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Section 57 applies in liability dispute case due to fundamental dishonesty

Hanif v Patel
Before HHJ Main QC
Manchester CC – 11 May 2016

A claimant who would have recovered 25% of his claim for damages following a road accident, had his claim dismissed under Section 57 of the Criminal Justice and Courts Act 2015 due to his fundamental dishonesty. Whilst fraud was not pleaded in the case and liability was in dispute, the Judge applied Section 57 as a result of the claimant attempting to advance a statement from a witness who was not at the scene when the accident took place, leading to the whole of the claim for damages being dismissed, including the claims for hire, recovery and storage.

DWF acted for the insurers in the defence of the claim for damages, which included hire, recovery and storage, as well as personal injury. The decision confirms that the application of Section 57 is not just confined to fraud cases and that it can also be applied to those cases where liability is in dispute. DWF Paralegal, Hasan Patel and DWF Director Jewels Chamberlain, look at the background to the case and how the court applied Section 57. Had the claim been brought before the introduction of Section 57, the insurer would have probably been liable to meet 25% of the claim and the claimant’s costs, but will pay nothing and will recover the lion’s share of their costs.

The advent of Section 57 of the Criminal Justice and Courts Act 2015

Section 57 of the Criminal Justice and Courts Act (CJCA) became law on 13 April 2015 and applies to all claims for personal injury, where proceedings were issued on or after that date. The first three subsections state:

(1) This section applies where, in proceedings on a claim for damages in respect of personal injury (“the primary claim”) —

(a) the court finds that the claimant is entitled to damages in respect of the claim, but

(b) on an application by the defendant for the dismissal of the claim under this section, the court is satisfied on the balance of probabilities that the claimant has been fundamentally dishonest in relation to the primary claim or a related claim.

(2) The court must dismiss the primary claim, unless it is satisfied that the claimant would suffer substantial injustice if the claim were dismissed.

(3) The duty under subsection (2) includes the dismissal of any element of the primary claim in respect of which the claimant has not been dishonest.

Whilst there are now a number of authorities on the application of fundamental dishonesty in the context of Qualified One-Way Costs Shifting (QOCS), which has applied since April 2013, there is no reported case law as to what might constitute fundamental dishonesty in the context of Section 57.

Background to the case

The claim arose out of a road traffic accident which occurred on 9 July 2013 in Blackburn, when the claimant’s Nissan Almera, came into collision with the defendant’s Vauxhall Zafira. The defendant was a mini-cab driver, who was at work and on his way to collect his next fare. As a result of the collision, the claimant pursued a claim for personal injury, hire charges and recovery and storage charges.

The claimant suggested that the collision occurred as a result of the defendant pulling out from a parked position to his nearside without warning and in front of his vehicle as he travelled along Stanley Street in Blackburn. The defendant contended that he had travelled along Stanley Street on his way to collect a fare. As he reached the point where his fare was to be collected, he slowed down and indicated right. As he was in the process of turning right, the claimant attempted to overtake him, causing the collision.

A defence was entered to the proceedings, denying liability and the parties went on to exchange witness evidence. The claimant served his own witness statement, to which was appended a ‘witness questionnaire’ from someone called Laura Dawson. In the questionnaire, Dawson suggested that she had witnessed the collision, whilst she had been walking along Stanley Street and that liability for the accident lay with the defendant. The claimant also served a statement from Saeed Akhtar, who was engaged by the claimant to locate the defendant.

The defendant served his own witness statement and a statement from Caroline Porter, who was an independent witness and the defendant’s next fare. Porter stated that the collision occurred as suggested by the defendant.

The case was tried before HHJ Main QC in Manchester County Court on 13 May 2016. The defendant was represented by Bill Rankin of Oriel Chambers. Both the claimant and the defendant gave their evidence via interpreters. During the course of the case, quantum of the whole claim was agreed, subject to liability in the sum of £5,700.

Facts

The claimant gave evidence that he was travelling along Stanley Street when he was suddenly confronted by a taxi, which was attempting to carry out a U-turn. The claimant stated that the defendant’s vehicle had been parked and stationary before the collision and that he had been entitled to overtake in the way that he did. After the collision, the claimant came to a halt and obtained some brief details from the other driver before the defendant left to collect a fare, although he denied seeing any fare present at the scene of the accident. Having asserted in his statement that he had not seen the defendant’s fare (Mrs Porter), the claimant initially stated during the course of his evidence that there had been a woman stood by a wall  - where Mrs Porter said she was. The claimant later retracted this and asserted the only woman he had seen after the accident was Laura Dawson who was some 100m away from where the wall was.

