Dickinson & Ors v Tesco Plc & Ors [2013] EWCA Civ 36

Case No (1) B2/2012/1575 + A (2) B2/2012/0401+ A (3) B2/2012/0976 + C (4) B2/2012/2506[2013] EWCA Civ 36
IN THE COURT OF APPEAL (CIVIL DIVISION)
(1) ON APPEAL FROM READING COUNTY COURT
DISTRICT JUDGE HENSON
9RG02942
(2) ON APPEAL FROM CENTRAL LONDON CIVIL JUSTICE CENTRE
HIS HONOUR JUDGE MITCHELL
8CL07812
(3) ON APPEAL FROM UXBRIDGE COUNTY COURT
DEPUTY DISTRICT JUDGE NICHOLLS
9UB01363
(4) ON APPEAL FROM CENTRAL LONDON CIVIL JUSTICE CENTRE
DEPUTY DISTRICT JUDGE HOPKINS
9LB52411
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 04/02/2013
Before
LORD JUSTICE MOORE-BICKLORD JUSTICE RIMERLORD JUSTICE AIKENS
Between
(1) Mr Gary DickinsonApplicants/(2) Mr Guy SimmondsAppellants(3) Mr Martin VerleyAppellant(4) Mr Peter MoonsamAppellant(1) Tesco PlcRespondents(2) Stewart Alexander Group LtdInterested Party(3) Mr Chris O'NeilRespondent(4) Axa Corporate Solutions Assurances SARespondentMorgan Cole LLPInterested Party
Andrew Edis QC, Guy Vickers & Benjamin Williams (instructed by PCJ Solicitors) for AppellantsNigel Wilkinson QC & Paul McGrath (instructed by Kennedys Law Llp) for RespondentsSimon Monty QC for Interested PartyHearing Hearing dates : 30th October - 1st November 2012
Judgment

I. How these cases arise

[1]All four cases before the court concern charges incurred in hiring a replacement car on credit terms following a road traffic accident (“RTA”) in which the claimant was not to blame. Two of the cases are applications for permission to appeal out of time on the basis of “fresh evidence” and for permission to adduce that “fresh evidence” on appeal if permission to appeal is granted; the third case is for permission to adduce “fresh evidence” on appeal (permission to appeal having been granted by the lower court) and the fourth case is an appeal where the court below has granted permission out of time and ordered that “fresh evidence” could be adduced on the appeal. The cases are part of a continuing battle between the motor insurance market and car hire companies which provide an innocent victim of an RTA with a replacement vehicle on credit terms whilst his is being repaired.[2]Accident Exchange Limited (“AEL”) is part of Accident Exchange Group PLC. AEL is a specialist car hire and claims management company whose main business is the hire of cars to victims of RTAs. It operates a fleet of mainstream, specialist and prestige hire vehicles. AEL provided a replacement car on credit hire terms in each of these four cases. AEL is, effectively, the applicant or appellant in the relevant case. Mr Steven Evans is the chief executive officer of Accident Exchange Group. He has been heavily involved in the saga that has given rise to these cases and has given many witness statements in support of the four individual cases and collectively.[3]All four cases were originally determined in the relevant County Court in, respectively, November 2009, February and May 2010 and January 2011. However, the history of events which gives rise to the current applications and appeals goes back much further than that and I must sketch it out to make sense of the current proceedings.[4]The history starts with the decision of the House of Lords in Dimond v Lovell [2002] 1 AC 384 in 2000. It confirmed that a claimant could recover damages for the loss of the use of a car damaged as a result of the negligence of another driver, even if the car was not a “profit earning chattel”. If the loss of use could be mitigated or avoided by the hire of a replacement car then the cost of that hire would be the measure of damages recoverable for the loss of use. But a claimant can only recover the reasonable costs of hire. Dimond v Lovell established that if a claimant hires a replacement car on credit terms when he could have afforded to hire one without credit terms, then, generally speaking, the damages recoverable for loss of use of the damaged car will be only that sum which is attributable to the basic hire rate of the replacement car, ie. the hire rate stripped of the cost of any “credit” elements. For a fuller explanation and analysis of the cases, see Pattni v First Leicester Buses Ltd; Bent v Highways and Utilities Construction and Allianz Insurance [2012] PIQR Q1 at [29] – [33]. This “basic hire rate” has more recently been dubbed the “BHR”. See Pattni (supra) at [30(4)]. Thus, if a claimant car driver brought proceedings to recover the cost of the repairs of a car damaged by a defendant driver and AEL had provided the replacement car on credit terms, AEL would, generally speaking, recover the sum awarded by the judge in respect of the basic cost of hiring the replacement car, by right of subrogation or assignment.[5]The present four cases arise out of the activities of Autofocus Limited, (“AF”), a company which is now in liquidation. AF used to provide forensic services of a quasi-expert nature, principally to motor insurers such as Axa Insurance Company Limited (“Axa”) which is the insurer of all four respondents, when an issue arose in litigation in the County Court as to what daily rate of hire could be recovered by a car hire company through a claimant whose car had been damaged and who had hired a replacement car on credit hire terms, even though the claimant could have afforded to hire one on non-credit hire terms. In the nature of things, the insurer of the defendant driver would wish to demonstrate that the BHR was lower than the hire rate charged by the credit car hire company, so that the sum the car hire company could recover should be only the BHR, not the actual hire rate charged. Through its research and its reports AF provided a service which was designed to assist in demonstrating that the relevant BHR was lower than the daily hire rate charged by the credit hire company.[6]From 2002 AF was used increasingly by the insurers of defendant drivers to provide reports for use in court proceedings. In many of these cases AEL was the credit hire company that had supplied the replacement car on credit hire terms and whose hire rates were being attacked. AF maintained a computer database known as the “Instant Rates Information Service” or “IRIS”, which was available to subscribers who could thereby obtain an immediate spread of hire rate information. AF also used this database to create the three types of report that it developed for use in court proceedings. At first AF provided “Case Specific Reports” (“CSRs”). The classic format was that of a witness statement by an employee of AF purporting to set out, first, the result of telephone surveys of BHRs in the relevant area which had been carried out by that AF employee and, secondly, material extracted from the IRIS database. The second type of AF report, which was launched in June 2008, was the “small claims rate information pack” or “SCRIP”. AF devised this type of report because it became unable to produce the volume of CSRs required by insurer clients. SCRIPs could be produced more rapidly and did not involve making telephone calls. The SCRIPs took the form of a factual witness statement which referred to two sources of BHRs. The first source was the IRIS database and the second consisted of printouts of details obtained by an AF employee from websites of car hire providers. These SCRIPs were intended for use principally in claims that had been allocated to the “small claims track” or the “fast track” in the County Court and so the evidence in the SCRIPs would be given in writing only. The third type of AF report was called a “detailed rates survey” or “DRS”. The DRS was developed after CSRs had become discredited in 2009, in circumstances I outline below. DRSs took the form of a factual witness statement which also gave details of both website printouts and researches into AF’s IRIS database. In the case of a DRS a witness might be expected to give oral evidence in court and so be cross-examined on his statement.[7]The number of cases in which AF’s reports on BHRs were used in evidence increased markedly from late 2006, reaching a peak of nearly 160 claims a month in November 2007 and remaining (on average) at well over 100 claims a month until May 2010, when numbers dropped dramatically. Graph at Vol 8 page 280 The evidence of AF purported to show, on a case by case basis, that either the same type of vehicle as that supplied by AEL or a similar one was easily available locally for a much cheaper rate than that charged by AEL. Witness statement of Steven Evans dated 7 Sept 2009 in Glossop v Salvesen Logistics Ltd at [10]: Vol 7 page 290. Increasingly, judges in County Courts accepted this evidence of AF, which was often tendered under a Civil Evidence Act notice. In many cases no contrary evidence was submitted on behalf of AEL.[8]Mr Steven Evans became suspicious of the way in which AF appeared able consistently to produce figures which purported to demonstrate that the hire charges of AEL were considerably higher than those produced from AF’s own researches into local BHRs. Mr Evans’ view was that this conclusion was contrary to his own long experience in the car hire industry. He decided to conduct investigations into the report produced by AF for the case of Glossop v Salvesen Logistics Limited, (“Glossop”), in which AEL had supplied the hire car for the claimant. This case was due to be heard in the Chesterfield County Court on 8 September 2009. Ms Helen Wysall, an employee of AF, described as a “rate surveyor”, had prepared a report in support of the defendants in that case. The report stated that she had contacted various car hire companies to obtain their rates.[9]The results of Mr Evans’ investigations were set out in a witness statement dated 7 September 2009. Mr Evans contacted the same companies as Ms Wysall said she had contacted and he obtained witness statements in support of his enquiries. In the 7 September witness statement (at [45]) Mr Evans stated that his enquiries revealed that the evidence submitted by Ms Wysall “was incorrect…a vehicle was not available to Mr Glossop locally for a much cheaper rate, as alleged”. Mr Evans decided to do further enquiries into another twenty cases where AF had provided reports. Mr Evans summarised these investigations at [54] and [55] of his witness statement of 7 September 2009: “[54] In the course of one week of investigation…I engaged the services of 15 of my employees who are former serving police officers…[55] in an intensive period of telephone and face to face contact enquiries, we have obtained direct witness evidence in 20 cases where [AF] have made witness statements [which witness evidence] shows the enquiries were either never made at all or, if they were properly made and recorded, would have established different results than those shown in the records submitted as part of their evidence”.[10]Mr Evans alleged that his investigations showed that there was a “…pattern of falsification of evidence as a result of which my company has incurred significant financial losses already”: see [56] of the same statement. He said that he was “concerned” that there were “… good grounds to suspect [AF] have put evidence before many courts which is untrue”: see [61]. The Glossop case was adjourned and later compromised. Subsequently, Ms Wysall pleaded guilty to contempt of court by submitting reports for court proceedings that were false to her knowledge. She was sentenced to 28 days imprisonment, suspended for one year.[11]Following Mr Evans’ revelations, the CSR-type report was withdrawn by AF and replaced by the DRS. That was supposed to be based on written quotations from the websites of non-credit hire operators, with additional information which was obtained from their written terms and conditions and brochures. AF also undertook its own investigations into Mr Evans’ allegations. A report prepared by AF’s chairman, Mr Colin McLean, dated 19 October 2009, accepted that “…analysis revealed that some rate surveyors appeared not to have made all the calls that should have been made…”. The report recorded that the research director, Ms Elaine Walker, admitted that “…on occasions, when checking rate surveys, the checkers had sometimes changed information in a survey….by making another call and simply modifying the checklist”.[12]AEL instructed the solicitors on the panel it used to send letters to their opposite numbers in cases where the latter intended to rely on statements by AF, indicating that the AF evidence would be challenged. Such letters were sent in three of the four present cases. Dickinson v Tesco; Simmonds v Stewart Alexander Group Ltd; Moonsam v AXA Corporate Solutions. The essence of these letters was that the evidence of AF was untrue and based on flawed or non-existent investigations by AF. I shall have to consider these letters in the context of the individual cases below.[13]On 7 October 2009 AEL issued proceedings against AF claiming damages for the torts of conspiracy to use unlawful means to harm AEL, interference with AEL’s trade or business by unlawful means and deceit. A large number of specific allegations were made but none was made against the reliability of the SCRIP, DRS or IRIS database. It was, however, asserted that the AF evidence in all cases was worthless either because it could be proved to be false or because the falsity of evidence provided in other cases by AF would mean that, had the truth been known, no court would have accorded the evidence in the instant case any weight if it had been served under the Civil Evidence Act. AF attempted to strike out the claim on the basis of “witness immunity”, but that application was dismissed on 16 December 2009 by HHJ Mackie QC sitting as a Deputy High Court Judge. On the 14th of July 2010 AF’s appeal was dismissed. [2010] EWCA Civ 788[14]On 29 July 2010 AF went into administration and was subsequently put into a creditors’ voluntary liquidation. AEL became a creditor.[15]In 2011 Mr Evans of AEL requested that AF’s liquidators give AEL access to AF’s electronic database of its business records. In June and July 2011 Mr Evans obtained the liquidators’ permission to have access to the external hard drive containing some of AF’s business records, which were encrypted. Mr Evans and his team at AEL analysed this data and the results were set out in his witness statement dated 24 October 2011. That statement was produced for the purpose of applications to this court in relation to four cases in which AF had given evidence in the County Courts. The applications were for an extension of time in which to appeal, permission to appeal and to adduce “fresh evidence” on the appeal. 8 These applications were in the cases of Purushothaman v Malik; Seatoroy v Oliver; Sharples v Brown and Thomson v Landsdowne. The County Court decisions all pre-dated September 2009 and concerned CSRs produced by AF. The applications were heard by Aikens LJ and Sir Mark Potter on 1 December 2011 and granted: see [2012] RTR 21. The appeals in all four cases were subsequently compromised.[16]In November 2011 Price Waterhouse Coopers attended the liquidators of AF and obtained a complete copy of the AF business records and this information was put onto a disk which has become known in this litigation as “the Mirror Disk”. A consent order was subsequently made by HHJ Mackie QC that AEL could use this material in legal proceedings such as the present ones.[17]An analysis of the AF business records on the Mirror Disk demonstrates (and this is not in dispute) that:(1) historic basic hire rate data was fabricated by “rate surveyors” of AF;(2) these fabrications affected the IRIS database as well as the SCRIP and DRS reports produced by AF;(3) witness evidence by AF was routinely altered by other employees.[18]In each of the present four cases the claimant claimed damages for the loss of use of the car that had been damaged as a result of the negligence of the defendant. In one case AF produced a CSR report, in another a DRS report and in the other two cases a SCRIP report. CRS in the case of Simmonds; SCRIP in the cases of Dickinson and Moonsam; DRS in the case of Verley. In each case the judge accepted, to a greater or lesser extent, the AF evidence. Now that the evidence of AF’s malpractice has come to light, AEL, through the claimants, wishes to challenge the damages awarded in the County Courts in respect of the car hire charges.

