Personal Injury Newsletter

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1 Butterworths Personal Injury Newsletter XXXXX XXXXX XXXXXXXXXXX August 2012 Vol 4 Issue 8 NEWS UPDATE FOR PERSONAL INJURY PROFESSIONALS Enforcement problems for referral ban The Solicitors Regulation Authority (SRA) will not be able to properly enforce the ban on referral fees for personal injury cases because of law firms forming alternative business structures (ABSs), as well as problems in defining referral, the regulator has admitted in a new discussion paper. It also paints a gloomy picture for small firms doing personal injury work, as large firms pick up leads from small referral networks that are unable to respond to the ban, due to come into force in April This, combined with existing challenges such as the sluggish housing market, could lead to a steep increase in the number of financial failures among small firms, the paper says. It also claims that policing referral arrangements that involve advertising will be problematic, as claims management companies may legitimately argue that they are carrying out marketing for groups of firms. Claims management companies could also dodge the ban by linking up with a firm of solicitors to become an ABS. There would be no need for referrals, and therefore no referral fees would be paid, the SRA paper states. We believe that, provided that all of the requirements for authorisation are met and the ABS complies with all of its regulatory obligations, we cannot seek to prevent such arrangements simply because they are set up to avoid being caught by the ban. The SRA warns that it could impose licence conditions on an ABS or refuse authorisation. Personal injury compensation claims rise by 18% The number of people claiming personal injury compensation after road traffic accidents has jumped by a staggering 18%, according to new research. The increase in claims between 2010 and 2011 was the highest year-on-year rise ever and increased costs to insurers to around 400m in 2012, the report from the Institute and Faculty of Actuaries (IFA) showed. The IFA believes the rise which came despite an 11% fall in road accidents in the relevant period is down to unprecedented activity by claims management companies. David Brown, chair of the IFA working party which produced the report said: The clear correlation between claims management companies office locations and the hotspots for bodily injury claims suggests that the two are interlinked. We expect to see legislation coming soon which will affect the way in which claims management companies do business, which may account for the significant increase seen in 2011 it is possible this is a last hurrah. The jump in costs to insurers because of the rise in bodily injury claims is likely to result in a rise in motor insurance premiums for drivers, he said. He said that in 2010, the worst areas of the UK Courts can strike out as a last resort Courts can strike out personal injury claims for abuse of process, but only in exceptional circumstances where it is just and proportionate to do so, the Supreme Court has ruled. In Fairclough Homes Ltd v Summers, Summers was injured at work and sued his employers for 836,616. However, undercover video surveillance revealed that Summers injuries were not as severe as he claimed. He was filmed using crutches to enter and leave doctors premises but walking without crutches to and from those premises. The trial judge found Summers had exaggerated his injuries but awarded him more than 88,000 in damages since he had sustained serious injury. His employer argued the court should have struck out his claim entirely as it was tainted by fraud and an abuse of process. The Court of Appeal, however, held it had no powers to strike out the case, as it was bound by earlier cases including Shah v Ul-Haq. Giving judgment in the Supreme Court, Lord Clarke, said the court does have jurisdiction to strike out a statement of case under CPR 3.4(2) for abuse of process. However, this draconian step was a last resort and it was very difficult indeed to think of circumstances in which such a conclusion would be proportionate. He rejected the submission that cases should be struck out to deter dishonest claimants, and listed alternative ways to achieve deterrence, including ensuring that the dishonesty does not increase the award of damages, making orders for costs, reducing interest, proceedings for contempt and criminal proceedings. overtook the worst areas of the US in terms of the proportion of accidents involving bodily injury. It is disappointing to see this trend not only continue, but worsen in all regions with the exception of Scotland. The report said Liverpool had the highest proportion of claims, with 52% of thirdparty accidents involving personal injury. Manchester came second with 46%, while in Birmingham the figure was 39.2%. The study found that average awards were almost unchanged at 78,700, with the proportion of cases that were settled remaining at 70% for the third year running. Contents Lies, lies and damned lies 2 Closing the lid on referral fees 3 In practice 5 Case digests 7 Legislation update 8 Editor: Lucy Trevelyan Designer & Typesetter: Heather Pearton Customer Services: Director of news and insight: Tristan Hilderley Published by LexisNexis, Halsbury House, 35 Chancery Lane, London WC2A 1EL All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission in writing of the publishers. Printed by Headley Brothers Ltd. ISSN: X Personal Injury Newsletter 1

