Kumari v Kumar & Advantage Insurance
Keoghs Complex Injury team and Hastings Direct have secured the discontinuance of an estimated £10m alleged fundamental dishonesty claim, obtaining a precedent-setting costs protection order under QOCS. The claimant had attempted to transfer assets and claim impecuniosity.
The claimant was wheeling empty bins back to her house when her husband reversed his car into her. The insurance was placed through Hastings Direct and liability admitted for the accident. Advantage Insurance Company Limited were the second defendant to the claim.
Medical causation was contested but it was accepted that the claimant suffered injuries including fractures to her right leg with a delayed union. She did not make the expected recovery and alleged that she had developed complex regional pain syndrome (CRPS) in her right leg. She was dependent on a wheelchair and mobility scooter, but could use crutches for short distances. The claimant’s account of her days suggested she did little for herself, that she was unable to manage stairs and required help with day to day and overnight personal care. A significant claim for care was advanced.
Keoghs was approached by a member of the claimant’s family who stated that the claim was dishonest, providing video and photographic evidence. However they later retracted this, saying it was done in spite due to a family feud and that the evidence had been photoshopped.
Nevertheless, surveillance was undertaken of the claimant at a local airport as she returned from a family trip. This provided footage which the defendant said was inconsistent with her alleged reduction in mobility. Witness evidence was also gathered from various individuals including neighbours who confirmed they had seen the claimant mobilising without walking aids post-accident. The claimant contested the evidence and what the defendant said it illustrated.
Meanwhile, investigations uncovered that the claimant may have been running a business from home and deriving an income which hadn’t been declared during the course of the claim. Again this allegation was disputed by the claimant, stating that this business had instead been set up and run by other family members.
As the evidence continued to mount, Hastings’ defence was amended to plead fundamental dishonesty. The claimant disputed the allegations, stating that the evidence presented could be innocently explained.
Litigation was highly contentious and the matter was due for a 15 day trial at the end of 2023. However intelligence revealed that the claimant had transferred the ownership of her share in the matrimonial home to another family member shortly after the allegation of FD had been made. In 2022 the house was sold and the family member proceeded to buy another property where the claimant and her family began to reside. Keeping a keen eye on developments, Keoghs and Hastings sought an order for security for costs under CPR 25.12(1), to protect against the risk of being unable to enforce a future costs order against the claimant. Such an application is rarely made in personal injury claims, and this case was considered an untested issue in terms of whether such an order could be made in a case falling within the QOCS regime under CPR 44.14 and 44.15.
For in-depth information on the security for costs application and the case law behind our argument, click here.
The application was heard by District Judge Griffiths, in the Cardiff County Court in March 2023.
The court accepted that by transferring her share in the matrimonial home to another family member, who then sold the home and bought another property, the claimant had “put assets otherwise available for enforcement outside the reach of the defendant’s to seek enforcement of costs”.
The claimant contested that, given the claim was governed by QOCS and that they were impecunious, the order for security would stifle her claim.
DJ Griffiths accepted that whilst an application for security for costs is unusual in the context of personal injury claims, this does not mean an order cannot be made in the right case. He concluded:
“Just because it is a QOCS case, doesn’t mean I can’t make a security for costs order”.
DJ Griffiths next considered whether the claimant was impecunious and that an order for security for costs would stifle her claim, forcing her to give up her action. The only substantive evidence on these issues was a witness statement prepared by the claimant’s solicitor, stating the claimant had confirmed:
(a) She could not give security, her share in the matrimonial home had been gifted;
(b) The new property was not hers to pledge; and
(c) She had no other money to pledge.
The defence argued that this was hearsay evidence and wholly inadequate.
District Judge Griffiths concluded:
District Judge Griffiths concluded that it was just to make an order for security. He noted that the matrimonial home had been sold for £160,000, and the value of the claimant’s share in the property was likely to have been £80,000. Consequently he made an order for security for the defendant’s costs in the sum of £80,000, with the sum to be paid into court within 21 days. Finally, DJ Griffiths ordered the claimant to pay Hastings’ application costs.
Following the order the claimant discontinued her claim on 28 March 2023, over nine years post-accident, and six years from the commencement of litigation in 2017. The result sees perhaps one of the largest savings by any insurer in a case where allegations of fundamental dishonesty have been made. Although a final schedule of loss was yet to be provided, Hastings reasonably estimated damages to be around £5-£10 million with the claimant’s budgeted costs standing at almost £700k and a further budgeting request having been made to increase it.
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