A cautionary of tale where doctored evidence leads to an un-healthy bank balance.
This is an important article for all Personal Injury Practitioners and deals with the question of exception to QOCS. Hamblett -v- Liverpool Wholesale Flowers Limited (Liverpool County Court, 23rd January 2023) is a case where the Claimant’s fundamental dishonesty led to Qualified One-Way Costs Shifting being disapplied.
The action concerned a claim for personal injuries sustained by the Claimant when she slipped and fell heavily on a concrete floor sustaining a fracture to her left hip.
The Claimant is a self employed florist with a shop in Birkenhead and purchased her stock from the Defendant who, prior to 15 January 2018 operated from premises within the fruit and vegetable market on Edge Lane Liverpool until subsequently moving to the Liverpool flower quarter in Electric Avenue Liverpool.
In the early morning of 30 May 2018, the Claimant visited the Defendant’s warehouse, accompanied by her husband, in order to purchase a quantity of flowers. As she was leaving her left foot slipped in a pool of water and flower petals on the floor near the front of the Defendant’s premises and alleged that the accident arose due to the Defendant’s breach of statutory duty under section 2 of the Occupiers Liability Act 1957.
Liability was denied and it was the Defendant’s case that the Claimant simply stumbled or tripped on a display of flowers near the front of the warehouse, which was clearly visible and did not involve any breach of duty on the Defendant’s part.
The action initially appeared to involve a simple issue of fact as to what caused the Claimant to fall, however, at the commencement of the trial the Defendant made an application to introduce additional evidence in rebuttal in the form of various business documents compiled by the Defendants director. The application was allowed and as a result additional issues became relevant to the Court’s assessment of the credibility and reliability of a number of witnesses in respect of the following:
- Whether the premises were covered by CCTV cameras;
- Whether or not Mr S was present at the time of the accident;
- Whether an invoice for “damaged flowers” contained within the Trial Bundle was a genuine document, and
- Whether the Claimant had exaggerated the effects of her injuries.
The Accident
The Court heard evidence from the Claimant and her husband, each of whom provided written witness statements and gave oral evidence at trial. On behalf of the Defendant the Court heard evidence from the sole director of the company, from an employee at the premises, a porter, and from a customer Mr S..
The central issue regarding the cause of the accident was as to whether or not the Claimant had slipped on a pool of water and/or flower petals or whether she had simply stumbled and fell as a result of carrying a large box of flowers and not being able to properly see where she was going.
In evidence presented by the Claimant she confirmed the flowers were put in large cardboard boxes, she paid the director of the flower company and remarked at the time of about the quality of the CCTV cameras – noticing the the display on the monitors. The claimant dragged one of the boxes to the door and slipped in the pool of water by the door where she alleged the pool of water of 8 to 10 inches in diameter was from a display bucket – she fell heavily onto her left-hand side and was in no doubt whatsoever in her own mind that she had slipped on water on the floor.
Turning to the evidence from the husband of the Claimant he confirmed his remark to the director of the flower company the quality of the CCTV images and was in conversation with another customer when he heard his wife scream. Upon attending his wife he found her in a puddle of water of around 18 inches in diameter. He also confirmed that there was foliage or greenery on the floor in addition to the petals.
In his evidence the director of the Defendant company informed the Court that on the day of the accident it was dry, and the warehouse was quite busy with customers and that he had served the Claim ant and accepted payment just outside of the office before dealing with another customer. The director stated that the Claimant had become impatient and began to leave the premises carrying the last box out of four which she carried in front of her supporting it underneath her rather than dragging it behind. As she reached the front of the entrance the porter was walking back into the warehouse where the Claimant then apparently moved to her left in order to pass him but caught her foot on one of the display buckets causing her to fall to the floor. The director then completed an excellent book entry to that effect on the date of the accident and a copy of the entry was within the trial bundle.