II. The outline facts and history of the proceedings of the four cases

[19](1). Guy Simmonds v Stewart Alexander Group. Applications for extension of time, permission to appeal, permission to adduce fresh evidence. Mr Simmonds was involved in a road traffic accident on 18 August 2007. The defendant admitted liability for the collision. Mr Simmonds hired a replacement Audi RS4 Quattro on credit terms from AEL for a period of 67 days, incurring hire charges of £26,468.87. He could have afforded to hire a car on non-credit terms. Such claimants have, in the context of these car hire cases, become known as “pecunious” claimants, as opposed to those who cannot afford to hire a car on non-hire terms, who have been called “impecunious” claimants.[20]The claim for hire charges was defended chiefly on grounds that the period of hire was excessive and that the AEL hire rate ought to be less than the credit hire rate. The defendant made a pre-action interim payment of £18,535.63. The claimant issued proceedings on 15 October 2008.[21]On 15 January 2009, the Court allocated the claim to the multi-track and ordered that the parties “each have permission to adduce written evidence of a case specific survey of spot hire market rates (ie. a sample of non-credit hire rates, viz. BHRs), lay or expert” and that any such evidence should be served by 12 March 2009. The defendant relied on the evidence of Mr Paul Wilcox, the Operations Director and an “expert” of AF, dated 10 March 2009. This was intended to show a representative sample of BHRs for an equivalent vehicle. The statement, which was a CSR and in the format of an expert’s report, alleged that Keel Broom, a “rate surveyor” of AF, had conducted a survey of BHRs on 3 March 2009 by telephoning 8 car hire companies and requesting a quotation from each for the hire of an Audi RS4 Quattro or similar vehicle, the hire to start on 4 March 2009 at 2pm. Mr Wilcox’s report identified four car hire companies as able to supply an appropriate car on the date and time requested. Their rates were exhibited to Mr Wilcox’s report with copies of the supporting documentation. Mr Wilcox’s report also stated, effectively, that the four companies had had the model quoted or a similar vehicle on fleet since before the original hire of a car by the claimant from AEL. Mr Wilcox endorsed his report with a statement of truth. AEL says that it has been unable to obtain any direct evidence from any witness, either in 2009 or now, on whether these calls were or were not made as there are no relevant phone records for that time.[22]The case was listed for trial on 18 December 2009. On 26 November 2009 the claimant’s solicitors, Scott Rees, wrote to the defendant’s solicitors in the following terms:
“…If it is your intention to rely upon the evidence of Mr Wilcox we are likely to serve witness evidence which suggests that that company has a track record of providing evidence which is untrue. Examples of this include 1. The identified hire company not trading at the time of enquiry or at the time of hire; 2. the alleged enquiries not taking place as alleged or at all; 3. the identified hire company not employing members of staff as alleged by Autofocus; 4. The identified hire company not having a vehicle as alleged by Autofocus…”

