A weekly news bulletin from Greenwoods Issue 264: 24 March 2011 In this issue - Personal injury/fraud - Civil procedure/withdrawal of admission - Personal injury/adjournment of quantum assessment - From within Greenwoods - Article - Chronic pain Seminars - Understanding Financial Statements - Meet the Mediators - Tort of Deceit Bristol One Redcliff Street BS1 6NP T. 0117 910 0200 London Bedford Square 18 Bedford Square WC1B 3JA T. 020 7323 4632 London Market Office 77 Gracechurch Street EC3V 0AS T. 020 7220 7818 Manchester 57 Spring Gardens, M2 2BY T. 0161 245 6520 Milton Keynes 2 Eskan Court Campbell Park MK9 4AN T. 01908 298200 www.greenwoods-solicitors.com PERSONAL INJURY/FRAUD Following the defendant s appeal, the case of Noble v Owens (2011) EWHC 534 (QB) was sent by the Court of Appeal back to the court at first instance for a trial of the issue of whether a significant part of the award of damages to the claimant had been fraudulently obtained. The claimant had been severely injured in 2003 when his motorcycle was in a collision with a car driven by the defendant, who admitted liability. In 2008 damages were assessed in the sum of 3,397,000. The award was based on severe impairment of the claimant's mobility, which was supported by expert medical evidence confirming that it was unlikely there would be further improvement. The claimant had stated that he intended to use any award to provide the care and facilities he required. Following the award, the claimant and his partner bought a property with adjoining land. The defendant's insurers obtained fresh evidence, including surveillance evidence of the claimant carrying out various activities on the land without aids such as crutches, which they considered showed that he had deliberately misled the court regarding the extent of his mobility and disability. At the fresh hearing, further evidence from the claimant's consultant orthopaedic surgeon indicated that patients with comparable injuries occasionally achieved improved mobility more than three years after surgery. The defendant argued that the only credible explanation for the claimant's significantly improved mobility was that he had dishonestly reported the extent of his disability to the medical experts and had given false evidence to the court in the first trial. Further, the defendant submitted that the claimant had a propensity to be dishonest, demonstrated by false accounting to the Inland Revenue revealed at the first trial; by the fact that he had done virtually none of the things he had stated he intended to do in relation to his future care; had given false evidence on various matters; and had changed his case to fit with the medical evidence. In finding in favour of the claimant, the High Court judge held that the burden was on the defendant to prove that the claimant had obtained a substantial part of the damages by dishonestly and knowingly misrepresenting the true level of his disability to the experts and the court at the quantum trial. His general demeanour in the witness box did not indicate that he was lying. The fact that he had cheated the Inland Revenue and had not used his damages to acquire the services and facilities for which they were awarded counted against him, but it did not follow that he was guilty of dishonestly misrepresenting the true extent of his disability. Once compensation was in the hands of an injured claimant they might decide, contrary to their previous attitude, to spend the money received on things which they considered compensated them for their loss of amenity. Although there were suspicions regarding the claimant's evidence that did not mean it was knowingly false. His partner s evidence was straightforward and convincing and their assertion that his improvement was partly due to his over-reliance on painkillers was accepted. His improvement was significant but it did not follow that he was capable every day of doing what was seen in the surveillance evidence. The expert's evidence was of considerable significance and there were other factors supporting the evidence of the claimant and his partner. Surveillance footage carried out before the first trial did not show the claimant walking unaided, there was independent witness testimony of him using crutches and he had reported improvements when seen by his expert and other medical experts prior to the first trial. If he had dishonestly concealed his true state of mobility, he would have had to have spun an extremely wide and complicated web of deception. In the light of the evidence, and the expert medical evidence particularly, the defendant had failed to prove the allegation of fraud. Although there were reservations regarding some aspects of the claimant's evidence, overall he was truthful when denying that he had misstated the extent of his disability at the quantum trial. At the time of that trial, he was determined to try to walk unaided and might have been confident that he could somehow succeed in doing so but he had not dishonestly concealed his true state of disability or dishonestly emphasised his disability. Personal Injury l Property & Construction l Insurance l Commercial & Financial Risks l Fraud l Health & Safety l Motor Prosecutions
