“I FIND THAT THE CLAIM WAS CONSTRUCTED BY THE CLAIMANT’S LAWYERS ON A PREMISE WHICH WAS IRRELEVANT AND WAS NOT IN ACCORDANCE WITH THE CLAIMANT’S EVIDENCE OR THE LAW”: WHY MUCH MORE CARE IS NEEDED IN DRAFTING SCHEDULES

We are looking again at the decision in Cojanu v Essex Partnership University NHS Trust [2022] EWHC 197 (QB). This time at the judgment in relation to quantum. The case involved a situation where the claimant’s lawyers presentation of the case led to major difficulties in relation to allegations of fundamental dishonesty.  It highlights the importance of careful consideration of the case being forward in a Schedule.

“I consider that the incorrect pleading and the failure to quantify the claim properly by the Claimant’s lawyers in the schedule is not in this case a fundamental dishonesty. It was not a dishonesty at all. In addition, on the facts of this case inadequate pleading is not within the mischief which Parliament aimed to prevent by the passing of S.57. Nor is incompetence, carelessness, negligence or mere omission by the lawyers. The section requires proof of the Claimant’s dishonesty not his lawyers’ lack of competence.”

RELEVANT WEBINAR

This case will be one of many cases in a webinar on the 7th March 2022: Claims for loss of earnings: learning from recent cases.  Booking details are available here.

 

THE CASE

The claimant brought a claim for damages for clinical negligence.  He had been imprisoned for a period and then deported.  The Schedule of Damages, however, brought a claim for loss of earnings on the basis of earnings he could make in England, as a carpenter.   This was one of the reasons the trial judge made a finding of fundamental dishonesty on the claimant’s part.  That finding of fundamental dishonesty was overturned on appeal, however the judge did observe that it was the calculations of the claimant’s lawyers that caused the problem.  The claimant could not reasonably be expected to understand the claim that was being made and his own evidence was that he was in Romania and seeking work in Romania.

