The High Court has rejected a claimant personal injury firm’s objection to witness statements from the opposing solicitors that suggest it may be engaging in fraud.
Mr Justice Freedman made clear he was not saying the statements from James Stevens, a director and head of organised fraud at DWF, proved dishonesty on the part of North London firm Ersan & Co.
However, Ersan did not convince him that the statements amounted to impermissible expert evidence or were “unreliable”, such that the defendants should be disbarred from relying on them.
As a result, he upheld the decision of Her Honour Judge Backhouse last year.
The court was dealing with appeals from five road traffic accident claims brought by Ersan seeking damages of between £5,000 and £10,000 each.
Mr Stevens’ first witness statement analysed 372 claims submitted by the firm, which he said showed that 95% contained an allegation of psychological injuries, 67% of claimants were recommended for further psychological examination, and 68% of claimants served a psychological or psychiatric report.
Further, all 207 reports provided by a particular doctor diagnosed a recognised psychiatric condition, with two-thirds of them estimating a recovery period of two years or longer.
In his second statement, Mr Stevens said the data, on its face, “strongly indicates that all of the claims have been cynically managed so as to contrive an outcome whereby in every case, and irrespective of the true circumstances of that case, the claimant is presenting a claim that they have suffered psychiatric harm as a result of the relevant index event”.
Freedman J recounted: “The claimants submit that the allegation of fraud is irregular and unfair in that there is a failure to make specific allegations against Ersan & Co, and the nature of the allegations made should have led to Ersan & Co being an additional defendant to a conspiracy claim.”
The firm argued that Mr Stevens made statements of opinion, rather than fact, but provided no comparative data to show whether the figures were out of the norm. There was also a suggestion that these were a selection of cases, but with no information on how the selection was made.
The parties had been given permission in case management directions to serve further witness statements but there was no direction for expert evidence.
HHJ Backhouse acknowledged that the lack of statistics from claims handled by other firms “lessens the weight which the court gives to Mr Stevens’ statement in any particular case”, but held that the statement did not seek “to draw conclusions as to whether the figures are markedly higher or different”.
She explained: “It may be that that will be one of the defendants’ submissions, but that is not the evidence.”
The judge concluded that it was similar fact evidence. “Looking at the test, it may not ultimately be probative, that is very much a matter for the trial judges, but I am satisfied that it is capable of tending to prove fundamental dishonesty and so is admissible, and in my judgment it would be contrary to the overriding objective to shut it out.”
Freedman J said: “There is at least a cogent argument that the evidence ought to be the province of an expert and not of a solicitor with the assistance of paralegals in a law firm. It is at least arguable that the evidence is not purely factual, but that there might be statistical assumptions embedded within the information.
“At this stage, the court cannot make a definitive conclusion, but it is a real possibility that, without a statistician and/or further information, a judge might not be able to make findings of the kind which are invited in the second statement of Mr Stevens.”
The judge said a related question was what weight the evidence has without a comparator.
But despite these “serious reservations”, he agreed that Mr Stevens’ evidence should not be excluded, saying it could be tested at trial “as to whether in fact it is on analysis implied opinion evidence and not factual evidence at all” and, if admitted, what weight to attach to it.
While he “entertain[ed] doubts as to whether, without being in the context of other evidence, the analysis of Mr Stevens could by itself tend to show fundamental dishonesty”, there was enough in his evidence that may support such a submission.
Freedman J added that it was “unfortunate” that neither side sought to apply to adduce expert evidence – either to counter or support Mr Stevens’ statements – in advance of the hearing before HHJ Backhouse.