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

IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
QUEEN'S BENCH DIVISION

		Courtroom No. 11 The Royal Courts of Justice Strand London WC2A 2LL
		26th October 2017

MR JUSTICE MARTIN SPENCER:

1. This is an application by Abellio London Limited, who run public bus services, among other things, for permission to bring committal proceedings against the respondents for having made false statements of truth and interfered with the administration of justice.
2. This application arises out of a minor road traffic accident, which occurred on the 24 September 2014, and the proceedings which followed that accident.
3. The accident occurred when the applicant's bus collided with a vehicle in which the respondents were passengers. Both the respondents then made claims for whiplash injuries, supported by medical reports from Mr Kamar Iqbal, a surgeon.
4. In support of the claim, both respondents signed witness statements asserting that they had sustained severe pain in the neck, across the shoulders, and lower back for a number of weeks after the accident.
5. The claim forms issued for the purpose of the road accident claim gave statements of value of between £5,000 and £15,000, those claim forms being issued on 9 February 2015.
6. In support of the claim for damages both respondents produced witness statements. Thus the first respondent, in a witness statement signed by him on 8 April 2015, claimed that the bus had been travelling at between 10 and 15 miles per hour when it drove into his stationary car. He confirmed at paragraph 25 the report from Mr Iqbal, which he said accurately set out his injuries. He asserted at paragraph 28 that he developed severe pain and stiffness in the neck and across both shoulders, which developed within a few hours of the accident and was 'particularly severe for the first four weeks after the accident'. He said it was made worse by lifting and turning and radiated to both shoulders. He also claimed to have suffered a lower back injury, which he said was 'particularly severe for the first four weeks after the accident' and was made worse by sitting and standing for long periods, and especially when bending or lifting. At paragraph 35 he asserted that he was continuing to experience pain in his neck and back at the time of the witness statement, that is April 2015, which would have been some seven months after the accident.
7. Similarly, the second respondent in her witness statement, which starts at page 81, and which is dated 2 April 2015, asserted that she had felt pain in her neck and back which was severe for five to six weeks, and that she was continuing to suffer with pain in the neck and back, and her injuries were ongoing. At paragraph 25 of her statement she also endorsed the report of Mr Iqbal.
8. In fact, the bus involved in the collision was equipped with CCTV equipment, and a recording of the incident appears to show that the collision was so minor that this was an accident which was incapable of causing the injuries claimed. That is not a judgment made by the court, but part of the eventual evidence of Mr Iqbal, who, in November 2015, was sent the CCTV evidence and was asked to respond to a number of questions in respect of both these respondents.
9. First, asked to clarify the mechanism by which he believed the claimant had sustained injury, he said, '(4) I was advised that the claimant's vehicle was stationary before the zebra crossing when the third party bus smashed into the right front side, and I was under the impression that the collision occurred at a medium speed.' He confirmed that any suggestion that the only contact was a passing contact at very low speed, with the front off-side corner, would be inconsistent with his understanding of the nature and force of the contact between the vehicles, as had been represented to him when he interviewed the respondents for the purposes of his reports on 23 November 2014, some two months after the accident. He went on to confirm that in the circumstances, on the balance of probabilities, the claimant 'could not have suffered an injury in the manner that he alleges' (question 14). In answer to question 16, he went on to say, 'From the CCTV footage I couldn't see any movement of the claimant's vehicle, so I don't think I should support a diagnosis of soft tissue injury'. He concluded by saying, 'After considering the evidence in the form of CCTV footage, especially the absence of any movement of the claimant's vehicle, I don't think I should support the diagnosis and prognosis contained in the medical report'.
10. Despite that, the claimants in the road accident, the respondents to this application, persisted in their claim for damages, and this came before District Judge Bell at the Guildford County Court on 4 February 2016.
11. Both respondents were cross-examined by Mr Cox, who appeared for the defendant in those proceedings, and who appears for the applicant before me today.
12. The District Judge gave a judgment where, at paragraph 36, he recorded that 'both the claimants maintain their account of these injuries after being shown the CCTV footage and in cross-examination and being shown the photographs of damage to the vehicle'. He went on to say this:

"(36) The view which I have reached is the evidence given by both claimants is simply not credible. The CCTV footage of the accident is there, unusually in cases of his kind, can assist the court greatly in this particular case. It is clear from my viewing of that footage that there is no discernible movement of the car, to any extent, on the collision. There is no significantly jolting of the car. The evidence of the claimants that there had been a forceful jolting of the car and forceful jolting of both of them within the car, is not an account which is consistent, in my view, with the CCTV footage which I have seen.

