Another Section 57 ‘Fundamental Dishonesty’ Decision: Patel v Arriva Midlands Ltd & Anor [2019] EWHC 1216 (QB)

On Wednesday, judgment was handed down on the case of Patel v Arriva Midlands Ltd & Anor [2019] EWHC 1216 (QB), in which a ‘fundamentally dishonest’ personal injury claim, that included an ‘honest’ element, was dismissed.

The claimant pedestrian, in the present case, was hit by a bus in a road-traffic accident (RTA), in January 2013. As a result of the collision, he went into cardiac arrest and was left unconscious. He was later diagnosed with subarachnoid haemorrhage (bleed in the brain).

For a period of months after the accident, the claimant made an initial recovery in rehabilitative care. However, in May 2013, when he was discharged, he alleged that his health began to deteriorate and at the time of filing the claim he was significantly disabled’.

The claimant’s amended Particulars of Claim stated that he had ‘sustained a cardiac arrest, a traumatic brain injury, anoxic brain injury and a severe conversion disorder’.

Severe conversion disorder, caused by the accident involving the defendant bus company, was diagnosed by the claimant’s Neuropsychiatrist expert, Dr. Fleminger. In his expert report, the Consultant recounted that he found the Claimant in bed, mute, almost entirely unresponsive and without movement in his hands, arms or legs’. Further, he recorded that the claimant’s son had given the impression that his father’s disability had been ‘reasonably static over the last few months’:

‘He does nothing for himself. It is not possible to assess his mood or thoughts. He requires complete care, showing only the slightest participation in personal activities of daily living like washing and toileting, and being largely immobile. He spends hours in bed doing nothing. At best he will sit out appearing to watch TV, or opening his eyes and looking around when family visit’.

Similarly, the defendant-instructed Neurologist, Dr. Schady, ‘found the Claimant in bed, mute and unresponsive’, but was unable to clinically distinguish between a subconscious conversion disorder and a feigned disability.

Sometime between the parties’ experts visiting the claimant, the defendants secretly instructed surveillance operatives to conduct observations. They obtained video evidence of the claimant:

  • Walking ‘unaided, without difficulty and with a seemingly normal gait’;
  • Talking;
  • Negotiating road crossings;
  • Reading; and
  • Displaying manual dexterity (getting into and out of the passenger seat of a car unaided, bending over, shaking hands, stepping out of harm’s way and using door keys).

Immediately after the video footage was disclosed, Dr. Schady declared that the severe conversion disorder diagnosis could be ruled out. In his expert opinion, the claimant was not suffering with a physical or psychological medical condition.

Pre-trial, the defendants amended their Defence to plead that ‘the claim should be struck out pursuant to s.57 of the Criminal Justice Act 2015 on the basis of fundamental dishonesty of the Claimant and his litigation friend in relation to the claim’.

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Making specific reference to the dicta of Knowles J, in the leading case of LOCOG v Sinfield [2018] EWHC 51 (QB), it was further submitted that the claimant had ‘substantially affected the presentation of his case on quantum in a way which goes to the root of the claim, and adversely affects the Defendants in a significant way’.

Mr Derek Sweeting QC acceded to the defendant’s s.57 application at the trial of liability, in which he ‘found in favour of the Claimant on primary liability, but made a finding of 40% contributory negligence’.

The application hearing took place on 14 May 2019.

Had the Claimant Been ‘Dishonest’?

Her Honour Judge Clarke, sitting as a High Court Judge, considered the surveillance evidence to be ‘completely and wholly inconsistent’ with the claimant’s presentation to the experts.

Appling an objective standard (‘ordinary decent people’), she commented that the claimant’s son had ‘presented an egregiously untrue picture of the Claimant’s disabilities’:

‘... it is more likely than not that the Claimant knew at the time of each of the visits by Dr. Fleminger and Dr. Schady that he could sit, stand, support himself, walk, talk, communicate and manage for himself, but that he presented to those doctors that he could not ... so I am also satisfied that it is more likely than not that the Claimant knew and could understand that his son ... informed the doctors that he could not communicate and could do nothing for himself, being unable to walk, largely immobile, requiring complete care and confined to a bed or a chair. I am satisfied that both he and Chirag Patel knew that this was not true’.

