High Court overturns Recorder’s finding of fraud against law firm that was not given chance to defend itself

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24 June 2015

High Court: elementary fairness

High Court: elementary fairness

A Bolton law firm has won an unusual judicial review against the decision of a Recorder who had accused it in his ruling of being party to a ‘crash for cash’ fraud, without giving the solicitors the chance to rebut the allegation.

The High Court ruled that Mr Recorder Osborne in Manchester County Court “was not entitled to make a conclusive finding of dishonesty or fraud against MRH [Solicitors] and they should be treated as not having such a finding made against them”.

Last October, Mr Recorder Osborne gave an ex tempore judgment at the end of a four-day trial dismissing a claim for personal injury and consequential losses on the basis that the underlying motor accident was staged and the claims fraudulent.

In the course of the ruling, he found that MRH, which acted for the claimant driver, was party to fraud, as were Apex Hire UK and Pennington Legal, which had provided hire cars to him.

None of them were party to the proceedings or had been given any warning that the findings might be made. Further, the defendant had expressly disavowed any suggestion of fraud.

In MRH Solicitors Ltd v The County Court Sitting at Manchester & Ors [2015] EWHC 1795 (Admin), Mr Justice Nicol, sitting with Lord Justice Burnett, agreed with the submission by MRH’s counsel, Julian Knowles QC, that the Recorder would have been entitled – if he thought the evidence called for it – “to voice his suspicions or concerns as to the conduct of MRH, but noting that he had not heard anyone from MRH give evidence…

“What… he should not have done in fairness to MRH was to make positive and unqualified findings that the solicitors had been fraudulent and dishonest.”

While Nicol J said he could understand, on the evidence, why the Recorder’s suspicions were aroused, “in the absence of good reason a judge ought to be extremely cautious before making conclusive findings of fraud unless the person concerned has at least had the opportunity to give evidence to rebut the allegations. This is a matter of elementary fairness.” It was also, he added, to avoid the court “falling into error”.

The High Court made the same ruling in relation to Apex and Pennington; although the Recorder had not made such an explicit finding about them, “we think that the clear implication was that the Recorder was saying that Apex and Pennington were parties to the fraud which was for their benefit”.

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