Claimant ordered to repay damages received after court finds that accident was staged

Teare J in the High Court has ordered that the claimant in a personal injury case should pay back the damages he received from insurers, plus costs and interest, in UK Insurance Ltd v Gentry.

Details of the underlying case

The claimant, Mr Gentry, suffered injuries after a car accident. The accident took place on 17 March 2013, when Mr Miller drove his car into Mr Gentry’s car. Mr Gentry’s car was stationary at the time. There was also a third party involved, Mr Voller, who was a passenger in Mr Gentry’s car at the time of the accident.

Mr Miller made a claim on his insurance. Eventually, Mr Gentry commenced proceedings against Mr Miller. The proceedings were not defended in time and a default judgment was obtained by Mr Gentry. This in itself started a process of litigation, as the insurers applied to set aside the default judgment. The insurers’ application was denied by the Court of Appeal in March 2016 (Gentry v Miller and another).

Mr Gentry’s claim was for in excess of £100,000. As well as claiming damages for personal injury, he hired a replacement car himself, declining the offer of a replacement from Mr Miller’s insurers. Eventually Mr Gentry was awarded £226,458 in damages. However, following the Court of Appeal hearing in March 2016, the payment of any damages to Mr Gentry had been stayed, pending the outcome of the proceedings for deceit, bought by the insurers.

Insurer’s suspicions

The insurers became suspicious and started investigating the matter. In February 2014 it became clear that despite the denials of Mr Gentry, he and Mr Miller had a friendship going back some years. Evidence was found via Facebook, Linkedin and Experian, linking Mssrs Gentry and Miller.

Mr Voller had also intimated a claim against the claimant, and a settlement had been reached. However, upon investigating the claim more thoroughly, settlement cheques were stopped.

The insurers issued proceedings for fraudulent misrepresentation, on the grounds that Mssrs Gentry and Miller had staged the accident.

The judgment

Teare J found for the insurance company. His judgment is most succinct and should be considered by practitioners when considering fraudulent misrepresentation, or other quasi-criminal litigation.

He makes clear that the burden of proof in relation to the fraudulent misrepresentation was on the claimants, and in addition:

“… particularly cogent evidence is required in order to discharge the burden of proof. In short the nature of the allegation makes it appropriate to apply a standard not far short of the criminal standard”.

In making his decision, Teare J also provided guidance on how he came to the decision that there had been a fraudulent misrepresentation by Mr Gentry:

He examined contemporaneous documents to see whether they supported either party’s case.

• He put emphasis on the fact that Mr Gentry did not provide witness evidence, and therefore eluded cross-examination.
• He examined all the circumstantial evidence:
  • Mssrs Gentry and Miller were friends at the time of the collision;
  • neither Mr Gentry nor Mr Miller informed the insurance company that they were friends at the time of the accident, or following on from the accident;
  • when the insurer discovered Mssrs Gentry and Miller were friends, they lied about it. From the judgment, it would appear they went to some lengths to lie about their friendship.
• He looked at the case in the round, and commented: “In cases of this nature it is necessary to stand back and have regard to the whole of the evidence”.

It should be noted that Mr Gentry acted as a litigant in person in the matter. It is clear from the judgment that Teare J gave him the opportunity to provide a full defence, even allowing a witness to be called that had not provided a witness statement.

Teare J ordered that Mr Gentry pay back the money he had been awarded, together with interest and costs. He had been awarded £226,458 in the previous proceedings, but only a fraction of this sum had been paid to Mr Gentry (around £19,179).

There seems to have been a spate of cases recently regarding fraudulent claims, often arising out of spurious road traffic accidents (RTAs). They are providing strong guidance to practitioners when considering claims in fraudulent misrepresentation and other quasi-criminal proceedings.

Notes for practitioners

Alleging fraud or deceit is obviously a difficult decision for a practitioner to make, with professional conduct issues arising if a claim of fraud or deceit is made without strong grounds (see IB(5.7) of the Solicitors Regulation Authority (SRA) Code of Conduct). In addition, as the burden of proof is on the claimant to prove fraud or deceit, a strong case must be made out.

A practitioner should therefore:

• Consider the documentary evidence. Is there any direct documentary evidence that supports an allegation of fraud/deceit?
• Consider all the circumstantial evidence. Does this seem to infer that there has been a fraud/deceit?
• Step back. Look at the case as a whole. What does the case look like in general?

Practitioners should be aware of the comments of Teare J, that: “In short the nature of the allegation makes it appropriate to apply a standard not far short of the criminal standard”, and advise accordingly.

This article first appeared on the Practical Law Dispute Resolution Blog; January 2018.