FUNDAMENTAL DISHONESTY IN PURSUING A LOSS OF EARNINGS CLAIM: “IT IS NOT NECESSARY FOR THE PURPOSE OF THIS CASE FOR THE COURT TO DETERMINE WHETHER PSYCHIC POWERS EXIST”

I am grateful to barrister Brian McCluggage for sending me a copy of the judgment of HHJ Backhouse in Amdur -v- Krylov (13/04/21) a copy of which is available here  E14YJ570 Amdur v Krylov final 13.4.21 (1).    The judge found the claimant had been dishonest in pursing a claim for loss of earnings as a psychic.  There are other criticisms of the way in which the schedule had been prepared, the doctor reporting on the claimant’s behalf and the accountancy evidence put forward.

 

“… the presentation of the Claimant’s claim has been slap-dash, even reckless, with a disregard for the need to prove losses claimed. Whilst the Claimant sought to blame his former solicitors, he signed the statements of truth on the documents they prepared. “

THE CASE

The claimant, a professional psychic,  was injured in a road traffic accident on the 22nd January 2015. He pursued a claim for damages for personal injury and other losses. Initially using solicitors but as a litigant in person at trial.  The defendant admitted liability, however causation was in issue and the defendant alleged fundamental dishonesty.   The claimant worked as a clairvoyant and made a substantial claim for loss of earnings.

THE JUDGE’S TASK IN ASSESSING THE SCHEDULE OF DAMAGES

The judge commented that the case was unusual in that the claimant disavowed earlier claims for damages.

The Claimant’s evidence
15.This case in unusual in that Mr Amdur disavowed large parts of the evidence and of the schedule of loss which had been put forward on his behalf by his former solicitors. He was at pains to tell the court that he considers that his solicitors had exaggerated his claim by putting forward heads of loss which he is no longer pursuing.  He also said that they had run up ‘insane’ legal costs of £100,000 which they now expect him to pay and that he is only pursuing the court case to recover those costs.
16. His solicitors prepared 3 witness statements for him while they were still acting; a main statement dated 29.4.19 on which he was chiefly cross-examined and two dated 16.9.19 and 20.4.20 responding to evidence gathered by Ms Ashleigh Barrett of NetWatch Global Ltd on behalf of the Defendant from the Claimant’s online activity, in particular certain Facebook posts. When I took him to these statements at the beginning of his evidence, he said that the amounts of money claimed were wrong.  Thereafter, in cross examination, he referred to the statement of 29.4.19 as ‘my solicitor’s statement’, disassociating himself from it.
17. Mr Amdur also disavowed most of the Schedule of Loss submitted with the Particulars of Claim and with a statement of truth signed by him. He said that he was not relying on two emails from him dated 21.6.20 and 26.7.20.  He said that his mother had prepared the first email as he was ill at the time but I consider that it is written in his style. These emails are part statement, part updated schedule of loss. He said that only a long email from him dated 2.3.21 was ‘fundamentally correct’.
23. As Mr McCluggage submitted, it is not necessary for the purposes of this case for the court to decide whether psychic powers exist or whether the Claimant believes that he possesses such powers. I am prepared to accept that Mr Amdur does believe that he has a ‘gift’ and that he considers that he behaves with integrity when working as a clairvoyant, unlike others in the field who are ‘charlatans’ as he called them.  It does seem to be the case that Mr Amdur has had the TV exposure he claims and he appears to have enjoyed a wealthy lifestyle, judging by his assets.  There seems to be some truth in his descriptions of being entertained by wealthy clients or TV companies.
CRITICISM OF THE CLAIMANT’S MEDICAL EXPERT
30. The two experts approached their task in very different ways. I have to say that I found both Mr Coombs’ reports and his oral evidence unhelpful for a number of reasons. His reports largely consist of repeating what the Claimant told him, with very little analysis or interrogation of the medical records.  In oral evidence, he acknowledged at the outset that the case turns on the Claimant’s credibility which is a matter for the court to decide, but indicated that he considers the Claimant to be an entirely genuine individual.  Despite being reminded by Mr McCluggage more than once that his job was not to act as an advocate for the Claimant, in my judgment, Mr Coombs was unable to prevent himself sliding into that role.  He repeatedly told the court that ‘it has always been the Claimant’s case that…’ or ‘the Claimant’s opinion was…’ whereas the court requires, and is entitled to expect, independent expert opinion.