THE JUDGMENT ON THIS ISSUE
   Dishonesty as to quantum
71. The Recorder’s finding of fundamental dishonesty on quantum related to two factual findings: the correct country for the assessment of damages and the size of the scheduled calculations of the claim. So the Recorder found as follows:
“33. The special damages the Claimant has put forward relate to losses which are based upon him being employed in the UK as a carpenter. These, I find, are claims which are not just open to legitimate argument due to differences of legal or professional approach to the calculation of damages but, rather, they are predicated on wholly false premises. The Claimant has produced little evidence of any sustained employment either here or in Romania. He has at the most earned some few hundreds of pounds over many years, since 2008, during a rather chequered employment history. He had no earnings in the United Kingdom for the year he was in the UK before the index
offence was committed.
  1. He had no identifiable occupation, which is supported by evidence of regular earnings such as would enable the Court to quantify a Smith v Manchester award. This element is grossly inflated, which even a superficial comparison with what little documentation there is in the bundle to prove his earnings since 2008 would show. This approach is compounded by the fact that the Defendant knew full well since May of 2016 that he was to be deported at the end of his sentence and that therefore there was no realistic
possibility of him living and working in the United Kingdom on his release.
  1. Miss White submitted to me that an inflated claim on quantum will have a substantial adverse effect on the Defendant’s approach to the claim and affect how they would deal with it. She refers me to a passage inLondon Organising Committee of the Olympic and Paralympic Games (in liquidation) v Haydn Sinfield[2018] EWHC 51 (QB). That is referred to in her skeleton argument. I agree with that submission. The Defendant would have been influenced to adopt different tactics, make different decisions on expert evidence and view the litigation risk entirely differently.”
“36. Taking all these factors into account, I find that substantial elements of the claim, namely the claims for special damages, are fundamentally dishonest. The entirety of the claim is therefore dismissed on this ground, pursuant to section 57.”
72. The Claimant’s evidence, so far as it was relevant and in the appeal bundles, was that he would not be able to do his job as a builder “in Romania” (para 17 of his witness statement).  The evidence clearly showed that he did some work in prison.  He wrote that when he returns to Romania (his witness statement was signed on 20.2.2020 and served the month after, whilst he was in prison) he would keep horses, cows and sheep and he was worried about the restriction his fingers injury would cause (para 23).  He asserted he would be unable to go back to meaningful work as a builder “when I return to Romania”.
73. When counsel drafted his updated schedule dated 11.12.2020 the Claimant had been long since deported to Romania. The deportation occurred in March-June 2020. Despite this his barrister drafted the schedule relying on UK earnings rates for the Smith v Manchester claim and UK care rates for the care claim and UK surgery costs for the medical costs claim.
74. I consider that counsel’s calculation using UK figures for medical costs, care and loss of earnings capacity was irrelevant and wrong in law.  The UK figures were as irrelevant as were the builders’ rates of pay in Monte Carlo or the costs of surgery in New York. 
75. The schedule was signed by the Claimant’s solicitor.   I was provided with no evidence about the factual circumstances relating to the authority given by the Claimant to the solicitor to sign the schedule and the statement of truth attached thereto.  The solicitor was not called at the trial.  Neither side put any part of the transcript before me relating to this. The Recorder made no findings about the Claimant’s evidence about when or even if he gave authority to sign the schedule.
76. I infer under CPR 52.21(4) that the schedule was signed with the Claimant’s approval, but he was a Romania builder who needed a translator to understand English and was in Romania at the time.   If presented with an English barrister’s schedule of loss, premised on English Law, how could he challenge the way it had been drafted?  I do not see how the errors in the drafting of the schedule on the method of calculation of a Smith v Manchester award or the other heads of loss can be laid at the Claimant’s door and in any event I do not consider that they are proof of dishonesty by the Claimant. 
77. In addition, the Claimant did not say in his witness statement that he relied on UK wages rates.  No doubt he has never heard of the UK Government’s ASHE earnings figures for carpenters which his barrister used in the schedule.
78. I also take into account that the Defendant of course saw through the Claimant’s lawyers’ errors in the schedule. In the counter schedule, dated 8.2.2021, the Defendant descended into liability submissions (which were themselves irrelevant to quantum) but then on quantum, quite properly they asserted that the UK salary and earnings rates for carpenters were irrelevant and put forwards Romanian employment rates for carpenters at £7,300 pa. Likewise, they asserted Romanian medical costs for surgery would be £3,000 and for physiotherapy they offered £100. For DIY and care, on Romanian rates, they admitted a sum of £2,500. All of the above quantifications were subject to their defences of S.57 and illegality.
79. The Defendant did not put before me any evidence to show that the Claimant himself asserted in his own evidence that he thought he could earn UK builder’s rates in Romania or have surgery in the UK.  His evidence was that he had been deported to Romania and wanted to work there.
80. But all the evidence shows it was drafted wrongly by his lawyers and the Defendant rightly pleaded out the errors in their counter schedule. I note that even after service of the counter schedule the Claimant’s lawyers did not redraft the schedule despite their errors over irrelevant evidence and law having been pointed out to them. In her submission to me Miss McGungle frankly admitted that the errors were hers and took responsibility for them as she did before the trial judge.  It is to her great credit that she did so.  I do not understand on what evidence the Recorder could have found that the Claimant himself was dishonest in the way his schedule was drafted in relation to the country issue.
81. Turning then to the next issue. It was pleaded that the schedule was “inflated” by the Claimant and was “predicated on a wholly false approach”.   A dishonesty finding made by the Recorder which appears to rest on the assertion that damages were “inflated”.  I must therefore look at the claim and the counter schedule and identify the issues.
82. The Smith v Manchester damages were claimed on the basis of 2 years loss of earnings.  In law the multiplicand for Smith v Manchester awards is either the annual salary the Claimant used to earn or that which he will earn in future.  Ignoring the Claimant’s lawyers’ errors in using the UK figures for a carpenter, the Defendant’s admitted that a Romanian carpenter would earn 7,300 pa. So the issue between the parties on the multiplicand was which figure to use.   Despite this admission by the Defendant, the Recorder refused to find that the Claimant had any earning capacity and found that there was insufficient evidence of earnings. However, the documentation at trial showed the Claimant had low earnings in Romania in 2008, they were 6,381 RON between Feb and Oct 2008. There was no documentary evidence between 2009 and 2014.  He also had low earnings in the UK between the summer of 2014 when he arrived and June 2015 when he was arrested, the figure was £775. The documents also showed that the Claimant was made bankrupt in 2006 in Romania. The Recorder also had evidence of his employment as a carpenter in 2005, 2006 and 2008 with official Romanian stamps on the documents and various employers’ names.  The judge did not mention these in his judgment.
