£6.6 million personal injury claim falls away due to fundamental dishonesty
DWF has obtained a significant reduction in a substantial claim for damages, raising arguments of fundamental dishonesty. Whilst the claimant had suffered a genuine and serious hip fracture, the defendant argued that the entire claim for loss of earnings, pleaded in excess of £6m, was tainted by, amongst other things, an undisclosed regulatory suspension on the claimant's part.
The case was handled by James Lee, Associate, in DWF's Catastrophic and Large Injury Team in Liverpool, with counsel for the defendant being Andrew Lawson of St John's Building, Manchester
The claimant tripped on a paving stone on a canal footpath in Leeds in February 2014. The defendant was unaware that they owned the accident site until the incident occurred and raised a McGeown defence, based on the judgment of the House ofLords in McGeown v Northern Ireland Housing Executive (1994), that the area was in fact a public right of way and that they had not carried out any work to the area.
In the incident, the claimant sustained a fracture to the hip, requiring surgery which left him with a leg length discrepancy. The claimant's orthopaedic expert considered that the fracture had caused ossification, which would lead to a hip replacement in the next 5 years and would require subsequent replacements. In addition, the claimant alleged that he had injured his back in the fall.
The defendant's expert agreed that the claimant had fractured his hip and had been left with a leg length discrepancy. He considered that recovery was incomplete and was unlikely to improve. He did not think the back pain was accident related and believed the claimant could return to work as an osteopath within a year or so of the accident.
The claimant's case was that at the time of the accident, he was a self-employed osteopath, working with both animals and humans. His original schedule of loss pleaded that he was unable to work for 14 months, before then returning part time. He also pleaded that there was a 14-month delay in the progression of his practice as a consequence of the accident. Further, he claimed that if the accident had not happened he would have been working 65 hours per week by October 2014.
However, what the claimant did not disclose, was that he was suspended from practice from the General Osteopathic Council from April 2014 to February 2015, i.e. after the accident, due to a real risk of significant harm to patients because of his chronic alcohol dependence. Thereafter, he was subject to various practising conditions until May 2016. DWF discovered this evidence as a result of enquiries online and served it on the claimant.
The defendant pleaded that other than dishonesty, there was no credible or plausible objective explanation for the claimant failing to declare these interventions. Despite that, the claimant continued to claim past loss of earnings without any reference to the fact he was suspended, and the obvious effect on his earning capacity in 2014/2015.
The claimant updated his schedule of loss, this time referring to the suspension, but rather than reducing the figures claimed, they in fact jumped from £347,000 to £6.6 million. The claimant contended that notwithstanding his suspension he still could have carried out work providing alternative therapies. The claimant now pleaded that but for the accident he would have worked 65 hours a week to the age of 80. His loss of earnings claim totalled £6,549,700: the bulk of the claim.
The defendant pleaded in response that the schedule was fundamentally dishonest under s.57 of the Criminal Justice and Courts Act 2015 and/or CPR r.44.16, and argued that the massive claim for loss of earnings was 'fundamental' to the overall value of the claim presented. With reference to Ivey v Genting Casinos UK (2017) we set out the relevant objective test:
"Although a dishonest state of mind is a subjective mental state, the standard by which the law determines whether it is dishonest is objective".
Applied to the facts in this case, even if therefore the claimant considered his loss of earnings to be meritorious, judged objectively, the defendant believed that he was being deliberately reckless and dishonest in his presentation of his claim to the court.
In support of the defendant's position, we highlighted that the claimant had provided no supportive statements, either from patients confirming they would have been happy for him to treat them whilst suspended, or from colleagues. The claimant supplied no evidence of bookings, lost appointments, testimonials or work diaries despite numerous requests; this ultimately resulted in an application for specific disclosure.
The General Osteopath Council records indicated that the claimant was working shortly after the accident (and before his suspension) which, the defendant stated, demonstrated that physically the claimant was able to work.
Crucially, the claimant maintained the claim for past loss of earnings of £14,000 during the period between 2014 and 2015 in which he was suspended. We pleaded that this was dishonest.
Based on the claimant's minimal disclosure of tax returns as compared to his own accounts we pleaded also that the claimant had made a false declaration to HMRC.
The defendant further argued that the claimant had misled his expert regarding his suspension and alcoholism.
The claimant's third schedule of loss presented a new head of loss, namely the prescription of orthotics fees claimed at a further £1.2 million. No evidence or documents were supplied in support, and the claimant's witness evidence was completely silent on this alleged loss. The claimant's own expert did not support any restriction in work activity.
We concluded that this reflected the dishonest intention of the claimant to willingly manufacture new heads of loss to inflate the value of the claim in order to pressurise the defendant to settle.
Under pressure from the arguments outlining fundamental dishonesty set out in the counter schedule, and a month before trial, the claimant accepted a nuisance offer of £25,000. This represented 0.3% of the value of his claim according to his most recently served schedule of loss.
For further information, please contact James Lee, Associate on 0151 907 3047 or at firstname.lastname@example.org
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.