Examples of this include

[23]Also on 26 November 2009 the claimant applied to rely upon the evidence of Mr Ian Bradshaw, who had been employed as a “rates investigator” by AEL since 2006. This evidence would have been in relation to alternative rates of hire from other providers. It did not refer to the concerns set out in the Scott Rees letter. The application was not listed prior to the claimant serving another statement from Mr Bradshaw (dated 16 December 2009), this time dealing with the period of hire. The applications would have been dealt with on the morning of trial but the trial was stood out on 18 December 2009.[24]On 27 November 2009 the claimant issued a witness summons requiring Mr Wilcox to attend to give evidence and to produce phone records. This summons was served at AF’s address, but Mr Wilcox had, by then, left its employment. Morgan Cole, the solicitors acting for the defendants, wrote to Scott Rees on 14 December 2009, stating:
“in light of the above we maintain the previous court order which allows for his evidence to be given in writing only.”
[25]The matter was subsequently relisted for trial on 25 February 2010. The applications to rely on the two witness statements of Mr Bradshaw went before HHJ Mitchell on 16 February 2010 and were dismissed. No other application to adduce evidence in support of AEL’s position was made. The trial on 25 February 2010 also came before HHJ Mitchell. Counsel for the claimant decided not to reapply for the admission of the evidence of Mr Bradshaw in relation to rate of hire but he did renew his application for the statement in relation to the period of hire. The Judge rejected that application. The claimant did not raise any of the matters concerning Mr Wilcox’s evidence that had been raised in correspondence.[26]The Judge’s findings and conclusions on the rate of hire, which were based on Mr Wilcox’s evidence, were as follows: the total judgment would be for £2,706.09 in respect of hire and associated charges. That sum was broken down as follows:(1) £2,631.09 for 12 days hire at the rate of hire of a company called ‘Performance Rentals’ referred to in the AF report, on the basis that the ‘Performance Rentals’ quotation was for an Audi RS4 Quattro (like-for-like with the actual car hired) and available in the claimant’s local area;(2) £59.66 for collision damage excess waiver, based on the quotation from Questor Insurance referred to in the AF report; and,(3) £75.00 for delivery and collection charges. The Judge reduced the period of hire from the 67 days claimed to 12 days. There is no proposed appeal against that last conclusion.[27]The total judgment sum (including repairs, which were not in dispute) was £5,098.07. In relation to costs the Judge ordered that the defendant pay the claimant’s costs until 28 May 2009 (to be assessed on the basis that the claim was a Fast Track clam) and that thereafter the claimant had to pay the defendant’s costs, because the defendant had invited the claimant to accept the interim payment in final settlement of the hire claim.[28]The claimant appealed to the Court of Appeal by Appellant’s Notice filed on 16 February 2012, which sought an extension of time in which to appeal, permission to appeal and permission to adduce fresh evidence in support of the other two applications and the substantive appeal if permission was granted. It was alleged overall in the Grounds of Appeal that:(1) the evidence of AF employees, including Mr Wilcox and Mr Broom, was misleading, untrue and “arose from an organisation riddled with illegality”;(2) the “statement of truth” on Mr Wilcox’s report was knowingly false;(3) the information provided was not the result of any genuine and legitimate survey of vehicle hire rates;(4) Mr Wilcox’s and Mr Broom’s evidence was unsafe and not that of an independent survey organisation; and(5) if the County Court had known of the widespread manipulation, suppression and concoction of evidence by AF, it would have attached no weight to the evidence of Mr Wilcox or Mr Broom.[29](2). Gary Dickinson v Tesco Ltd. HHJ Harris QC granted extension of time, permission to appeal and permission to adduce fresh evidence on appeal by order dated 28 March 2012. Mr Dickinson, who was a “pecunious” claimant, was involved in a road traffic accident on 25 February 2009. The claimant’s Mercedes C320 vehicle was damaged and he hired a replacement Mercedes C320 vehicle on credit hire terms from AEL for 15 days at a total hire charge of £4,258.28.[30]Proceedings were issued on 1 May 2009. The matter was allocated to the Small Claims Track on 13 August 2009 and standard directions were given, including one that each party had permission to rely on a “short written survey of [BHRs], to be served by 21 September 2009”. The defendant relied on a “SCRIP” report by Marie Harper, an “Administration Assistant” of AF, dated 24 September 2009. This stated that an important part of Ms Harper’s role entailed “surveying rates available in the UK self-drive hire market”. The statement said that she had obtained, from AF’s IRIS database, comparative UK rates at the time of the original hire of the Mercedes C320. The statement also said that on 24 September 2009 Ms Harper had gone to the websites of four major UK self drive hire companies and obtained rates of hire of equivalent vehicles and those rates were also shown in a table described as a “small claim rate information pack” or SCRIP. She said that “typical excess waiver charges for each company were added to the internet rates” and the total charges were shown on the summary sheet of the SCRIP. The SCRIP Hire Rate Survey exhibited to the report purported to show a table of the UK highest, average and lowest rates for a vehicle such as the claimant was entitled to hire, for the same month as the original hire of the Mercedes.[31]The case came before District Judge Henson in the Reading County Court for a small claims trial on 20 November 2009. She decided that the appropriate BHR was to be taken from the internet tariff set out in the AF report and, in particular, a quote from a company called Enterprise. The Judge adopted the rate of hire for a Mercedes Benz S Class, or similar, which rate was taken from the Enterprise Executive Premium range. In arriving at the final figure of £2,622.05, the Judge allowed the quoted rate for hire, premium location fee, excess waiver and VAT. She also allowed charges for delivery, collection and satellite navigation. The latter charges were not in dispute between the parties and so did not come from the Enterprise quotation. The charges were based on the 7 day Enterprise quotation. The 15 day hire calculation was made as follows:(1) the all-inclusive quote for 7 days was: £799.99 (pure hire) + £104 (premium location fee) + VAT + £70 (excess waiver, which already included the VAT), totalling £1109.59;(2) this rate was applied pro-rata for the period of 15 days: £1109.59 (7 day rate) divided by 7 (days) and multiplied by 15, thus producing £2377.69;(3) the agreed sums of £115 (including VAT) for delivery and collection and £129.36 The figure, quoted by Claimant’s Counsel and accepted by the Judge, was actually marginally incorrect: the figure should have been £129.38, but no point is taken on this. (including VAT) for the satellite navigation were then added, giving a grand total of £2,622.05.[32]An Appellant’s Notice was filed on 22 March 2012, seeking permission to extend time in which to appeal, permission to appeal and permission to adduce fresh evidence. Because this was a small claims case, in the normal course of things, an appeal would have been to the Circuit Judge in the County Court. The applications were all granted by order of HHJ Harris QC on 28 March 2012. The appeal was stayed pending the outcome of the Court of Appeal test cases for which permission to appeal had been granted by this court on 1 December 2011. See [7] and fn 15 above. This case was later selected and transferred to the Court of Appeal under the CPR 52.14 procedure so that a ‘SCRIP’ case could be considered on appeal.[33]The Grounds of Appeal, in common with AEL’s case on all these appeals, allege that the AF database, IRIS, upon which the Scrip Hire Rate Surveys were based, was largely a concocted and fictional document which was not the result of genuine research. Moreover, it is said by AEL that both IRIS and the Scrip Hire Rate Survey for this case were statistically suspect and they had supressed some material and wrongly manipulated other material which AF considered to be unhelpful to defendants’ motor insurers. The same four overall Grounds of Appeal set out above in relation to the Simmonds appeal are relied on also in this case.[34](3). Martin Verley v Chris O’Neill. On 18 December 2007 there was a collision and the vehicle of Mr Verley, a “pecunious” claimant, was damaged. The claimant hired a replacement vehicle from AEL between 18 December 2007 and 3 March 2008 (77 days), on credit hire terms, at a cost of £30,238.92.[35]The claimant issued proceedings on 1 June 2009. Liability was not in dispute. The matter was allocated to the Multi-Track on 3 December 2009 and directions were given. These ordered that statements of witnesses of fact be served by 16 March 2010. There was no provision for expert evidence. In relation to the BHR the defendant relied upon the witness statement of Mr Duncan Sadler, a “team leader” and “expert” employed by AF, dated 11 January 2010. Within the body of the statement there was an expert witness’s declaration. The statement said that Mr Sadler had obtained quotes from the websites of four UK retail companies operating in the claimant’s locality on 11 January 2010. Copies of internet rates obtained in the course of previous surveys carried out by AF in June 2008 were exhibited to Mr Sadler’s report. These indicated that “similar vehicles were available at that time”. The highest, average and lowest rates extracted from the AF database for December 2007 were also compared to the surveyed rates. The format was therefore that of a DRS. Mr Sadler’s statement also said that “full details of incidental and ancillary charges are not always available from the internet. To allow a comparison estimated costs from other sources have been used whenever specific information is missing”.[36]AEL now alleges that the enquiries referred to in Mr Sadler’s statement were not made by him. AEL say that the material on the Mirror Disk reveals that this survey was “prepared” by Amy Penn, “conducted” by Shane Lockwood and the report “completed” by Duncan Sadler, whereas the report contains no indication that it is the work of anyone other than Mr. Sadler himself.[37]The claimant relied on the statement of Mr Kenneth Perry from APU Limited (a wholly owned subsidiary of the Accident Exchange Group), dated 2 August 2010.