CLAIM AGAINST ALLEGEDLY DISHONEST EXPERT NOT STRUCK OUT: THESE ISSUES SHOULD BE DETERMINED AT TRIAL

In  EUI Ltd (t/a Admiral) v Smith [2024] EWHC 2803 (KB) Mr Justice Griffiths refused an expert’s application to strike out the case against him.  He upheld the decision of the Circuit Judge and stated that the issues should go forward to trial. The expert had prepared a report on a motorcycle that said it was undriveable. That fact was disputed by the insurer defendant.  Part 20 proceedings were issued against the expert who had prepared the report, arguing that the report was dishonest.  The expert failed in his application to strike out the case and for reverse summary judgment.

WEBINAR – EXPERTS IN THE COURTS IN 2024 11th DECEMBER 2024

On the 11th December 2024 I am giving a webinar reviewing the key cases and comments on expert evidence throughout the year (this is another hour long webinar that could easily be extended to last a whole day).

Matters to be considered include:

• Experts reporting outside their expertise
• Experts in fundamental dishonesty cases
• Compliance with the rules
• Conduct and alleged misconduct.

Booking details are available here.

THE CASE

The appellant, Mr Smith, was an expert instructed to report on damage to a motorcycle. He prepared a report stating that a motorcycle that had been involved in an accident was “beyond economical repair”.  The motorcyclist brought a claim against the driver of the car that struck the motorcycle. He also joined the insurers of the car (the second and third defendants) into the action.

THE INSURER’S PART 20 CLAIM AGAINST MR SMITH

The third defendant insurers (EUI) issued a Part 20 claim against Mr Smith.  The Part 20 claim form said that the report he had prepared was “dishonest”.  It was said that the motorcycle suffered no significant damage and remained driveable. It was alleged that the report was created dishonestly with the intention that the motorcycle be declared undriveable.

The claim was put in the “tort of deceit” and the “tort of unlawful means conspiracy” with the motorcyclist.

MR SMITH’S UNSUCCESSFUL APPLICATION TO STRIKE OUT THE PART 20 CLAIM AND/OR FOR SUMMARY JUDGMENT

Mr Smith applied to strike out the claim against him, alternatively for reverse summary judgment.

THE HISTORY OF REPORTS ON THIS PARTICULAR VEHICLE

The Third Defendant had obtained its own expert report which showed an interesting issue.

1. 1. Mr Murdoch’s second report related to a point pleaded at para 14 of the Part 20 Particulars of Claim, which was that Mr Smith “wrote a report relating to the same scooter following an accident in 2017 in which, similar, if not identical issues, have arisen”.

1. 1. Mr Murdoch’s second report (which post-dated the Part 20 Particulars of Claim) made the following points about that earlier accident in 2017 and about Mr Smith’s earlier report upon it:

i) The 2017 accident involved the same Motorcycle and occurred on 30 October 2017. Although the Motorcycle was the same, it had on that occasion a different driver and a different registered keeper.

ii) Mr Murdoch had access to Mr Smith’s 2017 report, and also 19 photographs of the Motorcycle which Mr Smith had taken on that occasion.

iii) Mr Murdoch set out the history of the Motorcycle from the records of the Driver and Vehicle Licensing Agency as follows.

a) It was first registered in August 2013.

b) In October 2014 it was a “Category C total loss”, meaning (as explained by Mr Murdoch) it had sustained structural damage requiring professional repair but could, upon repair, be put back on the road.

c) In July 2016, it was a “Category D total loss”, meaning it had non-structural damage, was uneconomic to repair (with, for example, cosmetic or electrical damage) but could be repaired on a “DIY” or do-it-yourself basis and could be put back on the road after that.

d) It passed MOT tests on 9 August 2016 and on 29 April 2017.

e) On 13 July 2017, the Motorcycle passed to a new registered keeper, who was the person involved in the earlier accident on 30 October 2017.

f) Mr Smith then produced his earlier report, on 8 November 2017. The Motorcycle was declared as a “Category N total loss” (explained by Mr Murdoch as the term replacing “Category D total loss”), i.e. it had non-structural damage and was uneconomic to repair, but could be repaired on a DIY basis and put back on the road.

g) It passed an MOT test on 22 February 2018.

h) It acquired a new registered keeper on 21 May 2018.

