London Strategic Health Authority v Pandya & Ors [2008] EWHC 967 (Ch)

[2008] EWHC 967 (Ch)Case No HC06C01315
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 09/05/2008
Before
SirAndrew Park
Between
London Strategic Health AuthorityClaimantGirish Pandya and othersDefendants
Hugh Norbury (instructed by Peters & Peters) for claimantMr Girish Pandya in person for in personHearing Hearing dates: 14, 15, 16, 18 and 21 April 2008
Judgment

Sir Andrew Park:

[1]These are as follows. Authority, the Usually the claimant in this case, the London Strategic Health Authority; sometimes the context will show that the term is used to refer to a locally based Health Authority in the years from 1998 to 2001 when the events which are the subject matter of this case occurred. Derek Clarke Chemist Business name used by Glosgrange Ltd; one of eight pharmacies which submitted false claims to the PPA. FP10C Designation of the form for NHS prescriptions which doctors produce using a computer-based system. A copy sample (front and back sides) is appended to this judgment. FP10NC Designation of the form for NHS prescriptions hand-written by doctors. A copy sample (front and back sides) is appended to this judgment. Glosgrange Ltd Company which owned Derek Clarke Chemist. Granil defendants, the The second and third defendants, Nalin Kotecha and Sideset Ltd; see below. Granil Pharmacy, the Pharmacy owned by Sideset Ltd and managed by Mr Kotecha; one of the eight pharmacies which submitted false claims to the PPA. Health Authority A locally based authority which, at the time of the events giving rise to this case, was responsible for providing some NHS services in its area; for example the Kensington & Chelsea and Westminster Health Authority. Kotecha, Mr Second defendant; owner of Sideset Ltd; associated with Granil Pharmacy; a witness for the claimant. London Strategic Health Authority The claimant; successor by virtue of statutory instruments to the organisations within the NHS against which the fraudulent transactions complained of were committed. NHS, the The National Health Service. NHS CFSMS The NHS Counter Fraud and Security Management Service. Norbury, Mr Hugh Norbury; counsel for the claimant. Pandya, Mr The first defendant, and the only effective defendant so far as the issues addressed by this judgment are concerned. PPA, the The Prescription Pricing Authority, an organisation within the NHS structure the function of which included receiving applications from pharmacies for payments in respect of prescriptions dispensed by the pharmacies, processing the applications; making the payments appearing to be due, and passing on the burden to the appropriate other organisations within the NHS; those organisations at the relevant time having been local Health Authorities. Scott, Mr From 1998 to 2006 a Fraud Investigator within the Pharmaceutical Fraud Team of the NHS CFSMS; from 2004 to 2006 in charge of the investigation of the events to which this case relates; a witness for the claimant. Sideset Ltd Third defendant; a company controlled by Mr Kotecha which owned the Granil Pharmacy.

Introduction and overview

[2]This case arises out of fraudulent activities over the years from 1998 to 2001 by which the proprietors of eight pharmacies used forged prescription forms to obtain large payments from NHS authorities for prescriptions which they had not in fact dispensed. The specific authorities which made the payments and were defrauded of the amounts paid no longer exist. The present claimant is their successor, and there is no doubt that, by virtue of statutory provisions which I need not enlarge upon, it is entitled to enforce any claims which might have originally been enforceable by the predecessors. When I refer in this judgment to ‘the Authority’ I should in general be understood to be referring either, as the context may indicate, to the relevant authority which existed at the time of the events complained of or to the London Strategic Health Authority in its capacity as the claimant in the action.[3]The Authority commenced this action, naming as defendants Mr Girish Pandya, the proprietors of all except one of the eight pharmacies, and, where the proprietor of a pharmacy was a company, the individual who was in control of the company. As I will explain in succeeding paragraphs the claim only continues now against Mr Pandya. He is not himself a pharmacist, nor does he have any ownership interest, direct or indirect, in any the eight pharmacies. However, it is said that he played a role in enabling the pharmacists to make the fraudulent claims, and that he is therefore jointly and severally liable with them for the losses caused to the predecessor authorities which suffered from the frauds. He pleaded in his defence that he knew nothing about the fraudulent prescription payment claims made by the pharmacies. In my judgment, however, he has been shown by the evidence to have been involved in the organisation and implementation of the fraud or frauds, and I accept the Authority’s contention that he is liable, jointly and severally with the other defendants, for the losses complained of.[4]The reason why the claim continues now against Mr Pandya alone, although it was originally commenced against thirteen defendants, is that the other twelve defendants, who were associated in one way or other with seven of the eight pharmacies, have settled the Authority’s claims against them. In nearly all cases the defendants who settled agreed to pay substantial sums to the Authority. The Authority’s claim extended to(i) the aggregate of all the payments in respect of fraudulent claims made by the pharmacies in respect of which the claim was brought,(ii) interest, and(iii) costs. If I have understood correctly, in the case of all except one pharmacy the defendants who settled agreed to pay an amount which was greater than the part of (i) referable to their pharmacy, but less than the aggregate of (i), (ii) and (iii) so referable. In the case of one pharmacy (Granil Pharmacy, of which more later as this judgment progresses) the settling defendants agreed to pay significantly less than the amount at (i). Where in (i) I referred to ‘the pharmacies in respect of which the claim was brought’ the expression covered seven of the eight pharmacies which made fraudulent claims for prescription payments, but not the eighth one, which was known as Derek Clarke Chemist: the company which owned that pharmacy, Glosgrange Ltd, and its controlling director were not made defendants to the claim. However, the Authority claims that Mr Pandya is liable in respect of payments made to that pharmacy as well as being liable in respect of payments made to the other pharmacies the owners of which were defendants to the claim.[5]I should mention here that the Authority’s claim was pleaded in alternative ways. One alternative was that there was a single coordinated fraud to which(1) all of the pharmacy owners,(2) all of their controlling shareholders if they were companies, and(3) Mr Pandya were parties. The other alternative is that there were eight frauds, each one being a fraud carried out at a particular pharmacy. On this analysis the eight frauds were similar to each other and had some elements in common (alleged participation by Mr Pandya in all of them being one such element), but they did not coalesce into one all-embracing conspiracy. Each of the eight frauds was alleged to have been carried on by (1) the owner of the pharmacy concerned, (2) the controlling shareholder if the owner was a company, and (3) Mr Pandya. I have not seen the terms on which the claims against the defendants other than Mr Pandya were settled, but from what I was told they seem to have been consistent with the second of the two bases. The case against Mr Pandya which was presented to me was, I think, tacitly constructed on the basis that that there were eight separate frauds, but that Mr Pandya made an input to all of them, and therefore he is liable to the Authority in respect of all of them. In the cases of the frauds carried out at seven of the pharmacies he is contended to be jointly and severally liable with the particular defendant or defendants who represented the pharmacy in question. In the case of the eighth pharmacy – Derek Clarke Chemist – it is contended that Mr Pandya is solely liable.[6]For completeness I should mention one detailed qualification to what I have just said. Two of the eight pharmacies which over the years submitted forged prescription forms in support of applications were owned by one company. So, on the separate frauds analysis as opposed to the single coordinated fraud analysis, one of the separate frauds was carried out at two pharmacies, not at one. The two concerned traded as the ‘the Warwick Pharmacy’ and ‘Gees Pharmacy’, but they were both owned by Kaylan Ltd, which was the eighth defendant to the Authority’s claim. The individual who was in control of Kaylan Ltd was Mr Hirani, and he was the ninth defendant. In the circumstances it might have been more accurate if, instead of saying that the ‘separate frauds’ analysis was that there were eight frauds in progress, one at each of eight different pharmacies, I had said that there were seven frauds in progress, six of them at six different pharmacies and one of them at two other pharmacies.[7]What I have just said about Kaylan Ltd prompts me to mention that in nearly all instances the name of the pharmacy differs from the name or names of the relevant defendants. For example, frequently in the course of this judgment I refer to Granil Pharmacy. That is the trading name under which the business was conducted, and it is usually convenient to use the name as if it was Granil Pharmacy which carried out relevant acts. But Granil Pharmacy was the name of a business owned and carried on by Sideset Ltd; and the owner and controlling director of Sideset Ltd was Mr Nalin Kotecha. So strictly speaking it was Sideset Ltd which made fraudulent applications for payments, but no-one thought of it like that, and for the most part I will refer to ‘Granil Pharmacy’ rather than to Sideset Ltd. It should be noted, however, that Granil Pharmacy is not one of the named defendants to this claim. Sideset Ltd (the third defendant) and Mr Kotecha (the second defendant) are. At some points in this judgment I refer to them as ‘the Granil defendants’.

