England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand London, WC2A 2LL
		15 July 2014

1. MR JUSTICE BEAN: On 25 April 2011, Mr Balraj Singh Thumber issued a claim in the Liverpool County Court alleging that on 21 January of that year he had been driving his car along Pleck Road Walsall when he was involved in a collision with a Mr Viktor Sivak. He alleged that he suffered whiplash injuries and a medical report in familiar form was annexed to the particulars of claim.
2. The particulars of special damage alleged that Mr Thumber's Audi car had a pre-accident value of £6,474 and was a write-off. It included a claim for car hire in the astonishing figure of £20,131.20 to-date and ongoing at £229.50 per day. It will be observed that the £20,000 figure is more than three times the pre-accident value of Mr Thumber's car and the claim had been issued barely three months from the alleged accident.
3. Mr Sivak, the defendant on the pleadings, took no part in the claim. His insurers, Liverpool Victoria, took the view that the claim was fraudulent. They applied to be joined to the claim as second defendants and served an amended defence alleging fraud; more of that later. On 27 September 2012, Mr Thumber signed a witness statement verifying the truth of his claim with a statement of truth. Of the vehicle which had driven into him he said: "I now know this vehicle to be a BMW 3 Series, registered number: W174 RCA, driven by Mr Victor Sivak." By the time of the witness statement, the hire charges claimed had risen to the eye watering sum of £130,488; that is about 20 times the pre-accident value of the car.
4. The trial was listed for hearing and came on before Mr Recorder Campbell at the Walsall County Court on 1 May 2013. Counsel for Mr Thumber applied for an adjournment arguing that Mr Sivak, most unfortunately, had not attended the hearing, perhaps he had not had proper notice, and the trial ought to be adjourned. The Recorder quite rightly refused the application. Mr Thumber then discontinued his claim and was ordered to pay costs on an indemnity basis to the insurers. A clearer implicit admission that the claim was bogus would be hard to find. On 7 June 2013, Liverpool Victoria applied for leave to institute committal proceedings. On 25 September 2013, Stuart-Smith J granted permission on the papers. Before and after Stuart-Smith's decision there were difficulties with service. The claimants obtained an order for substituted service. They allege Mr Thumber was evading service. Subsequently, a new order for substituted service had to be obtained and so forth.
5. It is unnecessary to go into that history because on 20 May 2014, on the application of Liverpool Victoria, this court fixed a date for hearing of the committal application on 13 June and on that date, when the case was listed before me, Mr Balraj Thumber did indeed attend. Three days before that the court had received by fax a letter from a firm of solicitors called Active Solicitors saying that they were coming on the record. It appears to me that they did not really mean it because when Mr Balraj Thumber attended before me on 13 June, he did so in person. He told me that he had sought advice from a solicitor at Active Solicitors, whom he happened to know, but he could not afford to instruct them on a private basis.
6. He applied for an adjournment of the hearing on two bases: Firstly, he said he had only heard of the case one week previously; and secondly, he wanted to get representation. I had then and have now grave doubts about the suggestion that he had only heard of the case a week ago. There is ample evidence from process servers and enquiry agents about service of the proceedings at what appears to be his family home; but, anyhow, I granted the adjournment. I explained to him that it was likely that he would be eligible, subject to means, for Legal Aid on a committal application, but that if he wished to be legally aided he would have to make a very prompt application, whether with the help of Messrs Active Solicitors or otherwise; that the adjourned hearing date, which I fixed in his presence for today, Tuesday 15 July, would take place come what may; and the only circumstances that I could think of which would warrant a further adjournment would be proper medical evidence of his being seriously ill.
7. On 5 July 2014, his brother, Mr Avtar Singh Thumber, sent a fax to the court enclosing a general practitioner's medical certificate. Mr Avtar Thumber's covering letter said that his brother, Balraj, was unable to attend court on 15 July due to his illness, and it enclosed a doctor's note. The doctor's note dated 4 July says: "I assessed your case on 24 June and because of the following condition, a depressive episode, I advise you that you are not fit for work." He was signed off work up to 25 July 2014. It says: "I will not need to assess your fitness to work again at the end of this period." There is no other information given on the form. Under the heading: "Comments including functional effects of your condition," the form is left blank.
8. Mr Avtar Thumber, who has appeared in court today, has produced a further medical certificate dated 14 July (that is yesterday) from the same doctor's surgery again in the same form: "I assessed your case on 14 July 2014 and because of the following condition, depressive episode, I advise you that you are not fit for work." Again, no comments in the comments box, but the period given is 14 July to 22 August.
