Nield & Anor v Loveday & Anor

SIR ANTHONY MAY: Mr Justice Keith will give the first judgment.

MR JUSTICE KEITH: One of the reforms introduced following Lord Woolf's proposals for the streamlining of civil proceedings was the requirement for various documents to be verified by a statement of truth. The sanction for verifying as true a statement in a document which was false without an honest belief in its truth is contempt of court. There have occasionally been proceedings for that sort of contempt, but this is the first time, so we have been told, that a contested case of contempt over statements in documents to be used in civil proceedings has come before the Divisional Court. The case reflects what may be the desire of insurance companies to crack down on litigants who they believe are trying to con them out of thousands of pounds.

The case comes about following an unexceptional road traffic accident. The first defendant, Graham Loveday (who is known as Jeff because Jeffrey is his middle name), was injured in it. He brought proceedings in the county court against the first claimant, Edward Nield, who was the driver of the other car. Mr Loveday is said to have inflated his claim by grossly exaggerating the extent of his injuries. The three documents which contain statements of truth falsely verifying his injuries, in whose truth he is alleged not to have had an honest belief, were his particulars of claim, a schedule of loss and his witness statement. Mr Loveday’s wife, Susan Loveday, the second defendant, is said to have assisted her husband in what is claimed to be his deception by making an untruthful statement of her own corroborating Mr Loveday's account of the effect of his injuries on his life. That statement contained a statement of truth from her verifying its contents. She has recently admitted contempt of court on the basis that when she signed the statement of truth, she knew that some of the things she was confirming in the statement were either not true or no longer true. Mr Nield and his insurers, the second claimant, Acromas Insurance Co Ltd(“the insurers”), took the view that it would be a disproportionate use of the court's time for each and every allegation of contempt against her to be litigated, and they have therefore accepted the basis on which Mrs Loveday admitted her contempt. Accordingly, they ask the court to decide the appropriate sanction for her contempt on that factual basis.

Mr Loveday does not dispute that at least some of the facts that he verified as true had ceased to be true at the time he verified them. He acknowledges that he would have realised that they were false had he known what he was purporting to verify. His case is that he did not know what he was purporting to verify, as he verified the relevant documents either without reading them at all, or without reading them sufficiently. There is medical evidence which is said to lend support to the suggestion that the depression which he was suffering from at the time, could well have made him sign documents of the kind he did sign without reading them through beforehand. On the other hand, the critical document he signed was his witness statement, and that was apparently annotated by him. He originally claimed in his defence that his wife had annotated it. He subsequently admitted in a witness statement that the annotations had been made by him after all. In his oral evidence, he acknowledged that the annotations looked a bit like his handwriting, but he could not say whether he had in fact made them, because he could not remember whether he had done so or not.

With that introduction I turn to the relevant facts, though since para. 2 of the Practice Direction supplementing Ord. 52 of the Rules of the High Court required the claim form to identify separately each of the alleged acts of contempt, the untruths which Mr Loveday is alleged to have told must be limited to those set out in the claim form. While I am referring to rules of procedure, I should identify the rules in the Civil Procedure Rules which require certain documents to be verified, and which provide for a false verification to constitute a contempt of court. Rule 22.1(1) provides (so far as is material):

Rule 22.1(4) provides (so far as is material):

Rule 32.14(1) provides:

As Sir Richard Scott V-C (as he then was) noted in Malgar Ltd v R.E. Leach (Engineering) Ltd [2000], C. & P. Rep. 39, this did not make any change to the law of contempt, and it was still necessary for it to be shown that in addition to knowing that what you were saying was false, you had to have known that what you were saying was likely to interfere with the course of justice. The standard of proof, of course, in respect of each of the elements of contempt, is proof beyond reasonable doubt, the burden of proof of that being on the party who is bringing the proceedings for contempt.

The accident which gave rise to these proceedings took place on 1 April 2006. Mr Nield drove his car out of the forecourt of a petrol station into the path of Mr Loveday's Landrover Discovery, which was passing at the time. Liability was promptly admitted by Mr Nield's insurers, but what remained in issue were the extent of Mr Loveday's injuries, whether they had been caused by the accident, and the extent of his consequential loss.

Proceedings were eventually issued by Mr Loveday against Mr Nield in Basingstoke County Court on 13 March 2009. The particulars of claim were verified by a statement of truth signed by Mr Loveday on 3 March 2009 in these terms:

It said that prior to the accident, Mr Loveday had been working as a driver at Evans Logistics. He had injured his hand about 10 months before the accident and had been off work during that time. However, his GP had recently certified him as fit to return to work, and he had started to work for Evans Logistics again on the day of the accident. Indeed, it was on his way home from work, after preparing for the next day's driving, that the accident had occurred. His salary had been agreed that day with Keith Evans, Evans Logistics' director, at £25,600 a year.

Mr Loveday's witness statement in support of his claim was verified by a statement of truth which he signed on 7 August 2009 in these terms:

It referred to an injury to his back in 1997, but it said that his condition had improved relatively quickly, and Mr Loveday believed that he had made a full recovery from it. As for how he felt in the immediate aftermath of the accident, Mr Loveday said that after a fortnight he was getting pain in his lower back. He had tried going to the dentist for treatment for other injuries sustained in the accident, but the pain (presumably the back pain) was so serious that he could not sit through the sessions long enough to get proper treatment.

