Fraud: Court Of Appeal Expresses Contempt For Discontinuance Tactic

The Court of Appeal recently granted an insurer's appeal against an order refusing permission to bring contempt proceedings against a Claimant who had discontinued his action. The discontinuance followed allegations that the Claimant - who was pursuing a noise-induced hearing loss ("NIHL") claim against his former employer - had signed a false statement of truth.

Lord Justice Haddon-Cave stated that the tactic of discontinuing claims, "should not be seen to be used by unscrupulous claimants or lawyers as an inviolable means of protecting themselves from the consequences of their dishonest conduct."

Background

The Claimant had brought a claim for noise-inducing hearing loss (NIHL) in the amount of £5,000 against Zurich's policyholder, Stanley Refrigeration Limited.

Liability was contested and the Claimant's medical records obtained.

The Claimant's medical report stated that he did not have "any noisy hobbies". The medical records suggested he was in fact, a professional singer and a motorcyclist, activities relevant to causation.

Zurich's representatives issued a Part 18 Request asking:

if he was or had been a professional singer whether he played an instrument if he performed with a live band and, and if so, how often The Claimant denied being a professional singer and performing with a live band. In a supporting witness statement, he also denied riding a motorcycle, repeating he was not a professional singer.

An intelligence report was commissioned to address the inconsistencies. These searches revealed the Claimant was the lead singer in a live band, in which he played the electric guitar. The band was regularly performing and actively rehearsing. His page also showed his interest in motorcycles and fast cars.

Zurich made an application to strike out the claim. On 21 March 2017, a notice of discontinuance was served by the Claimant's solicitors. Over the course of the next 3 months, both the Claimant's initial and subsequently instructed solicitors were the subject of interventions by the SRA.

Committal proceedings were issued on 12 September 2017. The Claimant opposed the application.

The Claimant submitted he had been cold-called, and that he was a victim of a scheme to make money from his hearing loss. He told the court his initial solicitors stated it would pursue his claim, and complete paperwork for him described as 'generic'. The Claimant stated that he had not signed the relevant Statements of Truth and had not seen the Part 18...