Claims Culture (has the bubble burst?) and the use of surveillance evidence in personal injury cases – is this the tide changing?

When I first sat down to write this is article a few weeks ago I was intending to direct my thoughts to situations when it might be useful (within personal injury litigation) for defendants to consider obtaining surveillance evidence. I am not intending to write an exposition on the admissibility or even the legality of such evidence which I think is familiar territory for most of us.

However, I have to admit that along the way my attention has been diverted by a number of recent changes and I will be considering those together with the question as to whether the tide has changed either in the so called “claims culture” and/or in terms of the court’s approach to the use of surveillance evidence.

As a defendant lawyer in this field I think that I have become instilled with a degree of cynicism. Having seen so many exaggerated, or just downright fraudulent, claims over the years that is perhaps inevitable. Further, whilst I was tempted to say in these days of an increasing “claims orientated” culture, looking back over my 40 years’ experience I am not sure that the current culture is really all that much different to when I started out on my career. The fact is that there have always been people only too ready to jump on the bandwagon if there is something in it for them.

There has though been a shift in culture in other respects and perhaps the major difference is the way cases are now funded. When I started by far and away the majority of personal injury claims were funded by the trade unions or by legal aid so the claimants (plaintiffs in those days) were either directed by their shop steward to their trade union’s solicitor or they found a high street legal aid practice. Gone are those days and perhaps one of the biggest changes in recent years is that the professional has perhaps helped to fuel the claims minded culture with, shock horror, even solicitors prostituting themselves with their TV ads and the like. Am I the only person who can remember when solicitors were not allowed to advertise?

The latter proliferated and were funded by the reforms intended to make everything more accessible and cheaper when CFA were introduced which gave us a situation when effectively the insurance industry funded the litigation from both sides but the bubble for those CFA claims “factories” (or perhaps I should say farms – the pile it high and sell it cheap merchants) has now been well and truly burst.

Whether this is going to have an effect on the number of claims that is pursued remains to be seen and may be the jury is out but the verdict already appears patently obvious as we hear, almost daily, as yet another claimant firm goes to the wall and with even the major players, whose core business has for many years been their work for their union clients, closing offices and announcing wholesale redundancies of their staff. Certainly the number of litigated cases is in sharp decline and with the exponential rise in court fees which has seen increases in issue fees of up to 760%, apparently soon to be increased yet again, is that a great surprise?

Perhaps the phrase “access to justice” is a thing of the past?

I am sure that there will still be significant numbers of low value cases which will run through the portal but it is doubtful that many will be fully litigated and it is with regret that I have to say that I personally doubt that those that are will necessarily receive justice.

Under the present regime of fixed fees in the fast track cases defendants of course now have the advantage of knowing what the claimant’s legal fees are going to be and may be the removal of the threat of paying a 100% uplift on the claimant’s costs and the enormous ATE insurance premiums will compensate the loss of the recovery of the defendants’ own costs and encourage defendants to fight a few more of the dubious cases.

Where I suspect the new regime is unlikely to impact to quite the same extent, that is in terms of the numbers of claims that will be litigated, is in respect of those cases that are at the top end of the scale, the high value claims involving serious or catastrophic personal injuries and it is in relation to those claims that the remainder of my comments will primarily be addressed.

I think that there has always been a tendency to think of surveillance as a tool to catch out the “fraudulent” claimants and undoubtedly the defence lawyer or insurer instructing an enquiry agent to undertake surveillance of a claimant will nearly always are going to hope for that result but I would suggest that it is certainly not the only use to which surveillance should be put and it is not always quite so immediately obvious how useful any surveillance might be.

Over the years I have personally seen some amazing results from surveillance:  the “blind man” who could drive; the claimant with psychiatric injuries and who allegedly could not string a sentence together and who suggested that dogs and cats each ran around on three legs and yet who was able to explain both the chemical properties of the phosphate fertiliser he used in his garden; and the man who was seemingly crippled and in a wheelchair and yet was caught on camera wielding an axe chopping down some trees, to mention just a few.  I could go on and give literally dozens of examples and, leaving aside the fact that in many of the examples we are talking about claimants who have committed serious criminal offences by trying to defraud insurers, some of the explanations that I have heard in court have been just as funny or even funnier than what they have actually been caught doing.

I remember one case in particular that came on for trial in the High Court where the claimant, who was a very muscular chap of about 6 feet tall, when confronted by video evidence (clearly showing him swinging an axe) protested to the Judge that the person shown in the video was him but his brother.  The judge insisted that he get his “brother” to court the following day to give evidence. When we turned up for the second day to our surprise another witness was ushered into the witness box, a rather weedy looking lad of no more than five and a half feet who looked nothing like the claimant. When shown the video and asked if he recognised anybody in it he identified his “uncle” and when asked if his uncle was in court he pointed straight at the claimant.

The days when the defence team had that “fun” element of surprise when the defence barrister could spring such evidence on a claimant whilst cross examining him have long gone and whilst I applaud the efforts of the Civil Rules Committee and entirely agree that it is right and proper that such evidence should be disclosed at an appropriate stage prior to trial if it is going to be used, by removing that element of surprise the rule changes have to some degree blunted the effectiveness of that weapon. The claimant now sees it so far in advance that he has the chance to give a considered (no doubt schooled) response.

