The Court of Appeal has in Zurich Insurance plc v David Romaine  EWCA Civ 851 provided guidance on a species of contempt that almost every litigator will at some point found themselves giving consideration to – their uncovering of evidence that a party or witness has signed a statement of truth despite knowing, at the time of signing, that certain of the facts stated within the document they were verifying were untrue.
The procedure and the “public interest” test
By roadmap to bringing a contemnor before the court can be far from clear. The CPR acknowledge that “contempt of court can take a multiplicity of forms” (para.81.0.1). Any practitioner who has considered the facts of their own case (and the very nature of uncovering falsehoods usually means a degree of factual complexity will have existed to be unpicked) against this multiplicity will have quickly found themselves dealing with questions such as: Is the present situation a civil or a criminal contempt? Is it interference with the due administration of justice? Perverting the course of justice? Perjury? When research requires you to address the question as to whether the Attorney General needs to become involved in a private civil dispute, you know that you are moving into a surprisingly complex area.
The starting point is that contempt of court proceedings can be brought for making or causing to be made a false statement in a document verified by a statement of truth – 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 the court’s permission to bring those proceedings – see r.81.18.
A key ingredient of succeeding in such an application (which is actually brought as a fresh Part 8 claim) is not to demonstrate that a contempt has been committed – that is for the substantive proceedings – but that committal proceedings would be “in the public interest“. This leaves open an obvious question: in a private dispute, perhaps where only one party could have been (or was) harmed by the falsehoods, what exactly does “in the public interest” mean?
The alleged contemptuous conduct
In the present case, the appellant was appealing an order of the trial judge which refused permission to proceed with an application under r.81.18(3)(a) to commit the respondent for contempt of court.
The respondent had been employed as a refrigeration engineer from 1965 to 1971 and as an apprentice engineer from 1978 to 1985. In 2015, he issued proceedings against the applicant (the insurer of his former employer) for noise-induced hearing loss. In prosecuting that claim, the respondent advanced a narrative – signing three statements of truth while doing so – that he had “not had any noisy hobbies“. However, commentary in his medical records suggested that he was a professional singer and a motorcyclist; activities clearly of potential relevance to causation and loss.
The appellant homed in on the conflict in the evidence before it, including by making a Part 18 Request. This was met with a response from the respondent that his doctor must have misunderstood him as he did “not ride motorcycles” and in fact only played “soft music” on his guitar on “occasion“. He asserted “I was never and have never been a professional singer” and “I do not participate in any other pastime, hobby or activity, which may have contributed to any hearing difficulty or medical issues relating to hearing loss or tinnitus.”
The appellant then instructed private investigators who uncovered that the respondent had an interest in loud motorcycles and he was advertising himself out as the “lead guitarist and vocalist” in a rock-and-roll band. Evidence was obtained of him driving motorcycles and regularly playing loud live music in pubs and clubs, so the appellant applied to strike out the respondent’s claim on the basis of dishonesty.
Had that strike out application been successful, a costs order would have been enforceable against the respondent without the permission of the court (see r.44.16). However, qualified one-way costs shifting (“QOCS“) applied. This meant that if the respondent was to file a notice of discontinuance before the strike out application was heard, then the appellant’s costs of the litigation would not be recoverable. In the event, that is exactly what happened: the respondent discontinued his claim a matter of hours after the strike out application was issued. Unsatisfied with the situation it was left in, the appellant pursued committal proceedings, contending that the respondent was guilty of contempt of court pursuant to CPR 81.17(1)(a) by making a false statement in a document verified by a statement of truth in a way that materially interferes with the course of justice.
The High Court dismissed the appellant’s application on paper, finding that “[w]hilst 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” and “it is not in the public interest that committal proceedings be brought…where the Defendant discontinued his claim at a relatively early stage of the proceedings.”
Outcome of the appeal
The Court of Appeal held that the trial judge had “erred in principle in his approach to the exercise of his discretion” in that he: i) took into account an irrelevant matter, namely that the respondent had not been warned that if he brought a false claim, he ran the risk of committal proceedings; ii) failed to take into account a relevant matter, namely mischief caused by ‘tactical’ discontinuance in false insurance claims; and iii) that committal proceedings would not be proportionate. Accordingly, the appeal was allowed.
The court referred extensively to the leading case of In A Barnes t/a Pool Motors v Seabrook  C P Rep 42. Haddon-Cave LJ provided at paragraphs 26-33 both a helpful summary of the existing principles that apply along with his further development of those:
“27. In my view, the following further supplementary principles can be derived from Moore-Bick LJ’s judgment in [KJM Superbikes Ltd v Hinton  1 WLR 2406)] and are pertinent:
- Ultimately, the only question is whether it is in the public interest for contempt proceedings to be brought (ibid, ).
- 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, ).
- In addition, the Court should consider whether contempt proceedings would justify the resources which would have to be devoted to them (ibid, ).
- 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, ).
- The penalty which the contempt, if proved, might attract plays a part in assessing the overriding public interest in bringing proceedings (ibid, ).
Haddon-Cave LJ has emphasised that the “only question” is whether or not contempt proceedings were in the public interest, which is answered is answered affirmatively 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.
He also makes clear that the Court will not tolerate dishonest litigants avoiding judicial scrutiny:
“60. Finally, I would add that 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.”
The issues QOCS has caused for the insurance industry have led to a succession of judgments on what is needed to succeed in an application to bring committal proceedings. This can only help commercial litigators deal with parties in civil claims who seek not only to frustrate or delay litigation via obfuscation and obstruction, but venture into contemptuous conduct that goes a step beyond mere non-compliance with a Court order and instead deliberately advance a false claim or a false narrative in support of a claim.
While these decisions continue to refine the law, it is worth recognising that this latest one also serves as a warning to solicitors and barristers alike. One interpretation of the judicial commentary within it is that the Court is losing patience with a section of the legal industry that, it appears, feels able to turn a blind eye to clients bringing false claims and relying upon QOCS to avoid judicial scrutiny of those claims, save for in situations where insurers such as Zurich grasp the nettle and force the conduct before the Court. Some may even read this judgment as a call from the Court of Appeal that closer regulation of the low-value personal injury claims sector, and those operating within it, is now required.
(Addendum: Eagle-eyed readers may at this stage be wondering whether the same mechanisms and considerations apply equally for falsely-sworn affidavits. They do not, but have no fear: where committal proceedings are based solely upon false statements made via affidavit, as opposed to witness statement, then an application for permission is not required (International Sports Tours v Shorey  EWHC 2040 (QB)).)
The judgment for Zurich Insurance plc v David Romaine can be found here.
By Matt Peacock, Associate, Signature Litigation
Matt Peacock is an Associate with experience representing corporations and financial institutions in complex multi-jurisdictional and multi-party High Court disputes. He has particular expertise in disputes concerning fraud, engineering, and technology.
Signature Litigation is a law firm specialising in high-value commercial litigation, international arbitration and regulatory investigations.