FUNDAMENTAL DISHONESTY FOUND WHEN CLAIMANT HAD FILED SCHEDULE WHICH WAS MISLEADING ABOUT LOSS OF EARNINGS CLAIM: THE CLAIMANT COULDN’T HAVE EARNED AND SHOULDN’T HAVE CLAIMED

I am grateful to the barrister Nadia Whittaker for sending me a copy of the judgment  handed down today of HHJ Richard Carter in Brown -v- Liverpool University Hospitals NHS Foundation Trust & Mersey and West Lancashire Hospitals NHS Trust. After dismissing the claimant’s case on clinical negligence the judge went on to find that the claimant had been fundamentally dishonest in the way in which he had presented his claim for loss of earnings. A copy of the judgment is available here Judgment Brown v Liverpool University Hospitals NHS Foundation Trust and another

Nadia tells me that the Judge ordered costs on an indemnity basis from the moment the Schedule of Loss that claimed dishonestly various sums in respect of loss of earnings was served a year ago and gave permission for enforcement of the costs order.

“The attempt by the Claimant to cure his dishonesty in the most recent Schedule of Loss is not relevant if the court is satisfied that he was dishonest in the earlier Schedule of Loss.”

THE CASE

The claimant brought a claim for damages alleging clinical negligence.  That action was dismissed as the claimant did not establish liability or causation. However, having found for the defendant,  the judge also considered the question of whether the claimant had been fundamentally dishonest. The  alleged negligence had occurred in 2008. The claimant made a claim for loss of earnings as a lorry driver. he Claimant’s pleaded case on damages was in a gross sum of £2,506,800 of which around £750,000 was in respect of loss of earnings and pension. However for part of the period he claimed loss of earnings he was disqualified from driving.

THE JUDGMENT ON FUNDAMENTAL DISHONESTY

Having found against the claimant in relation to the issue of negligence the judge considered allegations of fundamental dishonesty in the way that the claimant had presented his claim for loss of earnings.

“Fundamental Dishonesty

170. Ms Whittaker invites the Court to find the Claimant has been fundamentally dishonest. In her written submissions she identified several areas of the Claimant’s claim where he had been dishonest:
i) His conviction for drink driving in October 2008. This was relevant to his claim for loss of earnings as it covered the period over when he was disqualified from driving and to his assertion that he was unable to work as an HGV driver due to his physical symptoms (see 1/97) “The Claimant was employed as an HGV in 2008. The Claimant was forced to retire from his role as an HGV driver due to the severity of his symptoms, particularly the reduced range of movement in his spine. The Claimant retired at the end of 2008.” He claimed loss of earnings in his original and revised Schedule of Loss from 1 April 2009. It was only removed in the Schedule of Loss served at the start of the Trial and the explanation was only that “…This was revised in the light of new evidence that came into the Claimant’s possession after the original Schedule of Loss was signed.” There was only at that point a reference to the conviction.

ii) The Claimant accepted that he had returned to working as an HGV driver full time with MJ Griffiths in 2010 (consistent with the pay slips provided) but then conceded he had worked for Davenport Transport until 2014. He conceded that the Schedule of Loss had been wrong and that he had signed the statement of truth without ensuring that the claims were accurate. Although he sought to blame his former partner for the details, there was no evidence to suggest that she was solely responsible for the calculation of loss of earnings.

iii) He gave a false figure for the income in the y/e 2018 undervaluing it by some £12,000. Ms Whittaker said this was to bolster his case on the date of the onset of his FM which Dr McKenna tied into his loss of employment.

171. Ms Whittaker says that these are clear examples of dishonesty. She referred to the well-established dictum in Ivey v Genting Casinos Limited [2018] AC 391 at [71] where the Supreme Court said:

“When dishonesty is in question the fact-finding tribunal must first ascertain (subjectively) the actual state of the individual’s knowledge or belief as to the facts. The reasonableness or otherwise of his belief is a matter of evidence (often in practice determinative) going to whether he held the belief, but it is not an additional requirement that his belief must be reasonable; the question is whether it is genuinely held. When once his actual state of mind as to knowledge or belief as to facts is established, the question whether his conduct was honest or dishonest is to be determined by the fact-finder by applying the (objective) standards of ordinary decent people. There is no requirement that the defendant must appreciate that what he has done is, by those standards, dishonest.”
172. She argues that the failure to disclose the existence of the conviction was clearly dishonest because the Claimant knew of it and could not have believed it was not relevant. As for the claims for loss of earnings she dismisses the Claimant’s explanation that he relied on his partner and points to the existence of pay slips that contradict his own claim, and to the lack of supporting evidence from her (in her witness statement).