i) Mr Souza had the collision on 17 August 2018 which is the subject of the present proceedings, and it was placed into storage. Mr Smith’s Report (the subject of the present proceedings) was (according to Mr Murdoch) dated 29 August 2018 and declared it a “Category N” total loss, i.e. it had non-structural damage and was uneconomic to repair, but could be repaired on a DIY basis and put back on the road.

j) On 11 September 2018, the Motorcycle was taken out of storage. On 18 December 2018 it acquired a new registered keeper (not Mr de Souza). On 4 February 2019 it passed an MOT test. It had mileage of 4,007 since Mr Smith’s Report, and total mileage of 9,769 since the previous MOT test. It passed another MOT test on 21 February 2020.

iv) Mr Murdoch noted that Mr Smith’s earlier report (addressed, like the later Report, to Professional and Legal Services Ltd, or PALS) listed 13 items requiring replacement and stated that the Motorcycle was “undrivable” and “Beyond Economical Repair”. Mr Murdoch understood “undrivable” to mean that, in Mr Smith’s opinion, the Motorcycle could not physically be moved under its engine power; or would fail an MOT test inspection; or involved “a danger of injury to any person” within the meaning of section 40A of the Road Traffic Act 1988; or would not at the time of inspection comply with the Road Vehicles (Construction and Use) Regulations 1986 (para 4.1.1 of Mr Murdoch’s second report).

v) However, Mr Murdoch’s opinion, based on Mr Smith’s photographs, was that the damage in 2017 was “cosmetic in nature” and “would not have affected the performance or handling of the machine”. He went through the 13 items said by Mr Smith to require replacement and explained his opinion by reference to the photographs.

vi) Mr Murdoch also stated that, in his opinion, all the damage identified by Mr Smith in 2017, and other areas of damage not referred to by Mr Smith, were “commensurate with normal use given the mileage of the machine and its collision history”.

vii) Mr Murdoch concluded that, of the 13 items identified by Mr Smith in his 2017 report as requiring replacement, from the photographs available (taken by Mr Smith in 2017), there was “no evidence that any damage had been caused to any of those items during the collision” (para 5.1).

viii) Mr Murdoch said that the Motorcycle was “almost certainly drivable and roadworthy at the time of Mr Smith’s 2017 inspection” (para 5.4). However, it was possible that this conclusion, based on the photographs alone, overlooked some defects, which could not be identified in photographs, which might constitute a reason for MOT rejection (para 5.4).

THE JUDGMENT AT FIRST INSTANCE

Mr Smith’s application was refused at first instance.  The judge decided that the case in deceit was pleaded in full, as was the conspiracy claim. He declined to give summary judgment.  The case depended on the evaluation of expert evidence and the claim being brought against Mr Smith was not “fanciful”.

MR SMITH’S UNSUCCESSFUL APPEAL

ANALYSIS OF THE PLEADED CASE

On appeal Mr Justice Griffiths did not accept the argument that the case against Mr Smith was inadequately pleaded.

1. 1. The Claim Form says that Mr Smith wrote “a dishonest expert’s report relating to damage supposedly caused to the motorcycle… when it was in collision with a motor vehicle… driven by the First Defendant”. It therefore makes it clear that the claim is about what the Report said about damage caused in the accident. The argument advanced to me that the claim is based on solely on roadworthiness, rather than (additionally) on causation, is therefore immediately placed in difficulty. I do not consider that what is said in the Reply should be taken as cutting down what is said in EUI’s prior pleadings in this respect.

1. 1. Turning to the Part 20 Particulars of Claim, the allegation is that contact in the accident was “benign and glancing”; and the Motorcycle (and this is a pleading of fact) suffered “no significant damage” and “was driveable” (para 4 of the Part 20 Particulars of Claim). The pleading then goes on to say that what the Report said was about this was not true. The Report said that it was “undriveable” and that “seven new parts were required” to put it “back into its pre-accident position”; and that it was “an economic write-off” (quoting from para 8 of the Part 20 Particulars of Claim). Again, this makes it clear that the pleading is that the Report is drawing a false comparison between the condition of the Motorcycle before and after the accident; in other words, that causation is (contrary to the submissions made to me) very much in issue, as well as the roadworthiness being in issue.

1. 1. The pleading then relies upon and pleads Mr Murdoch’s report dealing with each of the seven parts said by the Report to be required and to support the allegation in the Report that the Motorcycle was “undrivable” and “beyond economic repair”. In the case of each part, Mr Murdoch’s report (attached to the Part 20 Particulars of Claim), and explicit pleas in para 12 of the Part 20 Particulars of Claim (set out at para 26 above), aver that none of them was damaged in the collision and, moreover, none of them was damaged at all, save cosmetically, and to an extent which was completely inconsistent with the Report’s suggestion that the need to replace them rendered the Motorcycle “undrivable”.

