Court success: defence costs reimbursed following hearing loss claim

  • Court rules claimant was “fundamentally dishonest” in denying he was aware of his hearing loss years before making a claim
  • He had applied for occupational deafness benefit in 1992, but didn’t proceed with a claim against his former employers until 2013
  • Verdict shows fundamental dishonesty can be applied to procedural points – which could help defendants to strike out claims before they reach trial

Background

The claimant alleged he had suffered noise-induced hearing loss as a result of working as a labourer and bricklayer on construction projects between 1972 and 1974.

Four defendants were named on the claim, which was brought in November 2013. One of the defendants was a dissolved company for which Zurich had provided a historic employers’ liability policy.

While personal injury claims must normally begin within three years of a person noticing they have an injury attributable to an act or omission of another party, courts have the discretion to dispense with this limitation and allow a claim to proceed if they consider it equitable.

In this case, the claimant argued that it was only in November 2013 that he acquired the necessary ‘knowledge’ – required under the Limitation Act 1980 – to begin his claim. He claimed he had first noticed minor symptoms of hearing problems in August 2013, and that he was prompted to bring a claim after hearing a radio advert, in November of that year, about hearing loss associated with working in a noisy environment. He said it was only at this point that he realised his hearing loss could be due to exposure to noise while working for the defendants.

As well as denying any prior awareness of his hearing problem, the claimant also denied ever having made any claim for industrial disease benefits.

However, after the defendants presented the claimaint’s solicitors with evidence – in the form of social security records – that showed he had applied for occupational deafness benefit in 1992, and undergone audiometry, he discontinued his claim.

Legal arguments

With the advent of qualified one-way cost shifting (QOCS), a claimant hoping for a settlement that doesn’t materialise can discontinue their claim shortly before trial without having to reimburse wasted defence costs. This means that even if a claim is dishonest or speculative, insurers are left out of pocket.

However, due to the egregious nature of the dishonesty in this case, it was decided to make an application to displace the ordinary QOCS order and seek an enforceable order against the claimant. It was argued that by actively denying making any claims for benefits, the claimant had been fundamentally dishonest in relation to the procedural point concerning limitation.

Decision

A hearing was held to determine the application to seek an enforceable order against the claimant.

Representing himself at the hearing, the claimant argued he had forgotten about applying for benefits in 1992, and undergoing audiometry. This argument was rejected by the district judge hearing the case, who said that by 1992, the claimant was aware he was suffering from hearing problems and that these problems were related to his occupation.

The judge held that the claimant had made statements that were deliberately and knowingly inaccurate and dishonest, and that the claim for hearing loss was therefore fundamentally dishonest. She lifted the QOCS veil and awarded two of the defendants their defence costs.

Commentary

Historically, the issue of fundamental dishonesty has generally only been considered at trial, in relation to the substantive elements of a claim, for example the nature and severity of the claimant’s injuries, or the circumstances in which those injuries were caused.

However, this verdict demonstrates that courts will consider fundamental dishonesty at the outset of a claim in relation to procedural points. This important precedent could potentially save insurers and policyholders considerable legal expense, by giving them the opportunity to apply for such claims to be thrown out before they reach trial.

Jonathan Owen (Ropewalk Chambers) was instructed by Weightmans LLP, who represented Zurich from receipt of the letter of claim through to the final hearing.

Summary prepared by Andrew Ball, Weightmans LLP.