9. Avtar Thumber tells me that his brother's mental health has seriously deteriorated; that he is not in a fit state to attend court, nor indeed do anything much, and it is thought that he may be sectioned under the Mental Health Act in the near future. I am sorry to say I am simply not prepared to accept this. If the general practitioner who signed the sick note yesterday was going to tell me that, he should have done so in the certificate. I dare say Mr Balraj Thumber is depressed, but that is not a reason for not attending court.
10. I return to the merits of the case, since I am not prepared to grant a further adjournment. The particulars of the contempt alleged are set out in the claimant's particulars document; and from here on when I refer to the claimant I mean Liverpool Victoria Insurance Company Limited (that is the claimant in the contempt proceedings). Firstly, they have expert engineering evidence which they would have deployed in the trial at the Walsall County Court and which they now deploy before me through Mr Davis, who has attended court today, to show that the damage to the Audi and the damage to the BMW, which were found when the expert examined the vehicles, was simply incompatible with the alleged collision having occurred in the way it is said to have happened. Secondly, the evidence of Mr Crabtree of Liverpool Victoria, who has also attended court today, shows that Balraj Thumber and Mr Sivak, far from being strangers, are linked. Avtar Thumber has told me today, on behalf of his brother, that this is simply an unfortunate coincidence, but I will set out what the insurance company's case is. A man called Sanam Johwar links the two men, Balraj Thumber and Mr Sivak. A credit card used to insure the BMW with Liverpool Victoria by Mr Sivak was also used by Mr Johwar to insure the same vehicle on 8 September 2010. Mr Johwar added Balraj Thumber to his trader's policy on 29 March 2011, that is about two months after the alleged accident, and Balraj Thumber conceded in a witness statement that he assisted Mr Johwar driving vehicles in his business. As to Mr Sivak's insurance policy on the BMW, that was incepted only two days before the accident, the same day that he became the registered keeper. He was unable to produce any receipt for the purchase of the car and he was unable to identify the surname of the person from whom he purchased the car.
11. I am quite satisfied that this is powerful evidence, not of an unfortunate coincidence, but of fraud. There are other oddities in the evidence supporting a finding of dishonesty. Mr Sivak's account at how the alleged accident occurred is implausible. He suggested that a wall had obscured his vision to the right. The photographs of the locus of the accident do not suggest that at all. He stated too that the accident happened because his foot slipped onto the accelerator. In his statement, he explains that his girlfriend (Ms Mateova) was travelling as a passenger in the BMW's front passenger seat at the time of the accident. Mr Thumber had made no reference to there being any second occupant in the BMW in his statement. Perhaps this kind of thing can fail to be noticed, but if Ms Mateova was indeed travelling as a front passenger in the BMW it is very strange that while the driver's air bag did deploy, examination of the BMW showed that the front passenger air bag did not.
12. Mr Thumber, in his witness statement, asserted that he had been involved in three other accidents in addition to the index claim; two before it in April 2009 and April 2010 and one more recently on 5 September 2012. His medical records, however, reveal that he had been involved in a total of eight accidents other than the index one. He failed to mention accidents or alleged accidents in 2000, 2002, 2005, 2006 and 2008.
13. It is perhaps the ludicrous level of claim for credit hire charges that has been Balraj Thumber's undoing. I have already referred to what they were; three times the pre-accident value of the car by the time of the particulars of claim and twenty times its value by the time of trial. In claiming £130,000 for credit hire charges, Mr Thumber failed to disclose that he was the sole director of a company with a turnover of £195,000 and cash sums in the company bank account of up to £37,000. Details of his financial means were directly relevant to the issue of his alleged lack of means.
14. There are other minor matters relied on by the claimants which do not seem to me to add anything to the case. Even on the basis of what I have set out so far, this is the plainest possible case of a fraudulent claim, of false witness statements and of what would have been, had the trial at the Walsall County Court proceeded, an attempt to obtain a great deal of money by perjured evidence.
15. This history and the total failure of Mr Balraj Thumber to give any explanation in answer to these allegations of fraud is one reason why I refuse the application for an adjournment, however courteously put by his brother.
16. I turn to the question of sanction. The dishonest giving of evidence in this way is plainly a contempt of court and I so find. The seriousness of this type of insurance fraud has been emphasised by the Divisional Court with the present Lord Chief Justice, then Sir John Thomas, President of the Queen's Bench Division presiding in a committal application brought by the present claimants, Liverpool Victoria Insurance Company v Bashir & Others [2012] EWHC 895 (Admin). The President said this:

"...it is important to set out the background of the very grave problems the insurance industry faces and why this claim is such a serious one. We were told that in the year 2010 insurers uncovered 133,000 fraudulent insurance claims -- that is to say 2,500 every week -- an increase of 9 per cent in the amount of such claims over the previous year. When describing fraudulent claims, the insurers are referring to two types of claim: one where there has been an accident or an incident where the claim has been exaggerated, and cases such as the present, where there has been no accident and no incident at all and are, therefore, in the real sense, bogus or contrived. Both are fraudulent, but the latter category is far, far more serious."

Pausing there; I have no doubt that the present claim is in the latter category. The President continued:

"This fraud has occurred in the area of motor insurance. It appears that in 2010 dishonest motor insurance fraud occurred on an extensive scale. There were 40,000 of them. Motor frauds were, of all the frauds, the most costly. They totalled over £466 million. The insurance industry estimates that insurance fraud costs £2 billion a year adding on average an extra £44 per year to the insurance bill for every UK policy holder.

The detection of such fraud is very difficult. The diligence of the insurers in this case is to be highly commended. We were told that until relatively recently the police have not had the resources to investigate this type of fraud. Although, as this case illustrates, this type of fraud involves relatively small sums of money in each claim, together such claims give rise to the very large figures to which we have referred. At the beginning of this year the City of London Police had been funded by the insurance industry to set up a motor insurance and insurance fraud enforcement department which has the capacity to deal with 100 cases per month. As was said by counsel for the insurers today, that is the tip of the iceberg."

17. In another decision of the Divisional Court given by Moses LJ in South Wales Fire and Rescue Service v Smith [2011] EWHC 1749 (Admin), the learned Lord Justice said:

"For many years, the courts have sought to underline how serious false and lying claims are to the administration of justice. False claims undermine a system whereby those who are injured as a result of the fault of their employer or a defendant can receive just compensation.

They undermine that system in a number of serious ways. They impose upon those liable for such claims the burden of analysis, the burden of searching out those claims which are justified and those claims which are unjustified. They impose a burden upon honest claimants and honest claims, when in response to those claims, understandably those who are liable are required to discern those which are deserving and those which are not.

Quite apart from that effect on those involved in such litigation is the effect upon the court. Our system of adversarial justice depends upon openness, upon transparency and above all on honesty. The system is seriously damaged by lying claims. It is in those circumstances that the courts have on numerous occasions sought to emphasise how serious it is for someone to make a false claim, either in relation to liability or in relation to claims for compensation as a result of liability.

Those who make such false claims if caught should expect to go to prison. There is no other way to underline the gravity of the conduct. There is no other way to deter those who may be tempted to make such claims, and there is no other way to improve the administration of justice.

The public and advisors must be aware that, however easy it is to make false claims, either in relation to liability or in relation to compensation, if found out the consequences for those tempted to do so will be disastrous. They are almost inevitably in the future going to lead to sentences of imprisonment, which will have the knock-on effect that the lives of those tempted to behave in that way, of both themselves and their families, are likely to be ruined.

But the prevalence of such temptation and of those who succumb to that temptation is such that nothing else but such severe condemnation is likely to suffice."

18. Going back to the Bashir case where the fraudulent claim was confined to the bracket of £5,000 to £15,000, the President said that prior to the admissions and provision of helpful information by the first and second defendant, the court had had in mind sentences well in excess of 12 months' imprisonment. In my judgment, in the present case, the proper sentence is one of 12 months' imprisonment.
19. When the warrant of committal is executed, Mr Balraj Thumber should be made aware: firstly, that as the law stands, he will serve only half of that sentence; and secondly, that it is open to defendants committed to prison for contempt to seek to purge their contempt and be discharged from custody. If, contrary to my expectations, Mr Thumber is indeed sectioned under the Mental Health Act that may form the basis of an application to this court to discharge the order for committal. But that is the order of the court today.