On 22 December 2015, a Judge in Gateshead County Court took the bull by the horns and made a robust finding that not only should a fraudulent personal injury claim be struck out, but that the solicitors acting for the injured party should pay all of the Defendant bus company's costs. The case – KB (an infant) v Go North East Ltd – is only a first instance decision, but in an area of developing law, is a useful guide as to how to deal with fraudulent and opportunistic claims.

It also deals with the emerging problem of Claimant solicitors running ever weaker claims to the doors of court in the belief that the new rules permit them to do so with little or no risk of incurring liability for the Defendant's costs.

The nature of the problem

For personal injury cases brought since April 2013, a Claimant who wins still gets his costs from the Defendant, however if the claimant fails – even at trial – he does not have to pay the Defendant's costs. This is known as QOCS (Qualified One Way Costs Shifting). So, a Defendant can defend a weak case all the way to trial, win hands down and still have to pay its own costs.

In an effort to avoid serious injustice, it was decided that the QOCS rules should not apply where either:

  • The case is shown to be fundamentally fraudulent, or
  • The case is struck out on one or more of the following grounds:
  • There were no reasonable grounds to bring proceedings;
  • Proceedings are an abuse of the court's process;
  • The Claimant's behaviour (or that of someone on his behalf) is likely to obstruct the "just disposal" of proceedings.

Recent experience shows an increasing trend of weak claims being brought, with proceedings being issued and being run to the doors of court before being discontinued at the last moment. The strategy appears to be to see if the Defendant "blinks" and makes some offer on the basis that it will have to pay its own costs even if it wins.

Even more gallingly, these minor claims are "farmed" (ie encouraged and created) by unscrupulous claims management companies or solicitors who actively chase people who have been involved in an accident (in fact in some cases, simply calling random telephone numbers on the chance that the recipient has had an accident: yes we have all been there!).

The facts of KB v Go North East Ltd

In October 2012, Go North East's bus was proceeding along a narrow road outside a school with lots of parked cars present. A car driven by KB's great Grandfather, H, was coming the other way. KB was 5, and a rear seat passenger. There was insufficient room for both vehicles, so they both stopped. The bus driver (wrongly) assessed that he could squeeze through, slowly. The bus scraped the side of the car whilst travelling very slowly at about 5 mph.

The drivers swapped details, no complaint was made of injury, and the damage to the car was paid for promptly by Go North East.

About 18 months later, a claim for injuries was made against Go North East by both H and KB.

It was discovered that H had told his own insurers 7 days after the accident that no one was injured. He signed this with a statement of truth. Although this was pointed out to H's solicitors (who acted also for the child KB in his claim), they pressed on and medical reports were produced:

  • For H: alleging a whiplash injury causing ongoing pain that might be permanent, and that he needed physiotherapy
  • For KB alleging that he had a whiplash injury lasting 4 months, and bed wetting that started 2 days post-accident and persisted for 7 months.

On the basis that H had told his insurers a week after the accident that no one was injured, and that this was a minimal collision, it was denied that either H or KB had suffered injury. Proceedings were issued on behalf of H. At trial in April 2015, the Judge found that he had not proven any injury was caused by this accident, and that whilst he was not fraudulent, if he had a neck pain, it was unrelated to the accident.

At his trial, H said that as far as he knew, KB had not injured his neck. 3 other points came out of importance:

  • Two different versions of his statement had been disclosed, the second of which elaborated considerably on the effects of the collision and how he had been looking sideways at the time and was thrown about. It transpired that he had never seen the second version, and that his solicitors (who were not present in court) had "improved" the approved and signed statement, then taken the signature page and stapled it to that "improved" version
  • The claim for physiotherapy was withdrawn. In cross examination, H said he had never intended to have physiotherapy, despite it having been pleaded as having already been paid for, and he had been told by his solicitor to claim it "just in case" he decided to have some. The disclosed physiotherapy invoice was from a company with connections with the solicitors
  • When asked why he notified the claim so late in the day, H said he had been called by a solicitor. He was adamant that it was the same solicitor that acted for him, and not a claims management company. Solicitors of course are prohibited from cold calling for claims under their professional conduct rules.

Despite the decision, the same solicitors issued proceedings on behalf of KB, no doubt hoping that as this was a child's claim, the court may have sympathy, and Go North East would "blink" and pay something to avoid trial again.

child's medical records were obtained. They showed that there was no record of any neck injury to KB, and that he had suffered with bed wetting for a long time before and after the accident. There was no reference to the accident at all, and his mother (who brought the claim on his behalf and who had given the details of injuries to the medical expert) had told a doctor that she had no recollection of any precipitating cause of the bed wetting.

On seeing the records, we pointed these matters out to KB's solicitors and invited them to discontinue the claim. They never responded.

When witness evidence was received from KB's solicitors, they produced a statement in KB's name (he was then still only 8) as if it was his statement, but the signature page was that of his mother. As a statement has to be signed by the person making it, this was pointed out to KB's solicitors. Again they failed to respond.

Application to strike out

An application was made to strike out the claim on the basis that it had no prospects of success , as the statement was not admissible in evidence, so no evidence could be called and the claim was doomed to failure.

This was due to be heard at the start of trial. In the meantime, KB's solicitors proceeded as if they would pursue the claim at trial, but the day before trial, formally discontinued the claim. That meant that there was no claim to strike out and Go North East could not seek a costs order against KB.

An application was therefore made to:

  • Reinstate the case, and
  • Then strike out the case on the grounds that there were no reasonable grounds for bringing the case, that it was an abuse of court process, or the Claimant's conduct obstructed the just disposal of proceedings.
  • Enforce costs entitlement against KB (in effect against his mother);
  • Seek a costs order also against KB's lawyers due to their conduct, improper behaviour or negligence.

The court's findings

The Judge:

  1. Set aside the notice of discontinuance to allow Go North East's application to strike the claim out to proceed. This sounds bizarre, but the intention was to reinstate the case so that the court could then make a costs order in favour of Go North East (whereas on discontinuance under the QOCS rules no costs could be recovered);
  2. Then, struck out the case on the basis that if the matter had proceeded to the hearing, it had no prospect of success, as the witness evidence would have been disallowed;
  3.  Found the mother of KB was fundamentally dishonest in telling the medical expert that KB had suffered serious bed wetting due to the accident. She had misled the medical expert for financial gain. She would be ordered to pay Go North East's costs;
  4.  Found serious misconduct by not just the mother but also the solicitors. They had: Cold called H in order to generate a claim that would never have been made otherwise; failed to reassess the weakness of the claim after the medical records were seen which undermined the bed wetting allegation and negligently produced a witness statement that would never have been allowed as evidence due to its deficiencies;
  5. Accordingly, the solicitors should also be ordered to pay Go North East's costs.

Comments

Courts are slowly beginning to take a tougher line on fraudulent claims.

This case also shows that in the right case, a court will also take a very tough line on shoddy and unscrupulous solicitors. It shows there can be a remedy sometimes when solicitors pursue weak claims and pull the plug at the last moment.

The Judge described the solictors' failings as serious and persistent. They had, very late in the day, served a witness statement that denied any regulatory breach in relation to the allegation of cold calling, but it did not actually deny that they had called H, nor did it explain how they had come to be acting for him. H lives in Tyneside, and the solicitors are based in Macclesfield in the North West. The Judge said that as they had had every opportunity to deal with this serious allegation but had not, he was entitled to make an adverse inference that they had cold called H.

The case also demonstrates that it is worth taking a firm line on unmeritorious claims in the right case.