Contempt Of Court: Liverpool Victoria Insurance V Yavuz & Ors

Judge considers test for contempt of court in insurance fraud case

The insurer alleged that nine defendants who had brought claims for damages in relation to car accidents were part of a "crash for cash" conspiracy to defraud the insurer. Warby J considered the appropriate test for contempt of court proceedings. Reference was made to the earlier decision of Barnes v Seabrook (see Weekly Update 29/10), in which certain propositions were laid down. This included the proposition that "a person who makes a statement verified with a statement of truth, or a false disclosure statement, is only guilty of contempt if the statement is false and the person knew it to be so when he made it".

Warby J thought it was arguable that that proposition "may have been a little too narrowly framed". CPR r32.14 provides that contempt proceedings may be brought against a person who makes a false statement verified by a statement of truth "without an honest belief in its truth" and the judge said that "It would seem to be inherent in this wording, and consistent with principle, that the reckless individual who verifies a false statement with no care or consideration for whether it is true or false may be guilty of contempt, as well as a person who tells a deliberate lie".

The defendants has also argued that in order to establish contempt, it must be shown that the statement "interfered with the course of justice in a material respect" and that the defendant was "aware of its significance and purpose in the proceedings". The judge said that that put the matter too high: "The false statement must...