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Shah v Ul-Haq & Ors, Court of Appeal, 9 June 2009

23 June 2009
The issues

Road traffic – fraud – striking out – whether a claim should be struck out on the ground that the Claimant had been involved in a fraud upon the Court in respect of an associated claim.

The facts

In May 2006 the Defendant, Anita Shah, negligently drove her Peugeot into the rear of a Rover motorcar which was stationary in front of her at traffic lights. The Rover belonged to Mr Ul-Haq who was driving it. There was minor damage to the Rover. In the Rover with Mr Ul-Haq was Mrs Parveen, Mr Ul-Haq’s wife, and their two children. A claim was made by his wife for minor whiplash injuries and also by Mrs Samara Khatoon, Mr Ul-Haq’s mother who alleged that she too had been in the car and had suffered a whiplash. Both Mr Ul-Haq and his wife supported Mrs Khatoon’s claim that she had been in the car at the time. Mr Shah denied that Mrs Khatoon had been in the car and also disputed that any of the Claimants had suffered any injuries. The matter went to Trial before the Recorder. At Trial Mr Ul-Haq and his wife gave evidence that Mrs Khatoon had been a passenger at the time of the collision. The Defendant argued that Mr Ul-Haq and his wife were lying about the presence of Mrs Khatoon and about their own injuries and that all the claims should be rejected. Alternatively, the Defendant argued that if the Recorder were able to find that Mr U;-Haq and his wife had suffered genuine injuries, then the Recorder should strike out their claims under CPR 3.4(2) on account of their part in the attempted fraud. The Recorder found that Mrs Khatoon had not been in the car and that Mr Ul-Haq and his wife had conspired with Mrs Khatoon to support a fraudulent claim. Mrs Khatoon’s claim was dismissed with costs on an indemnity basis but he held that Mr Ul-Haq and Mrs Parveen had genuinely suffered minor personal injuries. He declined to exercise his discretion under CPR 3.4(2) to strike out the claim and assessed Mr Ul-Haq’s damages at £2,583.38 and his wife’s at £2,259.37. He further directed that each should pay two-third’s of Mrs Shah’s costs of defending the claim, ie £1,777.00. The net effect of these Orders after set off was that Mr Ul-Haq, Mrs Parveen and Mrs Khatoon had between them to pay Mrs Shah £1,375.75. The Defendant appealed to the High Court. The High Court Judge came to the conclusion that there was a discretion under CPR 3.4(2) to strike out even a genuine claim at the end the Hearing and accepted that the Recorder’s approach had been coloured by his doubts as to the existence of the power and decided to exercise the discretion afresh. He approved the approach suggested by Judge Phillips in Ghalib v Hadfield, namely, that there were two questions to be asked: i) to what extent had the Claimant failed to help the Court to further the overriding objective, taking into account the definition of that objective of CPR 1.1 and ii) whether in the light of the conclusion under i) the discretion should be exercised to strike out the claim under CPR 3.4(2). The High Court Judge, following this approach and carrying out the balancing exercise suggested by that case, concluded that although the fraud was serious, it was not of the most serious kind and declined to strike out the claims, dismissing the Appeal. The Defendant appealed further to the Court of Appeal.

The decision

The Court was unaware of any reported case in which a Judge had dismissed the whole of a claim because he had found that the claim had been dishonestly exaggerated. The invariable rule is that in those circumstances the Judge would award the limited damages which were appropriate to his findings. The Claimant’s credibility might be damaged such that he failed to prove any part of his loss but if he proved some loss he would recover that even though he had fraudulently attempted to recover far more. It was well established that a Claimant would not be deprived of damages to which he was entitled because he had fraudulently attempted to obtain more than his entitlement. There was no logical justification for suggesting that the position should be different where the Claimant’s attempted fraud consisted of lying to support the claim of another person rather the lying to enhance his own claim. The policy of the law was not to shut them out from justice altogether, save in circumstances where the claim related to an insurance contract. That policy might be wrong and it might be that the law should be changed. The Court had some sympathy with the view that fraudulently exaggerated claims should be struck out in their entirety. However, such a change would have to be a matter for Parliament rather than judicial intervention.

Appeal dismissed.

Comments

Both Lady Justice Smith and Lord Justice Toulson made some pointed comments about the frequency of fraudulent claims in personal injury actions and Lord Justice Toulson in particular noted that the Claimants in this case, on the basis of the Judge’s findings, were guilty of serious criminal offences, including conspiracy to defraud and conspiracy to pervert the course of justice and that it might be that prosecutions were needed as a deterrent to others.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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