Thus, the claimant’s conduct was ‘dishonest’.

Had the Claimant Been ‘Fundamentally Dishonest’, Within the Meaning Of Section 57?

In Smith v Ashwell Maintenance (see our case analysis here), HHJ Hampton reasoned that, where a claimant exaggerates or overstates a claim, ‘mixed motives of attempting to convince or deceive’ will not lead to a finding of ‘fundamental dishonesty’.

However, having accepted that she had ‘no evidence of the Claimant's motives’, especially given that the claimant had not submitted his own witness statement, it was impossible for the Judge to make that assessment.

In response to the defendants’ s.57 application, witness evidence of the claimant’s family and friends described his condition as ‘variable’, i.e. that the so-called severe conversion disorder affected the claimant on ‘most days’, but not on the days where surveillance was undertaken.

In light of all the evidence before her, the sitting High Court Judge could identify ‘no discernible neurological damage’. Seeing that the claimant’s ‘dishonest presentation’ had resulted in an untenable diagnosis of severe conversion disorder, which represented the ‘bulk’ of the pleaded claim value, she found in favour of the defendants:

‘Accordingly, I am satisfied on the balance of probabilities that the Claimant’s dishonesty has substantially affected the presentation of his case which potentially adversely affected the defendant in a significant way, and so the Claimant has been fundamentally dishonest in relation to his claim’.

The claimant had had ‘ample opportunity to obtain further [supportive] expert evidence’, post-admission of surveillance footage, to rebut the presumption that severe conversion disorder sufferers could not ‘display variation in capability’, but failed to do so.

Was There Any ‘Substantial Injustice’?

Furthermore, HHJ Clarke found no ‘substantial injustice’ to circumvent dismissal and was therefore entitled to dismiss the entirety of the claim, including the ‘honest’ part of the claim, which was assessed at £5,750.

Full text judgment can be accessed here.

Additional Comments on Timing of ‘Fundamental Dishonesty’ Applications

At the application hearing, the claimant initially contended, ineffectually, that the s.57 application should not have been heard until all matters relating to the quantification of the claim had been ‘tested and ventilated’ and assessed at a full trial on quantum:

‘In my judgment, the costs of full quantification (both to the parties and in terms of the call on the resources of the court) are likely to be both unnecessary and disproportionate, in breach of the Overriding Objective’.

In fact, we believe that dismissing a ‘fundamentally dishonest’ claim is feasible as early as pre-trial, by way of an interlocutory strike-out application.

In edition 265 of BC Disease News (here), we reported on BC Legal’s successful dismissal of an occupational deafness claim. In that instance, the claimant had made a pleading of knowledge within the past 3 years (to comply with s.11 of the Limitation Act 1980), even though there was unquestionable evidence of the same claim, albeit abandoned pre-litigation, having been presented more than 10 years ago.

It was obvious that, should the claim proceed to a trial of liability, there would be a finding of s.57 ‘fundamental dishonesty’. Stuart Bacon, Head of BC Legal’s Southend Office, therefore submitted, at the pre-trial application hearing, that there were ‘no reasonable grounds’, pursuant to CPR 3.4(2)(b), for bringing the NIHL claim.

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Employing this novel, dual-limbed approach, the claim was disposed of early, without having to file a Defence and without incurring much in the way of costs. Providing his own case analysis of Patel and the current legal landscape, Stuart explains:

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15.pngThe defendant in the latest case obtained terminal evidence of ‘fundamental dishonesty’ in 2016, but was unable to use this to dispose of the claim until May 2019. The defendant inevitably incurred significant costs over this 3-year period.

Qualified-one-way costs shifting (QOCS) is automatically dis-applied (CPR 44.16), but the claimant is unlikely to have the means to pay and his ATE insurance providers certainly will not foot the bill.  