[38]The trial was heard by Deputy District Judge Nicholls on 20 January 2011. The judgment was not officially recorded. However, we were shown the note of judgment prepared by counsel for the claimant and it was not suggested that it was inaccurate. From this it appears that the judge criticised Mr Perry’s rates as ‘second hand and multiple hearsay’ which ‘might have the appearance of bias’. The judge preferred to rely on the evidence of Mr Sadler and chose the top basic hire rate of £236.31 per day quoted by Signature Car Hire and evidenced by an internet printout. The judge concluded that the claimant was entitled to recover 74 days hire at the Signature rate of hire, so the judgment figure was £17,426.94.[39]The Claimants lodged an Appellant’s Notice on 20 April 2012. This relied overall on the four grounds of appeal referred to above.[40](4). Peter Moonsam v Axa Corporate Solutions Assurances SA (a firm). Permission to appeal granted by HHJ Mitchell on 22 August 2012. He did not grant permission to adduce fresh evidence on appeal. Mr Moonsam, was involved in an RTA on 31 October 2008. He was not to blame. His VW Golf 1.4 was damaged as a result. He hired a replacement vehicle, a VW Golf 2.0 GT, from AEL between 29 January 2009 and 28 February 2009 (31 days) on credit hire terms. He was “pecunious”. The total hire charges were £2181.73. The Defendant made a pre-action interim payment (which was also an offer) in the sum of £1584.55.[41]On 4 September 2009 the claimant issued proceedings in the Lambeth County Court seeking £597.18, which he alleged was the balance due in respect of hire charges, taking account of the interim payment of £1584.55. On 27 October 2009 the claimant’s solicitors stated that they would object to any AF evidence on the basis that there were serious doubts as to its validity. The matter was allocated to the Small Claims Track on 14 December 2009. On allocation a direction was given permitting both parties to obtain and rely upon written evidence as to the BHR.[42]On 2 March 2010 the defendant filed its evidence on the proper rate of hire. This took the form of a ‘SCRIP’ statement by Mr Shane Lockwood dated 27 January 2010. Mr Lockwood described himself as an “Accounts/Administration Assistant” for AF, an important part of whose work was “surveying rates available in the UK self drive hire market”. The statement drew from two sources:(1) the AF database of rates summarised in SCRIP form; and,(2) internet printouts from the websites of four UK rental companies on 27 January 2010. Mr Lockwood said that “typical excess waiver charges of each company were added to the internet rates” to produce the total charges shown in a summary sheet. In relation to comparable cars, the first table showed that the highest UK daily rate was £36.03 per day, the average UK rate was £29 per day and the lowest UK rate was £20.21. The actual internet quotations for the local area exhibited in the second summary showed daily rates of £23.86, £26.76, £30.04, and £30.24. The average of those four internet rates is £27.73.[43]The claimant served a statement from Mr Ian Bradshaw of AEL on 18 March 2010. His statement summarised the position as follows: the lowest available daily rate was “£16.11 plus VAT (i.e. £18.93 including VAT) with a £600 collision damage excess”, the highest daily rate was “£37.93 plus VAT (i.e. £44.57 including VAT) with a £500 collision damage excess” and the “arithmetical mean daily hire rate for this group was £22.94 plus VAT…” (ie. £26.95 including VAT).[44]The hearing finally took place before Deputy District Judge Hopkins on 25 May 2010. The Judge reduced the period of hire by two days to 29 days. He assessed the daily BHR at £29. He drew this rate from the UK average figures for 2009 in Mr Lockwood’s SCRIP report (for Group S3). See [4] – [7] and [12] of the judgment. The overall award was £841. That meant that the claimant had failed to beat the pre-action interim payment of £1584.55. The claimant was ordered to repay the balance (£743.55) and to pay a contribution towards costs on the basis of unreasonable conduct.[45]The claimant appealed by Appellant’s Notice dated 8 May 2012. The Grounds of Appeal allege that the AF IRIS database, on which all SCRIP Hire Rate Surveys (including that of Mr Lockwood) were based was largely concocted and fictitious and did not result from much if any genuine research. This was one of many cases where similarly unsatisfactory evidence of AF had been submitted to the court. The same four overall grounds of appeal, referred to above, were relied on.[46]HHJ Mitchell granted permission to appeal out of time on 22 August 2012. He said that he did so in order that the matter could be considered in this court alongside the other “test cases”. HHJ Mitchell did not deal with the application to adduce fresh evidence.[47]The general submission of Mr Andrew Edis QC, who appeared on behalf of all former claimants and current applicants and appellants, (so, effectively, for AEL) was that there was and could be no dispute that the AF system was riddled with fraud and abuse. In each of the four cases, quasi-expert evidence, in the form of reports of employees of AF, had been put before County Court judges who had relied on them as being truthful evidence. But neither the reports nor any oral evidence based on them were truthful. Mr Edis accepted that he could not necessarily prove that a particular AF report in a particular case made a fraudulent misrepresentation. But, he submitted, there had been such a wholesale abuse of the way that the expert evidence adduced by AF had been prepared and presented that, in each of the four cases before the court now, there had been a fundamental abuse of the court process. Therefore, he submitted, the court should grant an extension of time, permission to appeal and permission to use fresh evidence on the appeals in the cases of Simmonds and Verley, should admit fresh evidence in the case of Moonsam and in all those three cases and in that of Dickinson as well, the court should allow the appeals.[48]Mr Edis further submitted that if this court allowed the appeals then there should be a retrial of the issue of the applicable hire rate in each of the four cases. He also submitted that this court should order that, upon that retrial, the judge should deal with the issue of the applicable hire rate simply as if no AF evidence had been tendered and upon the basis of whatever other evidence had been before the court at the original trial of that issue. In other words, the defendants should not be permitted to adduce any new evidence on the retrials. Mr Edis’s fall back position was that there should be retrials in all cases, giving the parties in all cases the opportunity to adduce whatever evidence the lower court directed on the issue of the applicable hire rate.[49]In support of the applications for an extension of time in which to appeal in Simmonds and Verley and in support of all the proposed appeals in all cases, Mr Edis relied, first, on statements of Mr Jason Lee dated 9 February 2012, In relation to Simmonds 12 March 2012 There are two statements of this date: one relating to Dickinson and one relating to Verley. and 1 May 2012. In relation to Moonsam. Secondly, Mr Edis relied on the statements of Mr Stephen Evans dated 20 June 2012 and 11 October 2012.[50]Judge Harris has already given permission to the appellant in Dickinson to adduce Mr Lee’s statement of 12 March 2012 as fresh evidence. In summary that statement says:(1) that the IRIS database was “mostly nothing more than a fabrication and concoction based on a far more limited and restricted set of survey based figures extrapolated (and often simply invented) to fill and populate a database with figures that had no foundation in truth of honest data gathering”;(2) that AF referred to contacts at the hire companies that did not exist;(3) that the branch of hire company referred to did not have the vehicle on fleet or the vehicle class available for hire as alleged by AF;(4) that quotes were never obtained by a telephone call at all;(5) that the terms of rental and level of rates stated by AF were therefore incorrect;(6) that the standard operating procedures used by AF led to its witnesses habitually excluding ‘unhelpful’ rates in reports;(7) that AF reports were signed off by surveyors other than those who had done the surveys;(8) that AF was sufficiently concerned about the allegations that it withdrew many of its reports in October 2009 and that many of the AF members of staff resigned; and that(9) given the magnitude of the problem, it was correct to infer that AF as a whole was affected and that each report was totally undermined as a result.[51]The other statements of Mr Lee reflect these points. The statement of 9 February 2012 expressly states that the case now advanced by the applicants/appellants is based on the material recovered from the Mirror Disk.[52]In Mr Evans’ statement of 20 June 2012 he put forward evidence relating to the validity of the SCRIP and made allegations as to the knowledge of both Axa and Morgan Cole, the principal firm of solicitors who acted for Axa and its insureds in RTA car credit hire claims, concerning AF’s methods. He also made statements about the availability of any other evidence about hire rates at the material times. We are not concerned on these applications/appeals to deal with any allegations concerning the knowledge of either Axa or Morgan Cole of AF’s methods. I am therefore not going to refer to those parts of Mr Evans’ evidence. However, Mr Evans does state that material on the Mirror Disk revealed that, on 1 June 2009, Elaine Walker, the “operations manager” of AF, wrote an e-mail internally at AF explaining how important the historical data was for their reports. On 13 September 2009, that is shortly after the Glossop case had been adjourned as a result of the allegations made by AEL on AF’s working methods, Stuart McPherson (the person responsible for the historical data) wrote an e-mail explaining the reasons why he “would not be keen to have our historical rates subject to detailed scrutiny”.[53]Mr Evans’ statement of 11 October 2012 is long and contains much material. Of particular importance at this stage are the following:(1) it refers to a letter dated 23 March 2005 from AF to Mr Forsyth of the solicitors Morgan Cole, telling him that AF has left out one rate from a report because it was higher than the rate used in its report as the guide to the BHR. See para 8 of Mr Evan’s witness statement.(2) There is an internal AF email of 13 October 2008 from Mr Stuart McPherson to Ms Lindsay Cullen, where, effectively, Mr McPherson advised Ms Cullen on how to make a SCRIP report seem stronger for court use by excluding the more expensive hire company rates.(3) It said that the directors of AF were aware, (at least), from reviewing telephone records in January 2009, that the surveyors were not making the calls they claimed that they were making, but were afraid to dismiss employees because of the possibility that this malpractice might come to light. Para 8(i).

