“Rather fail with honour than succeed by fraud”

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“Rather fail with honour than succeed by fraud”

Published 25 November 2019

Whether there are many of our civil law judges who are familiar with these words attributed to Sophocles is a matter for speculation but they are fast becoming a tenet by which civil claims for compensation are judged. 

That what a claimant might aver during proceedings be it in a statement of case, a schedule of damages, a witness statement or even in giving disclosure can be the foundation of finding of fundamental dishonesty is a matter about which there is no doubt.  However in Jet 2 Holidays Ltd v Hughes & Anor [2019] EWCA Civ 1858 the Court of Appeal has put at risk of committal for contempt those who make false witness statements which are disclosed under the pre-action protocols, ruling that for committal applications to be made it is not essential that there be “proceedings”.

This matter concerned a claim in respect of alleged holiday illness directed against the package holiday company with which the holiday had been booked.  In purported compliance with the pre-action protocol for personal injury claims, the prospective claimants served witness statements containing statements of truth.  Among the allegations it was asserted that food was left uncovered for long periods, food appeared to have been reused on several occasions, burgers seemed undercooked, ants and beetles were around the food areas and ants were crawling on the bread.  The proposed claimants also alleged that children were being sick in the pool and their child became ill after swallowing pool water.  They claimed to have started to feel ill on the second day and began being sick on the third and were acutely ill for the remainder of the holiday with diarrhoea, stomach pains, vomiting, weakness and were not fully recovered on their return home.  They said that they believed that their sickness was caused by undercooked food and unhygienic conditions at the hotel.

However, when the claim was investigated it was found that the proposed claimants had, during their holiday posted various images and comments on social media which included two posts on Twitter, other posts on Facebook and a video on YouTube which showed them and their children well and enjoying themselves at the hotel in question.  The claims were rejected and no proceedings were issued by the proposed claimants.

The appellants sought permission to bring committal proceedings against the respondents based on the allegedly false statements in their original witness statements that had been verified by a statement of truth. 

The respondents made further witness statements in which they said that the allegations in their original statements were true, that they had complained at the time to the manager of the hotel and that they felt they had to make the best of things, putting up a front that they were having a great holiday and that the Facebook pictures were not a true reflection of their mood at all times throughout their holiday.

The appellants also sought leave to amend their application for permission to include as a part of the committal proceedings the allegedly false witness statements made in the response to the application.  At first instance the judge held that in the absence of proceedings being brought committal proceedings could not be founded on a witness statement and also refused permission to add the statements made in responding to the application to the basis of the committal proceedings.

To cut a long story short, the Court of Appeal overturned the judgement of the High Court determining that committal proceedings could be brought in respect of witness statements made where no proceedings were ultimately issued in respect of the claim that was being advanced.  It went further, granting permission to amend to include within the committal proceedings allegations in respect of what was said in the witness statements responding to it.

This case will now return to the lower courts for the application for committal to be determined.

This decision adds significantly to the armoury of those fighting fraudulent claims and makes it absolutely clear that it is not possible to avoid the consequences of advancing fraudulent claims by not instituting proceedings: trying it on but not suing is no protection from the consequences of advancing a dishonest claim.

Insurers, who stand in the front line of the fight against fraud and probably see and push away some of the most outrageous “try-ons”, will now have good reason to consider referring to their legal advisers dubious claims that have been knocked away at an early stage. That the institution of proceedings has been ruled unnecessary for a committal application, opens up a significantly higher number of cases in which action can be brought against fraudsters. 

In view of the likely greater focus of insurers on fraud cases identified pre-proceedings, consideration of private prosecutions rather than committal proceedings as a means of bringing fraudsters to account may become more commonplace.  We will be considering the respective merits of private prosecutions and committal proceedings in a future update. In the meantime, if you want to discuss the issues raised above please contact Catherine Burt or Leila Edwards:

Authors

Catherine Burt

Catherine Burt

Newcastle

+44 (0)191 404 4042

Leila Edwards

Leila Edwards

Birmingham

+44(0)121 698 5160

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