The important part of his witness statement for present purposes related to how he was in August 2009 when he signed his witness statement. He said that when he went out, he had to use a wheelchair if he was going any distance. He relied fully on his wife to help him to get both indoors and outside. The pain was such that he could walk virtually no distance at all, and he struggled with any stairs or steps. His wife had to help him with the stairs at home, which meant that she had to take him up to bed every night. Other than that, he did not go upstairs anymore. There were a number of steep steps from the street to their front door. His wife had to help him up and down those as well. His wife had become his full-time carer. Indeed, she would not leave him at home on his own, not even to go to the supermarket. In fairness to Mr Loveday, it should be added, in case it was thought that Mr Loveday was saying that Mrs Loveday believed that he could not cope on his own, that that was not what Mr Loveday was saying. Although not stated in the claim form, what Mr Loveday was saying was that Mrs Loveday did not want to leave him on his own because she feared that he might take his own life, so depressed was he over what had happened to him.

Mr Loveday talked in his witness statement of the other ways his back pain had affected his life. He had developed a fear of travelling which he described as "absolutely crippling". The prospect of having to go in a car filled him with such dread that he would become violently ill. He would do anything to avoid going out, particularly in a car. "I just want to be locked up safe at home", he said. He would not accompany his wife to the shops, even though Motability scooters were available at their local shopping centre. He was no longer able to work on cars or rebuild engines which he loved doing before his accident, and he and his wife could no longer go caravanning. Finally, he referred to a holiday which he and his wife had had on Lake Garda at the holiday home which friends of theirs had the use of. He spoke of managing the journey there on 23 May 2009 only with great difficulty. When they had arrived at the airport, he had been put in a wheelchair and taken straight through. He had been the first on the plane and the last off it. However, since getting home on about 3 July 2009, he had found things extremely difficulty. He summarised things in this way:

Mrs Loveday's witness statement in support of her husband's claim was verified by a statement of truth which she signed on 7 August 2009 in these terms:

It is inappropriate to set out in detail all the passages in that statement which are alleged to be false in view of the insurers’ acceptance that the particular lies which Mrs Loveday has admitted in her amended defence should form the factual basis for determining the appropriate sanction for her admitted contempt of court. Para. 6 of her amended defence which was filed on 21 June 2011 reads (so far as is material) as follows:

I have not relied on these admissions when considering the insurers’ case against Mr Loveday.

The insurers were sceptical about the impact of Mr Loveday's injuries on his life, and they commissioned private investigators to conduct covert surveillance on Mr Loveday, even before he issued his proceedings. He was the subject of surveillance on a total of 11 days in February 2008, and January, April and July 2009. We have been provided with both summaries and DVDs of that surveillance, but the DVDs have been edited to a single DVD of just under an hour, so that we could focus on the parts of the footage where Mr Loveday is said to have been the most active. I have viewed the whole of that footage. I shall have something more to say about it shortly, but it shows that Mr Loveday was very far from being the housebound invalid he was claiming to be.

The records on Mr Loveday kept by his GP had been disclosed to the insurers by the time they formally responded to Mr Loveday's particulars of claim. A close examination of them showed that Mr Loveday had been suffering from sciatica before the accident, and that caused the insurers to suspect that Mr Loveday had dishonestly minimised its extent in order to pretend that his back pain was exclusively attributable to the accident, and that he had dishonestly attempted to attribute to the accident a deterioration in his sciatica which had occurred many weeks after the accident. Also disclosed to the insurers had been a letter purportedly written by Mr Evans confirming that Mr Loveday had started to work for Evans Logistics again as a class 1 heavy goods driver on 1 April 2006 at a salary of £25,600 a year. The insurers suspected that the letter had been forged to bolster Mr Loveday's claim for loss of earnings, and that Mr Loveday had not returned to work that day at all.

All these allegations were included in a counterschedule and counterclaim dated 17 October 2009, which was served along with copies of the DVDs on Mr Loveday's then solicitors, Shoosmiths, a few days later. The insurers acknowledged that Mr Loveday might have sustained some temporary soft tissue injury, and they were prepared to re-open an offer originally made to Mr Loveday in November 2006 to settle his claim by a payment to him of £1,850.00, together with £1,574.75 towards his legal costs. But in addition, the insurers counterclaimed for a declaration that Mr Loveday's claim was “contaminated by ‘spectacular dishonesty’ in that he had set out to perpetrate a ‘manipulation of the civil justice system on a grand scale’”, and for his claim to be struck out as an abuse of the court's process. They also put Mr Loveday on notice that permission to commence committal proceedings for his contempt of court would be sought.

Mr Loveday accepted the insurers’ offer, but the sums of £1,850.00 and £1,574.75 were by consent ordered to be set off against Mr Loveday's liability to pay the insurers’ costs of the action from 26 November 2006 (which I assume to be three weeks after the original offer had been made to Mr Loveday), such costs to be assessed on an indemnity basis, if not agreed. Shoosmiths were permitted to come off the record as acting for Mr Loveday, and on 8 October 2010, permission to proceed with proceedings for Mr and Mrs Loveday's committal for their contempt of court was given by the Divisional Court, on the basis that there was a strong prima facie case against them, and that it was in the public interest for such proceedings to be brought.