IV. The position of the respondents

[54]On behalf of the respondents in each case and on behalf of Axa, the motor insurer standing behind each respondent, Mr Nigel Wilkinson QC stated in paragraph 7 of his written submissions that: “Axa will not seek to rely upon the accuracy of any AF employee’s evidence as to a specific BHR where that evidence is solely drawn from a reported telephone conversation with a hire company…Axa will however continue to rely upon internet printouts from third party providers as providing accurate evidence (there is no evidence to suggest that any particular internet printout is not the genuine evidence of what it professes to be) and will support any assessments of BHRs which are independently and objectively justified as accurate (for example with fresh evidence)”.[55]In relation to the applications in Simmonds, Verley and Moonsam for permission to adduce fresh evidence, Mr Wilkinson pointed out that the proceedings in the County Court in those cases took place, respectively, in February 2010, January 2011 and May 2010. They were, therefore, long after September 2009, when AEL had become suspicious of AF’s methods and the reliability of its reports and had, in the Glossop case, openly made accusations about their correctness. Mr Wilkinson also noted that the witness statement of Mr Evans of 7 September 2009 exhibited research into 20 cases where, it was said, the evidence of AF was untrue, including three involving Mr Wilcox (the AF witness in Simmonds) and four involving Mr Sadler (the AF witness in Verley). Yet, at the time, no evidence challenging those AF statements was put before the courts in the present four cases. This was despite the intervening proceedings of AEL against AF alleging conspiracy and deceit, which were started in October 2009.[56]The overall submission of Mr Wilkinson was that in those cases where there was an application to adduce fresh evidence it should be refused because there had been ample opportunity for years before the present applications to adduce evidence challenging the honesty of the methods of AF and the veracity of the AF results on hire rates. Similarly in the two cases where permission to extend time to appeal was needed, that should be refused for the same reasons and also because it would be disproportionate to grant the very long extensions of time sought.[57]In relation to the appeals in Verley and Dickinson, Mr Wilkinson submitted that the decisions of the judges below rested not on the veracity of the AF witnesses but, instead, on the independent third party quotations taken from the internet. Therefore both those appeals should, in any event, be dismissed.[58]In relation to the appeal in Simmonds, if permission to appeal out of time and to adduce the fresh evidence were given, Mr Wilkinson accepted that the respondents could not justify the correctness of the evidence of Mr Wilcox for the purposes of the appeal. Therefore, he submitted, if the matter got as far as the appeal in that case, then it should be allowed and a retrial ordered and both parties should be permitted to adduce further evidence on the applicable hire rate.[59]In relation to Moonsam Mr Wilkinson submitted that the judge’s conclusion on the applicable hire rate was based on the rates taken from third party internet sites and also the evidence of Mr Bradshaw of AEL. The judge’s conclusion on the applicable BHR was therefore not “wrong”. Even if the way that the AF evidence was prepared and presented to the court constituted a serious procedural irregularity it did not lead in that case to an unjust decision, because the AF evidence actually yielded a higher figure than did Mr Bradshaw’s evidence. Therefore, it would be contrary to the overriding objective to permit the fresh evidence of Mr Lee to be adduced. Alternatively, as the decision of the judge was not “wrong”, the appeal should be dismissed.

V. Appeal or Fresh Action?

[60]The court raised with Mr Edis the question of whether, in principle, the correct remedy in these cases was by way of an appeal and, if that was allowed, a retrial. We reminded him of the general rule stated by this court in Noble v Owens [2010] 1 WLR 2491 that, where fresh evidence is adduced in the Court of Appeal tending to show that the judge at first instance had been deliberately misled into the judgment that he gave, the court would not allow an appeal and order a retrial, unless either the fraud was admitted or the evidence of it was “incontrovertible”. Otherwise the alleged fraud had to be pleaded and proved in a new action to set aside the judgment which it was alleged had been obtained by fraud. See [27] in the judgment of Smith LJ; [50] per Elias LJ; Sedley LJ agreed in the result. In Noble v Owens, where the alleged fraud went to the quantum of the damages recoverable by the claimant for personal injuries, the court was not satisfied, on the “fresh evidence” adduced, that the fraud alleged in relation to the damages was incontrovertible. Therefore it ordered that the alleged fraud issue should be remitted to the trial judge, who, if he found it proved, could then reassess the damages.[61]Mr Edis submitted that the “fresh evidence” in these cases established that there had been fraud by AF, which fact was incontrovertible. The fraud went to the credibility of AF’s evidence. He emphasised that the fraud was not that of the defendant in any of the cases. Therefore, the correct course would be to proceed by appeal and to allow the appeals. He also submitted, in the alternative, that the “fresh evidence” established beyond doubt that there had been an abuse of the process of the court in each of the four cases. If so, then the procedural irregularity in each case was such that an appeal was the correct route and that, in each case, the appeal must be allowed.[62]Mr Wilkinson stated, in his written submissions, that because the present four cases had been listed as “test cases” to provide guidance to the lower courts, the respondents would not argue that an appeal was the wrong method of challenge in these cases. Orally, Mr Wilkinson appeared initially to withdraw rather from that position. However, I think that, ultimately, he did not do so.[63]The position in these cases is unusual. The claimants/applicants/appellants are obviously not seeking to disturb the judgments against the defendants/respondents on the issue of liability. The only question at issue is the sum recoverable in respect of the cost of hiring a replacement car. Both sides accept that, in each case, the claimant/applicant/appellant must be entitled to retain the damages (for hire charges etc) which the court below has already awarded him. The only question is whether he should recover more than the sum already awarded. Moreover, the evidence of Mr Evans to the effect that AF was operating a system that was generally dishonest and could not be trusted, is not challenged by the respondents. As already noted in [47] above, Mr Edis frankly accepted he could not prove that a particular AF report in a particular case made a specific fraudulent misrepresentation. But the fact that the AF system was riddled with dishonesty and fraud and that, in general terms, this made the reports produced unreliable is not seriously challenged.[64]Given the general acceptance of the respondents that (all other things being equal) in these cases the route of an appeal rather than a fresh action is the correct one, the fact that the general dishonesty of the AF system is not challenged and the fact that it is only the judgments on the quantum of the hire charges that are in issue, it seems to me that, in these particular cases, if the applicants/appellants surmount all the other hurdles (which the respondents say they cannot), then the correct remedy is by way of an appeal. This would recognise that the effect of the fresh evidence was to throw in doubt the reliability of the basis on which the judges gave their quantum judgments below. This approach also seems the most efficient way to deal with the cases, given that it is common ground that if we accept Mr Edis’s submissions, the remedy to be granted is a retrial on the issue of the quantum of car hire charges recoverable. The precise format of the retrials and what evidence each party can adduce on them does remain in issue. I will deal with that, if necessary, after all the other issues that arise.[65]In the cases of Simmonds and Verley, the question of whether there should be an extension of time in which to seek permission to appeal will depend on whether permission is granted to adduce “fresh evidence”. The latter issue arises also in Moonsam. In my view the following issues should be considered in the order stated: i) Should permission to adduce “fresh evidence” be granted in any or all of Simmonds, Verley and Moonsam. If the answer is “no”, then there is no basis on which to mount an application for an extension of time or for permission to appeal. ii) If permission to adduce “fresh evidence” is granted, then, in the cases of Simmonds and Verley, should there be an extension of time in which to seek permission to appeal? To decide this issue the court must consider individually and collectively the factors set out in CPR Part 3.9 insofar as they apply to these cases. If no extension of time is granted, then there can be no permission to appeal. iii) If an extension of time is granted in Simmonds and Verley, then should there be permission to appeal in those cases? iv) If permission to appeal is given, then, in all the cases, should the appeal be allowed? As already noted, Mr Wilkinson accepted that in the case of Simmonds, if permission to appeal was granted, then he would not resist the appeal itself, because he could not rely on the statements of Mr Wilcox. v) In those cases (if any) where the appeal is allowed, what form should the retrial take?