(37) I recognise that the bus is a heavier vehicle than the car, but the CCTV footage and the photographs of the damage to the vehicle seem to me to undermine the accounts given by both claimants.

(38) I do not accept the claimants' evidence that they suffered severe pain for four weeks for the first claimant, five to six weeks for the second claimant, to their neck and back or that they were still suffering constant pain from those sources at the date of the examination. The evidence of Mr Iqbal does not support the claimants' case, and in light of the answer that he has given to part 35 questions, the finding which I reach on the evidence before me, taken as a whole, on the balance of probabilities, is that there was no material personal injury caused by this collision.

(39) This is not a case where the claimants have put forward a claim based upon minor injuries or pain; they then decided it was severe injury to neck and back, and over a substantial period. They have repeated those allegations to Mr Iqbal for the purpose of him preparing his expert report to go before the court. This does not seem to me to be a question where there is a mistake which has been made on the part of the claimants or that it is a case of minor exaggeration of genuine symptoms. I regret the conclusion to which I have come, on the evidence before me, is that the first and second claimants' accounts are grossly misleading. The cross-examination put to them was very fairly put. They had the opportunity to clarify if there was any misunderstanding in the evidence they were putting forward and the extent of the injuries they had suffered. They, however, made no retreat from the accounts which they had put forward of severe injuries over a substantial and sustained period.

(40) The view to which I have come is that the claimants have been fundamentally dishonest in the particular claims put before the court at trial today. The claims are dismissed".

13. In April 2017 some 14 months later, the defendants of those proceedings, and the applicant in this application, applied for permission to bring contempt of court proceedings against both respondents, arising out of those previous proceedings and the findings by the District Judge.
14. It is common ground between the parties that the test for this court to apply is that it is proportionate and in the interest of justice for such an application to be allowed to proceed on the basis that the applicant can establish a strong case of contempt of court and that it is in the public interest for such an application to proceed. Taking each of those tests in turn, whilst it is not for me to state any opinion on the merits of the application, which would be for the full court hearing the application for committal, I have no doubt that the applicant can and does establish a strong case. Indeed, Mr Mold, who represents the respondents, did not contend otherwise. The fact is that, on the evidence which I have recited, it is arguable on behalf of the applicant that this was, effectively, a conspiracy by both respondents to bring a fraudulent claim by convincing, firstly, the medical expert that the accident had been significantly more serious than it was and that, therefore, they had sustained injuries significantly more serious than were in fact sustained, if any injuries were sustained at all, and that this was then perpetuated through witness statements and evidence given in court. I need say no more about the strength of the case.
15. The main issue before me is whether it is in the public interest for such an application to be made, and on behalf of the applicant, reliance is placed upon the case of Barnes (t/a Pool Motors) v Seabrook & Ors [2010] EWHC 1849 (admin), a decision of Hooper LJ and Kenneth Parker J, of 23 July 2010. In that case reference was made to a statement by a Mr John Lezemore, a solicitor, who set out the arguments in favour of punishing defendants for contempt in circumstances such as the present:

1. To act as a deterrent, insurance fraud being endemic.

2. To raise awareness of the QBD judiciary at the sort of demands being placed on the circuit judiciary.

3. To raise public awareness.

4. To improve the administration of justice.

16. Similarly, on behalf of this applicant, Mr David O'Docherty, in a witness statement dated 1 March 2017, says this:

"(23) Whilst this case is a fast-track matter, insurance fraud is a serious problem that needs to be stopped. The message needs to be continually sent that those that seek to abuse the court system for financial gain must not get away with it and should be seen to be publicly and properly punished. In the case of our business, we are responsible for meeting the costs of claims up to a value of £250,000 out of our own funds. It is important therefore, that where those funds are to be utilised for the compensation of victims of accidents that those victims are genuine. In 2015 the insurance fraud bureau estimated that the cost of 'cash for crash' fraud was £336 million, which indicated the financial severity of the problem".