It is said in the judgement that s.57 is Parliament’s response to the problem of ‘fraudulent claims’.  We think this is slightly misleading as there is a well-established vehicle for disposing clearly fraudulent claims – CPR 3.4 ‘abuse and/or no reasonable grounds’, allowing such claims to be disposed of upon application by the defendant at any point in the litigation process. 

It is perhaps better to describe s.57 as Parliament’s response to the problem of ‘honest’ claims with ‘fundamental dishonest’ features i.e. exaggeration, specific dishonest pleadings, etc. So, Parliament legislated to fix a problem faced by defendants, but has it actually improved the status quo? Was this even the intention? 

Prior to the enactment of the 2015 Act, the ‘fundamentally dishonest’ element of the claim would have been dismissed in isolation, by virtue of the Court’s case management powers. Whereas now, the whole claim goes. 

In theory, the introduction of s.57 was excellent news for defendants, but the costs recoverability issue still remains. 

Before s.57 applications were possible, the defendant would have served its surveillance, made a low offer, settled, paid modest claimant costs and closed the file. Under the Criminal Justice and Courts Act, the defendant is ‘required’ to take the claim to trial to dispose of it. Despite the fact that damages and claimant costs are avoided, defence costs are significantly higher and, unless the ‘dishonest’ claimant has the means to pay, they are irrecoverable. What is the better result?

The problem is clearly created by the wording of s.57(1)(a):

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It seems implicit from this provision that there must be a trial of liability and a determination of quantum for the ‘honest’ part of the claim.

It appears that the legislators were more concerned with subsequent committal proceedings than trying to avoid increased insurer outlay. If so, this was arguably short-sighted, as the reality serves to increase insurance premiums and even take money out of the public purse to incarcerate ‘dishonest’ claimants. Regardless of its intended purpose, the Act would seem to force defendants to go all the way to trial in affected cases -or does it?

BC Legal has successfully struck out a claim of this nature at an early application hearing, i.e. without a trial. Our approach was to argue that the claim could be struck out pre-allocation, in accordance with CPR 3.4 2(a) - ‘no reasonable grounds’, if there was sufficient evidence to establish that s.57 applied. In other words, the claim had to be struck out imminently, because it could not possibly succeed at trial.

We argued that the defendant should not be forced to pay for a trial, in which the claimant could not possibly succeed. 

The claimant in our case advanced ‘fundamentally dishonest’ pleadings in respect of limitation. The Judge pointed out that she could call the claimant to give oral evidence on this point at an application hearing if she desired, but was satisfied on paper evidence that the claimant had been ‘fundamentally dishonest’.

What this approach achieved was a ‘mini trial’ of the ‘fundamentally dishonest’ case-disposing point, saving huge expense. 

In our case, the only work undertaken was the application. We did not even advance a defence.

The case law and CPR very much point towards ‘fundamental dishonesty’ being an issue that must be determined at trial, but this is not fair on the defendant.

Importantly, we made the claimant’s solicitors aware of the issue well in advance of the application and are now pursuing them for our client’s wasted costs. We also have an enforceable costs order against the claimant if necessary.  

It remains to be seen whether the Courts will consistently approve this approach, but given the potential costs saving it achieves, it is certainly a line of argument we will continue to pursue.

Even failure at application hearings will serve to benefit defendants. By ruling out suspicions of ‘fundamental dishonesty’ early on, defendants are left free to settle if needs be. Undoubtedly, some judges will refuse to hear a s.57 application pre-trial, but this ‘shot across the bow’ will serve as a clear warning of things to come for the claimant and will almost certainly increase the prospects of discontinuance and claimant lawyers coming off record for fear of wasted costs orders.

In summary, we consider that ‘fundamental dishonesty’ should be tackled as soon as the evidence presents itself.16.png

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If you suspect that a claimant has been ‘fundamentally dishonest’, for the purposes of s.57 of the Criminal Justice and Courts Act 2015, please feel free to contact Stuart to discuss your prospects of dismissing the claim in its entirety.

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