2 Lies, lies and damned lies Lies, lies and damned lies Rachel Vickers assesses the impact of the Supreme Court s recent decision on fraudulent claims The issue at stake in Summers v Fairclough Homes Limited [2012] UKSC 26 was whether the court has power to strike out a claim for abuse after the determination of liability and quantum, in circumstances where the claimant had plainly lied about the extent of his injuries. The defendant argued that as a consequence of his dishonest behaviour, the claimant should forfeit his right to any damages. It maintained that fraudulent claims were rife, and the risk of recovering no damages would act as an effective deterrent to such behaviour. The Court of Appeal held that there was no power to strike out a claim in its entirety at trial on the grounds of fraudulent exaggeration. They were bound by the previous decisions of Shah v Ul-Haq [2009]EWCA Civ542 and Widlake v BAA [2009] EWCA Civ 1256 which rejected the appellants submission that this fell within the remit of the court s powers. Power to strike out The Supreme Court gave permission to appeal and handed down judgment on 27 June It held that there was power to strike out a claim as an abuse of process pursuant to the inherent jurisdiction of the court and CPR 3.4(2) where there was evidence of fraudulent conduct even after the trial had been heard. However, it would only be in exceptional circumstances that a claimant would be ordered to forfeit his damages at trial rather than have the case determined on the merits. Where, as in the current case, the trial judge had been able to assess the damages, it would not be appropriate to deprive the claimant of his damages notwithstanding the abuse of process. Having considered whether the circumstances in which it would be appropriate to exercise the power of strike out were so theoretical, that the existence of the power could be rejected altogether, their Lordships decided that a never say never approach was preferable. As such they have left the door open for future argument but only very fractionally. In providing guidance as to the exercise of the power to strike out a claim after determination of the merits, their Lordships held that the court must examine the circumstances of the case scrupulously to ensure that striking out the claim would be a proportionate means of achieving the aim of controlling the process of the court and deciding cases justly. While emphasising that it was very difficult to think of circumstances in which the draconian measure of depriving the claimant of his right to damages would be proportionate, it was suggested that such circumstances might include a case in which there had been a massive attempt to deceive, but the award of damages would be very small. What amounts to very small? Summers obtained judgment for 88,716, of which sum 63,777 represented his loss of earnings for a five-year period post-accident. He fractured his wrist and heel and underwent three arthrodeses to his ankle. Surveillance was obtained which showed him doing far more than he asserted that he could do in his witness statement. He signed a schedule of loss stating that he was unable to work and would be unable to do so for the foreseeable future. The Department of Work and Pensions subsequently disclosed surveillance showing Summers working without any apparent difficulty and extracts of his wife s diary appeared to show that he was working and playing football. The trial judge found that after the second arthrodesis, Summers was to all intents and purposes asymptomatic as demonstrated by the surveillance evidence and that he was offered his third arthrodesis on a false premise, namely a description of continuing symptoms which did not exist. The judge stated in terms that the evidence before him was sufficiently cogent to sustain an allegation of fraud. Although their Lordships did not elaborate as to what would amount to a massive attempt to deceive it was clearly envisaged that this was something beyond a claimant working when he asserted that he could not, lying to obtain benefits to which he was not entitled and lying about his symptoms to those treating him to such a degree that he underwent unnecessary surgery. Such claimants will be entitled to damages insofar as the trial judge is able to assess the true nature of his or her disability. Heart of the dispute This scenario is to be contrasted from that in which the claimant s fraudulent conduct prevents the judge from being able to determine the substantive dispute. In Arrow Nominees v Blackledge [2002] 2 BCLC 167 the claimant falsified various documents which went to the heart of the dispute between the parties and the Court of Appeal held that the appellant s application to strike out the claim should have been granted because the claimant s conduct put the fairness of the trial in jeopardy. Chadwick LJ stressed that a party to litigation is not to be deprived of his right to a proper trial as a penalty for disobedience of the rules of the court (or for behaviour amounting to contempt) but that where a litigant s conduct amounts to abuse which puts the fairness of the trial in jeopardy and renders any resulting judgment potentially unsafe, the court has a duty to deny that litigant from taking any further part in the litigation. Their Lordships in Fairclough v Summers made it clear that their decision had no bearing upon claims in which the fraud or dishonesty tainted the whole claim. In most personal injury cases this distinction will be clear, such as the concoction of a road traffic accident as opposed to exaggeration regarding injuries that resulted from a genuine accident. Secondly the judgment does not apply to cases in which an application to strike out is made at an early stage of the proceedings. While a timely application would enable a defendant to advance cost saving arguments pursuant to the over-riding objective, in reality, in the absence of the defendant being able to establish that the claimant s conduct has placed a fair trial in jeopardy, the courts will be highly reluctant to deprive the claimant of his right of action at an interlocutory stage. It is the role of the judge to balance the 2 Personal Injury Newsletter

