When is a dishonest claim not a dishonest claimant?

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Dishonest claimant, or dishonest claim?

The High Court recently dismissed an appeal against a county court ruling, concerning the issue of “fundamental dishonesty”. The case involved a low-level RTA where liability had been admitted, but the defendant alleged that the claims for credit hire, injury and other associated losses by the claimant were fundamentally dishonest.  

The Honourable Mrs Justice Stacey upheld the Recorder’s County Court decision that, while a claim had apparently exaggerated the losses, the claimant himself had been ‘perplexed’ by the damages being sought and was not complicit in the dishonesty. 

The case of Michael v I E & D Hurford Ltd (t/a Rainbow) is interesting and explores in detail the appeal for the claimant being “fundamentally dishonest.” 

The situation

The claimant, Luul Michael, was involved in an RTA while working as an Uber driver, in the process of taking a passenger to their destinationAn employee working for the defendant was driving a Land Rover Defender, provided by the company, which was travelling very close behind the claimant. The driver of the Land Rover Defender then accidentally drove into the back of the claimant's vehicle as it was moving off from traffic lights.  

The initial valuing of the claim

The County Court judgment was handed down in 2020, at Leeds County Court. The judge awarded the sum of £3,624.18 to Luul Michael. The defendant appealed this, arguing that the Judge should have found that the claimant was fundamentally dishonest for the claims for physiotherapy and credit hire. 

The High Court stated that the recorder had concluded that the claim had been put together by solicitors, and the claimant (who did not speak English as a first language), was not entirely familiar with parts of his witness statement. The recorder also stated that the claimant was “confused by the procedure adopted by this court”, while accepting that the claimant gave unhelpful information including that “he had attended only one physiotherapy session rather than the eight claimed for.”  

The appeal and ruling

Appealing to the Queen’s Bench Division, the defendant argued that “the recorder had been wrong not to decide fundamental dishonesty.”  

Mrs Justice Stacey said, regarding the appeal: “It is too bold a submission to assert that an inaccurate pleading or defective disclosure statement is synonymous with the respondent’s fundamental dishonesty…and if the defendant solicitors consider that potential dishonesty lies with a claimant’s solicitor and not their client then surely their attention is better directed at the solicitor firms, rather than the hapless client who has instructed them.” 

Mrs Justice Stacey dismissed the appeal, commenting that it was a “classic” example of when it is best to trust the trial judge, who has had the benefit of listening to the witness first-hand and reaching their own conclusion.    

The High Court stated that the recorder had concluded that the claim had been put together by solicitors, and the claimant (who did not speak English as a first language), was not entirely familiar with parts of his witness statement. The recorder also stated that the claimant was “confused by the procedure adopted by this court”, while accepting that the claimant gave unhelpful information including that “he had attended only one physiotherapy session rather than the eight claimed for.”  

What was the outcome?

The recorder at first instance concluded that the claimant was not dishonest. In fact, he ruled that he had been involved in a genuine accident and had not intentionally sought to exaggerate his injuries. 

This being said, it is important to note here the difficulties that can arise from investigating the credibility of claimants. In this instance, the perplexed nature of the claimant and willingness to give unhelpful information despite the signed list of documents (physiotherapy invoices and others) seemingly disproved the argument of dishonesty. But in other cases, could allegations of dishonesty made by defendants give rise to scrutinising claimants’ legal representatives on a deeper level? 

This case demonstrates that while the solicitors may have been “dishonest” in putting the claim together, it is not necessarily the claimant that is driving the fundamental dishonesty.  

However, what recourse is there for defendants in claims of this nature? Bringing the dishonest solicitors in as an interested party to the action? Reporting the dishonest solicitors to the SRA?  

If you wish to discuss a matter concerning a defendant claim please contact Rav Johal.  

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Ravinder works with both insurers and self-insured companies, defending a range of claims and providing sound legal advice.

Ravinder has over 13 years’ experience of dealing with claims from straight forward RTA’s to multi-million pound fire damage and brain injury claims. Ravinder’s down to earth approach for clients is precise, friendly and commercial.

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Our experienced litigators always start by listening to your needs first and we promise to give you well-considered advice based on our expertise and where possible we will guide you to find a way to resolve the dispute amicably, at an early stage, particularly if we think you could gain from doing so.

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Misuse of Low Value Personal Injury Claims Protocol Limits Claimant to Portal Costs

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If a claimant acts unreasonably by not following the EL/PL Protocol for Low Value Personal Injury Claims, especially if a claim is believed to be worth more than the limit required for Portal costs to apply, they could be limited to those fixed Portal costs. The law is, any personal injury claim worth less than £25,000 must be limited to Portal Costs.    

The case of Harford v Music Store Professional UK/DV247 Ltd [2021] and the ‘unreasonable use’ of the EL/PL Protocol resulted in fixed costs applying to this claim will be of interest to the market. 

The situation

The claimant pursued a claim against his employer in April 2015, having had an accident at work whilst lifting heavy items. The claimant’s GP diagnosed a potential inguinal hernia and there was a further diagnoses of two lumber sacral prolapsed discs in his spine. 