173. She noted that under section 57 of the Criminal Justice and Court Acts 2015, if the Claimant succeeds on his claim but was dishonest, and his dishonesty went to the heart of his claim, then his claim would be struck out.

174. In additional submissions provided in the light of the judgment of HHJ Sephton KC in Shaw v Wilde [2024] EWHC 1660 (KB), Ms Whittaker points to §154 which notes that the Defendant only needs to show that a Claimant has been dishonest and not that he has persisted in that dishonesty. The attempt by the Claimant to cure his dishonesty in the most recent Schedule of Loss is not relevant if the court is satisfied that he was dishonest in the earlier Schedule of Loss. She also points to his findings at §171 where he noted that:

“…In my view, the statement of truth indicates that the person verifying a document knows what they are signing and vouches for its accuracy. This is the object of the clear policy evident in recent rule changes: the form of the statement of truth has been altered so that a person who verifies a document appreciates the serious consequences of verifying without an honest belief in its truth; the rules have changed to ensure that persons whose own language is not English express themselves in their own language. The court is entitled to expect that a person who verifies a document understands it and has an honest belief that what he is verifying is true. Under cross-examination, Mr Shaw recognised his responsibility for the accuracy of the documents he verified (even though he later suggested that he had simply agreed to what an expert or a lawyer had told him). I reject the submission that Mr Shaw had limited capacity to understand what he was signing owing to his poor educational attainment, his cannabis abuse or childhood neurodevelopmental disorders. He coped admirably in the witness box with a huge variety of bundles containing thousands of pages. I am satisfied that he knew what he was signing when he verified the Schedule of Loss of 26 May 2020 and the witness statement of 9 December 2020.”

175. The Claimant confirmed in cross-examination that he understood the importance of the statement of truth. He was unable to explain why erroneous claims were included and signed off other than to lay the blame solely at the door of his ex-partner. No evidence was adduced from her, or indeed from the Claimant’s Solicitors either about the basis for the initial Schedule of Loss or about the changes made in the most recent Schedule.

176. Ms Whittaker also noted that in some of the questioning of the experts it was suggested that “fibrofog” was a common problem suffered by those with FM and it might have impacted the Claimant’s evidence (or presumably his signing of documents). That was not something which was referred to in any of the medical reports on the Claimant nor in his own witness evidence, and there was nothing she submitted in his presentation in the witness box to suggest that he had any issues with competence.

177. Mr Austin pointed to the Claimant’s explanation for the incorrect claims for his loss of earnings. He noted that the burden of proving fundamental dishonesty lies on the Defendant and that the mistakes were honest mistakes made by the Claimant. It is unclear whether that honest mistake was in relying on his former partner rather than misunderstanding what he was claiming for. He referred to the Claimant’s “fibrofog” and a reference in the DWP records to his former partner being “completely in charge of finances” [3][355]. That document dates from 2017.

178. He submits that the Claimant was not dishonest about the extent he worked since his evidence was that he could not work full time as an HGV driver and his pay slips show that he worked only part time. The additional earnings to be off-set came about only after receipt of information from the HMRC and his accountant.
Findings

179. I do not accept the Claimant’s evidence that he relied solely on his former partner to prepare the Schedules of Loss. Firstly, the Claimant signed those schedules and confirmed that he had understood the importance of the statement of truth. Secondly, Ms Leadsome did not state in her witness statement that she had prepared the schedule of loss or had been involved in the provision of information to the Claimant. The Claimant in his witness statement did not suggest that he had relied on Ms Leadsome to prepare the Schedule of Loss, that she had in 2023 or 2024 been in sole control of his finances or that he had any issues with providing the information about his finances or work history.

180. It seems that attempts were being made to obtain further information about the Claimant’s earnings in 2014 (see the financial bundle at [3][480] for instance). It is possible therefore that there were some items of disclosure which were only provided recently, and which may have required changes to the Schedule of Loss. But it is surprising that no evidence was filed (nor was any attempt made to file further evidence) to explain that late change in the claim.

181. The failure to provide evidence about his conviction and disqualification from driving at a time when he claimed for lost income as an HGV driver cannot be explained either by blaming his former partner, or any late disclosure by his accountant or HMRC. The Claimant must have known that he was not able to claim for loss of earnings for the first period when he signed the original Schedule of Loss in 2023 and the revised Schedule of Loss in 2024. The fact that he referred to this only in the final Schedule of Loss and removed the claim for 2009 is wholly unexplained. The obvious conclusion is that he knew he had not been able to work as an HGV driver for the 12 months from October 2008 and that his claim was not true.

