High Court Warns of “Disastrous” Consequences for Those Who Mislead the Court

The recent High Court judgment in Zurich Insurance plc v David Romaine issues a stark reminder to fraudulent claimants and clarifies the requirements needed for those who wish to bring committal proceedings against a party who has made false statements in court.

The Court of Appeal clarifies the “public interest” consideration for bringing an application for permission to bring committal proceedings in relation to a false statement of truth, and re-confirms that “disastrous” consequences can follow for those who mislead.

Below Matt Peacock, associate and commercial litigation specialist at Signature Litigation, examines the judgment in this case and what it means for those willing to provide false statements in court, as well as those on the receiving end of a false claim.

Commercial litigators are increasingly looking to committal proceedings to deal with parties to civil claims who seek not only to frustrate or delay litigation via obfuscation and obstruction, but deliberately advance a false claim or a false narrative in support of a claim.

The Court of Appeal decision in Zurich Insurance plc v David Romaine [2019] EWCA Civ 851 provides some welcome guidance on a species of contempt that almost every litigator will have come across; when a counterparty or witness has signed a statement of truth despite knowing, at the time of signing, that certain facts within the document they were verifying were untrue.

The starting point is that contempt of court proceedings can be brought in such a case – see r.32.14 (or in the case of a disclosure statement, r.31.23). We then look to Section VI of Part 81, which confirms that the first step in getting committal proceedings off the ground in such a case is obtaining, via a fresh Part 8 claim, the Court’s permission – see r.81.18.

In Zurich Insurance, the respondent had brought a claim for noise-induced hearing loss and in doing so advanced a narrative that he had “not had any noisy hobbies“. Unsatisfied with his response to a Part 18 request regarding his use of motorbikes and guitars, the appellant instructed private investigators. They uncovered that the respondent held himself out as the “lead guitarist and vocalist” in a rock-and-roll band that regularly played loud music in pubs and clubs, and he had an interest in and drove loud motorcycles. The appellant then applied to strike out the respondent’s claim on the basis of dishonesty. A matter of hours later, the respondent filed a notice of discontinuance. The appellants then applied for permission to bring committal proceedings against the respondent and the first instance judge refused permission.

In allowing the appeal, Haddon-Cave LJ gives at paragraphs 26-33 both a helpful summary of the existing principles that apply along with his further development of those principles:

  • Ultimately, the only question is whether it is in the public interest for contempt proceedings to be brought (ibid, [16]).
  • Whilst at the permission stage the Court is not determining the merits of the contempt allegation, nevertheless the Court will have regard to the following factors in order to determine whether the alleged contempt is of sufficient gravity for there to be a public interest in taking proceedings in relation to it. The factors include (i) the strength of the evidence tending to show that the statement in question was false, (ii) the strength of the evidence tending to show that the maker knew at the time the statement to be false, (iii) the significance of the false statement having regard to the nature of the proceedings in which it was made, (iv) the use to which the statement was put in the proceedings, and (v) such evidence as there may be as to the maker’s state of mind at the time, including his understanding as to the likely effect of the statement and his motivations in making the statement) (ibid, [16]).
  • In addition, the Court should consider whether contempt proceedings would justify the resources which would have to be devoted to them (ibid, [16]).
  • The Court should have in mind paragraph 28.3 of PD of CPR Part 32 and whether proceedings for contempt would further the overriding objective (ibid, [18]).
  • The penalty which the contempt, if proved, might attract plays a part in assessing the overriding public interest in bringing proceedings (ibid, [22]).

We now have clarity that the “only question” the Court should resolve in deciding an application for permission to bring contempt proceedings is whether or not they are in the public interest. This is determined when there is: (i) a strong case that the statement was untrue; (ii) that the maker knew it was false; and (iii) the maker know the significance of making that false statement in the context of the proceedings. Moreover, this decision makes clear that the Court will not simply allow dishonest litigants to avoid scrutiny simply because they discontinue when confronted:

the message needs to go out to those who might be tempted to bring – or lend their names to – fraudulent claims: that dishonest claimants cannot avoid being liable to committal proceedings merely by discontinuing their original fraudulent claim.

This warning should be treated seriously, as elsewhere the decision contains a reminder that the Supreme Court has endorsed the High Court’s reasoning in South Wales Fire and Rescue Service that:

The public and advisors must be aware that, however easy it is to make false claims…if found out the consequences for those tempted to do so will be disastrous. They are almost inevitably in the future going to lead to sentences of imprisonment, which will have the knock-on effect that the lives of those tempted to behave in that way, of both themselves and their families, are likely to be ruined.

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