1. 1. These are multiple and specific averments of fact which support the core allegation that the Report was saying things that were demonstrably untrue. The Report was saying that the Motorcycle was undriveable when it was driveable. The Report was saying that items required replacement because of the accident when they had not been affected by the accident and when they did not, in any event, require replacement. The averments of fact are sufficient to support the allegations of untruth.

1. 1. It is then pleaded that the Report was created dishonestly with the intention that it be declared undriveable even though it was driveable: para 13 of the Part 20 Particulars of Claim.

1. 1. Whilst it will be a matter for the trial judge, the pleaded fact that the Report says things that were not true, and which were (as Mr Murdoch’s report says, although not in these words) demonstrably and egregiously untrue, is certainly sufficient to support the allegation of dishonesty (taking that first). The pleading makes both those points (the Report is not only wrong, but obviously wrong), and therefore justifies the plea of dishonesty. Dishonesty can properly be inferred from the fact (which is pleaded) that untruths are told which are obviously and demonstrably untrue.

1. 1. Similarly, the allegation that there was an intention to declare the Motorcycle undriveable even though it was driveable (the second part of the above proposition from para 13) is sufficiently pleaded (it is pleaded explicitly in para 13.d. of the Part 20 Particulars of Claim) and sufficiently supported by pleaded fact for it to be wrong to suggest it would be appropriate to strike it out. The Report said in terms (and this is pleaded) that the Motorcycle was undriveable. The pleading says in terms that it was not, and gives details of the basis upon which that is said. The pleading supports the inference that the writer of the Report cannot honestly have believed in what he was saying.

1. 1. The pleading of facts to support the allegation of dishonesty by showing a motive for dishonesty (as I have set them out in para 28 above) is not necessary, but neither is it in any way objectionable. If the facts support an inference of dishonesty (as I have found they do, without, of course, deciding whether that inference will in fact be drawn by the trial judge), the argument that the allegation of dishonesty should be struck out has already failed. But that does not mean that going on, as the Part 20 Particulars of Claim do go on, to plead a plausible motive to explain the dishonesty does not strengthen the case (and, therefore, further undermine the application to strike it out).

1. 1. The significance, as I read it, of the points made in paragraphs 13.e. to h. of the Part 20 Particulars of Claim (summarised in para 28 above) is that they are averments of fact. They are averments made plausible by their presence in a listing document prepared by PALS’ own parent company (to which the pleading at this point refers). But it is not necessary to EUI’s case that EUI proves that Mr Smith had himself read that document. What matters is whether the facts there set out are true (and, on an application to strike out, they are to be assumed to be true) and were part of the context in which Mr Smith wrote his Report. In fact, there is no suggestion in the evidence, even in support of the reverse summary judgment claim, that they are not true. They are, on their face, facts relevant to and supportive of a motive on Mr Smith’s part for writing a Report which stated that the Motorcycle was a write-off, and was a write-off because of the accident.

1. 1. For example, they include the alleged fact that PALS (to whom Mr Smith addressed his Report) was connected with the company which would profit from the hire charges; and that these charges were significant; and it would benefit PALS (and its associated operations in claiming hire charges) if the Motorcycle was proved to be a write-off because then, not only could hire charges be claimed in the action, but they could be claimed for a longer period. I do not think it is far-fetched or unsustainable to suggest, by pleading the facts in para 13.e. to h. of the Part 20 Particulars of Claim, that this was part of Mr Smith’s thinking. Whatever the precise contractual relationship between them, Mr Smith addressed his Report to PALS. He had also addressed to PALS the earlier report commissioned in relation to an earlier accident in which this same Motorcycle was involved. Para 5 of the witness statement filed on his behalf suggests that PALS was a regular customer (see para 36 above). His own case is that the Report was not a one-off so far as he was concerned, but one of “hundreds” he does “every year… and for many years”. His own case refers to his “regular role in road traffic cases (carrying out an essential function of the post-accident and pre-litigation process)” (see para 25 of the evidence filed on his behalf, quoted in para 39 above).