The NHS prescription system

[8]Most of the population of this country will be familiar with aspects of how the NHS prescription system works. Typically a patient sees a doctor at the doctor’s surgery, and the doctor forms the view that medication of some kind or kinds should be prescribed for the patient. So the doctor prepares a prescription on a standard form. (I say more about the forms later.) In earlier years doctors used to write prescriptions in manuscript on forms which were then torn off a pad. (This earned the medical profession a reputation for seriously illegible handwriting, but somehow pharmacists seemed to be able to decipher it.) Forms of that sort are still in use, but more recently nearly all doctors use computerised facilities whereby they type information about the prescription into the computer, and the computer, drawing on a stock of blank forms in its paper tray, produces the completed prescription. Whether the prescription is handwritten or computer-produced, the doctor signs it and gives it to the patient who leaves the surgery with it. The patient takes it to a pharmacy, where the pharmacist dispenses the prescribed items and delivers them to the patient, usually together with instructions about when and in what quantities the patient should take the medication. These are likely to have been included in what the doctor wrote or typed into the prescription form. In some cases the patient has to pay a prescription charge.[9]The foregoing will be familiar to most readers of this judgment from their own experience. I now add two matters which they may assume but not know about in detail. First, the pharmacies do not (or at least do not generally) obtain drugs and other items from NHS sources. Rather they purchase them from pharmaceutical companies or other commercial suppliers. As customers know, pharmacies hold stocks of many drugs and draw on their stocks to fulfil prescriptions. Occasionally a pharmacy will have to order a prescribed drug from a supplier and may not be able to fulfil the prescription for a day or so.[10]Second, payments to pharmacies for providing patients with drugs pursuant to NHS prescriptions are made from public funds by organisations within the NHS structure. Once a month the pharmacy assembles all the prescription forms which it has fulfilled in the last month. It stamps them with its own details, and sends a bundle of them, with its own appropriate covering form applying for payment, to a department which has been established to receive and process the applications. At the times relevant to this case that was the PPA, the Prescription Pricing Authority. (The PPA has since been replaced by a differently named organisation, but I will ignore that in this judgment.) The PPA calculated the monthly amounts due to pharmacies, taking account of a price for the drugs (less a discount at a standard rate), adding a prescription fee, and deducting any prescription charges which may have been paid directly to the pharmacy by the patient. The PPA made payment to the pharmacy, and then, by internal NHS processes, passed on the cost to the relevant Health Authority. At the time of the events which have given rise to this case the Health Authority would have been one established for the locality where the pharmacy was situated. For example, for Granil Pharmacy, which was situated in West London, the relevant authority was the Kensington & Chelsea and Westminster Health Authority. So the loss arising from fraudulent prescription forms on the basis of which payments were made to the Granil Pharmacy was suffered by that Authority. However, as I have mentioned earlier, its rights of action are now vested in the London Strategic Health Authority, the claimant in this case.[11]Before moving on I should make two points. First, the PPA’s procedures included a number of features which might have shown that a prescription form on the basis of which payment was applied for was a forgery, or might have caused it to be subjected to special scrutiny. For example forms which would attract payment above an unusually high level were automatically identified by the system and might be singled out for specific enquiry. However, whoever devised the fraudulent system involved in this case obviously knew about matters of that nature, and it was some years before the PPA’s suspicions were aroused and investigations revealed what had been going on. Another example of the same sort of thing is that, if a claim showed that the patient had paid a prescription charge, that reduced the amount payable to the pharmacy, and diminished the risk of enquiry. Most, but not all, of the thousands of forged prescription forms which were involved in the frauds which this case was about purported to show that prescription charges had been paid. Of course they had not, because the prescribed drugs had never been prescribed in the first place.[12]Second, the NHS has a specialist department whose role is to seek to identify and cut short frauds of all kinds where the public funds of the Service are the intended victims. This is now called the NHS CFSMS (see the Glossary at the beginning of this judgment). Mr Scott of that organisation, assisted by colleagues, took charge of the investigation in this case when the organisation was contacted by a member of the staff of the Kensington & Chelsea and Westminster Health Authority who had become suspicious about a number of prescriptions. Mr Scott’s investigations, made in conjunction with the Kensington & Chelsea and Westminster Authority and later with the police, eventually uncovered the large scale frauds which had been happening. In particular in early October 2001 he and the police executed a search order at Granil Pharmacy and at the home of the individual in charge there, Mr Kotecha. The search revealed several incriminating documents which I will describe below, and appears to have brought the lengthy series of fraudulent claims (going back to 1998) to a rapid end. And this applied not just to fraudulent claims on behalf of Granil Pharmacy, but also to the fraudulent claims which were previously being made over the same sort of period by the other seven pharmacies as well.[13]I mention that at one stage criminal proceedings against some of all of the persons involved in the fraud were contemplated, but for reasons which I do not know, they did not proceed. All that was said about this was the following, by Mr Scott in the course of responding to a question by me about why so much time has elapsed since the frauds were first discovered:
“Roughly by 2004/2005 we had engaged counsel. The criminal prosecution was to all intents and purposes ongoing until 2006 when unfortunately certain things came to light with the Metropolitan Police, and the Crown Prosecution Service stopped the investigation.”