Page 2 of 5 CIVIL PROCEDURE/WITHDRAWAL OF ADMISSION CPR 14.1.A states 14.1A: (1) A person may, by giving notice in writing, admit the truth of the whole or any part of another party's case before commencement of proceedings (a pre-action admission ). (3) a person may, by giving notice in writing, withdraw a pre-action admission; (a) before commencement of proceedings, if the person to whom the admission was made agrees and; (b) after commencement of proceedings, if all parties to the proceedings consent or with the permission of the court. When the court is considering an application for permission to withdraw an admission reference is made to PD 14-7.2. In deciding whether to give permission for an admission to be withdrawn, the court will have regard to all the circumstances of the case, including: (a) the grounds upon which the applicant seeks to withdraw the admission including whether or not new evidence has come to light which was not available at the time the admission was made; (b) the conduct of the parties, including any conduct which led the party making the admission to do so; (c) the prejudice that may be caused to any person if the admission is withdrawn; (d) the prejudice that may be caused to any person if the application is refused; (e) the stage in the proceedings at which the application to withdraw is made, in particular in relation to the date or period fixed for trial; (f) the prospects of success (if the admission is withdrawn) of the claim or part of the claim in relation to which the offer was made; and (g) the interests of the administration of justice. In Woodland (a minor) v Stopford and another (2011) EWCA Civ 266 the court considered the application of these principles. The claimant had suffered a hypoxic brain injury during a school swimming lesson at a local authority swimming pool. She was then aged ten. The school had arranged for the first defendant/respondent to provide the swimming lesson. She was not present at the lesson which was given by another person engaged by her. The second defendant/respondent, who had also been engaged by the first defendant, was acting as lifeguard. Teachers and local authority staff were also present. The first defendant was a member of an association, which had insurance cover which covered her and the second defendant. The claimant's solicitors sent a letter of claim to the first defendant pursuant to the personal injury pre-action protocol. The reply was from claims handlers engaged by the association's insurer denying liability. The Health and Safety Executive had prepared a report into the incident and prepared a further report at the behest of the claimant's father. Some five years later the report was sent to the claims handlers who then conceded liability. About eighteen months later the association retracted the admission. The claimant then issued proceedings. Her claim for damages exceeded 2M. The judge permitted the admission to be withdrawn under CPR 14.1A on the basis that the balance, albeit by no great margin, came down in favour of the association. The claimant appealed. She accepted that inasmuch as the admission bound the first defendant the withdrawal by the association should be treated as having been made on her behalf also. The claimant submitted that the judge failed to give proper weight to the fact that no new evidence prompted the withdrawal of the admission, which was made only after a re-appraisal of the facts and there was no proper explanation for the change of mind. In dismissing the appeal, the court found that CPR 14.1A(3) conferred a wide discretion on the court to allow the withdrawal of a pre-action admission and CPR PD 14.7.2 listed the specific factors the court had to take into account in addition to the need to have regard to all the circumstances of the case. Those factors were not listed in any hierarchical sense, nor was it to be implied in the Practice Direction that any one factor had greater weight than another. Sometimes the lack of new evidence and the lack of explanation might be important considerations. In other cases prejudice to one side or the other would provide a clear answer, and in all the interests of justice would sway the balance. The judge had well in mind the fact that there was no new evidence to justify the change of stance. He correctly directed himself that the court could permit a party to withdraw an admission where no new evidence had come to light. The association did give an explanation for the reappraisal, namely that there had been insufficient investigation of the facts, and in particular blamed the claims handlers for failing to obtain detailed witness statements from the principal individuals involved and other failures. The judge had considered those factors which supported the claimant but also had in mind prejudice, which he analysed fairly, the stage in the proceedings, which he did not consider to be too late, the prospects of success, which he concluded were there and the overall interests of the administration of justice, all of which required a balance to be struck at the end of his assessment of the weight to be given to those matters. He weighed the factors for and against and was entitled to conclude that the balance came down in favour of the association. PERSONAL INJURY/ADJOURNMENT OF QUANTUM ASSESSMENT In Alexander v O'Brien [Lawtel 17/03/2011] the claimant applied for a trial date, fixed for some months after the application hearing, to be vacated. He had sustained severe injuries in a road traffic accident in September 2005 in which the defendant had been killed. He brought the claim against the defendant's estate. Liability was agreed on an 80/20 basis, in favour of the claimant, with quantum to be assessed. After the accident, the claimant was convicted of criminal offences committed before the accident. At the time of this hearing he was serving a custodial sentence from which he was due to be released in mid 2012. The claimant sought the adjournment until at least mid 2013.