I turn to whether the facts which Mr Loveday verified were false. I preface what I have to say about that by saying something about Mr Loveday himself. He is now 54 years old, having worked as a heavy goods vehicle driver for much of his working life. He and Mrs Loveday married in 2000. He has a number of children from a previous marriage. He has only one previous conviction, and that was for an offence of what he described as “drink/driving”, which I take to mean driving a motor vehicle at a time when the proportion of alcohol in his blood exceeded the prescribed limit. I have factored into my consideration of where the truth lies the fact that the absence of any previous convictions for dishonesty is something which Mr Loveday can rely on when it comes to his credibility. Moreover, the fact that this was his only previous conviction means that what he is alleged to have done is very much out of character, and that is also something which he can rely upon when it comes to whether he is likely to have behaved in the way he is alleged to have done.

I deal first with Mr Loveday’s claim to have returned to work on 1 April 2006. There are five things which together are said to show that this claim was untrue. First, the letter which purported to have been written by Mr Evans, and which was generated by a word processor rather than printed on Evans Logistics’ printed notepaper, did not have a contact telephone number. Secondly, Mr Evans spelt his first name unusually (K-I-E-T-H, not K-E-I-T-H), and the same unusual spelling appeared in Mr Loveday's own CV when naming Mr Evans as a referee. Thirdly, Mr Evans is not available to confirm that the letter is his. At any rate, his whereabouts are not known, because Mr Loveday says that Mr Evans has moved and he does not know where he has gone. Fourthly, on 20 March 2006, Mr Loveday's GP, Dr Mark Goodwin, informed the insurance company which Mr Loveday had mortgage protection insurance with that Mr Loveday could not return to his usual work as a fitter, welder and lorry driver. He was capable of only “lighter non-physical work”. It is said to be unlikely that Mr Evans would have employed him again as a heavy goods vehicle driver in the light of that letter. Fifthly, Mr Loveday has not produced any other documents to show that he had ever worked for Evans Logistics, let alone that he had started working for Evans Logistics again on 1 April 2006.

I am sure that the letter which was purportedly written by Mr Evans is a forgery. I know of no-one with the name Keith who spells his name K-I-E-T-H, and I should know. Mr Evans would not have written a letter in which he mispelt his name, and which prevented someone from getting in touch with him easily by omitting his telephone number. Indeed, although Mr Loveday claims that he saw Mr Evans prepare the letter and seal it, I am sure that it was typed by whichever of the Lovedays it was who typed Mr Loveday's CV. The same error in his CV over the spelling of Mr Evans' name is too much of a coincidence.

But it does not follow that just because Mr Loveday was prepared to rely on a forged letter, he must therefore never have worked for Evans Logistics, or not have started to work for them again on the day of the accident. It is not unknown for someone to bolster an honest case which they think they may not be able to establish because of the absence of corroborative evidence with bogus documents. Nor do I regard Dr Goodwin's letter to the insurance company as particularly significant. Mr Loveday may well have been downplaying his ability to return to work in order to get the insurance company to continue to fund his mortgage repayments. The absence of any documents showing that Mr Loveday had previously worked for Evans Logistics would have been surprising if it had been apparent before Mr Marcus Grant opened the insurers’ case yesterday that the insurers’ case was that Mr Loveday had never worked for Evans Logistics. In fact, its case in the claim form was only that he had not started to work again for Evans Logistics on 1 April 2006. The supposed disappearance of Mr Evans is suspicious, but it has not been suggested that the road Mr Loveday was driving on at the time of the accident was not between Evans Logistics' yard and Mr Loveday's home, or that he was driving in the wrong direction for someone who was driving home from work. All in all, I am not sure that Mr Loveday's claim to have started work again for Evans Logistics on 1 April 2006 was untrue.

I turn to the injury to Mr Loveday’s back in 1997. It will be recalled that Mr Loveday claimed in his witness statement that the problem had improved relatively quickly, and he believed that he had made a full recovery from it. The insurers originally said that that was untrue. He had continued to have sciatica, i.e. lower back pain, for some time, and they originally claimed that he had lied about it in order to attribute his back pain to the accident. Their case was that Mr Loveday had also tried to conceal his sciatica from Dr Y.A. Patel, a medico-legal specialist who prepared a report on Mr Loveday on 26 May 2006. Dr Patel reported Mr Loveday as having told him that he had been fit all his life and had had no cervical spine problems.

The claim that Mr Loveday had had sciatica for some time was said to have been borne out by a number of statements made by Dr Goodwin after Mr Loveday's accident. First, on 21 August 2006, Dr Goodwin wrote to an orthopaedic specialist that Mr Loveday had had “many years intermittent back pain with 10 yrs plus degenerative lumbar spine". Secondly, on 31 October 2006, Dr Goodwin reported to the Department of Work and Pensions, which was considering Mr Loveday's application for a disability living allowance, that Mr Loveday had had severe sciatica since injuring his hand at work in 2005, and referred to “extensive degenerative spine". It is noteworthy that Dr Goodwin did not link the sciatica or the degenerative spinal condition to any car accident. Thirdly, on 4 April 2007, Dr Goodwin wrote to a neurological specialist referring to Mr Loveday's “chronic low back problem”. As a result, his mobility in the past 18 months (i.e. since six months before Mr Loveday's accident) had been slow and limited. He was said to have been "in some back pain all day”. Again, the back pain was not linked to any car accident.