17. In the light of that evidence, Mr Cox submits that there is a strong public interest in committal proceedings being allowed to proceed to send a clear message to the public that this sort of fraudulent behaviour is not to be tolerated, and it is only if such proceedings are brought that that message will get across, because simply to make an order removing the shield from cost protection, and ordering the defendants to pay the costs of the RTA proceedings is an inter partes order which would not see the light of day. It is the publicity and the public nature of proceeding such as this which, and only which, has a chance of getting home to the public.
18. For the respondents Mr Mold relies upon three matters which he says should influence the Court in not exercising its discretion to allow these proceedings to proceed. Firstly, he relies on the delay between the decision of the District Judge, by which time the applicant knew everything that needed to know to bring this application, and the actual making of the application, a period of 14 months. In this regard he referred me to one of the cases considered within the umbrella of the Barnes case, namely Mandy Hill v Agnes Gough. In that case proceedings had been resolved by March 2006 and the Court said, at paragraph 73:

"(73) We were told orally that within months the matter was handed over to the police for investigation. The defendant was interviewed by the police in December 2007, and by early 2008 the claimant was aware that no proceedings were taken. Two years later, the application for permission to commit the defendant for contempt was made. In my view this information should have been provided in writing.

(74) I have no doubt that the delay in this case is such that the application should be refused. To permit the application would, in the circumstances of this case, now be oppressive".

To put that decision in context, that was a case where the defendant had suffered a whiplash injury in a road accident in August 2001, and had claimed substantial damages, amounting at one point some £1.7 million. In the course of the proceedings the defendant made what were alleged to be a number of false statements, verified by statements of truth, to the effect that her medical condition had not improved, she had suffered constant pain, she could only drive for 45 minutes, could only spend 30 minutes on a computer, and was very restricted in what she could do. The insurance company in that case had obtained covert video surveillance, and, in a joint statement, the medical experts had agreed that there was a discrepancy in the level of disability claimed by the defendant, and the objective evidence from the video, and they agreed that the defendant was, in fact, fit to return to work.

19. Whilst, in my judgment, there is certainly force in the point that proceedings of this nature should be brought as soon as reasonably practicable, I take the view that the delay of 14 months in this case, whilst quite close to the limit, was not of such a delay as to amount to oppression as was found in the Mandy Hill v Agnes Gough case. There is no great guidance from the courts as to how much delay is or is not oppressive, and much may depend upon the circumstances of the particular case, but, clearly, there are wider issues to be considered by a company such as Abellio London Limited, which may need to go to quite high level, including Board level, with the public interest and the private interest to be taken into account, with the obtaining of advice. I can see that it might take some time before a considered decision can be made, and it is in the interest of all respondents that the decision should be considered and not a knee-jerk reaction. If the courts were to give too short a time then that might encourage applicants in the position of Abellio to bring such applications where they would not do so upon longer and more considered thought, and therefore, there is a public interest in, at least, some time being taken before these decisions are reached. Thus, it can be said that there is a period within which one could say that the decision was reached too quickly, and there is a period when it could be said the decision has taken too long, and there is a grey area in between when the decision can be taken reasonably and is not delayed to long, and in my judgment this decision was taken within that grey area, and within the reasonable discretion of the applicant, although, as I have said, I think it was towards one end of that spectrum.
20. Next it is asserted that the respondents should have been given a warning, and in that respect, I have had my attention drawn to a decision of the Court of Appeal in KJM Superbikes Ltd v Hinton [2009] 1 WLR 2406. That case was very different to the present, where in an action for summary judgment between Honda Motor Company Limited and KJM Superbikes Limited, a witness had made a false statement in support of the application for summary judgment. The witness asserted that he had done so more to protect the reputation of his employer, Honda, than in any personal interest of his. The judge had recognised that KJM's desire to take proceedings against the witness had been, 'Motivated largely by anger'. The main burden of the decision of the Court of Appeal was, as it seems to me, that the court should be reluctant to grant permission to bring contempt proceedings against witnesses who have made false statements, and that seems to me to be a very different situation to the one with which I am faced, which is a wholescale alleged fraud by asserted victims of road accidents for personal gain. The public interest is very different.
21. Turning to the particular issue of warning, Moore-Bick LJ, giving the judgment of the court said this at paragraph 1:

