London Strategic Health Authority v Pandya & Ors

A person who knowingly participates in a dishonest scheme is jointly and severally liable for the resulting loss, even if the precise division of tasks is uncertain. Personal theft of the property used in the fraud, or completion of every forged document, need not be proved. Liability may be established by direct evidence together with compelling circumstantial evidence and inferences. Where several defendants are jointly liable for one fraud, settlement with some defendants does not release another defendant from the balance of the single liability. The claimant must give credit for sums received. A defendant who pays more than a proper share may pursue contribution from other participants under the Civil Liability (Contribution) Act 1978.

The claimant, successor to health authorities whose funds had been misappropriated, brought claims arising from fraudulent NHS prescription payment applications made by eight pharmacies between 1998 and 2001. The other defendants settled, leaving Mr Pandya as the only effective defendant.

The claimant alleged that Mr Pandya participated in the frauds by supplying genuine prescription forms, helping devise the prescription contents and receiving drugs in return. The central issues were whether he was jointly liable for the fraud involving Granil Pharmacy, whether the evidence connected him with the fraudulent claims made by the other pharmacies, and whether he remained liable for losses, interest and costs after settlements with other defendants.

1. Liability for the Granil Pharmacy fraud. Mr Pandya was jointly and severally liable with Mr Kotecha and Sideset Ltd. The court accepted Mr Kotecha’s evidence, approached with caution because of his participation in the fraud, because it was corroborated and clarified by documents found during the search of his home. Handwriting evidence established that Mr Pandya had written documents recording drug groupings, orders and running accounts.
2. Participation in the dishonest scheme. Mr Pandya supplied prescription forms knowing that they had been obtained improperly and were intended for dishonest use. It was unnecessary to determine whether he had personally stolen the forms, completed the forged prescriptions or performed every other act in the fraud. Unknown or additional participants did not affect his liability. His knowing participation in the scheme was sufficient.
3. Frauds involving the other pharmacies. The evidence showed that forms from the same sequential batches were distributed among several pharmacies, and that the same drug groupings recorded by Mr Pandya appeared in claims made by the other pharmacies. Those facts, together with the evidence concerning Granil Pharmacy, established by inference that he was implicated in the wider dishonest scheme.
4. Extent of recovery. The claimant was entitled to judgment for the losses attributable to all eight pharmacies, together with interest and relevant costs, subject to credit for settlement sums already received. The liability was a single joint and several liability in respect of each fraud, rather than a primary liability of the pharmacy defendants with a separate secondary claim against Mr Pandya. Any complaint that Mr Pandya bore more than his proper share could be pursued by contribution proceedings under the Civil Liability (Contribution) Act 1978.

First instance judgment. No appellate history is stated in the judgment.