It therefore looks as if Mr Loveday had had back pain for years, and if what Dr Goodwin was saying is anything to go by, it had got worse prior to the accident. That is borne out by an examination of the records of Mr Loveday's previous GP, which was an exercise conducted by Mr Keshav Singhal, a consultant orthopaedic surgeon who prepared a report on Mr Loveday dated 13 August 2007. He noticed that Mr Loveday “had been having back pain since 1997”, that at that time X-rays had revealed degenerative changes, and that when Mr Loveday was referred to a consultant orthopaedic surgeon in August 2006, i.e. after the accident with Mr Nield, a history of intermittent back pain had been noted. The question when this hearing commenced, therefore, was whether Mr Loveday had been lying when he had claimed in his witness statement that he had made a full recovery from his back injury in 1997. The insurers now accept that they can no longer prove that he was lying about that, and accordingly this aspect of the insurers’ claim is no longer proceeded with. I can understand that concession. Mr Singal's report revealing his previous history of back problems had been attached to his particulars of claim, and it therefore would have been difficult for the insurers to prove that Mr Loveday had deliberately set out to suggest otherwise.

From Mr Loveday’s pre-existing sciatica, I turn to his claim in his witness statement that a fortnight after the accident, he was getting pain in his lower back. There is some evidence that in the early part of August 2006, Mr Loveday sustained an injury which aggravated his pre-existing sciatica. On 15 August 2006, he saw Dr Goodwin who noted:

That is to be contrasted with the absence of any complaint by Mr Loveday about back pain in the immediate aftermath of the accident.

Four points can be made. First, Mr Loveday did not complain of back pain at either of the hospitals he was taken to on the day of the accident. Secondly, although Dr Goodwin noted on 3 April 2006 that Mr Loveday was saying that he had injured his back in the accident, neither then nor on any of the other five occasions on which Mr Loveday saw Dr Goodwin or Dr Goodwin's locum prior to 15 August 2006 did he complain of back pain. The only possible exception to that was a reference in Dr Goodwin's note of 16 May 2006 to "spinal nerve root of cervical spine", which was something other than the lumbar problem he complained of in relation to his lower back. Thirdly, when Dr Goodwin referred Mr Loveday for physiotherapy on 16 May 2006, he did so because of an injury to Mr Loveday's neck, which was likely to have been a whiplash injury. The only document from the physiotherapist shows that he was treating Mr Loveday for “cervical spine dysfunction”. Fourthly, Dr Patel's report referred to "a whiplash producing an injury to the cervical spine", but there was no reference in his report to Mr Loveday complaining of back pain. Indeed, he noted that on examination there was no tenderness of the lumbar vertebrae. Mr Loveday's claim in his evidence that he had been in pain when Dr Patel had examined him, and that for some reason Dr Patel had not referred to that in his report, does not ring true at all.

The absence of any reference to back pain prior to the occasion in early August 2006 when Mr Loveday experienced intense lower back pain as a result of lifting something suggests that such back pain as he continued to suffer thereafter was attributable to that incident, which then aggravated his pre-existing sciatica, rather than to the accident with Mr Nield. I am sure that his claim in his witness statement that after a fortnight he was getting pain in his lower back was untrue, as was his claim in the particulars of claim that the injuries he sustained as a result of the accident included an injury to his lower back. Indeed, Mr Loveday himself acknowledged that he was hardly in a position to say whether his back pain had been the result of the accident. He was at pains to say in his evidence that he did not know one way or the other whether his back pain had been caused by the accident, even though the particulars of claim averred that expressly, and all the things he had said about his current condition in his witness statement proceeded from that premise.

I come finally to the extent of Mr Loveday’s infirmity at the time he signed his witness statement. In it he painted the picture of a housebound recluse who was virtually immobile and who had developed a chronic fear of travelling. The footage obtained from the covert surveillance of him suggests otherwise. At no time was Mr Loveday seen in a wheelchair. He was always able to walk, sometimes slowly and with a rolling gait, which suggested that he was suffering some discomfort from his sciatica, but at other times without any apparent problem. Sometimes he used a walking stick, sometimes he just carried it, and sometimes he did not have one at all. When he was using it, he sometimes had it in his right hand, and sometimes in his left. But his claim that he could walk virtually no distance at all, and that he had to use a wheelchair if he was going any distance, was contradicted by the footage. There was nothing to suggest that he struggled with steps or stairs. The footage showed him only going up one step before he disappeared from view as he approached his home, but he gave no appearance of struggling with it.

The same goes for Mr Loveday's claim about his reliance on his wife. At no time was she seen helping him, whether going indoors or coming outside, but more significantly, there was nothing to suggest that she was looking after him in the way a carer does. There were times when he was seen out and about without her. There were times when she left him on his own while she drove off. Indeed, on one occasion, he spent a good deal of time without her when he went to what looks like a lock-up. The footage shows him with a boiler suit on bending down at times to work on a car. Mr Loveday claimed in his evidence that he was just sitting by the door and offering advice. All I can say is that that was not how it looked to me, and it contradicted Mr Loveday's claim that he could no longer work on cars.

There was also footage showing Mr Loveday going with his wife on 14 April 2009 to B & Q. That footage is important for three reasons. First, it shows Mr Loveday accompanying his wife to the shops, despite his claim that he would not do that. Secondly, it shows that he drove the two of them there. Indeed, there are many instances on the footage of Mr Loveday driving. For example, on 25 January 2009, he drove for two hours without a break to a caravan park in Gloucestershire, which itself contradicted his claim that he could no longer go caravanning. Thirdly, the footage of Mr Loveday visiting B & Q gives absolutely no hint of the agoraphobia which his witness statement talked of. Again, it was one of a number of occasions when he was seen out and about without displaying any anxiety or concern.

