Autofocus Ltd v Accident Exchange Ltd

This case is concerned with the scope of witness immunity. In Darker v Chief Constable of the West Midlands [2001] 1 AC 435, Lord Hutton said (at page 463c):

“The rule that a party or witness has immunity in respect of what he says and does in court has been established for centuries.”

He cited Cutler v Dixon (1585) 4 Co Rep 14b and the classical statement of Kelly CB in Dawkins v Rokeby (1873) LR 8 QB 255 (at page 264):

“… no action lies against parties or witnesses for anything said or done, although falsely and maliciously and without any reasonable or probable cause, in the ordinary course of any proceeding in a court of justice.”

The rule is founded upon public policy which seeks to encourage and protect honest witnesses, even if the consequence may be the safeguarding of the dishonest and malicious. The sanction against the latter is confined to the criminal law of perjury and attempting to pervert the course of justice.

It is well established that the immunity attaching to things said in the witness box extends also to the contents of witness statements prepared in advance of an anticipated trial: Watson v McEwan [1905] AC 480. It continues even if the trial never takes place: Stanton v Callaghan [2000] 1 QB 75. All this is common ground in the present case. However, in Darker the House of Lords accepted that the rule has boundaries, not least because of countervailing public policy. As Lord Hope said (at page 446d):

“… there is another factor that must always be balanced against the public interest in matters relating to the administration of justice. It is the principle that a wrong ought not to be without a remedy. The immunity is a derogation from a person’s right of access to the court which requires to be justified.”

Accordingly, the House of Lords held that the immunity did not extend to things allegedly done by police officers during the investigative process which could not fairly be said to form part of their participation in the judicial process as witnesses. In particular, it did not extend to the fabrication of false evidence.

Although many of the recent cases in this area are concerned with allegations of police malpractice, the present case is not. The allegation here is one of business malpractice. The context is that of motor insurance claims. Accident Exchange Limited is a credit hire company which provides hire cars to drivers whose vehicles have been damaged in road traffic accidents due to the alleged negligence of another driver. Accident Exchange then seeks to recover its hire charges by way of legal proceedings brought in the name of its client driver against the allegedly negligent driver. Autofocus Limited provides evidence for insurers of allegedly negligent drivers who wish to limit their liability for hire charges to the market hire rate (“the spot hire rate”) at which an equivalent vehicle can be hired. In essence, the insurers of the allegedly negligent drivers rely on Autofocus to provide them with material with which to contest the perceived inflated element of the hire charges claims.

The method ostensibly used by Autofocus involves the employment of rates surveyors who provide evidence of relevant spot hire rates on the basis of information obtained in telephone calls to a number of car rental companies. Following the telephone calls (usually five in each case), the rates surveyor feeds the information into a computer. This leads to the production of a spreadsheet. The surveyor then produces a witness statement in which he describes the process, refers to the telephone calls and exhibits the detailed information in the form of the spreadsheet. This simplified explanation will suffice for present purposes.

In the present action brought by Accident Exchange against Autofocus the Amended Particulars of Claim plead conspiracy to use unlawful means, interference with business by unlawful means and deceit. At its lowest, Accident Exchange’s case is that the rates surveyors put forward inaccurate spot hire rates either by misreporting the effect of the telephone surveys or by referring to telephone calls that had never taken place and that Autofocus is vicariously liable. At its highest, the case is that such fraudulent conduct was an integral part of the way in which Autofocus conducted its business, encouraging and condoning fraud.

The Claim Form was issued on 7 October 2009. On 12 October an application notice was issued on behalf of Autofocus seeking to strike out the claim or, alternatively, for summary judgment by reference to witness immunity. The application was heard by His Honour Judge Mackie QC on 30 October. His judgment was handed down on 16 December. He dismissed the application but granted Autofocus permission to appeal. The judgment contained extensive citation from Darker.

The plaintiffs in Darker alleged conspiracy to injure and misfeasance in public office. Their case was that police officers, together with an informant, had fabricated evidence. The Chief Constable applied for the statement of claim to be struck out by reference to witness immunity. The application succeeded at first instance and in the Court of Appeal in the light of the previous Court of Appeal authority of Silcott v Commissioner of Police of the Metropolis (1996) 10 Admin LR 245. However, the House of Lords allowed the plaintiffs’ appeal and overruled Silcott.

Lord Hope (at page 448) distinguished between statements made by police officers prior to giving evidence “where the functions that they are performing can be said to be those of witnesses or potential witnesses” and their conduct at earlier stages in the case “when they are performing their functions as enforcers of the law or as investigators”. He added:

“The actions which the police take as law enforcers or as investigators may … become the subject of evidence. It may then be necessary for the police officers concerned to assume the functions of witnesses at the trial to describe what they did or what they heard or what they saw. But there is no good reason or grounds of public policy to extend the immunity which attaches to things said or done by them when they are describing these matters to things done by them which cannot fairly be said to form part of their participation in the judicial process as witnesses. The purpose of the immunity is to protect witnesses against claims made against them for something said or done in the course of giving or preparing to give evidence. It is not to be used to shield the police from action for things done while they are acting as law enforcers or investigators.”

He later referred (at page 449b) to “the distinction which I would draw between the act itself and the evidence that may be given about the act or its consequences”, adding:

“This distinction rests upon the fact that acts which are calculated to create or procure false evidence or to destroy evidence have an independent existence from, and are extraneous to, the evidence that may be given as to the consequences of those acts.”

