South Wales Fire and Rescue Service v Smith

LORD JUSTICE MOSES: This is an application for committal of this 37-year-old defendant for contempt of court. He was for 12 years a fireman. In a claim brought in respect of an accident at work, the defendant, Anthony Smith, on his own admission made a false claim that since his accident he had been unable to work.

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 upon 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.

With those words, which we suspect are fully understood by Mr Smith and his father, we then turn to the facts of this case. The case was one of a trilogy of cases considered by the divisional court in a permission hearing dated 23 July 2010 and neutrally cited at [2010] EWHC 1849 Admin. We commend those concerned in this type of litigation to that judgment, which sets out the process by which contempt proceedings may be brought, the importance of such proceedings, and the facts of the trilogy of cases including this case.

The essential problem in this case arises out of the fact that time has passed since the contempt was committed until now when the full contempt hearing is brought before the court. We can illustrate that passing of time by reference to a number of dates. The alleged accident took place on 18 October 2005. The applicant brought proceedings in which he contended that he was unable to work. He received severance pay when he left the Fire Service, and sick pay, which were to become the subject matter of counterclaims on behalf of the South Wales Fire and Rescue Service.

He made four false statements of truth in support of his claim. Firstly, on 6 April 2007, he verified his claim for damages in the course of which he sought special damage for two years' loss of earnings and other damages in the sum of £15,000. He had, in fact, been working as a self-employed taxi driver and the claim was, therefore, false.

Secondly, he made a further disclosure statement in which he disclosed various documents in support of his claim for loss of earnings, again in which he asserted that he was telling the truth, on 14 August 2007.

Thirdly, he made a witness statement endorsed with a statement of truth, dated 19 September 2007, in which at paragraphs 30 and 32 he referred to his claim for loss of earnings, saying falsely that his source of income was only state benefits, that he was at a significant financial disadvantage and finding it extremely difficult to make ends meet. He referred to the solicitor's schedule of losses.

Finally and fourthly, he amended his particulars of claim with a statement of truth of 10 December 2007 in which he again asserted that he was claiming more than £15,000 but less than £50,000 including the claim for £15,000 loss of earnings.

It emerged that in fact he had been working as a taxi driver for part of the period, although he now says that it was for no more than 31 days, and he received as a taxi driver in Cardiff but paltry reward. But the analysis in the chronology proffered by the South Wales Fire and Rescue Service, who have taken enormous although justifiable pains to explain and prove his contempt, shows that the dishonesty was quite deliberate and persistent.

He took a written knowledge test for a taxi licence back in November 2005 and an oral knowledge test on 10 January 2006. Earlier taxi driving jobs were undertaken in February 2006, and on 11 January 2007 he applied for a renewal of taxi licence, asserting that he did not suffer from any physical disability likely to interfere with the efficient discharge of his duties. Thus he took a number of jobs, estimated by the Fire Service as some 650, in the period starting January 2007 at the very time he was signing statements of truth.

The result was, as he was subsequently to admit, that he had to accept that his claim was false and that the severance and sickness pay that he received from the Fire Service had to be repaid. He made an admission in May 2009 to the district judge that his claims were false. He admitted the counterclaim that the South Wales Service brought to recover the sums they had paid, and the result has been that £10,000 of his pension has been diverted to repay the Fire Service, and he still owes a further £10,000 or more, some £14,000 we think, although it does not include interest, secured by way of a charging order on the home where he lives with his partner.

In one sense, therefore, the results of the false claims and the work have financially proved a disaster to this former fireman, quite apart from the disgrace and loss of his good name. He had served for 12 years, we emphasise, in the Fire Service, and it has ended in the ignominy of being proven to have made these lying claims; because it is ignominious, it is important that we underline the gravity of this behaviour.

It is, however, important to set what we have said in the context of the passage of time to which we have drawn attention. This case has taken a very long time to reach the point when this court can deal with the contempt. As Hooper LJ and Mr Justice Kenneth Parker concluded in the application for permission, had there been inexcusable delay, that of itself would have been a ground for refusing permission to bring proceedings for contempt; but that court found that there had been no inexcusable delay.

The proceedings were foreshadowed quite properly by the counterclaim of the South Wales Fire and Rescue Service. Those who suspect that a contempt may have been committed should adopt that approach of the Fire Service and give as early a possible a warning of the intention to bring contempt proceedings.

But what became difficult was the identification of the appropriate process. There have been cases in the past when High Court judges have sought to bring proceedings for contempt in relation to contempt before inferior courts, and the decision of the Divisional Court to which we have drawn attention explains that those courts have no jurisdiction; the matter has to go before a Divisional Court.

The Fire Service brought proceedings for contempt, as they had indicated they would, in February 2010, but the permission hearing did not take place until 23 July 2010. Mr Smith sought legal assistance, but was subsequently refused. Sensibly, the Fire Service made an application for summary of judgment, but again, through no fault of the Fire Service, the proceedings were listed at a time close to the full hearing and thus the question of summary proceedings was never resolved.

A combination of the need for the issues as to procedure, permission, delay and Article 6, coupled with the delay caused by the defendant seeking legal aid, has led to a further passage of time. The result has been that this court is being asked to deal with a contempt which occurred many years ago back in 2007 and which was admitted, in effect, back in April 2009.