NHS prescription forms

[14]Some aspects of the detailed structure and contents of NHS prescription forms are important in this case. The forms are securely printed, and their distribution is subject to control. They ought to be kept in secure places in doctors’ surgeries. I append to this judgment copies of the front and back sides of sample forms as they are when supplied by the NHS to a surgery. One sample is of the form used by doctors for writing out prescriptions by hand. This is form FP10NC (see the lower left hand corner of the front side). In the case of that form the rear side is copied on a single sheet appended to this judgment. The other sample is of the form used by doctors to produce prescriptions through a computerised system. This is form FP10C. In the case of that form the two sides are copied on separate sheets appended hereto. As I have mentioned earlier, at the present day the form for use with computers (form FP10C) is the one on which most prescriptions are made.[15]It will be seen that in the case of each form some matters, including the basic lay-out, are already printed on the forms before doctors use them to make prescriptions. There are spaces in which the doctor writes or causes to be typed several important matters, including the name, age, and address of the patient, the details of the drugs or other items prescribed, and, in the case of form FP10C, the doctor’s own name and surgery address. In the case of form FP10NC the forms come to the surgery with the doctor’s details already printed on. In each case there is a place on the form where the doctor must add his signature in manuscript. In the top left corner of the front page there is a space which the doctor does not complete, but where the pharmacy to which the prescription is taken and which dispenses the drugs places its stamp. It needs to do that before it sends the form, together with other forms from the last month, to the PPA in support of its request for payment. There are some spaces on the rear side at which entries will be made in manuscript at the pharmacy relating to prescription charges or exemption from them.[16]It will be seen that at the foot of the front side of the copy forms appended to this judgment there is a long number in bold print. This is the prescription form’s unique serial number. It has been included on prescription forms since 1999. When stocks of blank forms are supplied to surgeries each form has its own number, and the numbers are sequential in the batch of forms as delivered. To identify the sequence requires the last digit to be ignored: that digit is there for a security purpose the precise nature of which I do not know and do not need to know. So in the appended sample form FP10C the last four digits are 9530. If the zero at the end is ignored the last three digits are 953. The corresponding three digits in the previous form in the batch would have been 952; in the next form in the batch they would have been 954; and so on.[17]The serial numbers enable the Authority which issues the forms to identify the particular surgery to which any form was supplied. In the case of forms FP10NC (the forms for completion in manuscript rather than through a computer) the address of the surgery is already printed on the forms when they are received by the surgery, but that is not so on forms FP10C (the forms for use with computers). When a form FP10C becomes a prescription by reason of the doctor typing in the details, the computer automatically inserts a unique registration number for the doctor (or possibly for the surgery – I am not sure which). I believe, but am not sure, that this has already been done in the case of forms FP10NC. On the sample form FP10NC appended to this judgment, I believe that the figure 311149 identifies the form as one supplied to the named doctor (Dr Sash in the sample), or at least as one supplied to that doctor’s surgery. When a form is submitted for payment to the PPA (or its successor) the system automatically checks, from the unique serial number of the form and the registration number for the doctor or surgery, whether the prescription was issued by a doctor at the surgery to which the blank form was supplied. If it was not there is something wrong; presumably payment will be withheld, and an investigation will be made. The persons who carried out the frauds in this case were obviously aware of this. The forms falsely submitted for payment by the eight dishonest pharmacies all bore purported signatures of doctors. The signatures were forgeries, as virtually all of the doctors have confirmed, but the names given as those of the prescribing doctors were all names of doctors registered at the surgeries to which the forms had been supplied, and the registration numbers inserted as part of the forgery were the correct numbers for the surgeries falsely shown as having been the source of the prescriptions.

