only 1 letter had been sent and 1 phone call had been made, prior to April 2018. The Claimant denied receiving the letter. 

On 25 June 2018, the adjourned strike out hearing was scheduled to take place. Upon arrival at the court, the Claimant reinstated her £10,000 offer to circumvent the hearing, but this was not accepted. In response, the Claimant made an increased offer of £13,000. This was accepted by the Defendants, on the proviso that the order specifically stated that the costs order was enforceable and that the Claimant had no QOCS protection. The desired order was subsequently approved by the Judge.

As such, there was no specific finding of abuse of process or dishonesty, which was sought in the original application. However, the costs order agreed at the hearing made specific reference to its enforcement and also referred to the claimant’s inability to benefit from QOCS protection.  Given that the Claimant is now personally liable for £13,000 of costs, arising out of a claim which yielded £1,350 in damages in 2011, the outcome in Smith should serve as a deterrent to the Claimant bringing more spurious claims in future.