At one time, it looked as if Mr Loveday's visit to B & Q might have had a wider significance. One of the things which Mr Loveday bought at B & Q was a paint roller. Why did he do that? There is evidence that Mr Loveday did some DIY himself. It comes from Saundra Fields. Her son and the Lovedays’ daughter were together for a time and had two children. But Mrs Fields has fallen out with the Lovedays, and there is no love lost between them. She may have had an axe to grind and her evidence has to be seen in that light, but she did say that Mr Loveday did a lot of work when he and his wife moved to a new house in 2006, and again when they moved home a year or so later. Having said that, parts of Mrs Fields’ evidence were based on what others had told her, as well as on what she had assumed, rather than on what she had seen for herself. For my part, I was by no means convinced that Mrs Fields could be trusted to get her dates quite right. I have no doubt that she believes that Mr Loveday was doing DIY, but she did not say that she was aware of him doing any DIY in April 2009 when he brought the paint roller at B & Q, and I have decided to put her evidence to one side.

There is one other point which arises from Mr Loveday's visit to B & Q on 14 April 2009. He drove there at midday, having previously gone to the dentist. That day happened to be the day when his solicitors had informed the insurers that Mr Loveday could not see the psychiatrist who the insurers wanted Mr Loveday to be examined by because he had a hospital appointment that day. The insurers say that that was a lie, and that he was trying to get out of being examined by the psychiatrist for fear that his deception would be uncovered. Mr Loveday's evidence was that his hospital appointment had been cancelled, which was why he went to the dentist instead. I am sceptical about that, but I cannot say that it cannot be true.

The surveillance footage shows that much of what Mr Loveday had to say about his infirmity at the time he signed his witness statement was false. His explanation is that much of it had been true in the past, but that when he had told Ms Gillian Jones, the solicitor at Shoosmiths who was handling his case, when they met at his home on 7 July 2009 about his infirmities, she had not appreciated that there had been a considerable improvement in his position, and that he had been talking about the past. That would have been quite a serious mistake for a solicitor to have made. From what we have seen of the correspondence and the care with which Ms Jones explained things to Mr and Mrs Loveday, that does not look to me as if it was the sort of mistake she would have made. Mr Robert Craven for Mr Loveday said that Ms Jones could well have got the wrong end of the stick about what Mr Loveday was saying. After all, she was at times under the impression that Mr and Mrs Loveday had gone to Alicante rather than Lake Garda for their holiday. But when Mrs Loveday had first told Ms Jones of their intention to take a holiday, she had mentioned Alicante, and if that was the only mistake Ms Jones made, it does not amount to very much.

Having said that, there was one other false claim in Mr Loveday's witness statement which cannot be put down to Mr Loveday and Ms Jones getting their wires crossed. That related to Mr Loveday's account of how he and his wife travelled to Lake Garda. It will be recalled that Mr Loveday claimed to have travelled by air. He made quite a point in his witness statement about how accommodating the personnel at the airport had been for a man who had to use a wheelchair. Not long ago, the insurers came to know of some photographs taken of Mr and Mrs Loveday during their holiday. They had been posted on Facebook. They show Mr and Mrs Loveday in a relaxed and happy mood, but one of the photographs stuck out. It was of Mrs Loveday standing by what looks like a Landrover Discovery with a caravan attached to it. It transpired that Mr and Mrs Loveday had not travelled to Lake Garda by air at all. They had gone overland by car, and Mr Loveday had done all the driving, both there and back. So how did this talk of them going by air get into Mr Loveday's witness statement? Mr Loveday's evidence was that they were originally going to travel by air, but that their plans changed when one of their friends had a bereavement. He said that he was pretty sure that he had told Ms Jones before they went to Lake Garda that they were changing their plans, presumably that they were now going overland. I am afraid that I do not believe a word of it. If Mr Loveday had told her that, it is inconceivable that she would have prepared a draft of his witness statement which included the following passage:

That description had to have been given to Ms Jones after the holiday, not before it. When you remember that she saw the Lovedays in their home to take their instructions to prepare their witness statements a few days after they had returned from Lake Garda, it is obvious that that was what Mr Loveday was telling her. Indeed, that is borne out by what Mrs Loveday was to tell Ms Jones, Dr Goodwin and Dr Renée McCarter, a consultant neuropsychologist who saw Mr Loveday on Ms Jones' instructions. Ms Jones' attendance note shows that she spoke on the telephone to Mrs Loveday on 3 July 2009, shortly after they returned from Lake Garda. She told Mrs Loveday that the insurers wanted Mr Loveday to meet their expert in London, rather than for the expert to visit Mr Loveday in his home, on the basis that if he had been able to travel abroad, he was able to get to London. Ms Jones' attendance note continued:

There is an element of ambiguity here. Mrs Loveday might have been confirming that Ms Jones had accurately described how they had managed things at the airport, but she might just have been confirming that it was too difficult to get Mr Loveday to London. However, even if it was the latter, Mrs Loveday does not dispute Ms Jones' understanding of what had happened at the airport. The attendance note shows that Ms Jones then advised Mrs Loveday to get a letter from Mr Loveday's GP confirming that it would not be appropriate for Mr Loveday to travel to London. That is what Mrs Loveday did, because the same day Dr Goodwin wrote an open letter in which he said:

For Dr Goodwin to have written that, Mrs Loveday must have failed to tell him that their plans had changed, and that they had travelled overland instead.