182. His evidence in cross examination was as follows:
It was a genuine mistake. My partner used to do my books. I apologise…
What was the mistake?
How were you able to put a claim for 19k for a period of time when banned from driving?
It was just an error
By whom?
Me and my partner
How were you able to make the mistake when you knew you were driving
I have memory problems

183. On balance I find that the Claimant did not believe he was entitled to make a claim for lost income for the y/e 2010 as he knew that he had been disqualified from driving. He may well have failed to take any proper steps to satisfy himself that he had lost income because of his injuries, but that does not assist him. Had he turned his mind to the question of whether he had lost work for that period, he would have known that he had not during the period he was banned. The key element contained in the test in Ivey is what was the Claimant’s knowledge at the time – he knew he had been disqualified and he knew that he had not been able to work. The fact that he may have chosen to accept what others had included does not mean that by signing the statement of truth he was not being dishonest.

184. I am satisfied that he did not genuinely believe that he was entitled to claim for that whole year. To that extent I am satisfied that his behaviour was objectively dishonest. I do not find that he was dishonest in relation to the pay he had received because that was dependant on the payslips and it is clear that efforts were being made to track those down and provide some account of monies received late in the day.

185. However, I find that he did not believe that he was entitled to claim for loss of earnings during the period over which he worked for Davenport Transport. He must have known when he had worked, and his decision to sign the Schedule of Loss without disclosing the true extent of his work was in my view dishonest. He cannot seek to shift the blame to his former partner when he signed the statement of truth and understood its meaning. I do not accept the suggestion that he was in any way incapacitated and unable to sign off his own claims. There is no evidence from any of the experts that would support that line of argument.

186. Is the dishonesty fundamental? In London Organising Committee of the Olympic and Paralympic Games v Sinfield [2018] EWHC 51 (“LOCOG”) Robin Knowles J approached the issue in this way:
“62. In my judgment, a Claimant should be found to be fundamentally dishonest within the meaning of s.57(1)(b) if the defendant proves on a balance of probabilities that the Claimant has acted dishonestly in relation to the primary claim … and that he has thus substantially affected the presentation of his case, either in respects 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. Dishonesty is to be judged according to the test set out by the Supreme Court in Ivey v Genting Casinos Limited (t/a Crockfords Club)…
63. By using the formulation “substantially affects” I am intending to convey the same idea as the expressions “going to the root” or “going to the heart” of the claim. By potentially affecting the defendant’s liability in a significant way “in the context of the particular facts and circumstances of the litigation” I mean (for example) that a dishonest claim for special damages of £9000 in a claim worth £10 000 in its entirety should be judged to significantly affect the defendant’s interests, notwithstanding that the defendant may be a multi-billion pound insurer to whom £9000 is a trivial sum”

187. In Denzil v Mohammed [2023] EWHC 2077, Freedman J reviewed the authorities and drew these principles from them (at [41]):
“(i) There is a danger about elaboration and metaphor. Otherwise, the courts will be applying the elaboration and metaphors of previous judges such that the word of the statute will fade into history and will not be applied: see Elgamal , para 70 per Jacobs J.
(ii) The statutory word “fundamental” should be given its plain meaning. The expressions “going to the root” or “going to the heart” of the claim are often sufficient to capture the meaning of the statutory word. Provided that it is understood in the same way, it might assist in some cases in respect of applying the word “fundamental” to consider whether the dishonesty “substantially affected the presentation of (the) case, either in respects of liability or quantum, in a way which potentially adversely affects the defendant in a significant way, judged in the context of the particular facts and circumstances of the litigation”: see LOCOG, paras 62–63.
(iii) The question whether the relevant dishonesty was sufficiently fundamental should be a straightforward jury question. As stated above, this judgment would return to this. “It is a question of fact and degree in each case as to whether the dishonesty went to the heart of the claim. That must involve considering the dishonesty relied upon, and the nature of the claim both on liability and quantum which was actually being advanced”: see Elgamal at para 72 per Jacobs J.

(iv) It will often be appropriate in this holistic exercise to consider the extent to which the alleged dishonesty resulted in an inflated claim, that is the extent to which the dishonesty, if not exposed, would potentially have resulted in a higher quantum of recovery in respect of the claims made. This involves consideration of the various losses claimed by a Claimant and assessing the potential impact of the alleged dishonesty on the award for those losses: see Elgamal at para 73, per Jacobs J.
“In some cases, it will be obvious that the dishonesty had a potential impact on the amount that might be awarded for a particular head of loss. For example, a personal injury claim will invariably involve a claim for PSLA, and a dishonest description of symptoms and suffering will inevitably have a potential impact on the PSLA. The significance of that potential impact is a matter for consideration in the context of whether the dishonesty went to the root of the claim. Conversely, it may be clear that the alleged dishonesty has no material impact on a particular head of loss”: see Elgamal per Jacobs J, at para 74.

