Director of Casualty Fraud, Nina Dayal, discusses a hat-trick of ground-breaking cases for the Keoghs casualty fraud team.
The new rule on fundamental dishonesty for personal injuries came into force on 13th April 2015 under Section 57 of the Criminal Justice and Courts Act 2015. Whilst our colleagues in motor fraud have been successfully using Section 57 as an effective weapon against fraud since its inception, casualty claims had seen no officially recorded instances of Section 57 being applied.
As a consequence, to win three such cases with Zurich within the space of a few weeks represents something of a breakthrough. In this article we examine the details of all three cases and consider the implications.
The claimant alleged that he sustained a back injury as the result of an accident at work when digging out a trench. Although the defendant conceded breach of duty, the claimant was put to strict proof that the accident occurred and that he had suffered the injury and loss alleged.
The initial claim was for loss of earnings, care and miscellaneous expenses including alleged ‘handicap in the labour market’ and was pleaded at nearly £10,000. The claimant’s medical evidence also attributed two years of back symptoms and ongoing restrictions to the alleged accident.
Fraud concerns arose when we found out that the claimant was working as a carer despite his alleged restrictions to perform manual work. We also found a witness who had seen the claimant washing and driving his car only days after the accident and another witness who saw the claimant seven days post-accident, bending down to tie his shoe laces without any apparent restrictions. Although the witness who had seen the claimant driving his car didn’t give evidence, we prepared a hearsay statement from the person she told. This same individual also confirmed that the claimant had been seen bending down to tie his shoe laces.
We then reviewed the claimant's medical records which showed he had been laying a patio and playing sport two and a half months after the incident and had failed to seek any medical treatment thereafter.
We alleged fundamental dishonesty, stating that the claimant’s presentation of symptoms was dishonest. We also argued that the claim alleging that the claimant was ‘handicapped’ in the labour market was advanced in bad faith, the claimant being wholly aware that the medical evidence did not support such a claim. As to the loss of earnings, it was accepted that the initial two week absence from work may have been reasonable (subject to causation being proven) but we said that any losses thereafter were dishonest.
Incredibly, after acknowledging that he had been seen washing his car, the claimant took the step of advising his GP that he had not done so and a note to this effect was recorded!
At trial the claimant performed poorly, providing inconsistent evidence. Despite us not producing a direct witness to the car washing, the judge was satisfied that the claimant must have performed this task for it to have been recorded in his notes.
The judge stated that, whilst the claimant had suffered some injury arising from the defendant’s breach, he had dishonestly exaggerated his symptoms, his claim that he was now handicapped in the labour market, his lost earnings claim beyond the initial 2 weeks and his care claim.
The judge then found that such dishonesty was fundamental and made an appropriate finding subject to section 57. He stated that damages would have been awarded in the total sum of £2,456.84 which was deducted from the defendant's costs of £7,745.00. The claimant was therefore directed to pay our client £5,288.16.
In this case the claimant alleged that he was working at the defendant’s premises, unloading and loading barrels when one struck him on the back of the head causing injury. He pleaded that he was not provided with a helmet until his return to work following the incident.
Liability was conceded, including causation, however, it became apparent that the claimant had considerably exaggerated and fabricated symptoms following the incident leading to a plea of fundamental dishonesty.
The claimant told his expert that, following the incident, he lost consciousness on the way to hospital, going into a ‘minor coma’ for 12 weeks. He also stated that he vomited every time he moved and returned to work over two months after the accident.
We obtained medical records which showed that he did not lose consciousness at any point and most certainly did not lapse into a minor coma. Furthermore, the defendant’s disclosure showed that he returned to work the day after the incident!
Part 35 questions were put to the claimant’s expert and the responses were helpful in undermining the claimant’s credibility.
At trial, the claimant’s evidence was particularly poor, contradicting the information contained in his Particulars of Claim, witness statement and medical report. The judge acknowledged that the claimant had not merely exaggerated symptoms owing to poor recollection, but had invented symptoms which went to the heart of the claim and would have markedly increased any damages awarded.