There was a suggestion by the defendant that they meet at some later point to exchange details, as the defendant needed to get off. The claimant’s evidence was that he was then able to approach Laura Dawson and get her details. Despite waiting for the defendant at the pre-arranged meeting spot, the defendant did not show. The claimant reported the accident to the Police in the early evening of 9 July but then engaged, via a friend of his called Saeed Akhtar (an insurance broker), the services of another man, also named Saeed Akhtar (a taxi driver) to trace the defendant. When the defendant was traced it was suggested that the defendant subsequently apologised and the parties went on to exchange details.

In his evidence the defendant said that he slowed down, indicated and was in the process of turning right when the claimant sought to overtake and collided with the front offside of his vehicle. The claimant then reversed, turned around and left the scene. In due course the defendant reported the accident to his insurers, but at that stage he did not know the claimant’s identity until he received a visit to his home from Saeed Akhtar (the insurance broker) and two other individuals. During the course of this visit, it was suggested to the defendant that he might enter into a criminal conspiracy, something that the defendant had no interest in. The defendant also reported the accident to the police.

Porter said in her evidence that she saw the defendant travelling along, slow down and indicate right and whilst he was in the process of turning right, the claimant turned to go around him and there was then a collision. She saw (but did not hear) the two drivers briefly exchange words and the claimant then left the scene. Caroline Porter disputed the presence of any other pedestrian on Stanley Street.

Findings

Having heard all the evidence, HHJ Main held:

  • There was an attempt to engage the defendant in a fraud and a conspiracy

  • Laura Dawson’s witness statement had been attached to the claimant’s statement in an effort to persuade the Judge that someone has witnessed the accident, when they had not and that the defendant was lying

  • The claimant had perpetrated that “unsavoury feature”

  • The collision occurred as the defendant suggested and he was undertaking a turn that he was entitled to make

  • But in making the turn, the defendant turned across the claimant’s path and the claimant was probably there to be seen

  • As a result, the defendant contributed to the collision taking place

  • Due to the bogus witness questionnaire and the claimant’s conduct, the claimant had been fundamentally dishonest

  • As a result of the claimant’s fundamental dishonesty, although the claim should have been allowed it should be struck out

Having reached that conclusion, subsections 4 and 5 of Section 57, then came into play:

“(4) The court's order dismissing the claim must record the amount of damages that the court would have awarded to the claimant in respect of the primary claim but for the dismissal of the claim.

(5) When assessing costs in the proceedings, a court which dismisses a claim under this section must deduct the amount recorded in accordance with subsection (4) from the amount which it would otherwise order the claimant to pay in respect of costs incurred by the defendant.”

The Judge recorded that, but for the fundamental dishonesty, the claimant would have recovered £1,425 in respect of the primary claim, representing 25% of the claimant’s claim. The judge then went on to order that the claimant would meet the defendant’s costs of the action on an indemnity basis, to be assessed if not agreed and that the defendant would have permission to enforce their costs, pursuant to CPR r.44.16. The defendant will recover their costs, over and above the amount that the claimant would have received, were it not for his fundamental dishonesty (the sum of £1,425).

The Judge also ordered the claimant to repay an interim payment back to the defendant in the sum of £1,145, an amount that had been paid to the claimant on a without prejudice basis in an effort to mitigate the amount of any credit hire claim.

Comments

This is the first time that we are aware of that Section 57 of the CJCA has been applied to a case where liability was in dispute and this is a groundbreaking decision. The scope of Section 57 is not simply confined to "fraud cases".

Although fraud was not pleaded in the defence, having heard all the evidence, the Judge was prepared to apply Section 57 and conclude that the claimant had been fundamentally dishonest.

The Judge concluded that the claimant had been fundamentally dishonest on the strength of the claimant appending the witness questionnaire to his witness statement, although the defendant had corroborating evidence from Porter that there was no such other witness at the scene.

There are two scenarios in which this outcome could not have been reached. Had the claimant issued proceedings on 12 April 2015 (so that Section 57 did not apply), then one assumes that the claimant would have recovered 25% of his claim and possibly the costs of the action, as the mechanism to dismiss the claim would not have been available to the Judge, in what was a liability dispute. Similarly, had the claimant not pursued a claim for personal injury, then Section 57 could not have been applied (there would be no “claim for damages for personal injury”).

 

Practice points

  • Section 57 can apply to cases where liability is in dispute

  • Section 57 can have application in cases where neither fraud nor fundamental dishonesty is pleaded

  • Where Section 57 does apply, then the whole claim is struck out

  • Where a claim has been dismissed, a judge can order repayment of any interim payment

  • Had the claimant been carrying a passenger who supported the claimant in his contention that there was a witness at the scene, then Section 57 could also be applied to any injury claim that the passenger might have brought (subsection 1 (b) of s.57 - fundamental dishonesty in a ‘related claim’)

Contact

For further information about this case, please contact Jewels Chamberlain by telephone on 01772 554126, or by email jewels.chamberlain@dwf.law

By Jewels Chamberlain

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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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