A Letter of Claim was sent just over two years after the claimant’s medical diagnoses, which stated that the claim was not suitable for the Portal. Liability was denied. The claimant had investigations and treatments leading to evidence being gathered for general and special damages, with Part 8 proceedings issued stating the claim value was between £10,000 and £50,000.  

The issue for discussion is whether the claimant acted unreasonably in not using the EL/PL Protocol for Low Value Personal Injury Claims, and whether he should be limited to the Portal costs (per CPR 45.24(2)(b)(ii)). 

The initial valuing of the claim

In June 2020, the claimant’s solicitor gave a witness statement explaining how he valued the claim in the first place. He explained his reasoning for it to be valued as a high value claim, and how he came to the conclusion that it was worth more than £25,000. 

Did the evidence back this up?

After all the evidence was gathered and counsel’s advices were given, it was apparent that the claim’s value was no longer higher than the Portal limit. The claimant then accepted a settlement from the defendant, which totalled £11,200. 

The claimant’s submission

  • The decision not to use the Portal was reasonable, due to the fact that the claim was valued as higher than the Portal limit 
  • Valuing a claim is seen as an ‘art’, rather than a science. Usually, the value is no more than an estimation of what a court would likely award.  

The claimant’s solicitors submitted ‘that the defendant must show that the claimant’s assessment of the likely value of the claim was so unreasonable that the court should drastically limit their costs entitlement to Portal costs’ (Bailii.org).  

The defendant’s submission

  • The defendant submitted that fixed costs apply in accordance with CPR 45.24(2)(b)(ii)According to the case reportIn that situation, the court may order that the defendant pay no more than fixed costs in Rule 45.18, together with the disbursements allowed in accordance with Rule 45.19. 

The ruling

On 17th June 2020, Costs Judge Haworth found the claimant to have acted unreasonably in not using the Portal or correct protocol, so determined the issue in favour of the defendant. Judge Haworth said:  

“I am satisfied that on reviewing the facts of this case, bearing in mind an accident in 2015, a letter of claim on 26 May 2017, coupled with the fact that the second medical evidence does not appear to have been obtained until 15 January 2018, less than three months before the expiry of limitation, to proceed with the claim outside the EL/PL Protocol was unreasonable. In my judgment, the reason for the issue of proceedings on 19 March 2018 was conditioned by the expiry of the limitation period without thought to the benefits of the Protocol and its undoubted relevance in these proceedings.” 

The costs in question were limited to the fixed amount of £4,205.00. 

In conclusion

This case shows that whilst the ‘art’ of valuing the claim is not easy, claimants’ solicitors should give proper considerations to it and if there is any doubt as to whether the claim meets the Portal thresholds or not, they should start the claim in the Portal. If the claim subsequently increases in value, for whatever reason, they can always drop it out at a later date. 

If you would like to discuss a costs-related matter concerning a defendant claim, please contact Rav Johal or another member of the team costs team. 

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Ravinder works with both insurers and self-insured companies, defending a range of claims and providing sound legal advice.

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Guides & Advice

Unmarried couples who live together: How to protect your assets

Choosing to live together before marriage is pretty much the norm in today’s society, with the number of couples choosing to cohabit on the up. Although it can provide a financially practical option, many couples fail to recognise the lack of protection of their assets if they separate.

There is a common misconception that cohabiting couples are protected by “common law”, giving them the same legal rights as married couples or those in a civil partnership. However, this is not the case - there is no such thing as cohabitation law and there is actually very little legal protection when dealing with a relationship breakdown. Read more about how you can resolve disputes that may arise using mediation, collaboration or arbitration. 

However, there are ways you can protect your assets in the event that the relationship endsThis is particularly crucial if children are involved, as protecting your wealth will provide security and help safeguard their future.  Although this may be an uncomfortable thought (after all, no one wants to plan for the breakdown of a relationship!), it is important to consider all eventualities and arrange legal protection if something was to go wrong, giving you both peace of mind. 

Cohabitation agreements

To avoid unwanted conflict further down the line, drawing up cohabitation agreement (or a ‘living together agreement’ as it is sometimes referred to as) should be the top priority for all unmarried couples that are planning to move in together. As there is no such thing as cohabitation law, cohabiting couples have very few legal rights compared to married couples and therefore a cohabitation agreement provides a level of legal protection and security for both parties in the relationship.  

It is essentially a contract between a couple that neatly sets out which assets are joint assets, and which are separate. It also outlines what will happen to those assets in the event of a break-up, i.e. if you moved into a property already owned by your partner and then you both live there for a number of years and have children together, does this become a joint asset?  

Read more about the benefits of cohabitation agreements, what can, and should, be included and how they can provide you with legal protection if your relationship ends. Our helpful FAQs on cohabitation agreements also address common questions and misconceptions around living together, but not being married. 

In order for a cohabitation agreement to be legally binding, it will need to be drawn up by a lawyer – you cannot just create your own and sign it. Once everything is agreed, the contract must be signed and witnessed by both parties in order for it to hold up in court. 

