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Multiple contempts lead to fine and suspended prison sentence in exaggerated £1million claim

Aviva Insurance Ltd v Aleksandar Kovacic
High Court
7 November 2017

DWF acted for Aviva and their insured in successful contempt proceedings against a claimant who, despite suffering genuine injuries in a road traffic accident, went on to exaggerate the extent of his ongoing disability. Having pleaded damages in excess of £1 million the claimant was awarded less than £100,000 at trial, but will not recover anything due to the costs sanctions imposed following his failure to beat a generous Part 36 offer made by the defendant. The case pre-dated the fundamental dishonesty provisions found in both the QOCS rules and s.57 of the Criminal Justice and Courts Act 2015. Charles Ashmore explains how the case unfolded and how fundamental dishonesty, had it been in force, would have affected the outcome.

Background

The claimant, Aleksandar Kovacic was badly injured in a road accident in March 2010. He was driving a minibus in the course of his job as a care worker for young autistic adults when Aviva's insured, Mrs Wroe, driving in the opposite direction, unaccountably failed to follow a left hand bend, continued in a straight line and into a head on collision with the claimant's vehicle. Mrs Wroe died as a result of the accident.

In the accident the claimant sustained multiple injuries, including serious leg fractures for which he had to be airlifted to hospital. After five weeks he was discharged home under the care of the Community Nursing Team. He was living in a first floor flat and because he was in a wheelchair he was essentially housebound.

According to the claimant's medical records, by February 2011 he had made a very good recovery from his leg injuries – he was fully weight bearing and mobilising without crutches inside the house. At that point his main concern was his right elbow. By March 2011, a year post accident, he was described as walking with a normal gait, but had stiffness in the elbow for which he underwent further surgery in June 2011.

In March 2012 his physiotherapist reported extreme pain in his left knee. He was uncomfortable weight bearing and had to resort to using crutches. By October 2012 his case manager was reporting chronic pain and poorly controlled pain management and in December 2012 his GP referred him to a pain clinic.

Proceedings and pleaded claim

The claimant issued proceedings in January 2013, so before the provisions on fundamental dishonesty in both QOCS and s.57 of the Criminal Justice and Courts Act 2015 were implemented. He served a schedule of loss pleaded in excess of £1 million containing a signed statement of truth along with a number of medical reports supporting his contention that he:  

  • could not work and was unlikely to be able to do so in the future,

  • had accommodation needs as a result of his injuries,

  • would need ongoing care and assistance,

  • could not drive and may never return to driving.

Having reviewed the schedule compared with the expert evidence, we and the insurers felt that something wasn't quite right. The claimant had clearly been seriously injured in the accident but the flavour of his expert evidence suggested he should have made more of a recovery than he was professing. With that in mind we took the decision to put the claimant under surveillance.

As the claimant's evidence came in, a picture emerged of his alleged level of ongoing disability:

  • On a good day he could walk 50 metres with crutches, whilst on a bad day he stayed in bed.

  • He carried a stick and never went out without it.

  • He had difficulty bending.

  • He could not carry anything heavy in the right arm, and tended to drop anything he was holding.

  • He could not take his daughters out alone, and his wife took them to school.

  • he had not returned to driving.

His employer provided a statement to the effect that before the accident the claimant was an exemplary employee and was being considered for promotion to Deputy Manager, with the possibility of promotion to Manager at a later date. However it was said that his injuries prevented him from returning to work and his employment was terminated on the basis that if he recovered he should reapply. His employer said that having seen him in June 2014 he appeared to lack the necessary level of physical fitness for any of the roles available.

Surveillance on the claimant began in March 2013 and continued intermittently until August 2013. The surveillance showed as stark a contrast as it is possible to imagine to both the evidence he gave to the medical experts and his witness evidence:

  • On each of the days that the claimant was under surveillance it was he and not his wife who took the children to school.

  • He walked there and back (an admittedly short distance of about 40 metres each way) with a limp but, crucially, with no walking aids.

  • He was not seen carrying a walking aid on any day save one.

  • That one day was the day of the defendant's medical examination. In the morning he mobilised without a walking aid but when the taxi came to collect him for his appointment he appeared, hobbling with a stick and struggling to enter the taxi, his mobility appearing very much more restricted than it had earlier in the day.

  • He was seen shopping and carrying multipacks of large bottled water.

  • Perhaps most starkly of all, despite claiming to be unable to drive, he was followed taking his wife and children to Skegness for the day. He drove there and back in a manual car.

  • Whilst in Skegness he was seen walking along the beach and up and down sand dunes without a walking aid.