When pressed in cross examination the director conceded that although he saw the Claimant fall he could not specifically say what she had fallen over and could not say that she did not slip. He accepted that the descriptions in both his witness statement and in the accident book were based on an assumption that she had tripped or fallen over part of the flower display since he did not actually see her feet at the moment she fell. Photographic evidence found that the floor was completely dry at the time of the accident.
The porter’s evidence was consistent with that of the director in that having taken part of the Claimant’s order to her vehicle he was walking back to the warehouse, saw the Claimant coming towards him carrying a box, and although there is plenty of room to pass the Claimant, had stepped to her left and placed a quarter of her foot on one of the display buckets causing her to fall heavily to the floor. It was the porter’s evidence that he looked at the area immediately after the accident noting that the floor was completely dry. In oral evidence before the Court reported he was adamant that the Claimant was carrying the box in both hands and not dragging it behind her.
The evidence of Mr S. was also consistent with that of the porter and the director in that he confirmed that the Claimant had picked up the remaining box carrying it wide width-ways in front of her with her arms beneath the box, blocking her view of her footing. Mr S. stated that as the Claimant neared the entrance, he heard a noise that sounded like buckets scraping or dragging on the floor and looked up to see the Claimant staggering and full against buckets.
The CCTV Cameras
In her witness statement of 11 July 2022, made four years post-accident, the Claimant asserted that she had commented to the director about how clear his CCTV footage appeared on the monitors and was told that the system had been installed by the council. In her oral evidence at trial the Claimant stated that the footage was displayed on a single screen split into four sections.
The Claimant’s husband also asserted in his witness statement dated 1 July 2022, that he had spoken to the director about the CCTV which showed clear images on the unit on monitors in the office. In his oral evidence at trial the Claimants husband initially asserted that there were four or five separate monitors in the office before stating it could possibly have been just one screen split into four.
The Claimant issued a part 18 request seeking additional information about the CCTV system and in response the Defendant asserted that there was no CCTV system installed, “only dummy cameras”.
In his witness statement dated 17 October 2018, some four months post-accident, the director confirmed that there was no CCTV coverage of the inside of the warehouse and in his second statement dated 1 April 2019, explained that whilst the cameras had been installed within the new warehouse, no recording equipment had ever been installed. In his oral evidence before the Court the director confirmed that the cameras were not connected to anything so they could neither monitor nor record images and denied having any conversation with the Claimant or her husband about CCTV.
The Court noted that there was no reference to CCTV in the letter of claim dated 12 July 2018 and also noted that liability was denied in a detailed email dated 27 October 2018 referring in particular to the evidence of Mr S.
The Court is therefore faced with two possibilities either the director was correct in asserting that the cameras were not connected, and the Claimant and her husband were simply mistaken in believing they were monitoring events at the time or the director had deliberately withheld relevant evidence from the court.
Having seen and heard the director give evidence the Court found him to be an entirely frank and honest witness who was doing his upmost to recollect events which occurred over four years prior to trial. The Court found that the evidence of the Claimant and her husband to be unreliable on that issue and this was to be a factor to be borne in mind when assessing their reliability on other disputed issues.
The presence of Mr S.
The Court held that in the detailed response to the claim that an email dated 27 October 2018 the Defendants supported their denial of liability by particular reference to the evidence of Mr S., a customer who was waiting to be served behind the Claimant and he saw her pick up the remaining box of flowers and carry it towards the exit where she fell over a flower display. The response concluded that the Claimant was the victim of her own misfortune and raised the issue of fundamental dishonesty in the event that she continued to pursue her claim.
The Court found that the importance of Mr S.’s evidence was clear from an early stage. The Claimant in her written witness statement referred to the email of 27 October 2018 asserting that he was not correct and had stated in her witness statement that she had not seen Mr S. in the unit before the accident. In her oral evidence at Court however the Claimant gave a different account, asserting that there was no one standing behind her when she paid for her order but nevertheless conceded that Mr S. was at the unit. When questioned under cross examination the Claimant gave conflicting accounts and the Court found the Claimant’s evidence, on the issue, to be totally lacking in credibility stating that recognising the central importance of whether Mr S. might have been in a position to witness for the Claimant. The Court found that her witness statement was entirely inconsistent with oral evidence and that her futile attempts to reconcile the blatant inconsistencies were completely unconvincing.