Properties in a single name

When the property is in your name only, once your partner begins to contribute towards the mortgage and renovations, then they will gain a beneficial interest in the property. The level of interest does vary depending on the extent of the contributions, but the property’s equity is no longer solely yours. 

Arguments can arise over the beneficial interest in the house of each person, as legal ownership differs from beneficial ownership. This is where living together agreements can be used to solve the dispute in a straightforward and less traumatic way. 

Planning for the future

It’s clear that cohabiting is now a normal and common occurrence, so it is essential that people know the best way to safeguard their financial interests. Although there is no legal status for cohabitation law, there are ways you can give yourself a level of legal protection. From putting in place a cohabitation agreement, to preparing a will to protect your personal wealth, we’re here to help. 

The best time to put a cohabitation agreement in place is before moving in together, but it’s never too late to set one up or seek advice if you’re feeling financially vulnerable. Our team of cohabitation lawyers will support you with reaching an agreement that works for your relationship. 

For more advice on putting a cohabitation agreement in place, speak to a member of your local family law team. 

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Arbitration | Resolving relationship disputes out of court

Arbitration | Resolving relationship disputes out of court

Many couples about to embark on divorce and financial remedy proceedings are blissfully unaware that there are others forms of dispute resolution to help them resolve issues, such as who is to keep the family home or how pensions are to be divided.

An alternative route to traditional forms of financial remedy proceedings

Due to the current COVID-19 pandemic, the family courts are more stretched than they ever were previously and it’s no understatement to say that the family justice system is at breaking point. In light of this, it can take parties’ years to resolve their financial matters flowing from their divorce if they choose to go down the traditional route of financial remedy proceedings. However, there are other approaches.

Many people are completely unaware about arbitration and how it can be effectively used as an alternative ‘out of court’ method for resolving financial matters.

What is arbitration?

Arbitration is a form of formal dispute resolution that has been available for family law issues since March 2012 (although many people still don’t know this exists).

During arbitration, the parties enter into an agreement under which they appoint a suitably qualified person (an arbitrator) to adjudicate their dispute and make an award – essentially the outcome of your case is decided by a neutral arbitrator as if they were a judge in court.

What are the advantages of arbitration?
Judge
You choose your own judge

Once you’ve appointed your suitably qualified arbitrator (i.e. your judge), that same person will deal with your matter until the conclusion of your case, creating continuity.

 

Flexibility
Degree of flexibility

You have more control and flexibility over the proceedings and the decisions being made, i.e. you can have a say in respect of the time, date and venue for any hearings within the arbitration process.

Handshake
Confidentiality

Possibly one of the most favoured benefits with arbitration is that confidentiality can be assured, meaning national and regional press publications are unable to report on your case.

 

Law court
Keeping matters out of court

You can resolve issues in a non-confrontational way, that can save you time and money. Therefore, many people tend to prefer the arbitration process, as opposed to the timely, costly and significantly delayed financial court proceedings.

Is arbitration expensive?

While many wealthy and/or famous people choose to use arbitration to resolve their financial matters, it certainly isn’t exclusively for the rich and famous. Many couples have also turned to arbitration as they do not wish to have their life on hold for months (or even years!) whilst their financial remedy case makes its way through the painstakingly slow family judicial system, adding time and money.

How and when should I start arbitration?

If you are about to commence a divorce, make sure you speak to a specialist family lawyer about the alternatives to court proceedings. There are a number of helpful out-of-court ways to work together to sort out your finances that could save you a significant amount of time and money.

Guiding you through the process

Whichever route you decide to take, our experienced family lawyers will support you and equip you with the information and guidance you need to reach a solution that works for you.

If your relationship has recently broken down, and you’re finding it difficult to agree with your ex-partner regarding a financial settlement or childcare arrangements, then arbitration may allow you to reach a solution you’re both happy with, and more importantly, may save you costly court action.

To see how this process could work for you, please speak to a member of our local family law team.

Meet the team

How we can help

Children - Parenting through a separation is never easy. Our team of experts are on hand to guide you through the process of making child arrangement orders, always ensuring the long-term interests of your children remain at the heart of every child custody decision.

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International Families - Our international family law solicitors are experienced in dealing with cross-border relationships. We will work alongside lawyers in other countries to secure the best outcome for you and your family if a relationship breaks down.

Mediation, Arbitration & Collaborative Law - When a relationship ends, it doesn’t mean financial issues or child arrangements have to be settled in court. Our mediation lawyers can help you reach a solution that works for you and your ex-partner, offering you more control and flexibility over the decisions being made

Cohabitees Agreements - Contrary to popular belief, there is no such thing as ‘common law’, meaning many unmarried couples fail to recognise their lack of legal protection if they separate. Our cohabitation law specialists can help you prepare a legally-binding agreement to protect your financial interests.

Personal Tax Planning - From drafting your will to advising you how to structure your finances in the most tax efficient way, we aim to be your personal tax partner for life, ensuring we can design a plan that is exactly right for you and your family to protect your personal wealth.

Wills & Succession - It can be difficult to envisage a time when you’re not there to provide for your family. However, we are here to guide and support you with preparing a will so your wealth is protected for your loved ones into the future.

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