Liability lessons on low value personal injury claims

April 13, 2023

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As we approach the tenth anniversary of the introduction of qualified one-way costs shifting (QOCS) to low value personal injury claims, a recently unreported case from Liverpool County Court has sparked new discussion around liability investigations. At the pre-action stage, liability investigations capture evidence that can later make the difference should a claim proceed to court. In some cases, if early enquiries aren’t carried out effectively by the adjuster, there’s a risk that the defendant’s insurer could settle the claim in full.

Gail Avril Hamblett v Liverpool Wholesale Flowers Ltd [2023],

A liability investigation played a role in the case of Gail Avril Hamblett v Liverpool Wholesale Flowers Ltd [2023] after the claimant and her husband visited the defendant’s warehouse to purchase flowers. As the claimant was leaving, she fell on the concrete floor, sustaining a fracture to her left hip. It was the claimant’s case that her left foot slipped on a pool of water and flower petals near the front of the premises. The claim was pleaded as a breach of section 2 of the Occupiers’ Liability Act 1957 which required the defendant to see that their visitor was reasonably safe using the premises.

Evidence collection

On face value, the circumstances were neither unusual nor complex. That was the initial view taken by our liability adjuster, who was instructed by the defendant’s insurer to collect evidence and provide guidance on pre-action handling of the claim. Meeting with the insured, she recalled discussing what happened, where it soon became apparent there were inconsistences in the claimant’s version of events. Further, there had been no clear breach in the insured’s duty of care as the claimant had simply stumbled or tripped on a display.

The outcome

Based upon inconsistent accounts as to the size of the pool of water the claimant allegedly slipped on and the late submission of a falsified invoice by the claimant — alleging she was charged for the flowers damaged in the fall — the court found fundamental dishonesty in the case. This ultimately followed full disclosure of the defendant’s evidence, including photographs and witness statements obtained by the adjuster at the time of her visit. Our liability adjuster also worked with the defendant’s sole director who was found to be a credible witness and a meticulous record keeper which helped confirm time stamps and accident book details. The case from Liverpool County Court was dismissed given the fraudulent element.

On the issue of costs, this was a low value personal injury claim where, ordinarily, the defendant would not recover an outlay from the claimant due to QOCS. For those familiar with the principle, it provides an interesting concept where dishonesty is concerned. Although it doesn’t endorse dishonesty, where it occurs and it’s found to be ‘incidental’ to the outcome of the claim, the claimant will not be punished by having to meet the claimant’s costs. It could be said the principle creates an imbalance that is favourable to the claimant.

On this occasion, the exception to CPR 44.16(1) was applied, which in effect disapplied the general rule surrounding the claimant’s immunity from costs. The defendant’s insurer was therefore free to pursue their outlay from the claimant.

Our legal services team weighed in on the case, saying that “It’s rare to see QOCS disapplied, and is testament to the early intervention and evidence capture of the liability adjuster. Common law liability is in a reasonably settled state, so the main driver of outcomes is the quality of a party’s evidence. This was the driver behind the witness statement reforms under practice direction 57AC; the earlier evidence is obtained, the greater the weight it will carry with the court.”

Looking forward

In the case from Liverpool County Court, our team recognised the case law and was able to quickly identify red flags and provide support. The liability investigation captured evidence that made a difference and helped the defendant’s insurer avoid settling the claim in full. Entrenched ideas around the principle of non-fault liability, the perception that compensation will hit the deep pockets of an insurer with claimants seldom viewed as the responsible party, has only helped to reinforce the idea that going to court isn’t always ideal. Although if there’s an appropriate level of evidence and due diligence is completed, it may benefit in the long run to take the fraudulent claim to court. It’s vital to work with a partner who understands the circumstances and complexities.

Special thanks to Paul Squires, development director, Sedgwick legal services, for his valuable contributions to this blog.

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