Lawyers Briefing Notes

Fri, 16 Sep 2011

Fraudulent Claims: Contempt of court proceedings: Excusable delay

Proceedings for contempt of court are not a common feature in the court listings and whilst there is no denying that fraudulent claims are a major problem in the UK, this is probably best explained by the evidential burden that defendants and insurers often have to overcome before contemplating such action.

However, there are other factors which must be considered before proceeding.

In the recent decision of South Wales Fire & Rescue Service v Smith , the defendant fire service applied to the court to commit a personal injury claimant to prison for contempt of court.

The claimant, Mr Smith who was employed as a fireman for 12 years brought a claim following an alleged accident at work on 18 October 2005. The claimant falsely alleged that since his accident he had been unable to work.

He made four false ‘statements of truth’ in support of his claim. He sought special damages for two years loss of earnings totalling £15,000 when he had in fact been working as a self employed taxi driver.

In his witness statement, he referred to his claim for loss of earnings saying falsely that his only income was state benefits and that he was at a significant financial disadvantage and finding it extremely difficult to make ends meet.

During the course of the contempt of court proceedings it also emerged that the claimant took written tests for his taxi licence in November 2005, an oral knowledge test on 10 January 2006 and in January 2007 when applying to renew his licence, he asserted that he did not suffer from any physical disability likely to interfere with the efficient discharge of his duties.

Lord Justice Moses rightly recognised that false claims impose upon those liable for such claims a burden of analysis, the burden of searching out those claims which are justified from those claims which are unjustified. He went on to add that those who make such false claims, if caught, should expect to go to prison.

However, in this case, the court was concerned by the length of time that had elapsed since the claim was brought. Expressing that only a custodial sentence was appropriate to underline the gravity of the conduct and deter those who may be tempted to make such fraudulent claims, the court confirmed that there should be no inexcusable delay in bringing contempt proceedings.

Although there had not been any inexcusable delay on the part of the defendant in this case, the court felt that passage of time inhibited them from sending the claimant to prison. The court sentenced the claimant to 12 months imprisonment suspended for 2 years.

The court also stressed that those who suspect that contempt may have been committed should give as early warning as possible of the intention to bring contempt proceedings.

Committing a contempt of court is a criminal act and therefore the requirement that there should be no inexcusable delay is not at odds with the criminal procedure in England and Wales. However, there does not seem to be any logical reason for imposing an obligation to give an early warning.

Unfortunately, the court did not elaborate on the issue. Proving fraud and contempt is fraught with evidential difficulty. What purpose does an early warning serve?

It may give the claimant an opportunity to justify and or explain his claim but conversely it could open the door to the destruction of evidence. If the claimant is committing fraud, no doubt, he will be much more cautious to cover his tracks.

Moreover, if it is the court who decides when such a warning should have been given, the lack of certainty could deter defendant and insurers from making applications for contempt.