Page 3 of 5 cont d In relation to the damages claim only the claimant had instructed care experts. They were unable to say what his needs would be given the state of the medical evidence. It was said that he should be rehabilitated following release and then the care experts could make a proper assessment of the appropriate care package. The defendant submitted that the directions for trial had been given the previous year when all the difficulties were known or foreseeable; the relevant residential unit was secure and there was a likelihood that the claimant would not wish to go or stay there; the care experts could cost on an alternative basis; it was not infrequent that the courts found it difficult to assess the future. The claimant argued that it was better to wait and make findings against a known background. In refusing the application, the court found that there were doubts as to whether residential rehabilitation was a practical option for the claimant. The unit identified was hundreds of miles from his home. It was a long time since the accident and in principle a further extended adjournment was not desirable. It was not appropriate to grant the adjournment. It had been sought against a double contingency that rehabilitation would be undertaken and that it would give rise to a situation in which firm projections could be made. It was not just to adjourn the trial any further. The trial judge would be in a position to make appropriate findings or deal with the matter in some other just way and the claimant's care expert would be able to submit a report. FROM WITHIN GREENWOODS ARTICLE - CHRONIC PAIN Handling Complex Regional Pain Syndrome Cases (by John Lezemore, Associate Partner) Of all chronic pain litigation, Complex Regional Pain Syndrome cases can be the most straightforward from the insurer and lawyers point of view since unlike the other chronic pain conditions Complex Regional Pain Syndrome can be the least invisible. The symptoms and signs of the condition are very often (in our experience) visible to the naked eye. The condition is anything but straightforward for the individual suffering from it, since (in our understanding) it can involve excruciating pain. The JSB guidelines accord a range of figures for general damages from 16,000 to 66,000. There are two types of Complex Regional Pain Syndrome: Type 1: where there is no demonstrable nerve damage; and Type 2: involving obvious nerve damage. Both types of CRPS may follow injury or surgery. Classic signs of Complex Regional Pain Syndrome The symptoms are (apparently) usually present near the site of the injury: 1.Burning pain 2. Swelling 3. Abnormally increased sweating 4. Change of skin temperature 5. Change in colour of limb/affected are 6. Softening and thinning of bones (in the affected area) 7. Rapid hair and nail growth (later hair growth diminishes and nails crack) 8. Constriction of blood vessels 9. Muscle atrophy How is the condition diagnosed? It appears to us that some medico legal experts have a lower threshold for diagnosis than others. Some experts seem to diagnose the condition even when there are not many of the visible signs. The International Association for the Study of Pain lists the diagnostic criteria for Complex Regional Pain Syndrome (Type 1) as follows: 1. The presence of an initiating noxious event or a cause of immobilisation. 2. Continuing pain, allodynia (perception of pain from a non painful stimulus) or hyperalgesia (an exaggerated sense of pain) disproportionate to the inciting event. 3. Evidence at some point of oedema (swelling), changes in skin blood flow, or abnormal pseudo motor activity in the area of pain. 4. The diagnosis is excluded by the existence of any condition that would otherwise account for the degree of pain and dysfunction. Type 2 Complex Regional Pain Syndrome is diagnosed as follows: 1. The presence of continuing pain, allodynia, or hyperalgesia after a nerve injury (not necessarily limited to distribution of the injured nerve). 2. Evidence at some point of oedema, changes in skin blood flow, or abnormal pseudo motor activity in the region of pain. 3. The diagnosis is excluded by the existence of any condition that would otherwise account for the degree of pain and dysfunction. Plainly insurers and PI lawyers should be careful that their appointed medico- legal experts have considered the criteria fully. We are aware that there is some scepticism amongst some doctors about the diagnostic criteria set out above. Our understanding is that there is no specific determinative test for CRPS but there are a variety of tests, which can be used to build up a picture (and in each case of CRPS you should ask of your expert(s) whether the various tests have been carried out): a) Thermography b) Sweat testing c) X-rays d) Electro-diagnostics
Page 4 of 5 cont d Thermography is a test which (perhaps) can be used in building up a picture of Complex Regional Pain Syndrome. The result is an image of the affected area with colours representing different temperatures. If there is a temperature difference between limbs this may, it seems, point towards a positive diagnosis. We are informed, however, that the test may have its limitations. For instance what if the claimant has recently exercised? What about a claimant who has used a lotion in the area? Blood flow is affected by other factors. Ask your expert(s) whether they have carried out sweat tests. X-rays are also important because they may reveal a diminishing in the quality of bone material due to disuse of the affected part of the body. Ask your experts whether x-rays show osteoporosis or a reduction in bone density (following bone densitometry testing). If