83. Smith v Manchester awards are summarised in Kemp on Quantum at chapter 10-025.  They are rarely awarded in recent years because the changes to the Ogden Tables multipliers take into account loss of earning capacity in the disabled multipliers.  However they usually run at between 3 months and 2.5 years and occasionally up to 5 years, with the multiplicand for the assessment being the annual wage for the Claimant’s work.  The range and size of awards is set out at 10-034 to 10-036.  The evidence necessary for a loss of capacity on the labour market award is (1) medical evidence of permanent disability (2) evidence from the Claimant that he wishes to work to support himself and his family and his assertion that the injury affects his ability to do the work he is educated or trained for and (3) if the Claimant is in employment evidence from his employers.
84. For this Claimant whose injury is permanent and who was 30 at the date of the negligence with a working life to say 65 or 68 and who was in occasional manual work before the negligence, there can be no doubt in my judgment that he has lost some work capacity over the course of his working life.
85. The Recorder made findings about the Claimant’s pre-negligence work history stating that he “produced little evidence of any sustained employment either her or in Romania. He has earned some few hundred pounds over many years since 2008 during a rather chequered employment history, and he had “no earnings” in the UK for the year before the index offence.
86. Those findings are not in accordance with the documentary evidence before the Recorder. The Claimant earned and declared £775 between the summer of 2014 and the offence and 6,381 Ron in 8 months in 2008.  
87. In ground 1d the Appellant contends that the Recorder was wrong to find that the schedule of loss assumed that the Claimant was living and working in the UK rather than Romania. In submissions that was explained as the Recorder being wrong to find that the Claimant dishonestly asserted he would be working in the UK, earning UK rates. I consider that the Recorder did fall into error.  He conflagrated the failings of the Claimant’s lawyers in their drafting of the schedule, which was drafted wrongly in law and based on irrelevant evidence, with the Claimant’s own evidence which was true and honest in that he asserted he was afraid because he was likely to be deprived of work capacity in Romania either tending livestock or as a carpenter/builder.  
88. I consider that the Recorder failed properly or at all to consider and apply the 5 steps required to make a finding of dishonesty in relation to the Claimant’s evidence on quantum, in particular as set out in Ivey v Genting which I have summarised above.
88. The Recorder failed to assess the Claimant’s state of mind as a fact and then failed to apply an objective standard to assess whether the Claimant’s conduct was dishonest.
89. I rule that the findings in paragraphs 33, 34 and 36 of the judgment in relation to dishonesty by the Claimant were reached using the wrong test in law, not based on appropriate findings of fact and in addition were unjust to the Claimant on the following matters:
90. i)Para 33 of the judgment:  I find that the claim was constructed by the Claimant’s lawyers on a premise which was irrelevant and was not in accordance with the Claimant’s evidence or the law. I find that there was no finding of fact made by the Recorder that the Claimant made any such assertion in evidence and no finding of fact as to what the Claimant was thinking when the schedule was authorised to be signed by his solicitor.  Without that evidence the Recorder was wrong to make a finding of dishonesty in relation to the schedule.  In addition, there was no finding that objectively the Claimant’s state of mind, when he approved the solicitor signing the schedule, and his his conduct (if he did) was dishonest.
ii)Para 34: I find that the Smith v Manchester award was not grossly inflated by the Claimant himself nor did the Recorder make any findings about what was in the Claimant’s mind relating to loss of earning capacity save what he said in his witness statement about his fears for being unable to carry out builders work or livestock husbandry in Romania.  The finding that the Claimant knew full well that he was to be deported to Romania and was so deported is nothing to the point.  The Recorder misdirected his criticism of the Claimant’s lawyers’ errors and aimed them at the Claimant.  The Recorder failed to apply the correct test to make findings of dishonesty against the Claimant in this paragraph.
iii)               Para 36: the finding that substantial elements of the claim namely for special damages were fundamentally dishonest was wrong in law because the Recorder did not apply the 5 necessary steps set out above and specifically the sub steps in Ivey v Genting to the Claimant’s state of mind and conduct in authorising the signature on the schedule drafted by his counsel. There can be no criticism of the Claimant’s written witness statement which clearly evidenced that he intended to live and work in Romania. 
91. In ground 1e the Appellant asserts that the Recorder “was wrong” to conclude that there was a lack of evidence of the Claimant’s employment in Romania.   I do not uphold that ground of appeal.  There was evidence of employment in Romania in 2008 but none thereafter. The finding of the Recorder was that there was little evidence of sustained employment since 2008. Where the judge fell again into error was in relation to the evidence of income in the UK when he found that he had “no UK earnings”.
92. I consider that the incorrect pleading and the failure to quantify the claim properly by the Claimant’s lawyers in the schedule is not in this case a fundamental dishonesty. It was not a dishonesty at all. In addition, on the facts of this case inadequate pleading is not within the mischief which Parliament aimed to prevent by the passing of S.57. Nor is incompetence, carelessness, negligence or mere omission by the lawyers. The section requires proof of the Claimant’s dishonesty not his lawyers’ lack of competence. It may be a moot point whether that includes the dishonesty of his lawyers (none is asserted here) but that may be an issue for another case, it was not in issue before me in this appeal.
Ruling on fundamental dishonesty
93.Therefore for the reasons set out above I do not consider that the findings of dishonesty made by the judge in relation to the background and lead up to the civil claim, namely the crime and the way in which the Claimant came to suffer the cut fingers, to be sufficient to come within the term fundamental dishonesty relating to the claim and hence that dishonesty finding falls outside S.57.
94. In addition, I consider that the judge’s findings of dishonesty against the Claimant in relation to quantum were wrongly made because he failed to apply the correct 5 step test in law of dishonesty to the facts. For that reason, the Claimant’s evidence on quantum does not come within the S.57 ambit.