3 Lies, lies and damned lies/closing the lid on referral fees weight to be placed upon various pieces of evidence (ie, medical records, medicolegal reports, DWP and employment records and surveillance evidence) and even where the evidence is tainted by widespread dishonesty of the claimant, it will be rare for the defendant to be able to establish that a fair trial is not possible. Costs Their Lordships in Fairclough v Summers accepted that the Pt 36 regime was of little benefit to a defendant facing a fraudulent claim due to the attendant obligation to meet the claimant s costs in the event of the offer being accepted. They envisaged that where the judge found evidence of fraud, the claimant would be ordered to pay the costs incurred by the defendant in respect of the fraudulent or dishonest parts of the Closing the lid on referral fees claim on an indemnity basis and that the defendant could Calderbank on this basis, while offering to pay the claimant an appropriate sum by way of damages. The fraudulent claimant will receive little sympathy from the court in relation to costs generally, if the defendant can show a genuine attempt to settle the litigation for a sensible sum, albeit that the claimant s damages may exceed the Calderbank offer. Contempt As well as being penalised in relation to costs, the fraudulent claimant places himself at risk of contempt proceedings. Insurers are increasingly pursuing contempt proceedings and what lies at the core of the decision in Fairclough v Summers is an assessment that this is a more appropriate way to punish Allison Wooddisse considers the new legislative framework for the proposed personal injury referral fee ban and analyses the possible impact It s only eight years since the ban on solicitors paying referral fees was finally lifted. Referral arrangements had long since been the profession s worst kept secret. The 2004 Referral Code didn t open Pandora s Box; it simply acknowledged that the box had been leaking for quite some time. The decision to relax the referral fee ban in 2004 is often credited with being the catalyst for the explosion in claims management companies, TV advertising and the rise of the much-disputed compensation culture. Mounting political and public pressure finally resulted in the Legal Aid Sentencing and Punishment of Offenders Act 2012, which received Royal Assent on 1 May This introduced a high-level statutory framework for the proposed personal injury referral fee ban, which is expected to be implemented in April It s not yet possible to understand exactly how the ban will operate, for two reasons: n the statutory framework will be implemented by frontline regulators such as the Solicitors Regulation Authority and claims management regulator, who will need to consult on amending their existing codes of conduct; and n certain powers are reserved to the Lord Chancellor to make secondary regulations. Who will be covered by the proposed ban? The Act will apply to regulated persons. This includes persons authorised by the Claims Management Regulator, the Bar Council and Law Society (SRA). Certain Financial Services Authority (FSA) authorised persons may also be included and the Lord Chancellor has power to extend the ban to persons authorised by other regulatory bodies. This is presumably to cater for the likelihood that other regulators will be able to regulate personal injury matters in the future. fraudulent behaviour than to strike out the claimant s claim at trial and relieve the defendant from meeting such liability as it would otherwise have been ordered to meet. Proceedings for contempt may be brought against a person if he makes (or causes to be made) a false statement in a document verified by a statement of truth without an honest belief in its truth (CPR 32.14(1)). Contempt proceedings may only be brought by the Attorney-General or with the permission of the court. Given the observations made their Lordships in Fairclough v Summers regarding the appropriateness of contempt proceedings in such cases, claimants can expect such permission to be requested and granted more readily in future. Rachel Vickers Barrister, Outer Chambers What sort of claims will be covered by the ban? The proposed ban relates to prescribed legal business, ie, personal injury claims and any claim that is ancillary to a personal injury claim (s 56(4)). This is officially defined as a business that involves providing legal services to a client relating to: n any claim or potential claim for damages for personal injury or death; n any other claim or potential claim for damages arising out of circumstances involving personal injury or death; n other matters that the Lord Chancellor may subsequently prescribe by way of regulations. What will be prohibited? The Act will prohibit: n paying or receiving payment for referring the personal injury claim itself; n receiving payment in return for arranging for a third party to provide services to the client in connection with their personal injury claim; eg, a medico-legal agency. Somewhat unhelpfully, the Act collectively refers to both types of payments as a referral fee (s 57(7)) although most personal injury lawyers would consider the former to be a referral payment and the latter to be a commission payment. These are discussed in more detail below. Personal Injury Newsletter 3