Finally, when Dr McCarter visited the Lovedays at their home on 16 July 2009, less than two weeks after their return from Lake Garda, Mrs Loveday told Dr McCarter that getting Mr Loveday to the airport for the holiday had been extremely difficulty. Mr Loveday was there at the time, and he does not dispute that that was what his wife told Dr McCarter, though to be fair he could not confirm it either. There is no reason to think that Dr McCarter got the wrong end of the stick. So if Mrs Loveday was lying in Mr Loveday's presence to Dr McCarter about them having flown to Lake Garda, having previously failed to correct Ms Jones' impression that they had indeed flown there, and having previously failed to tell Dr Goodwin about their change of plan, it all rather suggests that Mr Loveday had been lying in just the same way to Ms Jones a week or so earlier.

Since I have concluded that many of Mr Loveday's claims in his witness statement were false in the respects which I have identified, I turn finally to whether he knew of their falsity. That has two elements. Did he know what his witness statement said? If he did, did he know that what it said was false in the respects I have identified? Whether he knew what his statement said depends on whether he read it. He says that he did not. When it arrived, he just threw it “in the corner”, along with anything else that his condition made him not want to read. It is necessary to put that part of Mr Loveday's evidence into context. Ms Jones went to Mr and Mrs Loveday's home to take their detailed instructions for their witness statements on 7 July 2009. Her attendance note said that she spent four hours with them, and thereafter one hour drafting the attendance note, five hours drafting Mr Loveday's witness statement, and two hours drafting Mrs Loveday's. Her attendance note shows that she thought that Mr Loveday was “really unwell”. She described him as having been “in considerable pain” throughout the interview, and said that he “regularly had to adjust himself and try and move”. Mrs Loveday had to bring him painkillers to easy his pain. When he needed to get up, he could not do so without the assistance of Mrs Loveday and a stick. He struggled to walk at all. Ms Jones thought that he was “exceptionally depressed”.

This description of Mr Loveday does not sit comfortably with the recent photographs of Mr Loveday on Lake Garda looking relaxed and happy, nor with the surveillance footage of him over three days on 28-30 July 2009 when he and his wife took their caravan to the Isle of Wight and camped at a caravan park. Mr Loveday was at his most active on these three days when compared with the other occasions when he was filmed. The conclusion, I am afraid, is inescapable that he was putting on an act for Ms Jones, and that she fell for it, just as he had been putting on an act for Dr McCarter, if her description of his presentation to her on 16 July 2009 is anything to go by.

Two days after her visit to the Lovedays, Ms Jones wrote separately to Mr and Mrs Loveday enclosing the witness statements she had drafted for them. That was on 9 July 2009. Mr Loveday sent his back to her with 43 of the 151 paragraphs in it having been annotated and corrected by hand. Each page of the statement bore his initials. Mr Loveday claimed not to be sure whether those annotations had been written by him. He would only say that it was possible that it was his handwriting, though he was to admit that some of the annotations contained information which could only have come from him.

Ms Jones' letter to Mr Loveday of 9 July 2009 asked him for his instructions on a particular entry which she had seen in his medical records and on two letters in his medical file. Mr Loveday replied on 17 July 2009. He admits having signed that letter, but it was unclear to me when he gave his evidence whether he was actually admitting that he wrote it. I am sure, though, that he did. Once again, it contains information which only he would have known about. The important thing about the letter is how detailed and focused it was. It was not the sort of letter which a man who was burying his head in the sand, and who was refusing to engage with his solicitors, would have written.

That brings me to the witness statement which Mr Loveday signed on 7 August 2009, and which contained the critical statement of truth. Mr Grant confirmed to us that, apart from giving effect to the annotations in the first draft, and apart from a total of 18 additional paragraphs earlier in the statement addressing in part the instructions which Mr Loveday had given in his letter of 17 July 2009, there were no changes to that part of the witness statement which was sent to Mr Loveday for his approval relating to his current condition. When it was returned, it had been annotated in eight places in what looks like the same handwriting, which to the untutored eye is different from Mrs Loveday's handwriting (an example of which is at pages 278-279 of the trial bundle), though since I am not a handwriting exert, I have put those considerations to one side entirely. As I said earlier, Mr Loveday originally claimed in his defence of 7 January 2011 that these annotations had been made by his wife. In a witness statement which he made on 2 March 2011, he admitted that the annotations had been his after all, but in his oral evidence yesterday, although he acknowledged that the annotations looked a bit like his handwriting, he could not say whether he had made them, because he could not remember whether he had done so or not.