Mr Pandya and his participation in the proceedings

[18]Until the end of 1996 (which was before the fraudulent claims for prescription payments started to be made) Mr Pandya was employed as a representative of a manufacturer of pharmaceutical products, Abbotts. That involved him in visiting general practitioners’ surgeries to promote the use of Abbotts’ products, including the use of them through doctors prescribing them for patients. He also visited pharmacists’ shops to promote purchases of Abbotts’s products by the pharmacies. From the end of 1996 until February 2000 he was not employed in the pharmaceutical business, but was self-employed. There is an issue of whether he continued on occasions to visit surgeries and pharmacies. The Authority’s case is that did. In February 2000 he became employed as a pharmaceutical representative again, this time by a manufacturer called Takeda Ltd.[19]This action was commenced in April 2006. The action was commenced not just against Mr Pandya, but also against the other defendants who were involved in the various pharmacies. Detailed particulars of claim were served, describing the alleged fraud or frauds. Mr Pandya instructed solicitors, and his defence to the claim against him was served in November 2006. The general thrust of the defence was that Mr Pandya could not admit or deny the existence of the fraud, because, if it had taken place, he was not involved in it and knew nothing about it. The particulars of claim had relied on several documents which were alleged to have been in Mr Pandya’s handwriting. The defence denied that the writing was his. In December 2007 Mr Pandya made a witness statement, and supported it by a statement of truth to which he attached his signature.[20]The trial commenced in the middle of April 2008. At the beginning of the month Mr Pandya’s solicitors gave notice that they were ceasing to act, and Mr Pandya gave notice that he would represent himself. He did that at the trial before me, although he did not attend on the first day. I told him at an appropriate time that, if he wished to give evidence, his evidence in chief would in principle be what was in his witness statement served the previous December, but that he would then be exposed to cross-examination, not just on the contents of the statement, but on any matters connected with the case upon which counsel wished to question him. I explained the position at the end of a Wednesday when, because of another matter which had to be dealt with on the Thursday, the trial would be adjourned until the Friday. I recommended Mr Pandya to take time to consider carefully whether he wished to give evidence. On the Friday morning, when the trial resumed, he informed me that he did not. The result, I believe, is as follows.(1) I cannot take account in support of Mr Pandya’s defence of any assertions made by him in his witness statement, although this does not make much difference if they are supported by other evidence in the case or are self-evident anyway.(2) I can, however, read Mr Pandya’s witness statement, and if he says anything in it which is adverse to his case counsel for the Authority can invite me to take account of it. This point is largely theoretical, since there is nothing stated in the witness statement on which Mr Norbury (counsel for the Authority) would in any event wish me to rely.(3) If the witness statement omitted to deal with any matter with which it might have been expected to deal, counsel could properly invite me to draw inferences adverse to Mr Pandya from the omission.

Some statistics relevant to the entire fraud or frauds

[21]Here are a few statistics which give an indication of the magnitude of the entire fraud or frauds. i) Applications for payments based on forged prescription forms were submitted over a period of about three years from mid 1998 to September or October 2001 by eight pharmacies owned by seven different persons. ii) The Authority considered that it had identified 3,784 forged forms. As a result of reconsideration in the course of the trial the Authority formed the view that there was room for doubt on 11 of those forms, so it now says, and I accept, that there were at least 3,773 forged forms. iii) The total amount of the false claims in respect of which this claim or these claims has or have been brought is calculated by the Authority to have been £429,249.91. iv) The forged forms originated from 40 doctors’ surgeries in the London area. Thirteen surgeries account for the great majority (over 95%) of them. The precise figures which I have been given are that 3,546 forms were taken from 13 surgeries and 237 from 27 surgeries. Those numbers of forms do not exactly add up to either of the numbers in sub-paragraph (ii) above, but the discrepancy is very small.

How the fraud worked so far as the pharmacies were concerned

[22]I now describe how the fraud worked from the point of view of a pharmacy. In the account which follows I make no reference to Mr Pandya (except in an irrelevant respect at the end). Whether, and if so to what extent, he was involved in the frauds perpetrated by the pharmacies are matters which I consider later. It is appropriate to proceed in this way, because what I will describe in the sub-paragraphs of the next paragraph is in my view clearly established by the detailed evidence which has been presented to me on behalf of the Authority, and is not disputed by Mr Pandya. He does not formally admit it either: he just says that he knows nothing about it. I am satisfied that the account which I will give is correct on the basis of the evidence.[23]The account which follows gives the facts relevant to Granil Pharmacy. I could give similar accounts in the case of all or any of the other seven pharmacies. Detailed figures and dates would be different, but the basic facts and principles would be the same. Some of what follows has already been mentioned earlier in this judgment, but I think that it is helpful for the account to be complete in itself. i) Granil Pharmacy made monthly submissions to the PPA for payment in respect of NHS prescriptions. By doing so the pharmacy represented to the PPA that it had supplied the drugs or other items to the patients. ii) Each monthly submission had to be supported and accompanied by all the prescription forms in respect of which the pharmacy was applying for payment. iii) To qualify for payment the prescription forms had to be signed by doctors, and a signing doctor had to be registered at the surgery to which the blank prescription form had been supplied by the relevant Health Authority within the NHS. iv) In all months Granil Pharmacy’s applications for payment included entirely genuine prescriptions where the pharmacy had supplied the items shown to have been prescribed and was entitled to payment. v) But many of the applications for payment also included some forged prescriptions where the pharmacy had not supplied the items purportedly prescribed and was not entitled to payment. Further details of this are in the following sub-paragraphs. vi) The first month in which it has been ascertained that Granil Pharmacy applied for payments in respect of forged prescriptions was September 1998. The last such month was October 2001. Thus the total period within which some forged prescriptions were being submitted covered 38 months. In a few of those months the prescriptions submitted in support of the applications for payment were all genuine, but in most of the months they included forged prescriptions as well. vii) The investigations made by NHS CFSMS have disclosed a total of 1,016 forged prescriptions submitted by Granil Pharmacy over the 38 months. There may have been some others which the investigations have not discovered, but this claim is, so far as Granil Pharmacy is concerned, brought in respect of 1,016 forged prescriptions. viii) The aggregate amount paid to the pharmacy over the 38 months in respect of the 1,016 forged prescriptions was £113,839.15. ix) The forgeries were made on genuine prescription forms. The serial numbers on the forms indicated that they had originally been supplied to surgeries at which the doctors whose signatures had been forged were registered. x) The 1,016 prescriptions were purportedly made by doctors at a total of 38 surgeries. Nearly all of the doctors have confirmed that the purported signatures of themselves on the prescriptions were forgeries. In nearly all cases there are additional indications of forgery, such as that the names of the patients did not appear in the surgery’s records, that the patients’ addresses were wrong, or that the prescriptions were not consistent with any treatment which might have been prescribed for the patients named. The few cases where the doctor has not confirmed that the signature was a forgery are ones where the doctor was not asked: there was ample other evidence of forgery and, because in the case of that doctor only a small number of prescriptions was involved, the investigators considered that it was disproportionate to approach him. xi) As between the Authority and the Granil defendants (Sideset Ltd and Mr Kotecha) the claim was settled for £45,000. The settlement did not extend to the Authority’s claim against Mr Pandya.[24]Generally Granil Pharmacy is typical of the pharmacies which made similar fraudulent claims, but the relative figures in sub-paragraphs (viii) and (xi) are untypical. The Authority’s direct loss suffered by the fraudulent applications for payment made by Granil Pharmacy was almost £114,000. That was the amount without any addition for interest and costs, so the Authority’s entire claim against the Granil defendants was considerably more than £114,000. The claim was settled as between the Authority and the Granil defendants for only £45,000. In the case of nearly all the other pharmacies the claims were settled for amounts in excess of the direct loss. For example the Saturn Pharmacy: direct loss £137,953.30; settlement figure £165,278.13. It was suggested to me that the reason for the modest settlement agreed to by the Authority for its claim against the Granil defendants was that they did not have funds to meet a greater settlement. Mr Pandya suggested that the true reason was that a low settlement figure was agreed as part of an inducement to Mr Kotecha to give evidence against him. There might be something in this, but as I say later I nevertheless accept the evidence which Mr Kotecha gave.