4 Closing the lid on referral fees Referral payment It will be a breach of s 56 for a regulated person to: n refer prescribed legal business to another person and be paid for the referral n pay for a referral of prescribed legal business This means it will be a regulatory breach to make or receive referrals of personal injury claims (including ancillary claims) in return for payment. As one might expect, the definition of referral is very wide. By virtue of s 56(5), a referral will occur where: n a person (other than the client); n provides information that a provider of legal services would need; n to make an offer to the client to provide relevant services; ie, any of its legal services. Commission payment It is common practice in personal injury claims to introduce clients to third parties in return for a commission. This is particularly prevalent in relation to medical reports. The 2011 SRA Code of Conduct already requires solicitors to account to clients for commission received as a result of their instructions. Section s 56(2) of the Act takes this a step further; it will be a breach of that section for a regulated person, when providing legal services in the course of a personal injury claim (or ancillary claim) to: n arrange for another person to provide services to client; and n be paid for making the arrangement. What is a payment? The definition of payment in s 56(8) is relevant to the proposed prohibitions on both referral payments and commission payments. Once again, the definition is deliberately wide: n any form of consideration; n whether any benefit is received by the regulated person or by a third party; n excluding reasonable hospitality. This definition is sufficiently wide to incorporate payments to unrelated third parties, such as a charity. There is no guidance on what may constitute reasonable hospitality. How will the ban be implemented? The ban will be implemented by relevant front-line regulators (including the SRA) who must make appropriate arrangements for monitoring and enforcing the Act. Breach of the Act will be a regulatory issue, punishable by the relevant frontline regulator. Breach of the Act will not: n be an offence; n give rise to any action for breach of statutory duty; n make anything void or unenforceable except that a contract to pay a referral or commission payment in breach of s 56 is unenforceable (s 57(5)-(6)). Will there be any loopholes? The Act is far from watertight; a key potential loophole is woven into its very fabric. The final shape and size of this loophole could vary, depending on the identity of the front-line regulator. This is because of each front-line regulator can make rules providing that a referral or commission payment will be treated as a referral fee unless the regulated person shows it was not made as a referral fee, but rather: n as consideration for the provision of services; or n for another reason (s 57(7) and (8)). This somewhat back-to-front provision means that front-line regulators have flexibility to treat some referral and commission payments as being consideration for the provision of services, or as being paid for another reason rather than as a referral fee. This is subject to an overarching power reserved to the Lord Chancellor to set a cap on the maximum figure a regulated person can pay as consideration for the provision of services; beyond this figure, any payment would be a caught by the ban, regardless of any rules implemented by front-line regulators (s 57(9)). The combined effect of the provisions makes it impossible to know how the proposed ban on referral and commission payments will work in practice. Different front-line regulators may have different ideas on what is not a referral fee, but rather: n consideration for other services; n payment for another reason. We also do not know whether the Lord Chancellor intends to fix a cap on payments that can be made in consideration for other services and, if so, how that cap will be calculated. Call for clarity Referral fees were banned for a lot longer than they ve ever been allowed. Those operating in the personal injury market before 2004 will remember that, notwithstanding the ban, it was common practice for claims management companies and, even some insurance companies, to charge substantial fees for other services, such as marketing costs, taking initial witness statements and other administrative activities. The Act keeps the door wide-open for these activities to continue. It s unlikely that front-line regulators will slam this door shut and bolt all the locks. The issue is how far they go towards pushing it closed. It will be a brave regulator who will decide that every payment made in connection with the referral of a personal injury client is a referral fee. More likely, the battle lines will be drawn over what can be legitimately paid to third parties such as claims management companies in consideration of services such as marketing. Implementation of this ban is less than a year away. In the meantime, law firms and claims management companies must be able to plan their businesses. Law firms specialising in referred personal injury claims are entitled to know in advance whether their source of work is really going to disappear, as there are fundamental decisions to be made about whether to sell or restructure their business. Claims management companies must decide whether they will need to invest in an ABS that is licensed to conduct personal injury claims or whether they can continue to refer claims to external firms, which has the benefit of transferring risk outside their organisation. The SRA expects the firms it regulates to run their business effectively and in accordance with sound financial and risk management principles (SRA Principle 8). The sooner the SRA makes its intentions clear on how it intends to implement the referral fee ban, the sooner law firms specialising in personal injury work can do so. Allison Wooddisse Solicitor and head of practice compliance LexisPSL 4 Personal Injury Newsletter