THE CLAIMANT’S CLAIM FOR LOSS OF EARNINGS

There were considerable difficulties with the claim for loss of earnings.
67. The difficulty with the Claimant’s claim is the absence of any reliable evidence on which to base an award for loss of earnings. The way in which the Claimant has put this part of his claim has varied from document to document. In the initial Schedule, he claimed a total of £65,000 p.a. lost profit for 2.5 years from his strands of income excluding rental income.  In his witness statement of 29.4.19 he put his loss of net income at £100,000.
68. In the ‘updated schedule’ in the email of 21.6.20, he claimed for ‘projected net income’ of £75,000 p.a. for the years 2015/16 onwards less his actual net income, derived from the Levine accounts. This gave a total sum of £264,087 together with ‘a loss of 40% of my projected income for the next ten years’.
69. After the Defendant served its counter-schedule, the Claimant prepared a further updated schedule of loss in his email of 26.7.20 in which £125,000 was claimed for each of the years 2015/16 and 2016/17 and a further £62,500 for 2017/18. This appears to have been based on the profit for four months in the Levine accounts 2014/15 of £41,659.  At trial, Mr Amdur simply claimed £75,000 p.a without any explanation as to how that figure had been calculated.
70. I should say that the initial schedule is a curious document for something apparently drafted by solicitors. The figures are said to be estimates and appear to have been plucked out of the air. So, for example, we see ‘loss of income from Readings £50Kpa, but say lost profit at £30K pa x 2.5 years’.

 

THE CLAIMANT’S EXPERT EVIDENCE

The judge was also critical of an accountancy report prepared on the claimant’s behalf.

“73. In terms of professional input into formulation of the Claimant’s claim, on 16.5.17 Mr Levine wrote ‘to whom it may concern’ suggesting that the total loss of income to date was £399,000 of which £80,000 was lost income from readings at £40,000 p.a. In her report of 4.7.19 Ms Summerfield said that ‘given the specialist nature of Mr Amdur’s work… and his noticeable lack of accountancy record keeping, it is inherently very difficult for me to say what he could have earned from 22.1.15 onwards but for the accident’.  She simply prepared her report based on the Claimant’s view that ‘he could have received’ projected net profit of £120,000p.a. and calculated a net loss of income to 5.4.18 of £196,663.  I have to say that it is surprising that she was prepared to put her name to this report which is worthless.”

 

