Verity Gillies-Smith and Caroline Elson have considered the case of David Craig Pegg v David Webb (1) Allianz Insurance Plc (2)  EWHC 2095 (QB) in which an interesting decision was reached by the High Court on the issue of fundamental dishonesty.
This claim arose out of an alleged Road Traffic Accident “RTA”. The claimant had been a front seat passenger in a vehicle involved in a collision with the first defendant’s vehicle. The claimant sustained soft tissue injuries to his neck, left elbow and left knee and claimed physiotherapy charges in the sum of £426. The insurer “the second defendant” maintained that the collision did not occur and this was merely a bogus claim. In the alternative, the second defendant alleged that even if there had been a genuine collision, it was contrived between the parties and fundamentally dishonest.
Trial Outcome (first instance)
At trial, the Judge accepted that there had been a genuine collision but found that the claimant had failed to inform the medical expert that he had been in a subsequent quad bike accident one month after the RTA. It was also found that what the claimant had told the expert was inconsistent with the claimant’s own evidence at trial regarding the longevity of his injuries. As such, it was held that the claimant was not entitled to rely on his medical evidence because of those inconsistencies and without medical evidence the claim had to fail.
However, despite the issues relating to the claimant’s inconsistent evidence, the Judge did not make a finding of fundamental dishonesty and although the claimant’s claim was dismissed, the second defendant was ordered to pay 60% of the claimant’s costs. The reason for the costs order was because the court said that the second defendant had run a case of ‘fundamental dishonesty’ which meant that what would otherwise have been a one-day fast-track matter became a two-day multitrack matter.
High Court Decision (appeal)
The second defendant appealed to the high court on the basis that the Judge should have made a finding of fundamental dishonesty against the claimant and that the costs order made against them was wrong in principle.
The high court found that there were a number of factors which pointed strongly towards the claimant being dishonest in his presentation of his injuries to the expert and to the court which the Judge at first instance had failed to deal with adequately. These included the following:
• The claimant had not sought medical assistance after the accident from either his GP or from the hospital. The fact that it was his solicitors who arranged for physiotherapy to be carried out should immediately have raised at least a suspicion in the mind of the Judge.
• The claimant attended A & E after a quad bike accident just one month after the RTA, but had not mentioned the injuries sustained in the RTA. That was considered to be a "deafening silence".
• The claimant then failed to inform the medical expert of the quad bike accident and the injuries he sustained. The only reasonable inference which could therefore be drawn was that the claimant deliberately failed to tell the expert in order to mislead him about the effects of the index accident. That was a second incidence of "deafening silence".
• At trial, the claimant’ confirmed that his neck symptoms had recovered within three to four weeks of his accident, his elbow had recovered within four to five weeks of his accident. He was unable to say how long he had suffered symptoms in his knee due to a pre-existing injury. However to the expert, the claimant reported that he still felt the effects of the injuries at the time of his examination which led the expert to conclude a prognosis of 6 months.
• His dishonesty was compounded further by lying about the longevity of the injuries in the claim form and his witness statement. In his witness statement, the claimant adopted the prognosis of six months recovery given by the expert even though he was aware that he misled the expert into giving this prognosis.
• The claimant also advised the medical expert that the physiotherapy treatment was ongoing although he had been discharged from physiotherapy almost a month earlier.
In light of the above, the high court endorsed the dismissal of the claimant’s claim with a finding of fundamental dishonesty. Dishonesty as to the extent of the injuries was not merely incidental or collateral but formed the very basis of the claim.
The high court disapplied Qualified One-way Costs Shifting ("QOCS") under CPR 44.16 and ordered the claimant to pay the second defendant’s costs. An adjustment was made on the costs payable as a significant amount of court time had been directed towards the question of whether the claim was in fact bogus (which had not been accepted by the court at first instance) and the claimant was ordered to pay 70% of the second defendant’s costs to be assessed on an indemnity basis.
This is a welcome decision for defendants as it highlights that fundamental dishonesty may be established even in cases where issues of dishonesty are largely based on inconsistent medical evidence. The costs order made against the claimant is a warning to dishonest claimants of the impact of misleading medical experts.
This case also highlights to defendants the importance of obtaining medical records at an early stage, checking carefully for inconsistencies within the claimant’s evidence which, to the court, could be considered ‘deafening silences’ and ultimately leading to a finding of fundamental dishonesty.
Verity Gillies-Smith is a Solicitor in the insurance division at Langleys.