I am sure that the annotations were his. He did not explain why he had admitted that the annotations were his in the witness statement he had made on 2 March 2011, if he really is unsure whether they were his. But more importantly, I am sure that the annotations in the original draft of his statement were his, if only because so many of them were based on information which only he would have had. If he had annotated the original draft, there is no sensible basis on which one could argue that he did not annotate the final draft. Since it was he who annotated the final draft, he must have read it through beforehand. I do not believe him when he says that he just threw it “in the corner”. I am sure that he read it and absorbed it sufficiently to correct it where he thought it needed correcting. Indeed, in his defence of 7 January 2011, he said that he had signed it “without thoroughly reading it”, which suggests that he was admitting that he had read it, albeit not thoroughly. It was not as if he could not have known how important the statement of truth was. In her letter of 9 July 2009, Ms Jones had written:

Mr Craven said that the fact that Mr Loveday signed his witness statement of 2 March 2009 is significant in this context. That statement contained obvious inaccuracies, and if he had not read that through properly, what does that tell you about whether he had read through the witness statement of 7 August 2009 properly? But that does not deal with the annotations. Even if he had not read it thoroughly, the fact remains that he must have read the original draft with care to have corrected 43 out of its 151 paragraphs. Since the subsequent draft merely reproduced the original draft, and was only changed to give effect to the corrections which Mr Loveday had wanted to make and to his instructions in his letter of 17 July 2009 without making any changes to what it said about his current condition, it must follow that he would have known what was said in the final draft about his current condition when he signed it.

In concluding that Mr Loveday read through the final draft of his witness statement before he signed it, I have not overlooked the evidence of Dr R.W.K. Reeves, a consultant forensic psychiatrist, who examined Mr Loveday on 25 February 2011. He diagnosed Mr Loveday as having a chronic depressive illness and as suffering from post-traumatic stress disorder. He did not believe that Mr Loveday would have had the sophistication to invent what Dr Reeves called "the very accurate symptomatology” of these conditions. But having reached that diagnosis, Dr Reeves' report concluded as follows:

Dr Reeves' response to these revelations was that they did not affect his diagnosis at all. He did not specifically comment on whether he still stood by his opinion that not reading through the document was "just the sort of thing this man would have done". But even if it was the sort of thing which a man with the conditions which Dr Reeves diagnosed would have done, that does not mean that it was what Mr Loveday did do. For the reasons I have given, I am sure that he did read through the document, and read through it sufficiently carefully to correct it when he thought it needed correcting.

That brings me finally to whether, when Mr Loveday read through the witness statement, he knew that what it said was false in the respects which I have said were false. I am sure that he did. There is no suggestion that Mr Loveday's depression or his post-traumatic stress disorder affected his capacity to know whether what he was signing was true. Anyone reading that statement would have appreciated that when it talked of Mr Loveday's infirmity, it was talking about his current infirmity, not his infirmity in the past. The relevant passage in the statement was preceded by a heading in the statement which read "My Current Position", and the whole of that section was in the present tense.

For all these reasons, I have concluded that Mr Loveday signed the statement of truth on the particulars of claim when he did not have an honest belief in the truth of the false assertion that he was “often reliant on a wheelchair for travel outside the home, as he is unable to walk more than a very short distance”, that he signed the statement of truth on his witness statement of 7 August 2009 when he did not have an honest belief in the truth of the false assertion that a fortnight after the accident, he was getting pain in his lower back, and that he signed that statement of truth when he did not have a honest belief in the following false assertions he made about his condition at the time:

Once Mr Loveday is found to have lied about the extent of his infirmity in his claim for damages for personal injuries, it must follow that he knew that by making the false statements which he did, he was likely to interfere with the course of justice. I would therefore find Mr Loveday guilty of contempt of court in the respects which I have identified pursuant to rule 32.14(1) of the Civil Procedure Rules.

SIR ANTHONY MAY: I agree that the allegations of contempt of court against Mr Loveday are surely established, to the extent which Mr Justice Keith has defined, and for the reasons that he has given. Mr Grant?

MR GRANT: My Lord, now at this stage the insurance company has discharged the legal burden that it had, and it respects the fact that at all times this is a public wrong, not a private wrong, and this point having been established and proven the contempt, I sit down and leave it to my learned friends to make submissions accordingly. Indeed, we are in relatively new jurisdiction on this point, which is why we brought the court's attention to the words of Lord Justice Moses in the very recent decision of Smith. Beyond those words, I have no further submissions to make on behalf of Acromas, unless, of course, the court requires my further assistance on any point.

SIR ANTHONY MAY: Well, it is entirely a matter for you and those instructing you. In some cases, not obviously entirely parallel with this, questions of financial orders arise, and consideration is sometimes given to whether orders in relation to the claimant's costs ought to be made. I understand you are not seeking such an order.

MR GRANT: In respect of that, I should have clarified that I would ask for an order that Mr and Mrs Loveday pay the costs of bringing this action against them.

SIR ANTHONY MAY: That, no doubt, can be considered later. But costs are sometimes considered so as to be linked with any penalty that might be imposed.

MR GRANT: That's correct. What I can tell the court is that as a result of the earlier costs order in the action before Swansea County Court, there is an unpaid bill of costs somewhere of the order of £40,000.

MR JUSTICE KEITH: Have those costs been agreed?

MR GRANT: That would have been made by default, so, yes.

MR JUSTICE KEITH: I see. There is a default order for the insurers’ indemnity costs in those proceedings in a sum of about £40,000.

MR GRANT: Those are my instructions, and there have been no proposals to pay those as yet.

SIR ANTHONY MAY: No enforcement proceedings have taken place?

MR GRANT: No.

SIR ANTHONY MAY: Thank you very much. Who would like to go first? Mr Harris or Mr Craven?

MR CRAVEN: I think I probably ought to, the first defendant. My Lord, firstly on that point about the costs, if Mr Grant meant there has been an actual determination of the costs, I wasn't aware of that. I certainly don't dispute that there has been an order for costs to be paid by the defendants, and, no doubt, it is a very substantial sum.

MR JUSTICE KEITH: I think he was saying that not only has there been an order, but there has been an assessment and default.