VII. Issue One: should permission be given for “fresh evidence” to be admitted?

[66]The question of whether the Court of Appeal should receive evidence that was not before the lower court is a matter of procedure. The position is set out in CPR Part 52.11(2) which provides that “unless it otherwise orders” the Court of Appeal will not receive oral evidence or evidence which was not before the lower court. In a number of cases since the introduction of the CPR, this court has stated that the issue of whether “fresh evidence” will be received by the court will, ultimately, depend on the “overriding objective” set out in CPR Part 1.1(1), which is to deal with cases justly. However, as Ward LJ put it in Robson v Robson, [2010] WECA Civ 1171 at [57]. Hughes LJ, whilst commenting on the application of this rule on the particular facts of that case, agreed with Ward LJ’s formulation in general. Patten LJ agreed with both judgments. “…whilst, therefore, the demands of the overriding objective to deal with cases justly may dominate the decision, the well established criteria of Ladd v Marshall [1954] 1 WLR 1489 still prevail”.[67]In Ladd v Marshall, At 1191. Denning LJ stated that three conditions had to be fulfilled in order to justify the reception of fresh evidence or the grant of a new trial. The criteria are:(1) it must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial;(2) the evidence must be such that, if given, it would probably have an important influence on the result of the case, although it need not be decisive; and(3) the evidence must be apparently credible, although it need not be incontrovertible. In the present cases, it is accepted that the proposed “fresh evidence” of Mr Lee and Mr Evans is entirely credible, even if not in all respects incontrovertible. The arguments are about the first two criteria, in particular the first one.[68]Mr Wilkinson submitted that it was clear from Mr Evans’ witness statement of 7 September 2009 in Glossop that “the balloon had gone up” in relation to the practices of AF’s employees Wilcox, Sadler, and Broom. He submitted that the witness statement alleged systemic abuse by AF of its IRIS data base and the CSRs based on it and other so-called “research”. That was reinforced by the allegations in the Particulars of Claim in the action brought by AEL against AF in October 2009, alleging a “systemic” abuse (para 14), a “system” (para 15) and, overall, alleging fraud.[69]In relation to Simmonds in particular, Mr Wilkinson pointed out that the solicitors for Mr Simmonds, Scott Rees & Co, had sent a letter dated 26 November 2009 to Morgan Cole, acting for the defendants, Stewart Alexander Group Ltd, about Mr Wilcox’s evidence. The letter said that Scott Rees had prepared a witness summons to serve on Mr Wilcox if necessary and it asked Morgan Cole to confirm that Mr Wilcox would be giving evidence and that he was still employed by Autofocus. It said that if Mr Wilcox did give evidence then Scott Rees were “likely to serve witness evidence which suggests that [AF] has a track record of providing evidence which is untrue”. It gave examples which were similar to those given in Mr Evans’ statement of 7 September 2009 in the Glossop case. The letter also referred to that case and said that Scott Rees were giving the defendants a chance to “consider obtaining [BHR] evidence from another source”. If not, then Scott Rees would “seek to adduce the evidence [it had] obtained and to demonstrate that the evidence of [AF] is unreliable and should not be accepted”. That would involve an application for disclosure against AF and/or a witness summons to produce documents.[70]In fact, none of those threats was carried out. Mr Evans’ witness statement of 7 September 2009 was not deployed. No witness summons was served on Mr Wilcox. There was no attempt to discredit the AF evidence at the hearing on 25 February 2010. Mr Wilkinson pointed out that there is no explanation in any of the material now served by AEL on the present application to explain why steps to challenge the AF evidence were not taken at the time. He submitted that, in the circumstances, AEL knew about the issue, had made the appropriate allegations which were backed by evidence, but chose not to press them. Therefore, the application to adduce fresh evidence should be refused. Accordingly, in the case of Simmonds, the appeal must be dismissed.[71]In relation to Verley, Mr Wilkinson underlined the fact that, at the time, AEL had evidence which could have impugned the credibility of the evidence of Mr Sadler of AF. This was because Mr Evans had asked Mr Peter Williams of APU Ltd (who were investigators) to make enquiries in another case called Ford v Trans Alliance (a firm). Mr Williams had given a witness statement dated 1 October 2009 which said that the Avis Rent a Car branch that Mr Sadler had supposedly telephoned to make enquiries about the availability of a rental car had never heard of either AF or Mr Sadler, so that he could not have made the enquiry he said that he had. Mr Wilkinson told the court that an application to adduce Mr Evans’ statement in Ford v Trans Alliancewas rejected by the trial judge, Recorder Susman. By November 2009 it seems that AEL had applied to commit Mr Sadler for contempt of court. Email dated 2 November 2009 from Colin McLean of AF to Neil Forsyth of Morgan Cole: bundle 8/page 159 However, that application was not pursued and there was no challenge to Mr Sadler’s evidence in that case. As already noted, the judge decided that the AEL evidence of Mr Perry was the less reliable of the two.[72]In relation to Moonsam, Mr Wilkinson noted that the solicitors for Mr Moonsam, Antony Hodari, had written to Morgan Cole on 27 October 2009, reminding them that “very serious allegations” had been made by AEL against AF and that there were “very serious concerns” about the “validity of [the AF] evidence”. So, Morgan Cole was warned, if AF served a report in that case, the solicitors would “…raise this issue with the court and seek to have any such evidence excluded”. Antony Hodari also stated that they would expect the author of any report to attend any final hearing for cross-examination “…failing which we shall issue a witness summons for the author in question”.[73]Mr Wilkinson took a further point in relation to Moonsam. He noted that Deputy District Judge Hopkins’ assessment of the BHR at £29 was based on figures within the SCRIP report which was higher than the arithmetical mean daily hire rate of £22.94 plus VAT stated in the report of Mr Bradshaw of AEL. Therefore, Mr Wilkinson argued, the fresh evidence cannot be said to have an important influence on the case in the claimant’s favour, because Mr Bradshaw’s evidence alone would have resulted in a lower figure for the BHR.[74]Mr Evans of AEL responded to these points in his witness statement of 11 October 2012.[75](1) Simmonds v Stewart Alexander Group Ltd. Mr Evans notes that an attempt to serve a witness statement on Mr Wilcox was made and he was served at AF because AEL believed he was still employed there at the time. When AEL learnt that Mr Wilcox had left AF’s employ, it was assumed that the defendant would not continue to rely on his evidence. That proved wrong. The attempt by AEL to rely on the evidence of Mr Bradshaw was unsuccessful, yet the defendants continued to rely on “…dishonest Wilcox evidence”. [9(b)(viii)] of Evans’ statement of 11.10.12. The extent of the dishonesty of the AF system was only revealed by a thorough scrutiny of the Mirror Disk material.[76](2) Verley v O’Neill. Mr Evans’ response to the argument that AEL did not attempt to challenge Mr Sadler’s evidence at the trial of that case is that, at the time, AEL had no basis on which to challenge Mr Sadler’s evidence because it did not know of the “dishonesty surrounding the creation of the DRS report of AF”. [9(c)(i)]. Mr Evans says that the full picture did not emerge until after a review of all the 867,521 items on the Mirror Disk was completed in September 2012. Moreover, it is only recently that it has emerged that the survey was not prepared by Mr Sadler but by Shane Lockwood, was “surveyed” by Amy Penn and was only “completed” by Mr Sadler.[77](3) Moonsam v AXA. Mr Evans’ response to the allegation that AEL failed to challenge the SCRIP statement from Shane Lockwood (relying on the IRIS database and internet printouts) is that at the time of the trial AEL was unaware of the dishonesty underpinning the production of the SCRIP and DRS evidence. He says that it was not until October 2011 at the earliest and, in reality, shortly before this appeal was begun that AEL could have been aware, following the initial review of the Mirror Disk. And the full picture only became clear upon completion of that exercise in September 2012. Mr Evans points out that the judge did not rely on the internet printouts in the Lockwood report but the figures from the IRIS database, which, it is now clear, were “primarily fictional”. [9(d)(i)-(iii)].[78]Discussion: The most difficult case, from the applicants’ point of view, is that of Simmonds. The report was in the CSR format, so relying on telephone surveys and the IRIS database, as in the Glossop case. Therefore the points that were made in the Glossop case about the deficiencies in this type of report apply equally here. The initial challenge to the Wilcox evidence was not maintained and the reasons given by Mr Evans for not doing so in his witness statement of 11 October 2012 are not particularly convincing. In particular, there is no proper explanation of why no challenge was made to the defendant’s use of Mr Wilcox’s statement despite the fact that AEL believed it fatally flawed and AEL knew that he had left AF’s employ in unexplained circumstances.[79]However, the “fresh evidence” on which AEL wishes to rely does go much further than the allegations made at the time of the Glossop case in September 2009. The statements of Mr Lee of 9 February, 12 March and 1 May 2012 and those of Mr Evans of 20 June and 11 October 2012 all say that, based on the analysis of the Mirror Disk material, it is clear that evidence used by AF in these and many other cases was neither honest nor independent and that the whole system used by AF to produce all its various types of report was dishonest. Although the evidence of Mr Wilcox could have been challenged more forcibly than it was, AEL did not have and could not have had the Mirror Disk material to put before the trial judge to demonstrate the depth and breadth of the dishonesty involved in the AF system. Mr Wilkinson specifically accepted that he could not rely on the correctness of the evidence of Mr Wilcox given at the trial of the Simmonds case. It must follow, in my view, that if the trial judge had had before him evidence of the wholesale unreliability and dishonesty of the AF system on which Mr Wilcox’s evidence was based, he would, in all probability, have rejected it. Therefore, the evidence that AEL now wishes to adduce would have had an important influence on the result of the case.