5 In practice In it for the money Karen O Sullivan and Louise Thomson throw the spotlight on dealing with fraudulent road traffic accident claims For some years the insurance industry has become increasingly concerned about the number of potentially fraudulent claims which are being made. Concerns have been raised in Parliament about the proliferation of such claims. This type of road traffic claim is estimated to cost the insurance industry millions of pounds each year with an estimated 30,000 staged accidents in 2009 alone. There are a number of different types of fraudulent claims including: n low velocity collisions - claims deriving from the most trivial touching of vehicles n deliberately staged collisions; n phantom passenger claims - a driver will assert that his car was carrying passengers who were not actually present; n claims where the injury or losses sustained are exaggerated It was recently held in Singh & Ors v (1) Habib (2) AIG [2011] EWCA Civ 599 that it was in the public interest to admit fresh evidence which raised concerns of fraud arising out of a road traffic accident where damages had been claimed for personal injury. Here the appellant insurers appealed against a judge s refusal to admit fresh evidence concerning allegations of fraud arising out of an alleged road traffic accident in which the respondent passengers brought a claim for damages for personal injury. However it is important to stress that fraud should not be pleaded lightly. Not only does the evidential burden of proof switch to the defendant as soon as the issue of fraud is raised but unwarranted allegations of exaggeration by a defendant can also be punished by costs sanctions (see Francis v Wells & Churchill [2007] EWCA Civ 135). In Clarke v Maltby [2010] EWHC 1856 (QB) the defendant was ordered to pay indemnity costs after accusing the claimant at trial of deliberately exaggerating her symptoms when the medical evidence did not support such an allegation. An exaggerated claim is quite different from a concocted claim and where the court finds that there is exaggeration then this can be punishable in costs. In Fairclough Homes Ltd v Summers [2012] All ER (D) 179 (Jun) the Supreme Court accepted that the court has power under CPR 3.4(2) and under its inherent jurisdiction to strike out a fraudulent claim as an abuse of process at any stage in the proceedings, even when it has already determined that a claimant is in principle entitled to damages in an ascertained sum. However, this power should only be exercised where it is just and proportionate to do so and in very exceptional circumstances. The Supreme Court went on to say that there were many ways in which deterrence of fraudulent claims could be achieved, which includes ensuring that the dishonesty does not increase the award of damages, making orders for costs, on the indemnity basis if necessary, reducing interest, proceedings for contempt and criminal proceedings Detecting a fraudulent claim Set out below are factors which, often taken together, suggest there is an element of fraud: n the circumstances are suspicious; n the accident occurred in a locality known for fraudulent claims; n there are links between the parties involved in the claim; n the injuries and losses appear out of proportion to the severity of the accident n there are inconsistencies in the description of the accident or the number of passengers in the car; ie, the accounts set out in the letter of claim differ from those given to medical experts, GP; n the claimant uses medical experts from unusual disciplines to prove a physical injury; ie, pain consultant, rheumatologist, psychiatrist; n there has been a history of similar claims; n there is an absence of police or other emergency service involvement. Courts are now tending to be proactive at an early stage in proceedings where fraud has been raised with claimants often asked to attend case management conferences so they can be warned of the consequences of making a fraudulent claim. It can therefore be useful to seek such a direction before a case management hearing to place pressure on a claimant suspect of bringing a fraudulent claim. Low velocity claims A low velocity collision occurs either where both vehicles are travelling at a similar low speed or alternatively where one vehicle is stationary and another vehicle is travelling at a very low speed and collides with it. In this type of accident a defence of causation may be raised, on the basis that the collision was insufficient to cause the injuries alleged by the claimant. In Armstrong and Connor v First York [2005] All ER (D) 107 (Jan), the claimant s vehicle was caught by a bus trying to pass it. The claimants alleged they had sustained personal injuries but the defendant denied that the claimants would have been injured by the extent of the collision that had occurred. The defendant relied upon a forensic engineer s report to support their defence. Despite the defendant s expert evidence the claimants succeeded, as the trial judge considered that their evidence had been honest and transparent. Accordingly, the perceived honesty of claimants and their witnesses will be key to low velocity collision claims succeeding at trial. The Court of Appeal gave guidance on the approach which should be followed by a defendant seeking to rely on expert evidence in a low velocity claim in Casey v Cartwright [2007] 2 All ER 78: n the defendant should notify the claimant within three months of receiving the letter of claim that they consider the claim to be a low velocity impact case and that they intend to raise causation issues; n the low velocity issue should be identified in the defence and be supported by a statement of truth; n within 21 days of serving the defence the defendant should serve upon the court and the other parties a witness statement clearly identifying why the defendant considers the accident Personal Injury Newsletter 5