THE JUDGE’S FINDING OF FUNDAMENTAL DISHONESTY
86. The Defendant’s allegations that the Claimant has been fundamentally dishonest in relation to a number of aspects of his claim were fully sent out in the Re-amended Defence and Updated Counter-schedule. They are:
  1. Falsely alleging that he was unable to work as a psychic reader for a significant period of time after the accident
  2. The same false allegation in relation to ‘wheeler dealer’ work
  3. Advancing a false claim for loss of income from sales of candles and jewellery
  4. Exaggerating his pre-accident income to inflate his claim for loss of earnings
  5. Advancing a false claim for sales of items at an undervalue
  6. Advancing a false claim for loss of rental income
  7. The Defendant contends that the evidence is clearest in relation to (a), (d) and (f) above.
  8. Section 57(1)(b) Criminal Justice and Courts Act 2015 applies to a claim for damages for personal injury if ‘the court is satisfied on the balance of probabilities that the claimant has been fundamentally dishonest in relation to the primary claim…’. Section 57(2) further provides ‘The court must dismiss the primary claim, unless it is satisfied that the claimant would suffer substantial injustice if the claim were dismissed’.
  9. Knowles J in Sinfield v LOCOG [2018] EWHC 51 held that a claimant would be held to be fundamentally dishonest if he had acted dishonestly and ‘that he had thus substantially affected the presentation of his case, either n respect of liability or quantum, in a way which potentially adversely affected the defendant in a significant way, judged in the context of the particular facts and circumstances of the litigation’. The words ‘substantially affects’ were intended to convey the same meaning as ‘going to the root of’ the whole of a claim or a substantial part of it, as used in Gosling v Hailo as approved in Howlett v Davies [2017] EWCA Civ 1696.
  10. Dishonesty is to be judged by the criteria laid down by the Supreme Court in Ivey v Genting Casinos [2017] UKSC 67. The court must ascertain subjectively the individual’s knowledge or belief as to the facts.  The question whether his conduct was dishonest is to be determined by applying the objective standard of ordinary, decent people.
  11. The use of the past tense in s57 (‘has been’) and the case of Roberts v Kesson [2020] EWHC 521 both show that abandoning or correcting dishonest claims will not necessarily allow a claimant to escape a finding of fundamental dishonesty.
  12. I bear in mind that Mr Amdur strenuously denies all allegations of dishonesty.
  13. I also bear in mind, as Mr McCluggage accepted, that there is a difference between claims advanced dishonestly and claims for which there is no or no sufficient evidence. In my judgment, allegation (e) in relation to the items allegedly sold at an undervalue falls within the latter category.  The Claimant has not produced any evidence as to the purchase or sale of the items or as to their value but there is no evidence that this was a dishonest claim.
  14. Mr McCluggage submitted that allegations (a), (b) and (c) can all be reduced to one, namely that the Claimant falsely claimed that he was unable to work for a significant period after the accident when in fact he could and did do so. However, I consider that I need to analyse carefully what the alleged false claims actually were.  There is no obvious evidence in the bank statements of Mr Amdur undertaking wheeler dealer activities in the post-accident period and I do not feel it is safe to infer that the various cash deposits must have come from such activities.  Mr Amdur was not cross-examined in this regard (Mr McCluggage not having enough time to deal with every point).  As regards the claim for loss of candles sales, Mr Amdur admitted in his witness statement of April 2019 and in cross-examination that he made some such sales after the accident. I am not satisfied that those claims were dishonest.
  15. The positive averment which the Claimant did maintain was his claim that he was unable to work as a psychic reader for 2 years or more after the accident. Although the initial schedule refers to the Claimant being unable to work generally for 2 years, it is apparent from the context that this refers to work as a psychic. This assertion was repeated in the April 2019 statement and again in oral evidence.
  16. For the reasons I have already given, I have found that this was an untrue statement and that the Claimant was able to and did do some psychic readings following the accident. Clearly, he must have known that he did that work and I find that in this respect the Claimant has been dishonest. I am also satisfied that this is fundamental dishonesty in that the dishonesty went to a substantial part of the claim.  At its lowest, the Claimant was seeking £80,000 for lost psychic readings (in the Levine letter) and six-figure sums for loss of earnings generally.  This head of claim formed a substantial proportion of the value of the claim and I also accept that the presentation of the claim in this way adversely affected the Defendant’s ability to settle the claim.
  17. As regards the allegation that the Claimant dishonestly inflated his pre-accident income, it is true that neither the Otigba nor the Levine accounts show the kind of income or profit pre-accident which would justify the claims advanced by Mr Amdur for loss of earnings. As I have already mentioned, it is arguable that the Levine pre-accident accounts overstate income.  Mr Amdur claimed in cross-examination that he had been living in the USA for much of the time before 2014 and that explained the limited evidence of pre-accident income, although in fact the bank statements we have suggest he was in this country for much of the time.
  18. Set against those factors is that the bank statements show significant amounts of income both pre-July 2014 (and post-accident), the source of much of which is unexplained. As I have already said, the accounts are unreliable for a number of reasons, not least because they depend on the Claimant identifying the nature of each entry.  I have also alluded to what appear to be the trappings of a wealthy lifestyle.  It seems to me possible that the Claimant may have earned much more before the accident than is recorded/ evidenced and I therefore do not feel able to say that the statements as to pre-accident income are dishonest.
  19. Certainly, the presentation of the Claimant’s claim has been slap-dash, even reckless, with a disregard for the need to prove losses claimed. Whilst the Claimant sought to blame his former solicitors, he signed the statements of truth on the documents they prepared.  Further, he persisted with some of the claims, including the dishonest one, when acting in person,
  20. Turning to the final allegation of dishonesty in relation to the claim for loss of rental income, as I have said above, I do not agree with the Defendant’s submission that the Claimant ‘recast’ the basis of this claim in his witness statement. I am not satisfied that the original claim was for a six month void after the accident, rather than the equivalent of six months’ rent, made up of losses on the lettings of individual rooms over a number of years. I am not satisfied there was a dishonest claim in this regard.  Further, in my judgment, the claim for £10,000 was not significant in the context of this case.
  21. Having found fundamental dishonesty, I have to consider whether the Claimant would suffer substantial injustice if the claim were dismissed. This is for the Claimant to prove and he has not addressed the issue at all or produced any evidence of any injustice.  In Sinfield,  Knowles J considered that the exception ‘must mean more than the mere fact that the claimant will lose his damages for those heads of claim that are not tainted with dishonesty…What will generally be required is some substantial injustice arising as a consequence of the loss of those damages’.
  22. Section 57 is undoubtedly a draconian remedy but in my judgment, there is no basis on which to find that the exception to it applies. I must therefore dismiss the claim.
  23. As required by s57(4) of the 2015 Act, I record that the damages which I would have awarded the Claimant but for the dismissal of his claim come to a total of £10,454.95, being made up of £4274.95 for the cost of vehicle repairs, £5000 for general damages and £1180 for the cost of physiotherapy.