On that basis, the judge found the claimant to have been fundamentally dishonest and dismissed the claim. For the claimant’s dishonesty, damages were assessed at £2,500, which was deducted from the costs awarded to the defendant of £5,605 leaving a net costs order in favour of the defendant of £3,105.
In our third case, we admitted that the claimant was struck by two metal pick trolleys at work and that, albeit a minor incident, the defendant was at fault.
The claimant said that he suffered a 3-6 month soft tissue injury to his left ankle and a 2-4 week soft tissue injury to his lumbar spine. He alleged that he was off work for three months post-accident, claiming the sum of £2,550 for loss of earnings. He also advised his own medical expert that he had attempted to return to work but his Occupational Health Nurse had declared him unfit.
A claim for loss of enjoyment of £300 for a pre booked holiday to Jamaica between the 17th September and 11th October was also advanced.
There was no mention of a back injury in the claimant’s medical records and his occupational health records showed that the claimant had returned to work two weeks post-accident, working regularly for a month before going on sick leave on the 14th September 2012.
The claimant attended his GP suggesting that Occupational Health had advised he needed a further four weeks off work when, in fact, the defendant’s Occupational Health Nurse had declared the claimant fit for amended duties on the 12th September. The defendant also had no knowledge of any pre-booked leave for a holiday to Jamaica.
Following some searching Part 35 Questions from Keoghs, the medical expert agreed that a back injury did not occur and that the claim for loss of earnings was inconsistent. The expert also stated that the claimant failed to mention the claim for loss of enjoyment during his initial examination and concluded that this head of claim conflicted with the level of injury suffered, especially given the claimant had already been back at work.
Following responses from the medical expert and exchange of witness evidence, we made a successful application to rely on an amended defence pleading fundamental dishonesty arguing that, whilst an incident occurred, there was no objective evidence of any injury. Even if an injury did occur, we contended that it would have been to the claimant’s ankle and worth approximately £1,500.
We deemed the back injury, loss of earnings and loss of enjoyment of holiday (totalling approximately £4,150) to be ‘dishonest’. As such, we argued that the claimant had fabricated or exaggerated his injuries and loss in an attempt to increase the value of his claim and in order to obtain a higher award for damages. In accordance with the guidance set down in the case of Gosling, this excess was over 50% of the value of the ‘genuine’ claim, therefore we contended that he should be found fundamentally dishonest.
On the morning of the trial, the claimant offered to discontinue on the proviso that the defendant would not make any claim for costs. This offer was rejected and we proceeded to trial where the judge agreed with our submissions and found that the claimant was fundamentally dishonest. The entire claim was consequently struck out under s.57 CJCA, with the defendant awarded costs on the indemnity basis in the sum of £5,395.40. The claimant's damages were assessed at £1,965.36 and this was deducted from the costs awarded thereby resulting in a final costs order of £3,430.04
These are the first three cases we are aware of which successfully applies Section 57 to casualty fraud and opens the door for employee liability and public liability claims to be dismissed at trial. Prior to such a mechanism being available to the judge, Zurich may well have been saddled with large and unjustified pay outs, in addition to costs.
As such these are welcome results for the industry, demonstrating that the same outcome can be achieved when fighting fraudulent casualty claims. It is vital to ensure that the right cases are identified, investigated and defended with the key here being the inconsistencies we uncovered in the evidence. Whilst the judges accepted that there had been some injury, the entirety of both claims had been tarnished by the dishonesty of the claimant.
Fraudsters will maximise all opportunities and this should be a warning to claimants who seek to exaggerate their otherwise genuine claim that they risk jeopardising the entirety of their claim leading to significant costs penalties. Fraudulent casualty claims remain a concern and insurers will take every step to vigorously defend such cases, ensuring the continued fight against fraud.
Nina Dayal
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