6 In practice to be a low velocity collision. The statement should specifically deal with the defendant s evidence, including the circumstances of the impact and any resultant damage; n if the court is satisfied the first three steps have been complied with, it ought generally to give permission for the claimant to be examined by a medical expert of the defendant s choice; n it is for the defendant to persuade the court that, on the evidence, the low velocity argument has a real prospect of success. Parties must carefully select the experts they instruct in low velocity claims. Medical evidence should ideally be provided by either an orthopaedic surgeon or A&E consultant who has experience of this type of claim. The medical expert must be provided with all the claimant s medical notes so they can ascertain whether there are contemporaneous notes from the time of the accident. Armstrong emphasises the importance of the claimant s credibility and the impression obtained of the claimant by the medical expert can often be useful evidence of this. Forensic engineers are sometimes instructed to examine the vehicles involved in the accident. They prepare a report considering factors such as the relative weight of the vehicles and the damage they sustained to ascertain whether the parties involved in the accident were likely to have incurred an injury. It is vital that they inspect both vehicles involved. Accident reconstruction experts can also be instructed to consider the likely injuries sustained and they will prepare their report by inspecting both the vehicles involved and the accident scene. Deliberately staged accidents These accidents occur when a claimant deliberately allows another vehicle to collide with them. The claimant then alleges they have suffered a whiplash injury as a result of the collision. Insurers will often search a claimant s name against various databases to ascertain whether they have had any previous personal injury claims. Suspicions will be raised if it appears a claimant has been particularly unlucky and involved in a higher number of accidents than the average motorist. Medical records can also be useful in identifying previous road traffic accidents. If it can be proved that the claimant and defendant already knew each other before the collision occurred this can be useful evidence that the accident was deliberate. Eye witness evidence may also be useful in proving the claimant was driving erratically just before the accident occurred. If a defendant wishes to assert a claimant is being deliberately dishonest or fraudulent then the defendant should confirm in their response to the letter of claim that fraud is being asserted. There is no requirement for a defendant to include a substantive allegation of fraud in their defence. Instead, the defendant can set out all the relevant facts in their defence and invite the trial judge to conclude that either the accident did not occur as alleged by the claimant or the injuries were not as stated by the claimant. In Daniel Locke v James Stuart & Axa Corporate Solutions Services Limited [2011] EWHC 399 (QB) the court gave guidance aimed at assisting the case management and preparation of cases which involved an allegation that there had been a conspiracy to claim compensation following staged road traffic accidents. The second defendant insurer sought to adduce evidence showing the following common features in this and eight other accidents: n the relevant claims were referred to solicitors by the same individuals; n the guilty vehicle had recently been taken on short-term hire; n both vehicles involved in the collision contained a number of people; n the accidents occurred in the same area in a six-month period; n there were links between the individuals involved, some of which were revealed by research on Facebook. The court rejected the argument that evidence from Facebook was inadmissible and held that the fact the parties were friends was a motivation in the claim. The following guidance was given by the court: n rather than providing the court with vast amounts of information it should be possible to prepare a document which accurately and fairly summarised the evidence so far as the primary facts were concerned; n such a document could identify which primary facts were in dispute so that the necessary material could be adduced to deal with that; n it might also identify which inferences were agreed and which were not; n further, a document could be devised which set out in a short form how entries on Facebook were created and what inferences might safely be drawn from them; n insurers making allegations of fraud should do so with care. Their legal advisers have obligations which require them to advance such allegations only on proper grounds. It would be inappropriate for trial bundles to contain the names and personal details of people with the suggestion that they had been guilty of fraud unless there were proper grounds evidentially for that assertion. Phantom passenger claim In Shah v Wasim Ul-Haq & Others [2009] EWCA Civ 542 the Court of Appeal declined to strike out a case in which a married couple who had sustained minor injuries in a road traffic accident fraudulently also claimed that the wife s mother had been in the car and was injured. The Court of Appeal reaffirmed the principle that claimants remain entitled to their legitimate damages no matter how fraudulently they have behaved. However, they are then usually