Attempted settlement negotiations

The surveillance was disclosed in September 2013, in advance of a joint settlement meeting. Despite a genuine effort on the part of the insurers to settle the claim at the JSM, the claimant, who at that time was represented by counsel, was unwilling to make any significant concession notwithstanding the contents of the surveillance. Following the JSM the defendant made a Part 36 offer of £350,000 and amended the defence to plead fraud. Shortly thereafter the claimant's solicitors ceased to act and came off the court record. From that stage onwards the claimant was a litigant in person.

Although we had resolved to proceed to trial, we and the insurers gave the claimant every opportunity to extricate himself from the proceedings. At a subsequent CMC we explained the position to the Master who highlighted to the claimant the risks he was facing. We also invited the claimant to participate in a mediation but he refused.

Trial and contempt proceedings

The case went to trial in early 2015 and was heard in the High Court by HHJ Bidder.

By then all of the experts in the case had seen the surveillance footage. The claimant's experts said that apart from an occasional slight limp (which was much worse on the way to and from medico-legal appointments), he showed no sign of disability, loss of function or any other residual symptoms; it was noted that he only used a walking stick on the way to and from medico-legal appointments. The defendant's experts were prepared to go further and say that the surveillance indicated quite clearly a deliberate exaggeration of symptoms.

At trial, the claimant, appeared as a litigant in person, and had no expert evidence to support him. His wife who had no official role in the proceedings was at one stage excluded from court for trying to assist him during cross-examination.

The claimant was awarded £97,525, which was significantly lower than the defendant's Part 36 offer. The judge held that 

this was a deliberate attempt to portray himself as someone who was more seriously disabled than he was, by someone who was forensically aware and by someone who was intending to try to deceive an expert medical witness and had prepared to do so. I should also add, without the need to narrate all the evidence in cross examination, that he similarly misled experts and exaggerated his inability to carry with both arms, which plainly is contradicted by the surveillance footage, of his shopping, carrying the heavy bottles of mineral water in both hands and unloading his car. I have concluded that the claimant can simply not be believed in relation to his condition, and except where his evidence is fully supported by reliable other evidence, I am unable to accept his evidence.

 The claimant sought permission to appeal which was refused both on paper and at an oral hearing in July 2016. As soon as he had exhausted the appeal route, we obtained permission to bring contempt proceedings on behalf of the insurer against the claimant. Two forms of contempt were alleged at the hearing before Spencer J in October 2017:

  1. for interference with the due administration of justice, through the false statements he made to doctors about his continuing disability which formed the basis of the medical evidence; and

  2. for making a false statement in a document verified by a statement of truth, without an honest belief in its truth.

Having heard from Mr Kovacic (now the defendant), the judge concluded that 

like Judge Bidder, I am quite satisfied that the defendant deliberately and cynically lied about the extent of his continuing disability in what he told the doctors and other experts, and in what he said in his particulars of claim and his witness statement. But for the video surveillance evidence he might well have succeeded in recovering very much greater compensation than he was truly entitled to. Accordingly I find the following twelve allegations of contempt [subsequently listed] proved.

 Mr Kovacic received a suspended jail sentence and a fine of £10,000. He has received none of the damages awarded because he was ordered to pay the defendant's costs on the indemnity basis from the expiry of the Part 36 offer together with the costs of the surveillance. He has also received unwelcome attention through extensive reporting of the case in the local and national press.

Comment

This case shows the importance of carefully forensically examining the expert and documentary evidence to establish where there are inconsistencies in a pleaded case. A combined 40 odd years of experience between the DWF and Aviva case handlers no doubt contributed to that feeling early on in the case that something did not add up.

It is also perhaps worth considering whether the entirety of the claim would have been struck out for fundamental dishonesty had the claim been brought after the introduction of s.57 of the Criminal Justice and Courts Act 2015. In our view, given the level of exaggeration and the heads of loss at the heart of the deception, it is highly likely that a judge would have found the claim to have been fundamentally dishonest making findings similar to those in this month's High Court decision in London Organising Committee of the Olympic And Paralympic Games (LOCOG) v Sinfield.

The upshot of a finding of fundamental dishonesty on the same facts would have been that the claimant would have been in a worse position than now, in that he would have failed to recover any damages, yet would have been liable for all of the defence costs, with the sole exception of a carve out from those costs equivalent to the level of genuine damages which he lost the chance to recover, namely £97,525.

In the same month where DWF also succeeded in proving contempt allegations against nine members of an organised 'cash for crash' scheme, this sends another strong message to those who would try to defraud insurers and through them the general public. The resolve of insurers such as Aviva to use all available weapons against fraudsters can clearly be seen from the outcome of this case.

Contact

For further information please contact Charles Ashmore on 01908 255594 or at charles.ashmore@dwf.law

Aviva were also advised and were represented at trial by William Featherby QC of 12 King's Bench Walk.  

 

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This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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