Kerry Underwood

PERSONAL INJURY AND CONTEMPT PROCEEDINGS: COURT OF APPEAL GUIDANCE

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These principles, and the whole issue of Qualified One-Way Costs Shifting, is dealt with in my book – Qualified One-Way Costs Shifting, Section 57 and Set-Off – Available from me here for £15.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

In

Zurich Insurance Plc v Romaine [2019] EWCA Civ 851

the Court of Appeal allowed an appeal against a High Court Judge’s refusal to allow the insurance company to proceed with an application to commit the allegedly fraudulent personal injury claimant to prison for contempt of court.

The claimant, or his solicitors, lied in the clearest terms in his reply to Part 18 Requests, denying that he was a motorcyclist or performed professionally in a rock band, both potentially relevant in what was a noise-induced hearing loss claim.

The claimant was represented by Asons (intervened in by the Solicitors Regulatory Authority on 29 March 2017) and their successors Coops Law (intervened in by the Solicitors Regulatory Authority on 23 June 2017).

An issue to be resolved by the court is as to who signed the Statement of Truth on the replied Part 18 Requests, and the circumstances.

The claimant discontinued seven days after the insurance company made an application to strike out the claim.

The insurance company then issued and served, by way of a Part 8 claim form, committal proceedings contending that the claimant was guilty of contempt of court pursuant to CPR 81.17(1)(a) in that he had made a false statement in a document verified by a Statement of Truth, contrary to CPR 32.14.

For the stench that infects some part of the claimant personal injury market consider paragraph 40 of the judgment:

 

40. The Respondent relied upon his statement filed for his appeal under paragraph 19 of CPR PD 52 in which he stated as follows: (i) His involvement came about as a result of a ‘cold call’ from personal injury claim solicitors, Messrs Asons, specialists in hearing loss claims, who conducted a hearing test at his home and said he may have a claim in view of his engineering background. (ii) He was subsequently informed by Asons that they would lodge a claim of between £1,000 and £5,000 on his behalf and they would do the paperwork which he understood would be ‘generic’. (iii) At no stage did he sign a statement of truth or see the Part 18 responses which contained an electronic signature which had been applied by Asons. (iv) He felt he had been a victim of a claims management scheme to make money from his hearing loss predicament. (v) Both Asons and Coops Law (which took over his claim) were the subject of interventions by the Solicitors Regulatory Authority (on 29th March 2017 and 23rd June 2017 respectively). (vi) Apart from Asons’s first visit, he never met or was interviewed by any legal representative of either Asons or Coops Law; any conversations were by phone. (vii) He is now 69 years-old and has been undergoing chemotherapy for bladder cancer and has responsibilities for a foster-child. (viii) He discontinued the claim on 21st March 2017 without taking legal advice which, with hindsight, may not have been the right thing to do.”

 

On 17th August 2018, a High Court Judge dismissed the Appellant’s application for permission to commence contempt proceedings on paper without a hearing. In his order refusing permission, the Judge recited that he had read the Part 8 claim form, the witness statements filed on behalf of the Appellant and the Respondent’s witness statement and stated the reasons for refusing permission as follows:

“Whilst there is good evidence of false statements being made deliberately, the documents upon which the Statement of Truth appeared were not signed by the Defendant. This is not a sufficiently strong case bearing in mind the need for great caution before granting permission”

Although it is in the public interest that dishonesty in litigation is identified publically, it is not in the public interest that committal proceedings be brought in the circumstances of this case, where the Defendant discontinued his claim at a relatively early stage of the proceedings.”

The Court of Appeal then set out the relevant Civil Procedure Rule:

“24. Where a person makes or causes to be made a false statement in a document verified by a statement of truth without an honest belief in its truth, proceedings for Contempt of Court maybe brought against that person with permission of the court. CPR 32.14 provides as follows:

“32.14 – False statements

 (1)   Proceedings for contempt of court may be brought against a person if he makes, or causes to be made, a false statement in a document verified by a statement of truth without an honest belief in its truth.

(Part 22 makes provision for a statement of truth.)

(Section 6 of Part 81 contains provisions in relation to committal for making a false statement of truth.)””

The Court of Appeal then set out the principles involved and the relevant case law

26. In A Barnes t/a Pool Motors v Seabrook [2010] C P Rep 42, Hooper LJ set out the following propositions (which he derived from the Court of Appeal’s judgment in KJM Superbikes Ltd v Hinton [2009] 1 WLR 2406):

“(1) A person who makes a statement verified with a statement of truth or a false disclosure statement is only guilty of contempt if the statement is false and the person knew it to be so when he made it.

(2) It must be in the public interest for proceedings to be brought. In deciding whether it is the public interest, the following factors are relevant:

(a) The case against the alleged contemnor must be a strong case (there is an obvious    need to guard carefully against the risk of allowing vindictive litigants to use such proceedings to harass persons against whom they have a grievance);

(b) The false statements must have been significant in the proceedings;

(c) The court should ask itself whether the alleged contemnor understood the likely effect of the statement and the use to which it would be put in the proceedings;

(3) The court must give reasons but be careful to avoid prejudicing the outcome of the substantive proceedings;

(4)  Only limited weight should be attached to the likely penalty;

(5)  A failure to warn the alleged contemnor at the earliest opportunity of the fact that he may have committed a contempt is a matter that the court may take into account.””

See also paragraphs 27 to 34 of the judgment where the relevant case law is considered.

The Court of Appeal held that a warning of contempt proceedings is not essential:

“47. In practice, the absence of a warning is unlikely to be of any relevance where the alleged contemnor is himself the claimant in an underlying personal injury claim (such as the present case) and where the allegedly false statements are contained in claims documents prepared by himself or his solicitors and signed with a “Statement of Truth”. Whilst the CPR do not provide (or allow) for a penal notice to be attached to a “Statement of Truth”, it is difficult to conceive of circumstances where a claimant can be heard to say that he was prejudiced by the absence of warning about the risks of contempt proceedings if he, himself, has been responsible for bringing a fraudulent claim.”

Early discontinuance of an allegedly fraudulent claim will not avoid liability to committal proceedings.

The value of the claim is irrelevant, given the “growing problem” of low value insurance fraud.

 

Comment

Spot on by the Court of Appeal. The merits of this claim remain to be determined on the facts.

Any party to any proceedings who acts fraudulently, any lawyer who does so, and any expert who does so should be locked up.

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Written by kerryunderwood

May 28, 2019 at 8:02 am

Posted in Uncategorized

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