1. The context pleaded against Mr Smith is context which is (allegedly) part of the world in which he operates. His Report was, in its own words, about an “Accident” and an “Insured” and it was filed in the context of court proceedings which Mr Smith (as shown by his CPR Part 35 “Expert’s Declaration” which formed part of the Report) fully expected to consider his Report. His Report was being used to support a claim for hire charges. Although it was written before proceedings were issued, it referred to an insurance claim following an accident and to court proceedings, and therefore anticipated the issue of such proceedings. If what he said in his Report was deliberately untrue, it is part of EUI’s pleaded context for the untruth that he was supporting a claim for hire charges that was false; and which would be larger because the vehicle was said by him to be a write-off rather than capable of a repair which would mean lower hire charges and a smaller claim, because if repairable (as Mr Smith’s Report said it was not, but which EUI’s case, supported by Mr Murdoch, says it was) the Motorcycle could be put back on the road, and the need for hire (and, consequently, the claim for hire charges) would cease sooner.

THE DECISION ON THE APPLICATION FOR REVERSE SUMMARY JUDGMENT

1. 1. I consider that the Judge was entitled to decide that the Part 20 claims have a realistic prospect of success and must be decided at a trial, applying the EasyAir principles which I have set out in para 95 above.

1. 1. Mr Smith’s case is relevant, not so much to his claim to strike out the Claim Form and the Part 20 Particulars of Claim (which conventionally require the focus to be on EUI’s own pleadings, and take them essentially at face value), but, particularly, to his claim for reverse summary judgment against EUI’s claim (which provides more scope for the consideration of evidence).

1. 1. Mr Smith’s Defence to the Part 20 Particulars of Claim alleges that, when Mr Smith did his Report, the Motorcycle “had damage and was undrivable” (para 6).

1. 1. This is hotly contested as a fact by EUI, and EUI is supported in that contest by the expert evidence of Mr Murdoch. That is a dispute which is suitable for a trial. Mr Littler’s report is not conclusive, for the reasons given by Mr Murdoch. It is also fair to say that Mr Murdoch’s expertise appears to be more relevant than Mr Littler’s. Those are further points against Mr Smith obtaining summary judgment on the basis of Mr Littler’s contested opinions.

1. 1. Mr Smith’s Defence says, however, that Mr Smith “does not state, has never stated, or been instructed to state, what damage was or was not caused to the motorcycle in the alleged accident, or that the accident caused the motorcycle to be undrivable” (para 6). Similarly, he pleads (in para 15) that he “has not stated that the motorcycle was undrivable because of the accident”, but only that it was undrivable when he inspected it. EUI has a realistic prospect of overcoming that assertion, given the context and content of the Report.

i) The Report contains an expert declaration saying that Mr Smith understands that his report will form evidence to the court (para 1 and para 11.1 of his “Expert’s Declaration”).

ii) The Report itself is addressed to PALS (Professional and Legal Services Ltd).

iii) The Report letterhead is Evans Harding Engineers (CG) Ltd, described as “Consulting Engineers & Claims Assessors; Theft & Claims Investigation Service”.

iv) The body of the Report starts by giving Mr De Souza’s name as the “Insured” and the “Accident Date” as 17 August 2018.

v) Both the Report itself and the accompanying “Expert’s Declaration” state a PALS “Claim Number”.

vi) The Report identifies “Pre Accident Damage” only as “Scratches Off Side”, and contrasts Pre Accident Value of £615 with the Report’s itemisation of “Moderate” impact severity, impact location “To The Near Side” (with arrows along the near side to illustrate this), and a list of seven “New Materials” required (four of them stated to be on the near-side), followed by the Report’s conclusion that these repairs will cost £942 so that the vehicle is “Beyond Economical Repair”.

vii) The Report says that the vehicle is now “Undrivable” and gives no indication that, in Mr Smith’s opinion, this was or might have been so before the accident whose date (17 August 2018) is at the top of the Report.

1. 1. Whilst I note Mr Smith’s case in this respect, I consider that it falls well short of rendering EUI’s contrary case (that Mr Smith’s Report was deliberately written to suggest, falsely, that it was the accident which caused the Motorcycle to be beyond economic repair and undrivable), so weak as to justify summary judgment against EUI without a trial.

1. 1. Mr Smith’s Defence also says that he “was told what damage was caused in the accident” (para 11). This may be meant to imply that he did, in fact, think that the new parts he identified were required as a result of the accident as a result of what he was told, perhaps by the claimant, but, if that is his case, it would be a matter for a trial to decide whether it can be proved and what effect it has on the outcome of the case. It does not render the pleadings liable to strike out; nor is it sufficient to establish Mr Smith’s case to a point where a trial is not required and he can claim summary judgment.