The Granil Pharmacy frauds: is Mr Pandya liable in respect of them?

[25]In my judgment it is helpful to approach the matters which I have to decide in two stages. The first stage is to consider whether Mr Pandya is liable to the Authority in respect of the fraudulent payments obtained by the Granil Pharmacy, considering the evidence relating to that pharmacy by itself. There is a substantial body of evidence which bears specifically on the fraud committed by that pharmacy. Having concluded that Mr Pandya is so liable, as I shall conclude for the reasons which I explain in this part of my judgment, I will then proceed to the second stage. Is Mr Pandya also liable to the Authority in respect of the fraudulent payments obtained by the other seven pharmacies? I address that question in the next part of this judgment.[26]Although the Authority settled with the Granil defendants for a much lower figure than its total claim against them, there is no doubt that they did perpetrate the frauds which they were alleged to have perpetrated, and that, if they had attempted to dispute the Authority’s claim, their defences would have failed. In this part of my judgment I consider whether Mr Pandya was jointly liable with them in respect of the same frauds. In my judgment he was. I base that opinion on two principal matters:(1) evidence given by Mr Kotecha; and(2) documents found in Mr Kotecha’s house, being documents which in my view manifestly incriminate Mr Pandya. Mr Kotecha’s evidence must be approached with caution, because on his own admission he was a participant in the fraud, and he must be regarded as a dishonest man. However, the reliability of the evidence he gave to me is, in my judgment, established by what is shown or what can definitely be deduced from the documents found in his house. I will describe the documents which are critical in this respect, but first I identify the main points in Mr Kotecha’s oral evidence.[27]He dealt with an obvious question to which the frauds gave rise. Somehow the pharmacies had got hold of genuine prescription forms which had been supplied on secure terms to doctors’ surgeries. How did the pharmacies get them? As respects Granil Pharmacy Mr Kotecha said that Mr Pandya provided them. He did not say anything about any knowledge or belief which he possessed as to how Mr Pandya had got the prescription forms, but he did say that he got them from Mr Pandya, well knowing that there was a breach of the law involved. On behalf of the Authority Mr Norbury invites me to find that Mr Pandya, using his knowledge and experience of doctors’ surgeries, stole the prescription forms from the surgeries to which they had been supplied by the NHS. I will come back to that later, but for present purposes it is sufficient for me to say that, whether or not Mr Pandya had personally stolen the prescription forms which were fraudulently used by Mr Kotecha and Granil Pharmacy, I accept Mr Kotecha’s evidence that he got them from Mr Pandya. In this connection it does not seem to me to matter whether Mr Pandya had stolen the forms himself or had obtained them from other persons. Either way he must have known that the forms had been obtained improperly and unlawfully, and were intended to be used dishonestly.[28]The second major matter contained in Mr Kotecha’s evidence was a description of what he did with the forms supplied to him by Mr Pandya and an associated description of what Mr Pandya obtained in return for himself. Mr Kotecha, as Granil Pharmacy, submitted the forged forms, together with other forms which were entirely genuine, to the PPA for payment and received from the PPA the payments applied for. The pharmacy had not, of course, dispensed the drugs specified in the forged forms, so the pharmacy received payment from the PPA for goods which it had not in fact supplied. What Mr Pandya received was not a share of the money, but rather drugs which were purchased by the pharmacy from regular suppliers and for which Mr Pandya made no money payment. He had ‘paid’ for them by providing the forms which enabled Granil Pharmacy to receive from the PPA payments to which it was not properly entitled. Mr Pandya asked some questions of Mr Kotecha in cross-examination, but none of them effectively challenged or cast doubt on the evidence which Mr Kotecha had given. The content of the evidence is in any event substantiated and clarified by some of the documents found in the search of Mr Kotecha’s house.[29]I come now to those documents now. On 11 October 2001 officers of NHS CFSMS and police officers, pursuant to search orders which they had obtained, searched the premises of Granil Pharmacy and the home of Mr Kotecha. They found quite a lot of relevant documents at Mr Kotecha’s home. I shall be referring to several of them from time to time in the remainder of this judgment. There are several documents in manuscript which has been identified as Mr Pandya’s handwriting. As I will explain, on their face they are highly incriminating of Mr Pandya. In his pleaded defence, drafted by counsel and solicitors on his instructions, he denied that any of the documents were in his handwriting. He repeated this in the witness statement which he served, but did not in the event tender in evidence. However, the Authority adduced expert handwriting evidence from a highly qualified expert, Mr Kim Harry Hughes, who in the usual manner had compared the documents which Mr Pandya denied to have been written by him with samples of his undeniably genuine handwriting. Mr Hughes was impressive and, in my respectful opinion, authoritative. His opinion was that there was conclusive evidence that Mr Pandya wrote the documents which he denies having written. If one of the documents taken as samples of Mr Pandya’s genuine handwriting is excluded (and for my part I would not exclude it), Mr Hughes would downgrade his opinion slightly from ‘conclusive evidence’ to ‘very strong evidence’. Mr Pandya cross-examined Mr Hughes, but nothing in the cross-examination cast any doubt on the evidence. I therefore find that the various manuscript documents which I am about to describe were definitely written by Mr Pandya, despite his denial in the defence. I base the finding on Mr Hughes’ evidence, not on any attempt to regard myself as a self-appointed handwriting expert, which I am not. I think, however, that I can properly add this: having seen myself the genuine sample handwriting and the questioned documents which Mr Hughes considered, his conclusion causes me no surprise.[30]The documents in Mr Pandya’s handwriting are on various scraps of paper, some of them being taken from the sort of notepads bearing the name of a commercial organisation which businesses provide to their customers. They fall into three categories. i) There is a list of nine groupings of drugs. For example, after the figure 1 (with a ring round it) there appears: Neoral 100 mg Oruvail 200 mg Augmentin. That is the first grouping. There is a line across the page, and then there is a figure 2 (similarly ringed) and the names of three other drugs. That is the second grouping, and so it continues until a grouping numbered 10. Since, however, groupings 3 and 9 are identical there are nine groupings, not ten. ii) There are several scraps of paper which are headed with a month and the word ‘Order’, and then set out a list of other drugs. For example, there is a ‘sticker’ piece of paper on which is written in Mr Pandya’s handwriting: ‘New Order May’. Beneath that heading the following appears: Amias 8mg ×30 packs Amias 16mg × 30 packs Actos 30mg × 30 packs Istin 5mg × 40 packs Istin 10mg × 40 packs. The first three items are bracketed together and the words ‘From UNICHEM’ are added. Against each of the last two items the word ‘Nottingham’ appears. All of this is in Mr Pandya’s hand. iii) For nearly all the months running up to September 2001 (the last month in which the fraud was carried out, the search having been on 11 October) there is a sheet of calculations. It is in the nature of a running account between Mr Pandya and Mr Kotecha. I will not attempt to describe it here, but I do describe its effect two paragraphs below.