On this basis, he concluded that the alleged wrongful acts related, at least in part, to things done by the police during the initial stage when they were acting as investigators.

In departing from Silcott, Lord Clyde said ( at pp 460h-461a):

“In my view the approach there taken to the scope of the immunity was too widely expressed. To extend it to cover all conduct that can fairly be said to be part of the investigatory or preparatory process takes it beyond the length of the intimate connection with the court proceedings and the extent which is necessary for the purposes for which it is granted.”

Lord Hutton’s speech included these passages:

“There is, in my opinion, a distinction in principle between what a witness says in court (or what in a proof of evidence a prospective witness states he will say in court) and the fabrication of evidence …” (at page 469f)

“… I consider the position is different where … steps are taken prior to the making of a statement of evidence, not for the purpose of making a statement of evidence which the maker intends to be an accurate and truthful one, but for the wrongful purpose of fabricating false evidence which would be referred to in an untruthful statement of evidence.” (at page 471h).

I now turn to the judgment below in the present case.

Having referred to some of the above passages in Darker, the judge acknowledged that there is a factual difference between the investigatory function of police officers and the rates surveyors in the present case who “have no investigative role independent of making enquiries with a view to giving evidence”. He concluded:

“That does not mean that everything they create is subject to the immunity. The distinction which Lord Hutton describes … may be even finer in this case but it is real nonetheless. There is a difference between the material created when making inquiries and the witness statement then prepared for the judicial process … It does not seem to me that the distinction between a statement and an exhibit is any more fine or invidious than that drawn between writing down a false confession in advance on the one hand and falsely claiming this later in the witness box, on the other … The exhibits are material collected on which the potential witness may be called to give evidence and are not, as I see it, subject to the immunity.”

The judge later granted Accident Exchange permission to amend the Particulars of Claim and this has now been done.

In a revised skeleton argument on behalf of Autofocus, Mr Michael Lazarus stated that he no longer seeks an order that the claim be struck out. This change of position is said to result from events since the hearing in the High Court, namely the permitted amendment of the Particulars of Claim, and “the broadening of the issues in [Accident Exchange’s] skeleton argument”. It follows that he is not seeking to overturn the material part of the judge’s order. This raises the obvious question: what is the point of the appeal? Mr Lazarus’s answer is that he still wishes to raise witness immunity in relation to the exhibits at trial and that, without a further and different order from this Court he would or might not be able to do so in view of the way in which the judge expressed himself. Accordingly, by an amended Appellant’s Notice, he now seeks a declaration that

“the evidence set out in the spot hire rates surveys exhibited to the witness statements and expert reports made by the … rates surveyors are protected by the witness immunity rule from being the basis of any claim against [Autofocus] to the same extent as the evidence given in the body of the witness statements …”

Although no such declaration was sought in the High Court, he submits that it is now the appropriate remedy. In a sense, Mr Lazarus is seeking to turn a strike-out appeal into a determination of a preliminary point of law. He says that his purpose is to free Autofocus from the judge’s words:

“It does not seem to me that the distinction between a statement and an exhibit is any more invidious than that drawn [in Darker] between writing down a false confession in advance on the one hand and falsely claiming this later in the witness box on the other.”

For his part, Mr Roger ter Haar QC, on behalf of Accident Exchange, submits that the declaration sought would be highly inappropriate, both procedurally and substantively. He makes the further point that, in refusing a strike out application, the judge probably did not intend to express his views on the merits of the witness immunity point with finality but should be taken simply to have decided the point on an arguable basis.

In my judgment, Mr ter Haar’s further point is correct. Whether considered from the perspective of strike out or from one of summary judgment, a conclusion adverse to Autofocus should have been, and was no doubt intended to have been, put in terms of arguability. The judge was not determining a preliminary point of law. No such application or order had been made under CPR3.1(2). Accordingly, the outcome of Autofocus’ application was not designed to be conclusive on the issue. It remains at large. By parity of reasoning, we ought not to take unto ourselves the ultimate determination of the issue, which we would be doing if we were to make a declaration in the terms sought. I would decline to do so.

In these circumstances, what needs to be said about the merits at this stage? Very little in my view. Although we have heard full submissions on the law, we are not in full possession of the facts. There may well be distinctions between the practices and conduct of different rates surveyors. These may (I put it no higher) impact on the issue. All this is for the trial. I note that in Darker Lord Hope said at the end of his speech (page 450b):

“I do not think that it can be asserted without hearing the evidence that these allegations fall within the boundaries of the immunity. This is a matter which should be considered in the light of the facts as they emerge at the trial.”

The same must apply here. The reasons are plain. In order to apply the Darker principles, it will be necessary to consider precisely what each rates surveyor and his superiors did or omitted to do and what their state of mind was at the time. It may be necessary to consider the chronology of the events from the phone calls (if made) to the spreadsheets, to the creation of the witness statements. I am bound to say that, if it is established that a particular surveyor dishonestly fabricated evidence, in my view, applying Darker, he would be unlikely to be able to avail himself of the immunity and it may be that, if the fabrication first materialised on the creation of the spreadsheet, it may make no difference whether the formal evidence was included in the body of a witness statement or in an exhibit to it. However, it would be inappropriate for me to say more at this stage.

For the above reasons, I would decline to make a declaration and would dismiss this appeal. Any solace to Autofocus will have to be found in this judgment.

I agree.

I also agree.