Insurance: Claimants Presenting Misleading Claims In Contempt Of Court

Insurers have recently succeeded in obtaining a criminal

conviction for contempt of court against a claimant who had brought

a dishonestly exaggerated claim against one of their insureds. This

is an important decision in the fight against claimants presenting

dishonest claims in litigation. It is also another protection for

insurers against fraudulent claims on insurance policies.

In the underlying claim, the claimant sought damages for back

injuries suffered following a collision with the defendant's

vehicle. During the course of those proceedings, the claimant

verified a series of documents by signing statements of truth. The

damages claimed were in excess of £750,000. The

defendant's insurers believed that the claimant was

exaggerating the severity of her disabilities and made a payment of

£25,000 into court. They subsequently produced surveillance

footage and other evidence which showed that the claimant had

presented a clearly misleading case. The evidence contradicted the

extent of her disabilities. She also failed to acknowledge

disabilities she suffered from prior to the accident. Having been

presented with this evidence, the claimant agreed to accept the

payment into court out of time and was responsible for meeting the

costs of insurers.

The defendant's insurers then brought a private prosecution

for contempt of court. Under Part 32.14 of the Civil Procedure

Rules, such proceedings may be brought against a person if he

makes, or causes to be made, a false statement in a document

verified in a statement of truth without an honest belief in its

truth.

In such a case, the applicant must show, beyond reasonable

doubt:

that the statement was false;

that the statement has, or if persisted in would be likely to

have, interfered with the course of justice in some material

respects; and

that at the time it was made, the maker of the statement had no

honest belief in the truth of the statement and knew of its

likelihood to interfere with the course of justice.

In this case, the court held that the claimant had made two

false statements, the falsity of which would have interfered with

the course of justice by allowing her to claim damages to which she

was not entitled. The court further found that the claimant did not

honestly believe in the truth of those two statements. Indeed she

knew that they were entirely misleading. She was consequently fined

£2,500 (a custodial sentence was considered to be

disproportionate in the circumstances).

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