[80]Accordingly, I am satisfied that the Ladd v Marshall criteria are fulfilled in the case of Simmonds. Furthermore, I regard the reception of this fresh evidence as entirely consistent with the “overriding objective” of dealing with this case justly on appeal. Despite the very long period between the trial in February 2010 and the application for permission to appeal out of time in February 2012, this remains a case where there is strong evidence that the judge decided the amount of damages on the main claim (ie. hire charges) on the basis of evidence that was the product of a dishonest system. The respondents accept (upon the basis of the evidence adduced by AEL in Mr Lee and Mr Evans’ statements) that they cannot rely on the evidence of Mr Wilcox. It must be in the interests of justice to permit the introduction of evidence of that dishonest system on appeal.[81]In the case of Verley, AEL did have evidence at the time of the trial in January 2011 to support a case that Mr Sadler could not have made any personal enquiries, because of the investigations that had been made by Mr Williams. However, Mr Sadler’s DRS report was not, in fact, based on personal contacts with any hire companies but by reference to internet searches and data from the IRIS database. The (unchallenged) evidence that his report had actually been “prepared” and “conducted” by two other people and only “completed” by Mr Sadler was revealed only once the Mirror Disk material had been analysed. Further, it was only upon analysis of that material that there appeared to be strong evidence that AF habitually manipulated internet material if some figures were “inconvenient” to the case it wished to put forward. None of this material could have been available at the time of the trial before Deputy District Judge Nicholls in January 2011.[82]That judge preferred Mr Sadler’s evidence to that of Mr Perry’s for AEL/the claimant. I am quite satisfied that if the material now available had been before the judge it would have had an important influence on his appreciation of Mr Sadler’s evidence and so the result in the case. Although there has been a considerable lapse of time since the trial, I regard the admission of the new evidence of Mr Lee and Mr Evans is required to fulfil the “overriding objective” on this appeal.[83]In the case of Moonsam, AEL warned the defendant’s solicitors long before the trial that there were serious concerns about “the validity of [the AF] evidence”, which was a SCRIP report by Shane Lockwood. But, again the point was not then pressed to a conclusion. Instead, AEL submitted and relied on the evidence of Mr Bradshaw. However, I accept Mr Edis’s submission that the evidence in the Mirror Disk on how SCRIP reports were put together and their dishonesty was not reasonably available at the time of the trial before Deputy District Judge Hopkins. I reject Mr Wilkinson’s submission that even if this evidence had been available it would not have had an important influence on the result of the issue on damages for car hire. It is clear from the judgment, in my view, that the judge relied on the report of Shane Lockwood and the figure for the UK average for 2009 which he took from a table in the SCRIP report. Moreover, the rates that were produced by Mr Bradshaw had substantial collision damage excesses attached to them. It is not clear that the judge took account of that fact in arriving at his overall “average” rate of £29 or that he would have arrived at that figure if he had concluded (as a result of receiving the fresh evidence impugning the AF report) that he could not rely on any AF figures at all.[84]Accordingly, in this case also, I conclude that the “overriding objective” requires that the new evidence of the dishonesty of the AF system should be admitted on this appeal.[85]Any application for an extension of time in which to appeal must be considered in the light of the criteria set out in CPR Pt 3.9. The individual factors on the “checklist” that is there set out must be analysed and the court must look at the matter overall. That list does not expressly refer to either the “merits” of the proposed appeal or the possible prejudice to an applicant if the extension is not granted. Those factors, which are often two sides of the same coin, will have to be considered when the question of extending time is difficult to resolve. See [23] of the judgment of Longmore LJ in Yeates v Aviva [2012] EWCA Civ 634 and the authorities there cited. I must therefore first consider each of the factors set out in the checklist.[86]In relation to the interests of the administration of justice, the applicants submit that justice demands that there should be an appeal in these cases because the evidence relied on by the judge below was the product of a dishonest system. The respondents submit that there are finite resources in the court system and that it is not generally in the interests of the administration of justice to allow “second bites at the cherry”. Whilst I see the force of the respondents’ argument, in my judgment, the interests of the administration of justice lie in permitting the applicants to have time to appeal extended so that the issue of the AF evidence can be considered on appeal, provided permission is granted.[87]The applicants submit that their applications for permission to appeal out of time were made promptly once the full extent of the corrupt nature of the AF system became reasonably clear. The respondents submit that the applications were not made promptly. Mr Wilkinson emphasised that AEL made allegations of fraud against AF in the action that AEL started in September 2009. Again there is some force in the respondents’ arguments. But the applicants’ appreciation of the facts concerning the AF system was very incomplete in 2009 and only became clear once the Mirror Disk material was properly analysed. Therefore, although I accept that the applications could have been made earlier, this is not a major point against granting an extension of time.[88]The respondents submit that the applicants intentionally decided not to act sooner than they did and that this should be held against them. It must be true that, at some stage, the applicants decided to wait until they had obtained and analysed the Mirror Disk material, although the applications for permission to appeal out of time were all made In February, March, April and May 2012 before the Mirror Disk material had been fully considered. In my judgment there was not any culpable delay on the part of the applicants.[89]The respondents also submit that there is no good explanation for the applicants’ failure to act sooner. I do not accept this submission. The position was changing as the applicants discovered more material.[90]The respondents accept that the question of the extent to which “the party in default” (ie the applicants) has complied with other rules, practice directions and court orders is not likely to be of relevance to these applications. It is a neutral factor.[91]As to the question of whether the failure to comply with the time rules was caused by the applicant itself or its legal representatives, the applicants point out that, strictly speaking, AEL is not the claimant in any of the cases and no blame can be attached to the claimants themselves. That is true but it is not an attractive argument to mount, given that it is AEL that would benefit from any successful appeal because of its subrogation rights. It is AEL and its legal team that have determined the course of the present applications. The respondents submit that AEL and its legal teams were fully aware of the issues in these claims and there is culpability in failing to act sooner than they did. I would be prepared to accept that AEL and its legal team might have acted sooner, but given the changing picture, I do not accept that the decision to wait until Mirror Disk material had been considered was unreasonable or significantly culpable.[92]The respondents accept that the next factor, ie whether the trial date or likely date can still be met if the relief is granted, is not relevant.[93]The respondents submit that the applicants’ failure to lodge their application for permission to appeal sooner will have an effect on the reliability of any evidence that may be adduced on any appeal and, if an appeal is allowed, on any retrial. I accept that this may be so in relation to evidence on rates of hire in all these cases, where the accidents took place in August 2007, December 2007, October 2008 and February 2009. Respectively: Simmonds, Verley, Moonsam and Dickinson. But, if it be the case that the appeals are allowed because of the dishonest activity of AF on whose reports the respondents relied, this is not a strong point in the respondents’ favour. The starting point is that a claimant is entitled to recover the hire rate agreed. It is for the defendant to show that this rate is unreasonable. It was and will be for the respondents to demonstrate that the hire rate claimed by the claimants/AEL is not reasonable. See Pattni v First Leicester Buses Ltd et al [2012] RTR 17 at [35]. If that exercise is more difficult for the respondents because of the activities of AF, then, in my view, that is not a factor counting against the applicants in relation to whether or not they should have an extension of time.[94]The last specific factor is the effect which the grant of the relief of an extension of time in which to appeal will have on each party. For the applicants it will give them the opportunity to recover what they regard as their just compensation. The respondents accept that the applicants may lose out on compensation (although that is in dispute) but it is argued that they had the opportunity to raise these matters at the trial of each to these two cases but did not do so. That is only really true in the case of Simmonds. In Simmonds there was no reapplication to admit the evidence of Mr Bradshaw in relation to rate of hiree. In Verley the applicants relied on Mr Perry’s evidence which was rejected by the judge. Moreover, if the extension of time is granted, the respondents say that they will be put to the expense of appeals and, potentially, retrials with the attendant cost and effort. Whilst I accept this last point, it is not a strong one in favour of the respondents, given the cause of the problem in the first place, ie. AF’s dishonest mode of operation.[95]Looking at the question of an extension of time overall, I am satisfied that it is in the interests of justice to extend time in both cases, for all the reasons discussed in relation to the individual factors above.