Having had the opportunity to carefully assess the evidence of Mr S. at trial the Court was left in no doubt that he had been present in the warehouse at the time of the Claimant’s accident and had recalled numerous details which the Court found entirely convincing.
The invoice for damaged flowers
In her witness statement, the Claimant alleged that not long after her accident she received a bill from the Defendant for damaged flowers which were caused when she slipped and fell over. She confirmed in her oral evidence that the document in the trial bundle was a copy of the invoice she had received, she subsequently produced the original. This was dated 30 May 2018 and noted the words “Broken Flowers” endorsed alongside the column headed “Description”. When questioned the Claimant denied that she had done anything to alter its contents and informed the Court in her oral evidence that the invoice would have been put through the books of the business as a legitimate expense, but she had kept it separate from other business accounts in her loft as she was so astonished by it. When questioned to explain why she had not disclosed the invoice until 2 December 2022, just a month prior to trial, she claimed that she did not have access to the loft and as there was no letter.
The witness statement of the Claimant’s husband indicated that he had opened the letter containing the bill and was astonished by its content recalling that the bill was for about £28 which he paid to avoid any arguments. However, in oral evidence the Claimant’s husband told the Court that the bill was hand delivered by a driver employed by the Defendant to his wife’s shop two or three days after the accident, and they had paid the driver in cash without question initially suggesting that it was for £39.80 although subsequently accepting that the bill was in fact for £39.80.
At the commencement of the trial an application was granted to Defendant to present additional evidence in rebuttal to the allegation relating to the invoice and that it had been asserted by the Claimant that by signing a statement of truth to the Part 18 response the Defendant had given answers that have proven to be false in a dishonest attempt to mislead the Court.
Evidence was given to the Court that upon receipt of the invoice the director conducted an extensive search of his business records, many of which had been held in storage by his accountants and as a result produced a number of additional documents.
In oral evidence before the Court the director explained that invoices were produced in triplicate from a numbered book with all invoices being in sequential order. After considerable research, hampered by the fact that the invoice adduced by the Claimant bore no number, the director had nevertheless been able to locate a carbon copy of the invoice which was identical to the document produced by the Claimant except that no date has been completed and the words “Broken Flowers” were missing, in addition to the invoice produced by the Claimant was torn at the bottom so that the invoice number could not be seen. The director was able to establish from his handwritten accounting records that the invoice had been issued and paid in cash on 25 August 2017; moreover the company’s address was shown on the copy invoice as the premises in Edge Lane from which the Defendant had been trading at in August 2017, but had moved to new premises in January 2018 with a new invoice book showing the new address.
Furthermore, the director located a further copy invoice issued to the Claimant on 25 May 2018 which bore the Defendant’s new address.
The Court found that had any invoice been issued for flowers damaged in the accident, it would have had a number sequential to 27600 and would have shown the company’s new address.
Although both the Claimant and her husband were cross-examined, they maintained their account that the document within the bundle had been delivered to them after the accident and had not been doctored by them in any way.
The Court utterly rejected the evidence of the Claimant and her husband and was satisfied that the evidence overwhelmingly established that the invoice produced by the Claimant had been issued in respect of a genuine order on 25 August 2017 rather than following the accident on 30 May 2018. The Court found that the invoice had been deliberately torn so as to conceal the invoice number and altered so as to add the words “broken flowers” and the date 30 May 2018 had been adduced in evidence with the deliberate intention of deceiving the Court into believing, not only that the director was a heartless individual, but in order to undermine the reliability of his Part 18 response; and to suggest that he was acting dishonestly. The Court was left in no doubt that the accounts given by the Claimant and her husband, in their witness statements, verified in each case by a statement of truth were false and further satisfied that the accounts given in the oral evidence will also false.