heavily penalised in costs. It was in the public interest to admit fresh evidence which raised concerns of fraud arising out of a road traffic accident where damages had been claimed for personal injury. Exaggerated claims In Summers the claimant claimed ongoing personal injury and financial losses. He initially served a schedule of loss in the sum of 838, The Supreme Court approved the trial judge s decision that, on the facts of the case, Summers had suffered significant injury as a result of the defendant s breach of duty and, subject to appropriate deductions, was entitled to damages amounting to 88, However, where the fraud taints the whole claim and the court is aware of it before the end of the trial, judgment will be given for the defendant and, if it comes to light afterwards, it will be open to a defendant to raise the issue in an appeal. An example of where an exaggerated claim could be struck out is where there has been a massive attempt to deceive 6 Personal Injury Newsletter

7 In practice/ case digests the court, but the award of damages would is very small. Contempt of court If fraud has been proven then proceedings for contempt of court should be considered. Recently there have been successful civil prosecutions for contempt of court where claimants have deliberately exaggerated their claims in attempts to recover greater damages. In MIB v Shikell [2011] EWHC 527 the claimant grossly exaggerated the effect of his injuries and claimed in excess of a million pounds. He and his father were each sent to prison for a year and ordered to pay costs while a witness who gave fraudulent evidence was fined and also had to pay costs. Similarly in Brighton Bus v Brooks [2011] EWHC 2819, the two defendants received suspended sentences and were ordered to pay large sums in costs after being exposed as giving fraudulent evidence. How to bring proceedings for contempt of court While running a fraudulent case is itself capable of being a contempt of court the most obvious way is to show that a party Case digests X Primary Care Trust v XB and another [2012] All ER (D) 182 (Jun); [2012] EWHC 1390 (Fam) 1 May 2012 Medical treatment Withdrawal of treatment Advance decision Patient suffering with motor neurone disease Patient making advance decision to refuse treatment Whether patient having capacity to make advance decision Whether advance decision complying with formalities Whether advance decision time limited XB was diagnosed with motor neurone disease in 2001 when he was 57 years of age. In 2003, he had a tracheotomy and for at least eight years his breathing had been assisted by an invasive ventilation device. As a patient with long term invasive ventilation XB was unable to talk and had latterly communicated by movement of his eyes to the right to indicate that he agreed with the question that was being asked of him. At points in has signed a statement of truth when: n they knew that the statement was false; and n that they did so without an honest belief that it was true. Proceedings for contempt must be started promptly and may only be brought by the Attorney-General or with the permission of the court (see CPR Part (1)). An application for committal for contempt of court may be made by any interested party and does not need the permission of the Attorney-General. In KJM Superbikes Ltd v Hinton [2008] EWCA Civ 1280 where the Court of Appeal indicated that the A-G s involvement was not necessary. The applicant must seek permission to bring contempt proceedings from a High Court judge or the divisional court at a preliminary hearing. In the preliminary hearing of Kirk v Walton [2008] EWHC 1780, Cox J held that permission should be given where: n there is a strong prima facie case of contempt of court; n proceedings would be in the interests 2010 and 2011, XB had indicated that he wished to have life sustaining treatment withdrawn, but he had not expressed such a wish in what was considered to be a consistent form. In November 2011, he made an advance decision to refuse treatment. The document stated that he wished to have his ventilation removed in certain defined circumstances. The document was agreed to by XB, with his wife (YB), his general practitioner (XW) and a mental capacity coordinator (AW). XB s view in relation to the document was sought through a collaborative process by those who were there, whereby it was read out to him, and then each part was dealt with and questions were asked in a way to find out if XB consented. His consent was communicated by movement of his eyes. At the end of the advance decision, the date 2 May 2012 had been put by the date of review. That date had also been put by the part that said valid until. The applicant primary care trust applied for a declaration under s 26(4) of of justice and/or in the public interest; n proceedings would be proportionate and in accordance with the overriding objective; n but that the discretion should be exercised with great caution. The burden of proof is on the applicant and is to the criminal standard. At trial, Coulson J held in Kirk that the applicant must prove: n the falsity of the statement in question; n that the statement has already, or if persisted in would be likely to have, interfered with the course of justice in some material respects; n that at the time the statement was made, the maker of the statement: n had no honest belief in the truth of the statement;and n knew of its likelihood to interfere with the course of justice (ie, the award of damages). Karen O Sullivan, professional support lawyer, LexisNexis Louise Thomson, barrister, 12KBW the Mental Capacity Act 2005 as to the validity of the advance decision. The issues which fell to be determined were: (i) whether XB had had the capacity to make