THE FIGHT AGAINST FRAUD – SUCCESS OR FAILURE?

pichris_rafferty By Chris Rafferty

Earlier this month the Scottish government set out its plans to introduce legislation emulating the funding arrangements which have now been in place south of the border for some time. The Expenses and Funding of Civil Litigation Bill, expected to be introduced next year, will permit DBAs to be enforceable by solicitors and will introduce a regime of QOCS, now three years old, countrywide. Though there are few details on how QOCS will work in practice, it is reasonable to expect that the exceptions in the current system will apply equally to the new regime.

How then has the exception contained in r44.16(1) fared over the past few years? A quick recap:

“Orders for costs made against the claimant may be enforced to the full extent of such orders with the permission of the court where the claim is found on the balance of probabilities to be fundamentally dishonest”.

At its inception there was much criticism as to how effective this exception would likely prove, with the Court expected to be very reluctant in reaching such findings. Certainly this has been evident in my own experience; even in claims where one could hardly criticise the Judge for making a firm finding of fundamental dishonesty, much care and deliberation has been invested into judgments to avoid this conclusion.

This has been reflected in numerous cases since. In Khan -v- La Tasca the District Judge had found at first instance that, in relation to a claim for injuries resulting from a fall in a restaurant, no such fall had taken place. The Defendant received £7,210 in costs.

On appeal HHJ Hodge QC decided:

‘[The] conclusion that the claim was fundamentally dishonest falls well outside the ambit of reasonable judicial decision-making,’

The costs order against the Claimant was rescinded and the Defendant ordered to pay the additional costs of appeal.

That being said my own experiences have not been typical across the board. In Shahid -v- Puddick it was accepted that one of the Claimants was genuine but denied that the two other Claimants, supported by the first Claimant, had been at the scene of the accident at all. The District Judge agreed and, rather than simply permitting the genuine Claimant damages in line with the injuries (approximately £2,000), concluded that the entire action was dishonest and dismissed all claims.

Such outcomes certainly open the door to defending successfully not just dishonest claims but those claims which may in the first instance be genuine, however continue to support dishonest second parties.

Evidence of robust attitudes to fraudulent claims is increasing. Recently Mr Bernard Parma received a 12-month sentence of imprisonment for fraudulently bringing a personal injury claim worth around £15,000. By day two of the original civil trial Mr Parma had stopped attending, whilst his evidence was described by the trial judge as ‘patently and persistently dishonest’. The Judge concluded that Mr Parma had:

“…repeatedly avoided questions, obfuscated, paused to give himself time to think and when all else failed simply said he could not remember… I unhesitatingly have come to the view that this is indeed a fraudulent claim… The manner in which it has been pursued must mean that there has been a conspiracy to pervert the court of justice”

Such robust language from trial Judges is indicative of an increasing courage to reach findings of fundamental dishonesty in cases where it is warranted. Indeed one firm of solicitors claim to have secured 146 findings of fundamental dishonesty in a year, with 8 findings occurring in one day.

With an expanded range for Courts to arrive at fundamental dishonesty, a proposed change to the regime in Scotland and apparently more judicial appetite for referring fraudulent claims it is incumbent on those bringing claims to ensure that a thorough analysis of the case ensures that the unenviable position of a finding of fundamental dishonesty is avoided.

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