Case underlines high threshold needed with fraud allegations

Noble v Owens

(Court of Appeal — 18 March 2010)

The defendant, Mr Noble, had been awarded substantial damages by the court at first instance for injuries suffered in a road traffic accident. Mr Owens admitted liability and damages were assessed in the sum of £3,397,766.49.

The award had been based on the finding that Mr Noble's mobility was permanently and severely restricted and he would never work again.

After payment of the damages, Mr Owens' insurers received information that Mr Noble did not appear to be as seriously disabled as he had claimed. Surveillance was arranged, which when reviewed led to Mr Owens' insurers concluding that the extent of mobility displayed by Mr Noble was so inconsistent with that presented at trial that the only conclusion that could be drawn was that he had deliberately misled the court of first instance as to the severity of his continuing symptoms.

Mr Owens was granted permission to appeal out of the usual time permitted and submitted that in view of the fresh evidence the previous award of damages should be set aside and there should be a retrial.

Mr Noble consented to the fresh evidence being admitted but submitted that Mr Owens' correct remedy when alleging fraud was to commence a fresh action to set aside the original judgment

It was held by the Supreme Court that it would not order a retrial unless either the fraud was admitted by Mr Noble or the evidence of it was incontrovertible. In the absence of this, it was convenient and economical for the case to be remitted back to the original trial judge.

COMMENT

This case highlights the high threshold placed on an allegation of fraud. The court was faced with a number of options in the face of Mr Owens' allegation of fraud. It could have set aside the judgment immediately and ordered a re-hearing or alternatively it may simply have let the judgment stand unless fraud had been proven at a trial. The court held that for a judgment to be overturned when fresh evidence is presented, either the alleged fraud is admitted or the evidence is of such magnitude that it could not possibly be denied. The court has adopted a balancing test, weighing up the justice and prejudice to the parties and the intrinsic severity placed on a fraud allegation but also looking at the economical reality of having to potentially order a case to be heard again. Accordingly, unless the issue of fraud is irrefutable, the case will be remitted to the original trial judge, if available, to then first make a decision on the issue of fraud taking into account the evidence presented to him at the original trial set against the fresh evidence presented. If fraud is established then it is within their power to impose such sanctions as they see fit with regards to the original decision. Jarred Bold, BLM Manchester

The following law report contributed by specialist insurance practice Berrymans Lace Mawer (www.blm-law.com) first appeared in Post Magazine on 20 May 2010.

Disclaimer: The law report contains information of general interest about current legal issues, it does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. Specialist legal advice should always be sought in any particular case.