Readers will have noted from recent articles that the issue of responsibility for legal expenses in personal injury claims is a hot topic. Scottish Courts have had to consider legislation introduced by the Parliament to encourage and protect individuals seeking damages for injuries whilst striking the balance of allowing Defenders to recover costs in appropriate circumstances. One of the most keenly-disputed areas where this issue arises is where there has been an allegation that the Pursuer has made a fraudulent representation or otherwise acted fraudulently.

The first case to consider the application of the test was the case of Gilchrist v Police Scotland in February 2023. In Gilchrist, a Pursuer was working at Edinburgh Royal Infirmary, attempting to treat a patient who had been brought to hospital by police officers. The police officers required to restrain the patient and, during the course of that process, the Pursuer sustained injuries. The action was successfully defended and the Defenders made a Motion for disapplication of Qualified One-Way Cost Shifting (QOCS) on the grounds that the Pursuer had made a fraudulent representation. The Motion was unsuccessful on the basis that the Sheriff had not made a finding that the Pursuer was incredible, nor did he hold that her evidence was deliberately untrue.

In two more recent decisions issued in October 2023, Natalia Musialowska v Zurich and Ali and Hussain v RSA, both of which concerned alleged injuries following road traffic accidents, the Court has taken the opposing view.

In Musialowska, the Court held that the evidence of the Pursuer and her partner regarding the point of impact was incredible and unreliable, having been tailored to fit with damage allegedly observed on the insured’s vehicle. In the course of their evidence, the Pursuer and her partner made the serious allegation without evidence that either the photographs of the insured’s vehicle had been tampered with, or it had been repaired following the accident and the insured was not telling the truth about the lack of damage - an accusation of conduct which the Court stated could be perceived as analogous to attempting to pervert the course of justice.

In Ali and Hussain, liability for the road traffic accident was admitted and the proof was restricted to the issues of whether or not the Pursuers had sustained the injuries alleged and if so, the value of those injuries. The Sheriff was critical of several aspects of the Pursuers’ evidence, including inconsistencies in their descriptions of the impact when compared with CCTV footage and their reporting of the alleged injuries to various medical professionals. Ultimately, the court found both Pursuers were incredible and unreliable in relation to “the core issues of their claims”.

In considering the application of the test, the Court stated: “The threshold for establishing a fraudulent representation or otherwise acts fraudulently is a high one and in considering the application … the court will require to consider the whole facts and circumstances of the claim or proceedings. Having conducted such an exercise, if the court then concludes on the balance of probabilities that the Pursuer or their legal representative has acted intentionally to mislead the court, the threshold will be met.”

It was considered that the cases went beyond the more common scenario where there are competing versions of events and the court prefers one over the other. While further cases will undoubtedly follow, these judgments show the Scottish Courts carefully weigh up the balance between providing access to justice and protecting innocent parties from claims without merit.

Val Pitt is a Partner, Horwich Farrelly

Incredible tales from the Scottish courts - Val Pitt