[31]As respects those three kinds of documents in Mr Pandya’s handwriting I make the following observations. As regards (i), most of the forged prescription forms submitted to the PPA for payment in the last few months of the fraud (submitted not just by Granil Pharmacy but by other pharmacies as well) were for the drugs in each grouping. Thus there are, for example, several forged prescriptions for Neoral, Oruvail and ‘Co-Amoxyclav’ (which is the same thing as Augmentin) in the quantities written by Mr Pandya in the list as grouping 1. The same applies to all the other groupings.[32]As regards (ii) and (iii), with the help of Mr Norbury and taking account of Mr Kotecha’s evidence, I can, I believe, deduce with confidence how the fraud worked as between Mr Pandya and Mr Kotecha. Each month Mr Pandya calculated (I imagine with assistance from Mr Kotecha) how much would be paid to Granil Pharmacy by the PPA on the forged prescription forms submitted for the month. Out of that sum Mr Kotecha (or Sideset Ltd, the proprietor of Granil Pharmacy) kept a quarter. Mr Pandya’s manuscript running accounts called this ‘Admin’. The other three-quarters was for the benefit of Mr Pandya, but it was not paid to him in money. Instead it was a credit to be applied against the price of drugs which Granil Pharmacy bought from suppliers like Unichem and supplied to Mr Pandya in fulfilment of his monthly orders. If the credit to Mr Pandya in a month was greater than the price of the drugs the excess would be carried forward to the next month. I believe that there was at least one month in which the price of the drugs supplied by Mr Kotecha to Mr Pandya was greater than three-quarters of the receipts fraudulently obtained by Granil Pharmacy from the PPA. In that case the deficit reduced the balance being carried forward to the next month.[33]Given what I have described in the last few paragraphs, it is in my judgment clear beyond doubt, not merely that Mr Kotecha and Granil Pharmacy were engaged in a protracted fraud perpetrated against the NHS (Mr Kotecha has indeed admitted as much in his evidence), but also that Mr Pandya was intimately involved in it. He supplied Granil Pharmacy with the prescription forms by the forging and use of which the pharmacy was able to extract from the NHS payments for prescriptions which it had not in fact dispensed to anyone. He devised many of the groupings or combinations of drugs which were used on the forged forms; or at least he was involved in some way in the devising of them, because he personally wrote down the record of them which Mr Kotecha kept in his house. He derived personal benefits by receiving regular supplies of drugs for which he did not pay. And he kept the records and made the monthly calculations to establish and record how matters stood between himself and Mr Kotecha as regards sharing of the proceeds of the fraud.[34]For those reasons I have no doubt that Mr Pandya is liable, jointly and severally with Mr Kotecha and Sideset Ltd (the Granil defendants), to the Authority in respect of the fraudulent claims for prescription payments made by Granil Pharmacy.[35]Before I move on there are two further points which I wish to make. One is that there is no evidence of what Mr Pandya did with the drugs which were supplied to him by the pharmacy without him paying for them. Mr Norbury conjectured that he may have sold them on the black market. This gap in the understanding of the events which occurred makes no difference to the matters which I have to decide.[36]The second point is that there is no evidence of who made the forged entries on the blank prescription forms. Those entries included the details of the drugs supplied, names, addresses and dates of birth for the alleged patients, the addresses of the surgeries at which the prescriptions were supposed to have been written, and the false signatures of the doctors who were supposed to have made them. Were those things done by Mr Pandya? Were they done by Mr Kotecha in the case of Granil Pharmacy (which would imply that they were done by other dishonest pharmacists at seven other pharmacies)? Were they done by someone else who has not been discovered by the investigation? I have no answers to those questions, but what is certain is that, in the case of Granil Pharmacy, the forms were forged by somebody and that Mr Pandya was a participant in the plot which, to his knowledge, involved money being fraudulently extracted from the NHS by the use of the forged forms. That is sufficient to render him liable to the Authority for the losses fraudulently inflicted on it. It is irrelevant to his liability that not all details of how the plot was carried out are known. It is also irrelevant that there may have been other participants whose identities and precise roles have not been discovered.[37]In my judgment the answer to the question is: yes. But the matter does require some discussion. The difference between Granil Pharmacy and the other pharmacies is that, in the former, the case of the Authority is supported by the evidence of Mr Kotecha and by the documents, incriminating of Mr Pandya, found at Mr Kotecha’s house. In relation to the other pharmacies there is no evidence from any of the pharmacists in charge of them, and there are no equivalent incriminating documents found on searches of the houses and pharmacy premises. However, as I will explain, there are many circumstances which lead me to the firm conclusion that Mr Pandya played a part, and a dishonest part, in the events which led to the other seven pharmacies making to the PPA fraudulent applications of the same nature as those made by Granil Pharmacy.[38]A major part of the Authority’s case is that I should find that (subject to one possible exception) it was Mr Pandya who over the years made multiple thefts of blank prescription forms from a large number of doctors’ surgeries. The possible exception is that at one time the senior doctor at a surgery (Brompton Medical Centre, 237 Old Brompton Road, London SW5) from which a large number of prescription forms were removed over the years was a Dr Iqbal. According to the evidence of another doctor, Dr Ali, who was a junior doctor in the surgery at the time but is now the senior doctor there, Dr Iqbal was very close to Mr Pandya. Dr Iqbal was involved some time ago in proceedings of some sort which alleged dishonesty against him. The proceedings were going badly for him, and in circumstances which I do not know in detail he has now fled the country and is in India. It is suggested to me that some of the prescription forms which were used in the earlier years of the fraud to which this case relates and which originated from Brompton Medical Centre may not have been stolen, but instead were provided by Dr Iqbal in full knowledge of how they were going to be used. If that was the case Mr Norbury submits that all the other forms used for the fraudulent scheme or schemes (i.e. all the forms except those provided by Dr Iqbal) were stolen by Mr Pandya. If it was not the case, then Mr Norbury submits that all the forms used in the fraud were stolen from surgeries by Mr Pandya.[39]In my opinion there is considerable force in the submission that it was Mr Pandya who stole the forms, or at least some of them. They ought to be kept in secure conditions in doctors’ surgeries. In general the evidence of the doctors (evidence which I admitted in written form under the Civil Evidence Act except in the case of Dr Ali, who gave evidence in person) was that pads of prescriptions to be made in writing (form FP10NC) were kept under lock and key. The evidence as regards batches of the prescription forms for use in computers (form FP10C) was more cautious. There would at any time be a large number of blank forms in the paper trays or drawers of the computer printers. If a person who knew what he was doing found himself able to get at a printer without being observed he would quickly be able to open the drawer and remove a number of the forms. The printers would in most cases be either in the doctors’ own rooms or in an administration area where normally surgery staff would be present.