However, I have to say that the reforms postJacksonappeared to be taking things just a step too far! Strictly speaking a defendant when completing the costs budget in Form H needs to include within the costs budget provision for surveillance evidence if it has in mind obtaining such evidence.  I have little doubt that for years claimants have been warned by their solicitors that it is likely that they will be watched but for the defendant’s solicitor to actually have to tell his solicitor in the Form H that you are budgeting for surveillance is frankly is absurd!

As things stand at the moment it does appear that there is no obvious way around this problem short of ignoring the rules and simply not including this in the directions questionnaire and Form H but to do so, at least potentially runs the risk of such evidence being deemed inadmissible but provided that the evidence is disclosed at the appropriate stage and an application is made if necessary to use it then it would be surprising if the court would abandon adherence to the overriding objective and disallow any such evidence if it is relevant.

So how do or how will the courts approach this?

I think that a degree of common sense was introduced recently in the judgment given by Judge Maloney QC on 19 May in the case of Purser v Hibbs & Another in which the claimant had failed to beat a Part 36 offer made by the defendants prior to trial.  The circumstances in that case were that the claimant had sustained injuries in a road traffic accident caused by the defendant and the defendant admitted liability.  Before commencement of the proceedings the defendant’s insurer conducted two periods of surveillance neither of which had demonstrated anything inconsistent with the claimant’s account of the extent or impact of her injuries.  The defendant then made a Part 36 offer which was not accepted.  Thereafter the claimant issued proceedings and nearly a year later the claimant was caught out, the surveillance evidence was disclosed and the claimant accepted the Part 36 offer that had been made prior to the issue of proceedings.

The question the court had to determine was as to whether the defendant should recover all its costs, including the costs of the surveillance.  There was of course no dispute that the defendant was entitled to its costs from the date of the Part 36 offer but the surveillance costs I understand had not been referred to in the Form H. It appears that common sense prevailed and those costs were allowed, the court did not want “to discourage the judicious use of surveillance evidence or to alert fraudsters to the use of surveillance evidence”.

I am not suggesting that surveillance evidence should be used in every large claim just because it is a large claim or for that matter solely with the expectation that the fraudsters can weeded out. Surveillance is never a cheep option and it is important to consider the cost to potential gain ratio. However, with the larger cases, particularly where there have been very serious or catastrophic injuries, it is much easier to justify.

So when should it be considered in those cases?

Firstly, I would suggest to see if you can obtain a “benchmark” in the early stages.  I am talking now about those cases where there is good evidence of serious injury having been sustained and no doubt regarding the claimant’s bona fides and you are looking to find out how serious the injuries are and how they are affecting the claimant in those early days.

This is often a long shot as the enquiry agents will only get to see the claimant if he gets out of the house but if they are able to see him it can help in a variety of ways. It may assist to decide which medical specialist you might want to instruct and it might certainly help with an assessment or early estimation of the likely total damages.

Another circumstance where that might apply arose in a case that I settled recently. In that case it was “thought” that the claimant broke his back when he fell through a skylight on a roof (in fact he had) but the defendant was no longer in contact with the claimant and his solicitors had not been telling the loss adjusters or me very much about the extent of his injuries or his likely prognosis. Insurers obviously wanted to know whether it was going to be a case involving someone who had become a paraplegic, in which event the claim could well have been into seven figures or whether this is someone who, although having sustained serious injuries and may not work again, those injuries were not so serious as to require a lot of care, aids and equipment etc. Sometimes it would be very useful to have a crystal ball on my desk but sadly that is something that I lack.

However, as we knew where the claimant was living surveillance was able to tell us that he had in fact made a reasonable recovery. We repeated the surveillance repeated several times over 18 months and that was able to help us steer the case towards a settlement at a JSM and saved the case turning into a litigated case.

In other cases, provided that you can establish where the claimant lives and the agents can then establish that he/she is at home, even if they do not see him a longer period of surveillance will give you a picture as to the degree of care that he may be receiving from friends and family or social services. That was exactly the position that we were faced with in another recent case in which a claimant, who fell from height, had suffered multiple injuries and it was alleged that he suffered a serious brain injury. He had made an excellent recovery from his other orthopaedic injuries but the brain injury was such that he was a “protected person” as it was said that he was unable to deal at all with his affairs. It was contended that damages on full liability in that case should be over £5M. Whilst there was no doubt that the claimant had suffered significant injuries we were able to show through the surveillance evidence that he was far more independent than his family were suggesting even though we could not go so far as to suggest that he was not or should not be a protected person. Even so, the evidence helped reduce the damages by several hundred thousand pounds.

To conclude I would say that in most cases you are generally still only going to obtain surveillance evidence for one of two reasons: (a) to get an indication as to how bad the claimant’s injuries really are; or, (b) when you think you might be faced with a fraudulent or exaggerated claim. However, I venture to suggest that there are many other reasons to consider surveillance, only a few of which I have touched on above and as the courts are reigning back from the strict position that defendant’s solicitors should include this on their costs budgets it is worth keeping this option in mind.

Andrew Nathan

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