Zurich Insurance PLC v David Romaine [2019] EWCA Civ 851

The Court of Appeal fired a warning shot across the bows of dishonest personal injury claimants (and their solicitors) by allowing an appeal against a refusal of permission to bring committal proceedings for contempt against a knowingly deceitful personal injury claimant.

Full judgment, dated 17th May 2019

Summary:

The Appellant had sought, and was refused, permission to bring committal proceedings against a personal injury claimant who had knowingly made false statements in order to advance his claim. The Court of Appeal allowed the Appellant’s appeal and gave it permission to bring contempt proceedings, specifically stating that the absence of a warning and/or an early discontinuance would be unlikely to protect dishonest personal injury claimants from the bringing of contempt proceedings.

Discussion:

In this case the Respondent brought a claim for noise-induced hearing loss (“NIHL”), stating in his particulars of claim that he had not had any noisy hobbies. The Appellant, in response to information in the Respondent’s medical records, sought clarification from him by way of Part 18 questions as to whether or not he rode a motorbike and played in a live band (both relevant questions in relation to causation. The Respondent asserted in both his Part 18 replies and his witness statement that the records were incorrect and denied ever having done either activity. Predictably, the Appellant commissioned an intelligence report that found evidence from the Respondent’s own facebook page that he both played in a rock’n’roll band and rode a motorcycle. They served said evidence and made a strike out application, following which the Respondent immediately discontinued.

The Appellant then issued and served committal proceedings on the basis that the Respondent was guilty of contempt of court by making false statements in a document verified by a statement of truth contrary to CPR 32.14. Goose J refused the application on paper and on oral reconsideration.

At paragraphs 26-34 of the Court of Appeal’s judgment, Haddon-Cave LJ gives a helpful summary of the principles that apply to a committal application based on false statements. He approved Hooper LJ’s statement, in A Barnes t/a Pool Motors v Seabrook[2010] C P Rep 42, of the principles outlined in KJM Superbikes Ltd v Hinton [2009] 1 WLR 2406 and added some principles of his own [26-27]. In summary, he emphasised that the only decision was whether or not contempt proceedings were in the public interest, but cautioned that they would only be in the public interest where there was a strong case that the statement was untrue and that the maker knew (i) it was false and (ii) the significance of making the false statement in the context of the proceedings. This was summarised as a requirement for “a strong prima facie case as to knowing falsity” [29].

In relation to Goose J’s judgment the Appellant agreed with him that there was a good prima facie case of deliberate and dishonest statements and that it was in the public interest for such conduct to be sanctioned. The Appellant disputed the judge’s reasons for finding proceedings were not in the public interest, being (i) the absence of warning given to the Respondent and (ii) the Respondent’s immediate discontinuance.

Of the failure to warn, Haddon-Cave LJ stated that a failure to warn will sometimes, but not always, be a relevant factor. He held that it was not relevant in this case because the Appellant had not had any opportunity to warn the Respondent of the consequences of his potential contempt, because the Respondent had commenced the claim and it was only in responding to the claim and gathering evidence (which, naturally, came after the false statements had been made) that the Appellant became aware of the knowing falsehood of the statements.

The following passage is a stark warning to dishonest personal injury claimants [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.”

The court then went on to deal with the relevant of the speedy discontinuance. Haddon-Cave LJ acknowledged that a claimant who readily acknowledges that the game is up is, theoretically, likely to be in a better position than one who continues to waste time and money even when the falsehood is clear. However, he then went on explicitly to consider the fact that early discontinuance has become a “stratagem” in low-value personal injury claims to protect the practice of large-scale issuing of claims with dubious merits. He summarised at paragraph 50: 

“Thus, whilst the Judge was right to observe that early discontinuance was not a “bar” to permission to bring committal proceedings, in my view, he erred because he should also have had regard to the very real mischief that the stratagem of early discontinuance represents in this arena as one of the tactics of unscrupulous claimants and lawyers who engage in the practice of low-value wide-scale insurance fraud, particularly in the field of e.g. NIHL claims.”

For those reasons the appeal was allowed.

It would seem from the above that the Court of Appeal is adopting a different approach to the problem of dishonest personal injury claims and that for insurers contempt proceedings may have become a new weapon in their arsenal.

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