In those circumstances, it seems to us impossible to say that this 37-year-old should go to prison now. He has not disputed the contempt, but it seems to us that the passage of time, whilst not constituting inexcusable delay, inhibits this court from saying that he must be punished now by going straight away to prison. The message as I would see it is that in future it is vital that these cases are dealt with with urgency and with speed, so that the all-important message of deterrence, the all-important process by which it is brought home to false complainants that the likely consequence is prison, can be underlined. It is as I see it futile to seek to bring that message home by imprisoning this man in respect of his admitted falsityso long after the offence of contempt was committed.

In those circumstances, I take the view that the appropriate way of bringing home the gravity of this offence is to order that this man should go to prison for 12 months, but that order should be suspended for 2 years, provided that within that period of 2 years this defendant pays the sum of £10,000 as a further sum towards that which he received from the Fire Service; in other words, he has a further 24 months to pay off another £10,000 out of the sum he owed, the subject matter of the counterclaim.

We appreciate that he is, as he tells us, in dire financial straits at the moment, although we notice that the disposable income which he disputes, assessed by the Legal Services Commission in a letter dated 13 September 2010, is just over £40,000 a year; but we think with a further two years, he ought to be able to find that sum, either paying it in instalments or saving it until that further period of 24 months has expired. There may still be further sums owing, but at least that will provide an incentive to be coupled with the suspended period of imprisonment.

MRS JUSTICE DOBBS: I agree, and merely add that the defendant should be aware that failure to pay that sum within the period will no doubt bring him back before these courts.

MR GRANT: My Lord, there is one further matter. This being a quasi-public, quasi-private matter, I am instructed to ask that the costs occasioned by these committal proceedings also be paid by the defendant in any event. As I say, it is an unusual jurisdiction that we are in. It is my submission that those costs remain in your discretion.

LORD JUSTICE MOSES: Do we know how much they are?

MR GRANT: I do, I have a costs schedule, it is a summary costs schedule without too much detail, but they are just under £24,000, including -- well, there should be no VAT, £24,000.

MRS JUSTICE DOBBS: Has Mr Smith been shown this?

MR GRANT: No, I am afraid he has not, my Lady.

MRS JUSTICE DOBBS: Well, he ought to be given a copy.

MR GRANT: He should be. In any event, I have noted there is an error because the bill should not have VAT on it because the claimant is VAT registered and should be able to reclaim that. My Lords, I have copies.

My Lords, I confess I have not had a detailed breakdown from my instructing solicitor on these costs, but just to assist what I do know about the costs bill. The cost bill is certainly higher than one would expect for an application such as this and there is no doubt that this cost bill includes an element of a learning curve, because this was a novel claim in the process. The briefing for counsel includes both this hearing and the lengthy hearing before Hooper LJ.

MRS JUSTICE DOBBS: Which involved two other parties.

MR GRANT: Indeed, and the preparation of quite detailed skeleton arguments for that, but not so much for this claim.

LORD JUSTICE MOSES: Or it can be taxed.

MR GRANT: Or it can be taxed. I was also asked by my clients to travel to Wales to have a conference there. The defendant might ask whether that is usual or necessary.

LORD JUSTICE MOSES: What do you want to say about the costs?

MR SMITH SENIOR: Perhaps I could -- I don't know if this a good thing or a bad thing, but the South Wales Fire Service have chosen to take Anthony to court, in their own words, to use this to prevent this happening again, and I understand that fully. But to ask Anthony to pay for that as well for them to achieve what they want, among everything else, I think is perhaps asking an awful lot, bearing in mind also that the fact that he admitted this and from our point of view, although I don't understand the legal system behind all of this, but from our point of view he admitted this some time ago and it could have been dealt with then in a local court and I presume --

LORD JUSTICE MOSES: I do not think so; that was the problem.

MR SMITH SENIOR: Yeah, you know, the sentence could have been set down then.

LORD JUSTICE MOSES: Yes.

MR SMITH SENIOR: And as the lawyer said, as far as travelling up to Wales for a conference, I think perhaps with today's technology is asking a bit too much.

LORD JUSTICE MOSES: We shall order some costs, but we think that the whole system is vastly overburdened. People need to think of some way of taking Mr Smith, the father's, point of dealing with it speedily and locally when this sort of matter comes to light. Of course, this case has served a very important public function, so Mr Grant on behalf of the South Wales Fire and Rescue Services tells us, but that is really nothing to do with Mr Smith. We think he ought to pay some costs, so what we are going to say is you should pay £1,000 towards the costs.

MR SMITH SENIOR: My Lord, could I just ask one other question, please?

LORD JUSTICE MOSES: Yes, certainly.

MR SMITH SENIOR: Could we have some sort of assurance maybe from the South Wales Fire Service that there is a line drawn under this now from their point of view, because Anthony has lost so many, had so many sleepless nights and worry over this.

LORD JUSTICE MOSES: Provided he pays the £10,000 within the next 24 months and £1,000 costs, that will be the end of it.

MR SMITH SENIOR: Will that be an assurance from the Fire Service as well?

LORD JUSTICE MOSES: Well, I cannot think that they -- you cannot force them to say anything publicly.

MR GRANT: I am not authorised to give the assurance, but I can foresee --

LORD JUSTICE MOSES: I cannot foresee -- this would be a line drawn under it today.

MR SMITH SENIOR: Thank you.

LORD JUSTICE MOSES: And I mean you are absolutely right, he has got to be allowed to get on with his life.

Thank you very much.