“Things gained through unjust fraud are never secure.”
Sophocles
If only. However, things do at least seem to be getting less secure for those advancing apparently dishonest credit hire claims; the courts are more alive to the issues that arise time and again in these types of cases, and they are imposing tighter directions, backed by more rigorous procedural sanctions, as the litigation progresses.
My aim in this article is to give a flavour of some of the issues and problems I have noticed, and some practical guidance on the steps that can be taken, to give defendants the best possible chance to defeat such claims, or at least settle them on favourable terms. I focus on credit hire issues alone rather than the frequently encountered suspicious circumstances of the accident itself, although there is of course a great deal of overlap between the two areas.
The gold standard will always be to show some kind of suspicious association between the claimant and the credit hire company that predates the index accident. This is not commonly found, since many bogus credit hire claims are organised by relatively sophisticated criminal enterprises with no prior associations with the claimant, but it does still happen (often, in my experience at least, in claims from the Milton Keynes and Bedford areas). The key here is good quality intelligence.
Searches should be repeated at regular intervals. They may reveal multiple accidents where the claimant used the same hire company, one or more past addresses shared with members of the credit hire company (whose identities can often be sourced, and witness statements obtained, using investigation agents). Use of carefully phrased Part 18 questions can be used to entice the claimant to deny that which should hopefully turn out to be undeniable.
Good quality intelligence is useless in practice if it cannot be rendered into a form that is readily comprehensible by the trial judge. It should be exhibited to a witness statement from the maker of the evidence, who should be prepared to come to court to explain the evidence and its provenance.
The key points should be put into a logical and easy to understand table. Typically however, where evidence of this form is available the case will never see the inside of a courtroom in any event.
The silver standard is to show that the address for the credit hire company (and perhaps the storage company) leads your investigator to a pretty ordinary terraced house on something that looks not dissimilar to Coronation Street.
This in itself will not be sufficient to defeat the claim, as astute opponents will point out that photos of the hire company’s given address (with nothing more) denies the company the chance to explain that they merely run the admin from the nerve centre on Coronation Street and in fact have their fleet of shiny people carriers a few streets away in an extensive lock-up.
As such, evidence calling into question the existence of the hire company should be presented in the form of a witness statement from an investigator who has, not only attended the premises, but also spoken to a representative of the CHO, and, hopefully, has been presented with an implausible story about where the hire cars are kept and where the claimant’s damaged vehicle was stored.
At the same time, the investigator should seek to obtain as much detail as possible from the representative regarding;
Corresponding carefully phrased Part 18 questions can then be put to the claimant in order to secure, with luck, interestingly different responses on some, or all, of these issues.
The bronze standard, although many judges are very interested in these kinds of issues, is to show the credit hire company has hopelessly failed to comply with important regulatory requirements.
Internet searches can reveal whether the hire car was appropriately insured, taxed and MOT-ed at the time of hire.
In taxi cases, it is straightforward to check with the relevant local authority whether the hire car is licensed for its suggested purpose.
DVLA searches as to ownership (or rather keepership) of the hire car can also, in some cases, reveal that the claimant has been a previous keeper (thus shading into gold standard evidence, especially if any previous connection to the hire car is denied by the claimant in response to a Part 18 question). The same result can be obtained by doing DVLA searches on the claimant’s own car, to see if it was previously owned by a member of the credit hire company.
The VAT registration number on any hire or storage invoice should be checked to see if it is genuine. It is possible to cause a lot of fuss about hefty invoices that do not attract VAT – how does the ‘company’ miraculously manage to stay below the VAT registration threshold? Do they only do two or three hires per year?
The claimant’s own financial and insurance position should not be overlooked. If he was driving without insurance at the time of the accident then a defence based on ex turpi causa can be raised.
Careful examination of documents disclosed in support of a plea of impecuniosity can reveal amongst the self-employed a less than entirely candid presentation of their income to HMRC. Many judges will draw seriously adverse inferences as to the claimant’s general credibility in such circumstances.
It has always been important to seek tight directions on allocation and to enforce compliance with the same via applications for unless orders.
The importance of this tactic is all the greater in our brave new procedural landscape post 1 April 2013. I have recently found Courts being far less willing to grant relief from sanctions, and much more ready to grant unless orders at an early stage in the litigation.
Don’t miss the opportunity to impose onerous unless orders with which a recalcitrant claimant is unlikely to comply. I recently had a claim struck out for failure to translate statements of case and witness evidence (providing the appropriate translator’s statement of truth, in compliance with CPR 22PD.3A). The issue of the claimant’s linguistic capabilities had only emerged from a close reading of the medical records, which showed his son translated when he went to the GP. Notwithstanding this, he had been blithely signing important court documents in his own name in English for several months, some of which showed off his, “detailed understanding,” of his, “contractual obligations,” to the hire, “company.”
Finally, the clearer and more focussed the defence, the easier it is to obtain directions that put the claimant on the back foot from the word go.
It is, in any event, very risky to run to trial in the current climate with a “put to proof” defence, when in effect the defendant seeks to present a positive case that the claim is fraudulent.
Niall Maclean
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