Intersting Credit Hire Case
Discussion
Those of you in practice will already know of the case of Hassan v Cooper. I've been out of practice for a few years but still like to keep up with credit hire cases as being a piston head, anything motoring related interests me. Anyway, here's a cut and paste job of the basics of the case...
Fast forward past the Spanish Inquisition and John Wilkes to the present day and the recently reported case of Sayeera Hassan v (1) Sandra Cooper (2) Accident Claims Consultants Ltd [2015] EWHC 540 (QB) in which Mrs Hassan was held liable to pay exemplary damages of £7,250 for her part in an exaggerated claim for damages arising from a road traffic accident.
Mrs Hassan was driving her car when it was involved in a collision with Mrs Cooper’s car. Mrs Cooper conceded negligence. There was it appears a genuine but modest claim for repairs and personal injury. However, Mrs Hassan’s claims management company (ACC) made a deliberate attempt to exaggerate her claim which Mrs Hassan actively supported even though initially she had been an innocent party. Credit hire in the sum of £42,045.12 and recovery and storage charges of £5,808.00 were added to the Claim. Surprisingly the repairs were said to have cost precisely the same as the estimate (£3,598.00) and when the repair shop was contacted by investigators they said the invoice produced by Mrs Hassan was a forgery. Later ACC tried to make the garage owner sign a statement stating he had forgotten he had in fact repaired the car. He refused to be intimidated, denied the allegation and furnished witness evidence for the D. On the day of trial the D successfully made application to amend to plead fraud and bring a Pt 20 claim for exemplary damages. Staggeringly, the Amended Defence pleaded that ACC had prepared the invoice themselves as the garage owner was “too busy” and had asked them to do it instead (!).
The credibility of the C’s case collapsed and the D obtained summary judgment. At a further hearing the D obtained judgment in the tort of deceit and the entire claim was struck out. The instant case was an assessment of damages hearing heard by HHJ Butler sitting as a High Court Judge at Preston. Perhaps foolishly, Mrs Hassan took the stand to give evidence and it emerged she had lied about the recovery of the car from the scene, admitting she drove it home herself. She verified by signature a claim for credit hire for a different car to that which was obtained, verified the falsified repair invoice and also exaggerated her whiplash claim by some months. She was held to be 10% responsible for the continued pursuit of the claims. HHJ Butler described the case as “a very serious false exaggerated claim”. ACC had gone into liquidation by the date of the damages hearing.
Exemplary damages may be awarded in three categories of cases (Rookes v Barnard [1964] A.C.1129):
Cases of oppressive, arbitrary or unconstitutional acts by government servants (e.g.Wilkes);
Cases where the defendant’s conduct had been calculated by him to make a profit for himself which might well exceed the compensation payable to the plaintiff;
Where expressly authorised by statute.
It is the second category which was applied in Hassan and which is of relevance in fraud cases. The burden of proof is still the civil one and a claim for exemplary damages must be specifically pleaded (CPR 16.4). Although the point remains undecided, it has been assumed that exemplary damages can apply in cases of vicarious liability (Racz v Home Office [1994] 2 AC 45, [1994] 1 All ER 97, HL).
Fast forward past the Spanish Inquisition and John Wilkes to the present day and the recently reported case of Sayeera Hassan v (1) Sandra Cooper (2) Accident Claims Consultants Ltd [2015] EWHC 540 (QB) in which Mrs Hassan was held liable to pay exemplary damages of £7,250 for her part in an exaggerated claim for damages arising from a road traffic accident.
Mrs Hassan was driving her car when it was involved in a collision with Mrs Cooper’s car. Mrs Cooper conceded negligence. There was it appears a genuine but modest claim for repairs and personal injury. However, Mrs Hassan’s claims management company (ACC) made a deliberate attempt to exaggerate her claim which Mrs Hassan actively supported even though initially she had been an innocent party. Credit hire in the sum of £42,045.12 and recovery and storage charges of £5,808.00 were added to the Claim. Surprisingly the repairs were said to have cost precisely the same as the estimate (£3,598.00) and when the repair shop was contacted by investigators they said the invoice produced by Mrs Hassan was a forgery. Later ACC tried to make the garage owner sign a statement stating he had forgotten he had in fact repaired the car. He refused to be intimidated, denied the allegation and furnished witness evidence for the D. On the day of trial the D successfully made application to amend to plead fraud and bring a Pt 20 claim for exemplary damages. Staggeringly, the Amended Defence pleaded that ACC had prepared the invoice themselves as the garage owner was “too busy” and had asked them to do it instead (!).
The credibility of the C’s case collapsed and the D obtained summary judgment. At a further hearing the D obtained judgment in the tort of deceit and the entire claim was struck out. The instant case was an assessment of damages hearing heard by HHJ Butler sitting as a High Court Judge at Preston. Perhaps foolishly, Mrs Hassan took the stand to give evidence and it emerged she had lied about the recovery of the car from the scene, admitting she drove it home herself. She verified by signature a claim for credit hire for a different car to that which was obtained, verified the falsified repair invoice and also exaggerated her whiplash claim by some months. She was held to be 10% responsible for the continued pursuit of the claims. HHJ Butler described the case as “a very serious false exaggerated claim”. ACC had gone into liquidation by the date of the damages hearing.
Exemplary damages may be awarded in three categories of cases (Rookes v Barnard [1964] A.C.1129):
Cases of oppressive, arbitrary or unconstitutional acts by government servants (e.g.Wilkes);
Cases where the defendant’s conduct had been calculated by him to make a profit for himself which might well exceed the compensation payable to the plaintiff;
Where expressly authorised by statute.
It is the second category which was applied in Hassan and which is of relevance in fraud cases. The burden of proof is still the civil one and a claim for exemplary damages must be specifically pleaded (CPR 16.4). Although the point remains undecided, it has been assumed that exemplary damages can apply in cases of vicarious liability (Racz v Home Office [1994] 2 AC 45, [1994] 1 All ER 97, HL).
Most insurers do have large fraud units dedicated to dealing with such cases however it takes a lot of evidence to be able to plead fraud in a civil case. In this particular case, I think it was a chance phonemail to the alleged repairing garage which led to the insurers finding out that the garage on the invoice never actually repaired the vehicle in question nor did they prepare an invoice.
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