England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION THE
ADMINISTRATIVE COURT

		Royal Courts of Justice Strand London WC2A 2LL
		1 February 2012

1. MR JUSTICE IRWIN: This is an application for permission to institute proceedings for contempt. The applicant, Accident Exchange Limited, is a company which provides car hire services and specialises in the credit hire of motor vehicles. The intended respondents to the proceedings were all employed as rate surveyors by a company now in liquidation known as Auto Focus Limited.
2. The background to the story can be simply stated. Claims on behalf of motorists who have been involved in accidents for the cost of the credit hire of substitute vehicles, during the period when their own vehicles were being repaired, have long been the subject of vexed litigation. The insurers on the other side have regularly challenged the claims, suggesting that they were, or are, inflated and too high.
3. Auto Focus found a niche within the market giving evidence as experts on behalf of defendant insurers seeking to reduce those claims. There have been literally thousands of such cases tried and settled. As the applicant here would say: tried and settled in very many cases, on the basis of evidence given by Auto Focus witnesses, effective in reducing the claims. It is suggested the evidence was based on fraud and perjury. Again, in very short compass, the suggestion is that these named respondents, and others within Auto Focus, consistently presented reports to the other side, and in those instances where matters were contested gave oral evidence, to the effect that they had checked the spot rates for comparable vehicles within the relevant locality, or at least the relevant market, demonstrating that the credit hire companies' charges were inflated and the claims therefore excessive. The suggestion is that that evidence was based on lies, and that there had not been the checks to establish the spot rates within the relevant market that were claimed.
4. So far as Accident Exchange Limited is concerned, there are said to be some 3,600 cases, and the suggestion is that over all there may be in the region of 30,000 cases concerned.
5. Having examined the method of operation of Auto Focus and assembled the information at an intermediate stage, before detailed examination of the phone records of Auto Focus, the applicant requested the involvement, or suggested that there might be involvement, by the City of London Police Force in prosecuting, on the basis of this material, criminal frauds. The force declined to initiate such an investigation or institute proceedings. We are informed that was because the facts outlined to them at that stage did not satisfy their criteria by which such investigation and prosecution would be launched. We have not seen what those criteria were, and therefore are unable to form any judgment of whether that was a definitive view from the public's point of view as to whether the public interest demanded formal criminal proceedings or not. Even if that was a correct judgment by those as yet unexposed criteria, as Mr Vickers has helpfully pointed out in his clear oral submissions the state of knowledge then was rather different from the position today.
6. The question of whether permission should properly be granted for the launch of proceedings of this kind, was considered by the Court of Appeal in KJM Super Bikes Limited v Anthony James Hinton [2008] EWCA Civ 1280. It is not necessary to recite passages from that judgment, but the contents of paragraphs 8 to 17 set out the approach of the court.
7. That case turned on facts which were confined to the named parties and confined essentially to one case. The situation here is rather different. The implications of the allegations made by this applicant, as will already be evident from the figures of cases we have recited, are enormous. If these allegations were made out, as my Lord Moses LJ has said, this would be perjury on an industrial scale. We of course reach no conclusion one way or the other at this stage, but we do observe that if made out, the public interest in conventional criminal prosecution might be rather different from the situation in KJM Super Bikes, or indeed the situation which was laid before the City of London Police some time ago.
8. We have well in mind that the applicant company has had to make considerable effort and financial commitment to reach the point where such a case can be placed before the court to seek permission, and that there may be considerations in their interest that this should be dealt with swiftly. That might differ from the public interest in the matter being dealt with comprehensively. The applicant has potentially different interests from the state prosecuting authorities in the shape of the Attorney General or the Director of Public Prosecutions.
9. All that said, it seems to us that introducing delay at this stage would not serve anyone's interest. The criteria laid out in KJM appear to us to be fulfilled. The evidence is ostensibly strong. There appears to be a basis for saying that the respondents in their individual cases had the knowledge that there was a false picture being presented to the court. The problem is certainly significant, with a large raft of cases. It would not be trivial if the matter were proved. This was systematic, as we have said. Therefore we are going to grant permission for the applicant to bring such proceedings.