[40]However, there was some evidence, particularly from doctors at surgeries from which large numbers of forms were taken, that Mr Pandya did at times have unsupervised access to rooms where some prescription forms were located and were not locked away. Further, there was evidence that Mr Pandya continued to visit some doctors’ surgeries from time to time during the period from 1998 until early 2000 when he was not employed by a pharmaceutical company. At several surgeries Mr Pandya offered to instal security camera systems without charge. (If I understand correctly, the systems were cameras in the waiting room and screens in the doctors’ rooms.) This was done in evenings or at weekends when there were no doctors or staff present. The doctors knew Mr Pandya from his visits on behalf of pharmaceutical companies, and trusted him. There was another occasion at another surgery when, out of normal hours and after the staff had gone, he brought a private patient to see a doctor and was left on his own in the waiting area while the medical consultation progressed. Mr Norbury has shown to me that, soon after the occasions (or at least soon after most the occasions) when Mr Pandya had a clear opportunity to steal prescription forms from a surgery, a significant number of forged prescriptions which originated from that surgery started being submitted for payment to the PPA.[41]So the proposition that it was Mr Pandya who stole the prescription forms could well be right. However, no-one saw Mr Pandya stealing them, and the case that he did is entirely circumstantial and inferential. I am certainly not prepared to say that he did not steal them, but I do not base my conclusion against him on a positive finding that it was he who stole the forms. In my opinion, even if the forms were stolen by someone else, there is ample material to establish that Mr Pandya was implicated in the dishonest scheme or schemes of which thefts of prescription forms formed a part. Further, that applies not just to the forms submitted for payment by Granil Pharmacy, but also to the forms submitted by the other surgeries as well.[42]There are several points to be made to substantiate what I have just said. Even if Mr Pandya did not personally steal the blank forms which were used in the fraud by Mr Kotecha, the evidence establishes, and I have found, that he was the person who provided them to Mr Kotecha. If he provided those stolen forms, the natural inference is that he provided all of the stolen forms which were used in the frauds. At the very least it is an inference which would be expected to be drawn in the absence of evidence explaining why it should not be drawn. Mr Pandya produced no such evidence.[43]Further, the proposition that Mr Pandya was involved in the events which enabled the other pharmacies (as well as Granil Pharmacy) to make the fraudulent claims which they did make is strongly reinforced by the three features which I identify in the next few paragraphs.[44]The first feature is this. The documents found in the search at Mr Kotecha’s house were not limited to the manuscript documents written by Mr Pandya which I have described earlier. There were also quite a lot of photocopies of prescription forms on which the forged entries had already been made. The photocopies are very poor, and are frequently incomplete because (as it appears) whoever made the copies (probably Mr Kotecha) put two or more pages into the machine to be copied together. When that is done it often happens that parts of the pages are not copied because they overlap the edges of the glass or overlap each other. However, enough can be seen for it to be clear that the copies were made after the false details (name and address of patient, address of the surgery, signature of the alleged doctor, etc) had been added, but before there were inserted in the space at the top left of the forms the stamps of the pharmacies which later submitted them for payment. The claimant is able to trace from the unique serial numbers of the forms which pharmacies submitted them for payment. Many of the forged forms of which copies had been kept by Mr Kotecha later had the Granil Pharmacy stamp placed in the appropriate space, and were submitted for payment by Granil Pharmacy. But some of them were not. If I have it correctly at least two of them were submitted for payment by a different fraudulent pharmacy, Saturn Pharmacy. So forms provided by Mr Pandya to Mr Kotecha were used in the fraudulent claims for payment of others of the eight pharmacies as well as by Granil Pharmacy.[45]The second feature concerns the groupings of drugs which, as I described earlier, were written out in Mr Pandya’s handwriting and were used on forged prescription forms around the middle of 1991. It will be recalled that the grouping numbered 1 was Neoral, Oruvail and Augmentin (or Co-Amoxiclav). That grouping appeared on forged prescription forms submitted for payment by Granil Pharmacy, but it also appeared on forged prescription forms submitted for payment by all or nearly all of the other eight pharmacies. The same is true of the eight other groupings which were recorded in Mr Pandya’s writing. Mr Pandya was obviously involved in devising the groupings which were used in the fraud in the three or four months before the search of Mr Kotecha’s house. Or at the least Mr Pandya was involved in recording in writing what those groupings were to be. Those groupings or some of them were used by all the pharmacies involved in the fraud, and that is another feature which associates Mr Pandya with the fraudulent conduct, not just of Granil Pharmacy, but of the other pharmacies as well.[46]The third feature is this. Blank prescription forms were supplied to surgeries in batches. As I have described earlier every form had its own individual serial number, and the numbers in any batch delivered to a surgery were sequential (ignoring the last digit, as I explained in an earlier paragraph). So if, as was a regular feature of these frauds, a number of forms were stolen from a larger batch at a surgery, the stolen forms would have had sequential serial numbers. The investigation carried out by the NHS CFSMS could and did trace all of the forms which had been forged and used in support of fraudulent claims. Further, the investigation could and did reveal which pharmacies had submitted which forms. These matters clearly show that someone involved in the fraud took from doctors’ surgeries batches of stolen forms with sequential serial numbers, and divided them up between the various pharmacies which were going to make fraudulent claims. Some batches were divided between all eight pharmacies; others were divided between fewer than eight. But in every case where a substantial number of sequential forms was taken from a surgery there was a sharing of the use of forms in the batch between all or some of the eight pharmacies. Usually a batch of improperly taken forms was shared between most of the eight pharmacies, and sometimes it was shared between all of them. It was not the case that one batch of stolen forms was used as the raw material for fraudulent claims only by Granil Pharmacy, while other batches were used for fraudulent claims only by other pharmacies. Mr Pandya was definitely implicated in the claims made by Granil Pharmacy. Those claims were based on forgery of some of the forms in a stolen batch. Other claims by other pharmacies were based on forgery of others of the forms in the same stolen batch. It seems to me virtually inconceivable that Mr Pandya could successfully say that he had nothing to do with the other forms, stolen as part of the same batch on a single occasion, and used by other pharmacies as material to carry out a fraud which had identical characteristics (and the identical victim) as the fraud carried out by Granil Pharmacy.[47]For the foregoing reasons I consider that the Authority’s case against Mr Pandya is made out, and is made out not just in respect of Granil Pharmacy’s fraudulent claims for prescription payments, but also in respect of all the other fraudulent claims by the other eight pharmacies.