IX. Issue Three: should permission to appeal be granted in Simmonds and Verley?

[96]As already noted above, Mr Wilkinson accepted that he could not oppose an appeal in Simmonds on the issues of the judgment sum and the order that the claimant repay part of the interim payment.It follows that there has to be permission to appeal in that case, because the standard of a reasonable prospect of success on appeal must have been met. So I would grant permission to appeal in Simmonds on those issues. As for permission to appeal the issue of costs below, which Mr Wilkinson did not concede, it seems to me that its determination will depend on the outcome of any retrial on the issue of the amount of hire recoverable. So, if necessary, I would grant permission to appeal on costs also.[97]As for Verley, the only issue concerns the amount of hire recoverable. Mr Wilkinson made no separate submissions on whether there should be permission to appeal, apart from those made on the topics of “fresh evidence” and an extension of time. In my view this case passes the test of there being a good prospect of persuading the Court of Appeal that the appeal should be allowed on the basis of the fresh evidence. So I would grant permission to appeal in this case.

X. Issue Four: in relation to Dickinson, Verley and Moonsam, should the appeals be allowed?

[98]CPR Pt 52.11(3) states that an appeal from a lower court will be allowed where the decision of the lower court was(a) wrong, or(b) unjust because of a serious procedural or other irregularity in the proceedings in the lower court. An appeal based on “fresh evidence” does not fit neatly into either of those two categories. The essence of allowing an appeal on the basis of “fresh evidence” is that such evidence would probably have had an important influence on the outcome of the case but not necessarily a decisive one. In these appeals the “fresh evidence” of Mr Lee and Mr Evans has not been seriously challenged but it has not been tested by cross-examination. The thrust of the fresh evidence of Mr Lee and Mr Evans is that there were serious irregularities amounting to dishonesty by AF in the way that material was collected, collated and put into reports for use in court cases and that judges in many cases, including the present four, wrongly accepted evidence from AF witnesses as being honest and accurate. The fresh evidence is aimed at showing, first, that there is a strong argument that the results below were therefore “wrong” in the sense of being wrongly arrived at because based on such fundamentally flawed evidence. Secondly, the “fresh evidence” is aimed at showing that there was a serious procedural or other irregularity in the proceedings below because, contrary to the natural assumption the judge would have made, the evidence was not honest. Effectively, Mr Edis argued that the appeals in all the cases should be allowed because both of those tests were satisfied in all four cases in the sense I have described,.[99]Mr Wilkinson argued that in the cases of Dickinson and Verley the judges decided the rate of hire recoverable on the basis of “an independent third party quotation taken from the internet” as opposed to the evidence of AF witnesses. He submitted that there was nothing in the fresh evidence to suggest that this internet evidence was itself tainted. In the case of Dickinson the judge had selected the internet quote of Enterprise, (for the relevant date) and that could not be faulted. In the case of Verley, the judge had accepted an internet rate quoted by Mr Sadler and that internet rate cannot be impugned. Therefore the trial judges were entitled to rely on the internet material as the basis for the hire rates they held were recoverable. Therefore, those appeals should be dismissed. On Moonsam Mr Wilkinson argued that the rate arrived at by the judge (£29 per day) could not be characterised as “wrong” for the purposes of CPR Pt 52.11(3). Therefore that appeal should be dismissed also.[100]With regard to Dickinson, Mr Edis relied on the evidence at paragraph 9(a) of Mr Evans’ statement of 11 October 2012. The point made is that although the isolated quotation from Enterprise may be valid, it has to be put in its context and that, in this case, is the fact that AF regularly manipulated rates so as to produce the lowest possible ones. Mr Evans pointed out in his statement that Ms Harper noted in her statement to the court that the Enterprise quotation does not include figures for “excess waiver charges”. That is noted in the Enterprise quotation itself, which also states that “damage waiver must be taken unless alternative coverage can be verified at the time of rental”. In paragraph 5 of her statement, Ms Harper stated that “typical excess waiver charges were added to the internet rates and the total charges are also shown on the summary sheet of the attached SCRIP”. Ms Harper exhibited to her statement the SCRIP Hire Rate Survey and note 2 to that states that further information about “excess waivers” (ie. the charges made by hire companies so that the hirer does not have to pay for any damage to the car hired up to the amount of the “excess”, usually around £500), will be found in Attachment 1. This sets out the cost of a waiver of the excess for 1, 3, 7 or 28 days.[101]Mr Edis submitted that the key question is whether those figures are reliable because they would have had to be taken into account by the judge in arriving at the overall daily hire rate figure. It is clear from the terms of paragraph 4 of Judge Henson’s judgment that she did so. At paragraph 9(a)(vi) of his statement of 11 October 2012, Mr Evans noted the thread of emails within AF on 15 – 16 March 2010 involving Mr Sadler, Ms Suzy Forrest and Mr Stuart McPherson about the accuracy of the excess waiver charges shown in Attachment 1 to any SCRIP sheet produced for a particular case. In an email dated 17 March 2010 from Mr McPherson to Mr Sadler, Mr McPherson states:
“With [Attachment] 1 we are creating a rod for our own backs, by presenting figures that we cannot support and that will inevitably be challenged. I certainly would not be happy about putting my hand on the bible and swearing to the judge that the Europcar XSW figures in [Attachment] 1 are accurate. As far as I am concerned [Attachment] 1 has no place in DRS. With SCRIP I would either return to it’s simplest form or do away with it altogether…”
. Ms Forrest responded:
“We are in danger of exposing ourselves if we don’t try and find a way of plugging the holes….From what [Mr Sadler] says its’ pretty alarming and I agree we must avoid the report losing credibility…”
Composite Hearing Bundle page 107.[102]Mr Evans also pointed out that a large number of emails between Ms Harper, Ms Linsey Cullen and Mr McPherson have been disclosed which show that it was regarded as routinely acceptable for AF “surveyors” to modify one another’s witness evidence and to discard any internet print outs which did not support their client’s case.[103]It seems to me that this “fresh evidence” is strongly supportive of the proposition that the figures for “Excess Levels and Waiver Details” in Attachment 1 to the SCRIP Hire Rate Survey exhibited to Ms Harper’s statement, on which Judge Henson relied, are not to be treated as either reliable or accurate. I would therefore accept that the judge’s figure for the total hire rate was based on unsatisfactory and unreliable evidence. I would therefore allow the appeal in the case of Dickinson.[104]In the case of Verley, the position is simpler. The judge relied on the evidence of Mr Sadler of AF. The “fresh evidence” suggests strongly that he did not conduct the survey for the DRS concerned, but it was done by Amy Penn and Shane Lockwood. Mr Sadler merely “completed” the report, although it indicates that it was his work. On that basis alone I would hold that the appeal should be allowed, given that the judge stated specifically that he preferred Mr Sadler’s evidence to that of Mr Perry. Further, given the evidence that in some cases all the relevant internet rates were not included in a DRS and that the unsatisfactory IRIS database was used to give additional credibility to the survey work undertaken, it seems to me that AEL has established that the evidence on which the judge based the hire rate awarded was unsafe and unsatisfactory. I would therefore allow this appeal also.[105]In the case of Moonsam, the evidence submitted by AF to the trial judge was in the form of a SCRIP report by Mr Lockwood. As I have already pointed out, it is clear from the transcript of the judgment that Judge Hopkins relied on the evidence of Mr Lockwood when concluding that the appropriate hire rate was £29 a day. That figure was based on the IRIS database, an extract of which was exhibited to Mr Lockwood’s statement. Bundle 6/page 433 It is clear from that extract there is the same problem about the veracity of the figures for the charge attributable to “excess waiver”. Those are set out in an “Attachment 1” to the SCRIP Hire Rate Survey, as in the Dickinson case.[106]In my view, whether or not the figure of £29 daily hire is “wrong”, it is clear that the “fresh evidence” would have had an important impact on the judge’s decision in the lower court, because it strongly suggests that the evidence of Mr Lockwood, based as it was on the IRIS database and the unreliable excess waiver figures was not either safe or satisfactory. Accordingly, I would allow this appeal also.[107]The effect of these conclusions is that, in each case, the appeals must be allowed to the extent that the decision of the judge on the hire rate to be recovered by the claimant must be set aside. As already noted, the respondents to the appeals accepted that the claimants/appellants were entitled to retain the sums that they had been awarded by the lower courts for car hire. Although we did not hear argument on the points, I would be inclined to order (despite the fact that the judgments below on hire recoverable are being set aside) that the claimants may retain the sums awarded by the judge below pending any retrial. I would also be inclined to order that there should not be any alteration of the position regarding interim payments or costs pending any retrial. In other words, it seems to me that the best practical solution is to maintain the current positions of the parties pending any retrial. However, the parties may have concluded that there is a more effective way of dealing with things; or they may wish to argue for a different order and, if so, this will have to be done by further written submissions to this court. However, I hope that can be avoided.

XI: Issue Five: What form should the retrials take?

[108]As already noted, Mr Wilkinson accepted that if the appeals were to be allowed then in all four cases there should be retrials of the issue of the recoverable hire rate. The only argument was on whether the defendants/respondents should be permitted to put in any evidence at the retrial on the issue of the hire rate applicable. I am not persuaded that this court should impose any restrictions on what evidence may be adduced by either side at a retrial. The defendants/respondents have paid the penalty for relying on the evidence of AF because the appeals have been allowed. In my view it would be unfair and disproportionate further to punish the defendants/respondents by an order debarring them from adducing evidence of hire rates at any retrial.[109]Mr Edis submitted on behalf of the appellants that this court should order that all four cases should be re-allocated to the Multi-Track for the purposes of the retrials. This would enable AEL to recover its costs. For the respondents Mr Wilkinson has submitted that there should be no re-allocation and he reminded us that recovery of costs is not a factor included within the matters relevant to allocation to a track under CPR Pt 26.8. In my view any retrials should be re-allocated to the multi-track given the history of the cases and the reason why the appeals were allowed and orders for retrials made.[110]Having said that, all other questions of how these retrials are to be conducted, including the question of what form any evidence on hire rate should take, must be a matter for the judge conducting the retrials. I would suggest that it would be sensible for all four cases to be heard by the same judge at the same time and under the same procedure so as to reduce costs as much as possible. I would hope that this would be agreed by the parties and arranged through administrative channels.

XII. Disposal

[111]In the cases of Simmonds, Verley and Moonsam, I would permit the admission of the fresh evidence in the form of the witness statements of Mr Lee and Mr Evans plus exhibits. In the cases of Simmonds and Verley I would grant the necessary extension of time in which to appeal and permission to appeal. In all four cases I would allow the appeals and order retrials on terms that(a) the retrial in each case is limited to the issue of the quantum of car hire recoverable and(b) that no sums be repaid pending the order of the court which hears the re-trial.[112]Mr Wilkinson invited the court to give some general guidance to lower courts, where there remain many other “Autofocus cases” where the claimant (effectively AEL) has made an application for permission to adduce fresh evidence, and for permission to appeal out of time. For my part I think it is not possible to give any sensible guidance beyond what must follow from my conclusions on the issues decided above. I have attempted to state the principles to be followed in relation to an application to adduce the fresh evidence relied on by AEL in these four cases. If AEL wished to attempt to adduce similar fresh evidence in other cases then those principles would, generally speaking, apply. But there may be particular facts that are relevant to individual cases; so it does not follow that such evidence would necessarily be admitted in all cases. Similarly, I have attempted to apply the principles for granting permission to appeal out of time and for permission to appeal. But, once again, there may be important specific facts that are relevant to other individual cases. There are all sorts of different possible situations that have not been covered by these four cases on which no guidance can be given. Thus, (for example) I am not prepared to indicate what should be the appropriate way to proceed in a case in which AF evidence had been adduced, but which was then settled. Nor would I be prepared to give a general indication, one way or the other, on the issue of re-allocation if an appeal were allowed and a retrial ordered.[113]Mr Wilkinson submitted that we should state a general principle that no “Autofocus appeal” should be allowed unless an appellant could show that the judge would have awarded an increased amount had the fresh evidence been before him or her. I would not accept that submission. The point about the “fresh evidence” is that it strongly supports a conclusion that, contrary to the justifiable assumption made by the judges at first instance, the AF evidence was not properly independent or reliable, because the AF systems on which it was based were deliberately manipulated and the evidence fabricated or misleading. The “fresh evidence” does not attempt to demonstrate what specific amount should have been awarded. As I have already pointed out, See [93] and footnote 32 above. the general rule is that it is for the respondents to demonstrate that the hire rate claimed by the claimant/AEL is not reasonable. Therefore, if a judge has awarded a sum that is lower than that claimed by AEL, then, at least on the face of things, there may be a strong case that the judge will have been led into awarding the “wrong” sum. But it is precisely because it is accepted by both parties that this does not follow automatically that there are orders for retrials in the present cases. The same reasoning is likely to apply in other cases, but there may be specific facts in individual cases which are important on which we cannot comment.[114]I agree.[115]I also agree.

Cited in 4 later judgments