188. Applying that approach to the instant case, it is right that the claim for the y/e 2010 represents some £19,174.20 out of a claim for £283,331.06 for loss of earnings. Similarly, the overall understating of income received represents some £118,375 for the period from 2009/10 to 2014/15. On that basis, the Claimant dishonestly sought to inflate his loss of earnings claim by over £100,000. That goes to the root of the claim for lost income and inflates the value of the claim considerably. I am satisfied that it went to the heart of the claim.
189. In the circumstances, I am satisfied the claimant’s claim was fundamentally dishonest.

190. Although I have already dismissed the Claimant’s claim, I have dealt with the issue of fundamental dishonesty should it become relevant when considering any consequential applications/orders.”

LOSS OF EARNINGS: FOUR WEBINARS

This is the second case this week where this blog has looked at a case that failed because of an inaccurate claim for loss of earnings.  This series of webinars is designed to take practitioners through key issues relating to loss of earnings claims.  One of the key themes is the need to ensure that evidence is available to sustain a claim which should then be accurately presented.

The child claimant and loss of earnings claims: 14th October 2024

Booking details are available here.

There are very particular problems that face practitioners when they are dealing with a claim by a child who could suffer loss of earnings in the future as a result of their injury.

This webinar looks at the ways in which the courts approach claims for future loss of earnings when a child has been injured.

• What evidence is required to prove a future loss of earnings?
• Will the courts look at patterns of earnings within the family?
• Cases where awards have been made for future loss of pension.
• Catastrophic injuries and future loss of earnings.
• What is the court’s approach to less serious injuries where a child claimant is at a disadvantage in the labour market?
• Damages for loss of earnings when the claimant was injured as a child but claims when an adult (primarily sexual abuse claims).

After looking at the relevant cases and guidelines in then sets out practical steps that a practitioner can take to ensure a child claimant is properly compensated for future loss of earnings and disability in the labour market.

There will be a questionnaire which deals, specifically, with claims for loss of earnings of those under the age of 18, or who have not yet entered the job market.

Claims for loss of earnings of the self-employed and those involved in entertainment & sport:  28th October 2024

Booking details are available here.

A self-employed person (including directors of small companies) face particular difficulties when seeking to recover loss of earnings after being injured. Similarly those who earn, or hope to earn, a living through sports and entertainment have particular difficulties in proving future prospects and earnings.

This webinar looks at the particular difficulties of acting for self-employed people who suffer loss of earnings due to injury, focussing on:

• The particular problems of the self-employed claimant
• When a claimant has not been fully declaring their income to the Inland Revenue.
• The injured business owner
• The effect of a limited company
• Calculating net loss

The webinar then goes on to look at issues in claiming losses in cases where the injured claimant earns, or hopes to earn, a living through sports and entertainment,  looking at cases where damages have been awarded and when a claim for “loss of chance” has been found to be appropriate.

The webinar looks at recent cases relating to self-employed claimants and those involved in sport, it identifies the practical difficulties these cases show and the best methods of overcoming them.

Those attending the webinar will also be sent “loss of earnings” questionnaire which has a specific section for self-employed/business owners

Loss of Earning Claims: Loss of Benefits and Pension Loss: 5th November 2024

Booking details are available here.

This webinar looks at the importance of considering and quantifying the value of a claimant’s benefits when considering a claim for loss of earnings.  It looks at those cases where courts have made awards for loss of benefits.

• Accommodation.
• Dental and health care
• Clothing
• Leisure facilities
• Company car and car allowance
• Insurance
• The London Allowance
• School fees

It then considers claims for loss of pension.

• Workplace pensions
• Private pensions
• Quantifying a loss of pension claim
• The effect of early retirement
• The state pension

Loss of earnings claims: the fundamentals:  11th November 2024

Booking details are available here.

This webinar looks at the essential elements of a claim for loss of earnings. It looks at recent cases to illustrate in a practical way how damages are established (or not established) at trial.

This webinar looks at major issues in relation to claims for loss of income, how they are presented and how they are established at trial. It looks at recent cases and considers the way in which the claimant’s case succeeded (or failed) because of the nature of the evidence presented by the claimant.

• The law as to loss of earnings
• How a claim for loss of income is calculated
• The claim is not just wages, the importance of fringe benefits
• Disability in the labour market, evidence, the schedule and the witness statement
• The Blamire award
• Awards for loss of congenial employment
• The schedule of damages and claims for loss of earnings
• Proving loss of earnings at trial – some practical examples
• A client questionnaire for loss of earnings