Hong Kong Personal Injury Brief - March 2023 edition

Another win for insurers – claimant solicitor severely criticised

In a robust decision handed down recently, HH Judge Andrew Li of the District Court (Judge) said “this is by far the worst case I have come across in my 10 years sitting on the bench” and that “such appalling conduct on the part of an officer of the court must be stopped in our profession, in particular in [Personal Injury] litigation.” It was found that the Plaintiff’s solicitor (Solicitor) deliberately tried to hide a subsequent accident (2nd Accident), vastly inflated the claim, failed to make proper discovery of documents and concealed the husband and wife relationship between himself and the Plaintiff. A personal costs order on indemnity scale was made against the Solicitor and the matter was referred to the Law Society for further investigation - Cheung Ka Man v Wong Yu Huen [2023] HKDC 370.

This was a simple and straightforward traffic accident case that came for trial on the Warned List in November 2022. The Plaintiff had alleged she sustained “multiple injuries to her head, neck, four limbs with stress disorder”. Half way through the opening submissions, the Plaintiff decided to discontinue her case before she even gave evidence in the witness box whereupon the Court dismissed the case with costs on an indemnity basis. Due to several issues revealed in the trial bundle and on the 1st day of the trial (see below), the Court also took the view that there should be an enquiry upon its own motion, as to why the Solicitor should not be made personally liable for all the Defendant’s costs. In arriving at his decision to award a personal costs order against the Solicitor, the Judge remarked that the whole action was founded out of greed and dishonesty and had the Solicitor acted honestly and according to the law, the matter would have been disposed of without trial. The main criticisms against the Solicitor were that he (i) deliberately and consciously tried to hide the 2nd Accident (ii) totally inflated and grossly exaggerated PSLA claim (iii) failed to make proper discovery of documents and (iv) failed to disclose the husband and wife relationship.

The 2nd Accident        

The Plaintiff met with the 2nd Accident some 6 weeks after the 1st Accident but this was not disclosed in the Plaintiff’s pleadings or Witness Statement. It was not until the Defendant’s solicitors wrote to the Solicitor to ask for an updated report from the Plaintiff’s treating doctor did the Defendant discover that the Plaintiff had met with the 2nd Accident. Disclosure of the 2nd Accident was extremely material as it would have shown that the Plaintiff had sustained similar if not identical injuries to her neck, shoulders and back in the 2nd Accident and that the injuries suffered were more serious in the 2nd Accident compared to the 1st Accident.

After further pressing by the Defendant, the Plaintiff disclosed that she had had made a separate claim against the driver of the other vehicle in the 2nd Accident which was settled for $200,000 at the pre-action stage in June 2021, which was about 6 months after the Writ was issued for the 1st Accident. However, the Solicitor refused to disclose the without prejudice correspondence between him and the defendant’s solicitors in the 2nd Accident (WP Correspondence) until after further chasing by the Defendant. After the WP Correspondence was disclosed, it became apparent that the Plaintiff had also failed to disclose to the defendant in the 2nd Accident that she had suffered from very similar if not identical injuries in the 1st Accident.

By the time of trial, the Solicitor was still refusing to include the WP Correspondence into the trial bundle. The Solicitor also refused to include documents from the police investigations of the 1st Accident into the trial bundle on the basis that the trial bundle index had already been agreed and these ‘new’ documents could not be included without the leave of court.

In very forthright language, the Judge said that the Solicitor deliberately tried to mislead the Court and the Defendant into thinking that all the Plaintiff’s pleaded injuries resulted from one single accident, ie the 1st Accident when he knew very well that they did not.

Excessive claim for PSLA

The Plaintiff pleaded $600,000 for PSLA which was then revised to $650,000 in the RSOD. At the same time, the Plaintiff in WP negotiations with the defendant in the 2nd Accident was claiming at least $700,000 for PSLA. The ‘combined’ claims would then be over $1.35M, which was “wholly unrealistic and grossly exaggerated”. At the opening submission, the Plaintiff’s counsel conceded that the likely award if she succeeded on liability should be HK$120,000, which amounted to roughly 20% of what was originally pleaded by the Plaintiff.

The Court said that while it is not uncommon for a claimant to pitch their claim a bit higher to give them room for negotiation, it was almost unheard of to pitch it at 5 times more than the likely recoverable amount (or almost 10 times when the 2 separate PSLA claims are combined).

Failure to make proper discovery

The Judge reminded practitioners that it is a solicitor’s duty as officers of the court to ensure that full discovery is made in good time before the trial. The Solicitor was in clear breach of such duty in failing to make full and timely discovery of the documents in relation to the 2nd Accident.

Failing to disclose the husband and wife relationship

The relationship between the Plaintiff and the Solicitor was not discovered until the first day of the trial. While the Judge made clear that there is no rule prohibiting a solicitor to act for his spouse, they must not place themselves in a position where their own interests conflict or are likely to conflict with their duty to the client. He was of the view that it is clear the Solicitor’s relationship and any financial interest that he may have in this case, whether by way of damages that his wife may receive or costs to be received by him may inhibit his ability to advise his client/wife properly and impartially. Under such circumstances, the Solicitor should have seriously considered whether he should continue to act and should have disclosed his marital relationship to the Defendant.

Implications

This case serves as a reminder to all practitioners that they are officers of the court and are obliged to deal with claims in an honest and honourable manner. Full and frank disclosure in the discovery process is of paramount importance and all relevant documents should be timely disclosed and should not be unreasonably withheld from the other side. Such duty includes checking with the lay client that no relevant documents have been omitted and reminding them of their duty of continuous discovery. Any attempt to conceal documents from the other side and the court will be met with adverse cost consequences, as evident from this case.

Additionally, it can be seen from the Decision that the court is not shy to publish large extracts of documentations submitted to the court, whether they be pleadings, correspondence, affirmations or other types of court documents to support its findings. As these decisions and judgments are openly published, it is imperative that practitioners ensure the accuracy and even tone of anything they write in the course of the litigation, including without prejudice correspondence which may be subsequently disclosed.

Last but not least, insurers will be heartened by this Decision as it clearly shows that the courts are willing to sanction claimants and law firms who act totally unreasonably in their pursuit of monetary gain.