Exaggeration.
Whilst it is not in dispute that the Claimant had suffered a serious hip injury as a result of the fall, it was suggested in cross examination that the Claimant had exaggerated the affects of her injuries and the Court found that there were significant inconsistencies within her evidence in this respect, which caused the Court to question the Claimant’s reliability as a witness and formed the clear view that the Claimant was indeed seeking to exaggerate consequences of her injuries.
The Court found that there was no breach of duty on the part of the Defendant and therefore dismissed the claim.
The CPR rules on Costs.
Under 44.2 of the CPR, the Court has discretion as to whether costs are payable by one party to another and the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party, obviously as the claim had been dismissed there was no dispute that the Defendant was the successful party, however, as this was a claim for personal injuries the Qualified One-Way Costs Shifting provisions of Section II of CPR 44, which had been introduced in 2013, applied. In view of the Court’s finding that both the Claimant and her husband had acted dishonestly by introducing a doctored invoice, that the Claimant had exaggerated her injuries and that the evidence of both the Claimant and her husband was unreliable, the Court invited written submissions on, inter-alia, the liability for costs and in particular whether the exception to qualified one-way cost shifting under CPR 44.16(1) applied.
Exceptions to qualified one-way costs shifting where permission required
44.16
(1) Orders for costs made against the Claimant may be enforced to the full extent of such orders with the permission of the Court where the claim is found on the balance of probabilities to be fundamentally dishonest.
(2) Orders for costs made against the Claimant may be enforced up to the full extent of such orders with the permission of the court, and to the extent that it considers just, where –
(a) the proceedings include a claim which is made for the financial benefit of a person other than the Claimant or a dependant within the meaning of section 1(3) of the Fatal Accidents Act 1976 (other than a claim in respect of the gratuitous provision of care, earnings paid by an employer or medical expenses);
or
(b) a claim is made for the benefit of the Claimant other than a claim to which this Section applies.
(3) Where paragraph (2)(a) applies, the Court may, subject to rule 46.2, make an order for costs against a person, other than the Claimant, for whose financial benefit the whole or part of the claim was made.
The submissions put forward on behalf of the Claimant suggested that the dishonesty of the invoice was collateral or incidental, rather than fundamental and denied that the exaggeration of her injuries was dishonest.
Citing Howlett v Davies [2017] EWCA Civ 1696 where the Court of Appeal approved a test that dishonesty is fundamental if it goes to the root of either the whole of the claim or a substantial part of it, the Court found the claim was fundamentally dishonest stating:
“Whilst there is no doubt that the Claimant fell and suffered a serious injury, and whilst I am prepared to accept that she genuinely believe that the time that she had slipped on water, I am driven to conclude that her reliance on the doctored invoice to support her case was dishonest which went to the root of the claim, and which had the potential adversely to affect the Defendant in a very significant way. I rejected the contention that it was a peripheral issue which was not directly relevant to the issues of the claim. Indeed, but for Mr Appleton’s meticulous record-keeping and his industry in searching his accounting documents, there was a very real danger of the Court being misled. The credibility of key witnesses in a case where liability is disputed must go to the root of the claim. In those circumstances I find that the claim depended as to a substantial or important part of itself upon dishonesty.”
The Claimant was therefore ordered to pay the Defendant’s costs.
Whilst we do not know the extent of those costs, bearing in mind the trial lasted for 2 days and the claim had a life span of approximately 4 and a half years, it would not be beyond the realms of possibility, that the Claimant’s dishonesty cost her close to, if not more than, a quarter of a million pounds.
Summary
As you can see from the above, as a result of the claim being found to be fundamentally dishonest, the Court disapplied Section II of CPR 44 and Ordered the Claimant to pay the Defendant’s costs.
How can PIC help?
The whole team here at PIC are able to assist and advise upon any thorny costs question.
Barry Bennett, Costs Consultant
18.05.2023