the advance decision; (ii) whether the advance decision had complied with the necessary formalities; and (iii) whether the advance decision was time limited. XW gave detailed oral evidence of the care that had been taken to ensure the terms of the document accorded with XB s wishes. YB gave evidence that XB had not agreed that there should be a date in the future when the decision would become ineffective. AW also gave evidence that he had not realised that there could be an end date to the advance decision. The court ruled: On the evidence, the court was entirely satisfied that XB had had capacity to make the advance decision, and that it had complied with all the necessary formalities to be an effective advance decision. Further, XB had not agreed to the advance decision to be limited to 2 May That was not something which had been discussed with or agreed to by him. The dates were in the context of keeping the advance decision under review. Personal Injury Newsletter 7

8 Legislation Legislation update Armed Forces and Reserve Forces (Compensation Scheme) (Amendment) Order 2012 Social Security (Industrial Injuries) (Prescribed Diseases) Amendment (No 2) Regulations 2012 Health and Safety (Fees) Regulations 2012 Enactment citation SI 2012/1573 Commencement date 21 July 2012 Legislation affected SI 2011/517 amended Enabling power Armed Forces (Pensions and Compensation) Act 2004, s 1(2) Enactment citation SI 2012/1634 Commencement date 1 August 2012 Legislation affected SI 1985/967 amended Enabling power Social Security Contributions and Benefits Act 1992, ss 108(2), 122(1), 175(1), (3), (4) Enactment citation SI 2012/1652 Commencement date 1 October 2012 Legislation affected SI 2010/579 revoked Enabling power European Communities Act 1972, s 2(2) This order amends the Armed Forces and Reserve Forces (Compensation Scheme) Order 2011, SI 2011/517 which provides for benefits to be payable to or in respect of a person by reason of injury or illness (whether physical or mental), or death, which is caused (wholly or partly) by service in the armed forces or reserve forces. The amendments make clear that where either para (4) or (9) apply, the exclusions relating to travel, sport and slipping and tripping do not apply. Articles 28 and 53 of SI 2011/517 are also amended to provide that there is a right of reconsideration in relation to claim decisions concerning medical expenses. New descriptions of injury or illness are also inserted into the tariff. The tariff lists the various forms of injury or illness for which compensation is payable, specifies a numerical tariff level and specifies for each tariff level the amount of compensation payable. Where a person sustains an injury which the secretary of state considers is sufficiently serious to warrant an award, he may make a temporary award, but must amend the tariff within one year of making the award if the award is to be made permanent. The new descriptors are the result of temporary awards having been made. These regulations amend the Social Security (Industrial Injuries) (Prescribed Diseases) Regulations 1985, SI 1985/967, which prescribe diseases for which industrial injuries benefit is payable. The amendments relate to the prescribed disease primary carcinoma of the lung, and include references to employment wholly or mainly as a coke oven worker: n for a period of, or periods of 15 years or more; or n in top oven work, for a period of, or periods of five years or more; or n in a combination of top oven work and other coke oven work for a total aggregate period of 15 years or more, where one year working in top oven work is treated as equivalent to three years in other coke oven work. From 1 October businesses will be required to pay the Health and Safety Executive (HSE) 124 an hour for investigation and enforcement if a breach of health and safety law is discovered during an inspection. New charges are also introduced for the assessment of onshore boreholes notifications. These regulations revoke and replace the Health and Safety (Fees) Regulations 2010, SI 2010/579. The regulations propose two new fees: n a fee for assessment of onshore boreholes notifications; and n a new type of fee, referred to as fee for intervention. Business will pay the fee for intervention of 124 an hour if a contravention is found during a HSE inspection or investigation. If a third party s involvement is required, the business will also have to pay for that involvement. The regulations cease to have effect five years after 1 October SUBSCRIBE TO BUTTERWORTHS PERSONAL INJURY NEWSLETTER BY FILLING IN THIS FORM 1 YES! I would like a 12-month subscription to Butterworths Personal Injury Newsletter, please invoice me for My Delivery Details *Required Fields *Title: *Name: *Surname: *Job Title: *Company: *Address 1: *Address 2: *Town: *Postcode: Telephone: 3 Return Your Order Signature Date / / Marketing Department, LexisNexis, Freepost RSJB-BCTH-ZGUB, Quadrant House, the Quadrant, Sutton, SM2 5AS Fax +44 (0) Privacy Policy We have a commitment to protect your privacy. We may use the information we collect from you to keep you informed of LexisNexis products and services. We do not sell, trade or rent your address to others, but we may pass your postal details to trusted third parties. If you do NOT wish to be kept informed by mail phone fax of other LexisNexis products and services, please tick the relevant box. If you do NOT wish your mailing details to be passed on to companies approved by LexisNexis, to keep you informed of their products and services, please tick the box. For further details of our privacy policy please visit our website at: Please quote response code AD Personal Injury Newsletter

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