"In some cases, of which this is an example, it may be possible to deal with an application of this kind at a much earlier stage, especially if the alleged contempt relates to a statement made for a limited purpose which has passed and has no continuing relevance to the proceedings. Although we did not hear argument on this point, I think that in general a party who considers that a witness may have committed a contempt of this kind should warn him of that fact at the earliest opportunity (as the appellant did in this case) and that a failure to do so is a matter that the court may take into account if and when it is asked to give permission for proceedings to be brought. However, it is important not to impose any improper pressure on a witness who may later be called to give oral evidence. In particular, if the alleged contemnor is to be called as a witness, an application under rule 32.24 should not be made, and if made should not be entertained by the court, until he has finished giving his evidence".

22. In my judgment, that really puts this issue of giving a warning into proper perspective. In some cases, to give a warning to a witness could be seen to be bringing undue influence by one party against a witness to the other party in a way which is not in the public interest because of its potential interference with the course of public justice. To give such a warning might frighten a witness into resiling from truthful evidence, and in failing to support a case which actually has merit. The warning in that case was appropriate because of the limited part being played by Mr Hinton, his witness statement being confined to the summary judgment proceedings, and in circumstances where, as I understand it, he was not to play a further role as a witness.
23. The present case is wholly different, and I wholly accept the submissions of Mr Cox that no warning was required. Furthermore, it seems to me that a warning would have been otiose; as Mr Cox submitted: both respondents were legally represented at the time, and the CCTV footage was disclosed to them, so they can have been in no doubt as to why it had been disclosed and the purposes of that. Even if there was some doubt arising out of that, any such doubt would have been dispelled by the part 35 questions raised of Mr Iqbal. By that time they and their solicitors must have known, beyond doubt, the line that was being taken by the applicant, yet they persisted in what the District Judge found to be their fraudulent claims. As Mr Cox submitted here it is so blatant and obvious that no warning was necessary, and I agree.
24. Thirdly, it is submitted by Mr Mold that having been ordered to pay the costs of the proceedings below, that is, in itself, a punishment, and by bringing these contempt proceedings the appellant is seeking, effectively, to punish the respondents twice. Again, I agree with Mr Cox that it is not right to regard being ordered to pay costs as a punishment. The fact is that, in almost all litigation, costs follow the result, and it is only in the limited area of post-1 April 2013 conditional fee agreements, that the qualified one-way costs shifting shield has been brought into effect, pursuant to the Jackson recommendations. That is a shield for claimants which encourages and protects claimants in the bringing of genuine proceedings and was never intended to give protection to claimants in the bringing of fraudulent proceedings. The outcome which is being sought by the applicant today, and in this application and these proceedings, is wholly different to the losing of that shield in the Part 8 proceedings, and to equate the two as both being punishment is, in my judgment, not correct. Furthermore, as I have already pointed out, any punishment which could be said to be visited upon the respondents by being ordered to pay costs is in the private domain, and part of the merit of an application of this kind is that the proceedings and the outcome are in the public domain.
25. Finally, I am asked to stand back and look at the overall nature of the case: the fact that there was actually an accident, so that there was no fabrication of that; the relative minor claim that was being made, thus I compare the damages capped in this case at £15,000 for each claimant with the substantial damages of over £1 million claimed in the Hill case; and I am asked to accept that, in the overall scheme of things, it is not proportionate for contempt proceedings to proceed against these defendants. Whilst I understand the force of that submission, in my judgment there is a significant public interest in these cases being brought forward as contempt proceedings in an effort to stem the industry which appears to have grown up to make fraudulent claims arising out of road traffic accidents, and in respect of which all members of the public pay, whether through their increased insurance premiums for road insurance or, in the case of this particular applicant, in the form of increased fares because of their liability to meet the first £250,000 charge. In that regard, it matters not whether the actual fraud was great or small, it is the principle of it which matters, and, in the circumstances, I am quite satisfied that it is in the public interest and proportionate that this application should be allowed to proceed.
26. In those circumstances, I allow the application permission to proceed.
End of Judgment Transcript from a recording by Ubiqus 291-299 Borough High Street, London SE1 1JG Tel: 020 7269 0370 legal@ubiqus.com
This transcript has been approved by the judge.