After the fire: “the legal process preyed on human susceptibility and vulnerability”

Following a major fire in a particle board plant in Kirkby in 2011, over 16,000 claimants – a staggering number – came forward.  On 30 July 2015 Mr Justice Jay dismissed all twenty selected test claims. His 232 page judgment in The Sonae Group Litigation is littered with sharp criticism – albeit in elegant judicial prose – of the process by which these claims were presented and evidenced. The Liverpool Echo was rather more direct, reporting the outcome under the headline “Why the £100m Sonae lawsuit collapsed: Fraudulent claims, dodgy signatures and unrealistic expectations”.

The judge’s concerns about the methods of some of the claimant representatives involved – including the forging of a claimant’s signature – were so serious for him to take the unusual step of referring two of the firms involved to the Solicitors’ Regulation Authority for investigation. Its enquiry and any subsequent action may give a signal of its appetite to tackle the sorts of practices denigrated by the judge.

The recent judgment dismissing The Sonae Group Litigation highlights many arguably unattractive features of the present claims environment. Some 16,626 claimants came forward following a serious factory fire, claiming damages for personal injuries and in nuisance. This huge number of claimants was generated even under the ‘opt in’ basis of the present group litigation provisions in the Civil Procedure Rules.

It seems that many of the claims were captured in ways which were roundly criticised by the judge, who found that “two of the questionnaires were shown to bear forged signatures, and that whole families have been signed up, apparently willy-nilly” and, further, that “Many of the questionnaires examined in the context of the test claimants were shown to be inaccurate and exaggerated, calling into question the objectivity and integrity of the whole process. Nor does the whole set up of pop-up shops and cold-calling of potential claimants inspire any degree of confidence.”

The judgment includes the following series of tweets posted by one of the test claimants who, at the time, was a trainee Chartered Accountant.

either of you’s jumped on this sonae claim bandwagon?

they’ve admitted liability so anyone living or working in the area at the time of the fire can claim

I’m getting involved I reckon, pays for the summer holiday if it goes thru

The judge offered one possible explanation for this claimant’s obvious embarrassment during cross examination as being that his tweets were taken out of context. He also offered an alternative: that the tweets “contained accurate insights into his true state of mind.” In a notable understatement, the judge found that “having regard to all the available evidence, I regret that I have to favour the second explanation.” Rather more directly, he then held that the defendant had proved fraud against this claimant.

Although it lays out the questionable procedures by which many of the claims were brought forward, the judgment is probably most significant because of the direct and unambiguous referral by the judge of two of the firms involved to the SRA. How it investigates these and any steps it might subsequently take should be closely watched.

For more details on the Liverpool Echo coverage, please click here.

About the Author

akAlistair Kinley is BLM’s Director of Policy & Government Affairs.

Alistair is responsible for BLM’s engagement with government departments and regulators on policy and public affairs issues and consultations affecting the firm and its customers. He coordinated BLM’s market-facing activities in connection with the Insurance Act 2015 and the consultations which preceded its publication and introduction in Parliament.

He is a member of the Civil Justice Council (CJC), a regular speaker and experienced commentator on legal and procedural reforms and was a contributing editor to the Law Society’s Litigation Funding Handbook (September 2014).



One thought on “After the fire: “the legal process preyed on human susceptibility and vulnerability”

  1. And the aftermath to the above is confirmed as the liquidator is appointed. Perhaps not too much sympathy for the off-shore funder but a worrying time for the employees and concerns of the smaller creditors of the business. More importantly one hopes that the regulator will take a good look at the judge’s criticisms that Alistair outlined to prevent it happening again.

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