not then the defendant may find itself in a position where the condition may be less likely. So what if the claimant really does have Complex Regional Pain Syndrome? It appears that treatment involves medication and physical therapies. One form of drastic treatment that insurers and PI lawyers may come across is the spinal cord stimulator. This is a device which is placed surgically into the spinal cord. In a case that we dealt with recently the consultant rheumatologist we had instructed expressed very grave concerns about the use of a cord stimulator not least because the claimant was not displaying the classic signs and symptoms of the Complex Regional Pain Syndrome. He went on to describe the possible side effects of what he viewed as potentially mutilating surgery. The risks appear to include paralysis or death. (We should point out that the expert was discussing a particular case). As we understand it provided the condition is managed clinically from an early stage a claimant can expect to make a good recovery. On the other hand if significant changes to the claimant s body have occurred and some of the worst effects of the disease have manifested themselves, then the condition may not improve and the claimant may be left with a serious or very severe disability. Litigating complex regional pain syndrome cases In terms of litigating Complex Regional Pain Syndrome cases the defendant will want to see all of the claimant s pre and post-accident records. Plainly the defendant needs to know whether there was anything in the claimant s pre-accident history which meant that the claimant would have a disability, regardless of the happening of the accident. If that is not the case and the claimant enjoyed good health before the accident, the records still assist in forming a picture of the development of any Complex Regional Pain Syndrome. The defendant will want to crossreference the complaints made by the claimant (as recorded in the notes) to the diagnostic criteria and the classic signs and symptoms of the condition. Ultimately the defendant will require a robust expert (one who insurers and defendant PI lawyers know to be circumspect). You will want to ask your expert whether they have (a) identified the classic signs and symptoms, (b) carried out the various tests to validate the criteria before reaching the diagnosis. An expert is entitled to produce a draft report in the first instance and upon receipt, insurers or defendant solicitors should discuss with their expert the criteria described above to ensure the report accurately reflects the expert s thinking. Where clinical records and a robust medico legal expert (for the defendant) tend to suggest that the claimant is suffering from advanced Complex Regional Pain Syndrome frequent surveillance is probably not going to be worthwhile. Insurers may wish to commission a short period just to double check there is no disparity between the case reported to the doctors and reality. In those cases where there is a significant question mark over whether the condition actually exists; where the claimant does not display the classic signs and symptoms; but the claimant s expert is still adamant that the claimant is suffering from entrenched Complex Regional Pain Syndrome, surveillance evidence can be invaluable. If you have any questions about Complex Regional Pain Syndrome cases then please do not hesitate to contact John Lezemore at chronicpain@greenwoods-solicitors.com or T. 0207 4623441. (Please note that the views expressed above do not represent medical opinion but are based on widespread experience of handling Complex Regional Pain Syndrome cases from a lawyer s point of view.) Further information For further information on any of the issues dealt with in this Alert, other than where a contact has been provided, please contact Geoff Owen on T. 01908 298216 or E. gro@greenwoods-solicitors.com To subscribe or unsubscribe from this Alert, please email crm@greenwoods-solicitors.com
Page 5 of 5 Seminars Greenwoods holds a series of training events for both our lawyers and interested clients. Below are those events being held in the next couple of months. If you would like to attend any of the following seminars please email crm@greenwoods-solicitors.com, indicating which you are interested in attending. UNDERSTANDING FINANCIAL STATEMENTS 31st March 2011 08.30-09.30 77 Gracechurch Street Gary Joyce London EC3V 0AS Kingston Smith LLP MEET THE MEDIATORS 7th April 2011 14.00-15.00 77 Gracechurch Street Matthew Greenberg & Mark Jackson-Stops London EC3V 0AS In Place of Strife TORT OF DECEIT 13th April 2011 16.30-17.30 57 Spring Gardens Brian McCluggage Manchester M2 2BY 9 St John Street Other Greenwoods publications Greenwoods produces a number of regular publications on various topics, namely: PROPERTY, CONSTRUCTION & INSURANCE REVIEW (Monthly) MOTOR CRIME FOCUS (Quarterly) FRAUD REVIEW (Quarterly) H & S REVIEW (Quarterly) MARINE INSURANCE REVIEW (Quarterly) If you would like to subscribe to any of the above publications, please email crm@greenwoods-solicitors.com, indicating which you would like to receive. The information and opinions contained in this document are not intended to be a comprehensive study, nor to provide legal advice, and should not be relied on or treated as a substitute for specific advice concerning individual situations. This document speaks as of its date and does not reflect any changes in law or practice after that date. Greenwoods is a firm of solicitors regulated by the Solicitors Regulation Authority in England and Wales. You can access the rules which regulate our professional conduct at: www.rules.sra.org.uk Greenwoods Solicitors 2011