Hussain v Hussain & Anor

On an appeal from factual findings, the Court of Appeal asks whether the judgment was wrong, rather than whether it would have reached a different conclusion. Trial judges retain an important evidential advantage, especially on witness credibility, but an appellate court need not use a “plainly wrong” formula. In a fraud claim, the defendant retains the burden of proving fraud on the balance of probabilities. The allegation’s gravity requires appropriately cogent evidence. There is no general “follow the money” rule making complicity the only economically rational explanation for a staged collision. Medical-record omissions may affect reliability or credibility, but do not by themselves establish fraudulent complicity. The appeal succeeded because the trial judge’s two identified reasons did not justify that inference.

The claimant sought damages for vehicle damage, associated expenses and soft-tissue injury following a road collision. Aviva defended the claim as fraudulent, alleging that the collision was staged and that the claimant was complicit. After a three-day trial, HHJ Shaun Spencer QC found that the claimant had participated in an attempted fraud, dismissed the claim and ordered indemnity costs against him. The claimant appealed, challenging the burden and standard of proof, the inference drawn from the alleged fraud campaign, and the reliance placed on medical records and credibility. The central issue was whether the judge’s conclusion that the claimant was knowingly involved in a staged collision was wrong.

The appeal was allowed. Lord Justice Davis gave the leading judgment, with Lord Justice Treacy and the Master of the Rolls agreeing.

1. Appellate approach. Under Civil Procedure Rules 52.11(3)(a), the question was whether the judgment below was wrong, not whether the Court of Appeal would have reached the same conclusion. The trial judge’s assessment of witnesses carried significant weight because of the judge’s opportunity to observe the evidence and gain the feel of the case, as explained in Powell v Streatham Manor Nursing Home [1935] AC 243. However, the Rules did not require a finding that the judge was plainly or clearly wrong. The observations of Ward LJ in Assicurazioni Generali Spa v Arab Insurance Group [2003] 1 WLR 577 reflected the need for appellate caution, while allowing more ready review of inferences drawn from undisputed primary facts.
2. Fraud and proof. Aviva bore the burden of proving fraud on the balance of probabilities. The seriousness of the allegation was a circumstance to be taken into account and required appropriately cogent evidence, consistent with Hornal v Neuberger Products Ltd [1957] 1 QB 247. The judge’s use of a so-called “follow the money” rule was unsound. Economic sense did not require both drivers to be complicit. A fraudulent driver might obtain a benefit through passengers, his own insurance claim, or associated service arrangements, while the other driver remained innocent.
3. Medical records and credibility. The absence of a collision entry and discrepancies concerning medical attendances could bear on recollection, reliability or credibility. They did not logically establish that the collision was staged or that the claimant was complicit. They were too slender a basis for rejecting the claimant’s entire account, particularly when the medical printouts showed that the records were not wholly complete.
4. Application and order. The judge’s two stated reasons were insufficiently cogent. The Court accepted that a genuine accident by chance was excluded by the findings, but the possibility that the first defendant had deliberately caused a collision with an innocent victim remained. The recovery-vehicle point was not given material weight because the judge made no finding on it. A further letter from the doctor’s surgery was not admitted, although attached contemporaneous printouts were accepted as authentic. The appeal was allowed, with further submissions on the consequences unless the parties agreed them.

1. Court of Appeal (Civil Division): Allowed the claimant’s appeal from the Bradford County Court order. [2012] EWCA Civ 1367.
2. Bradford County Court: HHJ Shaun Spencer QC, by order dated 16 November 2011, dismissed the claim and ordered the claimant to pay Aviva’s costs on an indemnity basis.