10. However, as part of the directions that go with the grant of permission we are going to direct as a matter of urgency that the bundle of court papers, which has been put before this court in seeking permission, should be served on the Attorney General; that within three months of today, provided that is a working day, the Attorney or his nominee must indicate in writing to all parties, and to the court, as to whether he wishes to remain an interested party in these proceedings, as to whether or not he intends to institute criminal proceedings against these respondents, and as to whether or not the institution of criminal proceedings will affect the onward conduct of these proceedings.
11. We can discuss dates and directions in due course.
12. LORD JUSTICE MOSES: I agree.
13. MR VICKERS: I am grateful. Of course in normal circumstances there is a requirement to serve the Part 8 claim form seeking the committal within 14 days of the grant of permission. Do your Lordships still envisage that that should be done, notwithstanding we will obviously have to wait a longer period to hear if the Attorney General wishes to continue to be involved, or would you give a longer period?
14. LORD JUSTICE MOSES: My view is you should crack on in the normal way. Although we have given an outside limit to the Attorney, we sincerely hope he will take an interest far sooner than that. That is the absolute maximum. It might be worth your people speaking to his office quite shortly and liaising with them and saying, "What is the best way of getting on with this?" One thing you do not want to do is, having invested all this money in pursuing it, be delayed unless it is going in the end to --
15. MR VICKERS: There is another matter. I wonder if I might raise it with you. You will be aware we had a decision on the appeal permission on 1 December 2011, but it was only yesterday we were able to get a transcript of that judgment. I anticipate a transcript of my Lord's judgment that has just been handed down is likely to be of assistance to the Attorney General in coming to a conclusion. I wonder if there is anything that you can do to expedite --
16. LORD JUSTICE MOSES: We will ask for an expedited judgment.
17. MR VICKERS: That would be most helpful. I do not know whether you have seen the draft order which I have prepared. You will be aware, of course, that what we seek is to commit the seven respondents in respect of a number of specified cases. Obviously they are entitled, when we serve the Part 8 claim form, to know precisely what it is that is being alleged against them and in respect of which particular cases, rather than some generalised allegation that they have done this hundreds of times. I hope you have the most up-to-date version of the draft order which contains a schedule, which should have all the cases and all of the court numbers, so that those cases can be --
18. MR JUSTICE IRWIN: It does not have all the court numbers.
19. MR VICKERS: There is a more up-to-date version of it. You may have one with just a few numbers in it. Now I have ones which have all the numbers.
20. LORD JUSTICE MOSES: You can hand that in, then it will have to be endorsed by us.
21. MR VICKERS: What it does not have in yet, as you have just made them, is the directions in relation to the Attorney General. In other respects, if you are able to approve this order, then obviously I can go back to chambers --
22. MR JUSTICE IRWIN: The text has not changed?
23. MR VICKERS: The text has not changed. It is just after I drafted it I was able to obtain all the County Court numbers for all but one of the cases that are involved. That case is identifiable by the court it was in and other matters. This will enable the Part 8 claim form to be issued in relation to the specific cases saying, "This is what we say you did in relation to these specific cases", which is obviously what the respondents are entitled to.
24. MR JUSTICE IRWIN: The order we make will have to incorporate the direction relating to.
25. MR VICKERS: Of course. What I would propose to do is go back to the Manchester chambers and add into my draft the directions you have given and then submit that back to the court, so that that order can be approved and sealed.
26. LORD JUSTICE MOSES: Yes. You will need to draw up an order that includes my Lord's more recent directions.
27. MR VICKERS: That is the point I make. I go back to the chambers and add into my draft the directions that have been given this morning and then send that back. In all other respects I wanted to ensure that you were satisfied with this order.
28. MR JUSTICE IRWIN: Obviously the bundle of papers must include this order. That goes without saying.
29. MR VICKERS: Equally we will include the judgment as soon as we get it. We will probably send it all first and tell the Attorney General that the judgment will follow as soon as we get it.
30. LORD JUSTICE MOSES: Anything else?
31. MR VICKERS: Only I ask that you -- it is in the order in any event -- reserve the question of costs of this application to the application for committal.
32. LORD JUSTICE MOSES: Yes. We are most indebted to you. Thank you very much.