The consequences

[48]The result, I believe, is that the Authority is entitled to judgment against Mr Pandya in the full amounts which it claims. Those amounts are, in the case of each of the eight pharmacies, the losses suffered by the Authority at the hands of that pharmacy, together with interest from the times of the losses, and together with the Authority’s costs referable to its claim against that pharmacy and Mr Pandya, but reduced by the amount paid by the relevant pharmacy defendants in settlement of the Authority’s claim against them.[49]At the end of the hearing I expressed some disquiet about whether the consequences should be as I have just said, but on reflection, and upon reading the transcript of the discussion which I had with Mr Norbury at the time, I am satisfied that my disquiet was misconceived. I do, however, wish briefly to explain the point which originally troubled me.[50]Take as an example the Granil defendants. This is in fact the example where the point which initially troubled me emerges in the most dramatic form, because it is the case where there is the largest gap between the full amount of the Authority’s claim against pharmacy defendants and the amount for which the claim against those defendants was settled. The primary claim against the Granil defendants was £113, 839.15, the aggregate of the payments to Granil Pharmacy upon forged prescription forms. In addition the Authority claimed interest and costs. I do not know what the amounts of interest and costs were, but let me assume that they were £x and £y. So, ignoring the 15 pence, the Authority’s total claim against the Granil defendants was £113, 839 + x + y. The Authority settled against those defendants for only £45,000, and it is now claiming the difference from Mr Pandya. That difference is £68,839 + x + y. I had no difficulty over the £68,839, but I did wonder whether the position might be different as regards the £x + y. Would a judgment against him which included the £x+ y mean that Mr Pandya would be required to pay to the Authority interest and costs which were properly to be regarded as the liability of the Granil defendants, and ought not to be capable of being fastened on to Mr Pandya if the Authority chose, or was not able, to recover them from the Granil defendants?[51]On reflection, however, I have concluded that any doubts which I had were misconceived. It is a mistake to approach the case as if the primary liability is that of the Granil defendants, and any claim against Mr Pandya is separate and secondary. The correct position, as I now perceive and accept, is that, as respects the fraud committed by false claims made by Granil Pharmacy, there was a single claim brought by the Authority against the Mr Kotecha, Sideset Ltd, and Mr Pandya. That single claim quantifies out at £113, 839 + x + y, and the Authority’s case is that the three defendants are jointly and severally liable to it for that sum. The fact that the Authority has settled with the other two defendants for a smaller sum does not mean that Mr Pandya ceases to be liable to the Authority, but the Authority must of course give credit to Mr Pandya for the £45,000 which it has received from the other two. From one point of view the result may seem to bear hardly upon Mr Pandya, but if he believes that he is bearing an unjustly large share of the amount which is owed to the Authority his remedy is to bring proceedings against the Granil defendants under the Civil Liability (Contribution) Act 1978. Mr Pandya, as a litigant in person, will probably not be able to understand this point or to know what to do about it. That is unfortunate for him, but it cannot affect the principle of the matter.[52]There are two points, related to what I have just said, which I have to make, and then that will be the end of this judgment. The first point is that, as I have mentioned earlier, no claim was brought by the Authority against Glosgrange Ltd, the owner of Derek Clarke Chemist, one of the eight fraudulent pharmacies. The Authority does, however, include its losses sustained at the hands of that pharmacy, together with interest, in the amount for which it seeks judgment against Mr Pandya. In my opinion it is entitled to that judgment against Mr Pandya, and if he considers that Glosgrange Ltd and its controlling shareholder should be made to bear part of the burden, the law provides him with a possible means of bringing that about, by making a claim against Glosgrange and its shareholder under the 1978 Act.[53]The second point is to record a perceptive general observation with Mr Norbury made to me. Mr Pandya seems to feel aggrieved that the Authority is pursuing this case against him to the end. If he does feel that way it may be because he thinks that other defendants have got off lightly. Or it may be because he knows that there were other persons involved in the fraud who have not been found out and have not been sued. Perhaps there is a ‘Mr Big’ out there somewhere and that Mr Pandya was in reality only a minor player in the dishonest plot. If that is right and Mr Pandya feels that there are other persons who deserve to suffer more than him from the consequences of the plot being discovered, that provides him with no defence to the claim against him. His remedy, if he wishes to pursue it, is to bring a claim for contribution under the 1978 Act.[54]I have now covered everything which I believe needs to be addressed in this judgment, and I have nothing to add.