1. 1. Mr Smith’s Defence states (as the Report does not) that the reason he considered the Motorcycle to be “undrivable” when he inspected it was “due to the side mounting / side stand being exposed by the missing nearside belly pan” (Defence para 15). In the Report, by contrast, the list of the seven items as “New Materials” did not single out the belly pan but simply listed it (as the second of seven “New Materials”) without further explanation or emphasis (see para 11 above). What the basis of his opinion was, and what by his Report he represented it to be, is therefore properly a matter for examination and determination at trial.

1. 1. A clear dispute which is key, both to EUI’s efforts to establish that Mr Smith’s Report was dishonest and an act of deceit, and to Mr Smith’s defence, is that Mr Smith denies “that he intended the motorcycle be declared undriveable even though it was driveable” (Defence para 18). Whether the motorcycle was in fact driveable, and whether (if it was driveable) that was so obviously the case that a proper inference is that Mr Smith’s Report to the contrary was dishonest, and promoting a deliberate falsehood, are matters for trial.

1. 1. Mr Smith’s Defence says he has “never received instructions from PALS”, and that his instructions “came from Evans Harding Engineers (CG) Limited” so he “had and has no interest in ‘ingratiating himself’ with PALS” (Defence para 20). However, the Report is addressed to PALS and, although Evans Harding are on the letterhead, Mr Smith wrote and signed it, and also signed the accompanying Expert’s Declaration. On the face of it, Mr Smith is giving his Report to PALS, therefore. What the relationship between Mr Smith and Evans Harding might be is not stated in the Defence but that, and whether it means that Mr Smith had no interest in PALS providing repeat business can be explored, if necessary, at trial. Mr Smith’s bare assertion does not dispose of the point, or render it unarguable. It is also EUI’s case, supported by Mr Murdoch, that Mr Smith had given a previous report to PALS in respect of the 2017 accident, so the element of repeat business was arguably present.

1. 1. Mr Smith denies the case against him, also, in respect of the unlawful means conspiracy. He states that he has “never met or communicated with the Claimant” (Defence para 31). The Claimant was, however, according to Mr Smith’s Report, the “Insured” and so his name, and his interest in the claim, was apparently known to Mr Smith. I have dealt with this point in paras 128 and 129 above.

1. 1. Mr Smith’s Defence says it is not clear to him whether the Report statements summarised in para 8 of the Part 20 Particulars of Claim (see para 26 above) are alleged to have been dishonest. However, that flies in the face of the Part 20 Particulars of Claim which very clearly state that EUI’s case is that the Report was dishonest. This is said in the Claim Form, quoted in para 23 above. It is also said in terms in para 13.d. of the Part 20 Particulars of Claim (quoted in para 27 above). That averment comes directly after the passages in which what Mr Smith said in his Report about each of the seven new items said to be required (as pleaded in para 8 of the Part 20 Particulars of Claim) are contrasted with statements, backed up by Mr Murdoch’s evidence, that none of them were required (as pleaded in para 12 of the Part 20 Particulars of Claim) and that Mr Smith’s own photographs do not support his Report.

1. 1. Mr Smith denies dishonesty. This denial is based on alleging that he did not intend to imply anything at all about the relationship between the accident and the damage, and that he stands by all the assessments in his Report (which Mr Murdoch’s evidence rejects). However, that is a dispute between him and EUI which cannot be resolved by way of summary judgment. EUI’s case, as pleaded, and as I have summarised it above, is sufficient to justify a trial which includes the question of whether the Report was dishonest and deliberately deceitful. EUI’s case (supported by Mr Murdoch) is that Mr Smith’s Report was not only wrong, but stated something that no reasonable expert could have stated (that the Motorcycle was “undriveable”) and this supports the allegation of deliberate deceit on Mr Smith’s part. EUI’s case is also that Mr Smith’s Report suggests that damage had been caused by the accident which was not caused by the accident. That is a case which is at least arguable, given the implication of the Report read as a whole and Mr Smith’s acceptance that he did not believe that the parts he listed as requiring replacement had been damaged in the accident which his Report was, on its face, about.

1. The conspiracy claim also has a realistic prospect of success, given the analysis I have already performed when deciding not to strike out that claim.