MR CRAVEN: Yes.

MR JUSTICE KEITH: And the assessment and default is the sum of £40,000.

MR CRAVEN: Sorry, it was that bit that I wasn't aware of.

MR JUSTICE KEITH: I see. I'm so sorry.

MR CRAVEN: I wasn't aware of that.

SIR ANTHONY MAY: Mr Grant, are you able to confirm that, because it might be that your instructions are that there is an order for costs -- no doubt that's correct -- and that the amount claimed is in the order of £40,000. Has it actually been assessed?

MR GRANT: I am instructed there is a default cost certificate that orders Mr Loveday only to pay the full extent of Mr Nield's costs below, and Mr Nield's costs below exceed £40,000. There has been no assessment of process because the default costs certificate has been obtained. There have been no steps to enforce that order to date.

SIR ANTHONY MAY: Thank you very much. Yes, Mr Craven.

MR CRAVEN: I am grateful for that. I accept that clearly it was going to be a very large sum in any event. It appears from what I am told that there is no immediate prospect of it being paid, nor would there be any reasonable prospect of any further costs order made in these proceedings being paid.

The consequences of these proceedings, and of the result of the personal injury claim, have already been very serious for the defendants, and in particular Mr Loveday. The prospect of this action, these proceedings, have been hanging over them since October 2009. The whole process has been crippling financially for them. Mr Loveday, of course, has lost his job. He has lost his entitlements to benefits. He appears to have lost his house. He has lost his self-respect. He has lost his health and fitness. He has lost his good character. I accept that the authority my learned friend referred to has indicated that a custodial sentence must be considered in cases like this, and I can't realistically suggest that a financial penalty of any significance could be made instead. Of course, the inability to pay a financial penalty should not in itself automatically lead to a custodial sentence.

SIR ANTHONY MAY: No.

MR CRAVEN: But your Lordships know that at least to some extent that Mr Loveday is in poor physical and mental health. Prison would be a physically very harsh place for someone in his condition. He cannot, of course, plead in mitigation any admission of liability, but, of course, contesting the case simply means that there is that absence of mitigation. It doesn't in itself aggravate the penalty which should be imposed.

SIR ANTHONY MAY: Correct.

MR CRAVEN: I do suggest that this, even though serious, is by no means the most serious kind of contempt in falsifying a statement in making a personal injuries claim. Although, as a result of your Lordship's findings of fact, I can't dispute that it has been found that it was a persistent attempt with several different aspects, it wasn't a sophisticated attempt, it wasn't -- I hope I can say this -- one that was all that likely to succeed. Quite apart, of course, from the fact that unknown to them they were being surveyed, and that was going to destroy the claim, there was the fact that there wasn't yet, as I have submitted, any very substantial supporting medical evidence. That was presumably going to be dealt with sooner or later, and it might well have brought an end to the claim.

I don't think, however, that there is a great deal more I can say on behalf of Mr Loveday, except to repeat the fact that his physical and mental health is such that it would be very difficult for him to cope with an immediate custodial sentence, and I therefore ask your Lordships to consider a suspended sentence. My Lords, those are my submissions.

SIR ANTHONY MAY: Thank you very much.

MR JUSTICE KEITH: I have one question for you, Mr Craven, and it relates to Mr Loveday's own costs of his claim against Mr Nield.

MR CRAVEN: Yes.

MR JUSTICE KEITH: He had the benefit of legal expenses insurance, and later on he had the benefit of the after the event insurance.

MR CRAVEN: Yes.

MR JUSTICE KEITH: In the letter which Ms Jones wrote to him, following the disclosure of the surveillance, she referred to the fact that the policies could well be avoided --

MR CRAVEN: Yes.

MR JUSTICE KEITH: -- in which case he would be personally liable for all of Shoosmiths' costs.

MR CRAVEN: Yes.

MR JUSTICE KEITH: Were the policies avoided, and did he become liable for all of Shoosmiths' costs, in addition to the £40,000 or so that he became liable for, the insurers’ costs?

MR CRAVEN: I am sorry, I don't know the answer to that. If I may, I will turn to take instructions, but I think we don't know.

SIR ANTHONY MAY: It would be very helpful to know please.

MR CRAVEN: Yes, I think the fact is that no action has been taken to recover any costs from him, even if there is theoretically such a liability, but may I take instructions? Well, I am told that it certainly appears to be the case that no action has been taken to recover any costs from him. We unfortunately don't know whether they have positively avoided the policy, or whether it was just a threat. It may well be that they have taken the view that further action wouldn't be profitable. I am sorry, I can't say anymore than this.

SIR ANTHONY MAY: Thank you very much. Yes, Mr Harris.

MR HARRIS: In the case of Mrs Loveday, can I first of all identify the mitigating documents that have been put in the trial bundle for use at this stage in the proceedings.

SIR ANTHONY MAY: Can you remind us?

MR HARRIS: My Lord, yes, it starts at page 158 of the third folder, the most recent folder. They consist of seven character references from people that live in the small community of Bryn Corrin(?) and they have known Mrs Loveday for various lengths of times, they refer to in their references. Some are more detailed than others.

SIR ANTHONY MAY: Will you just give us a moment to read these again?

MR JUSTICE KEITH: I am afraid for me, the first time. I haven't looked at them. I knew they were there, but I just hadn't got round to looking at them. So I shall read them now. (Long pause).

MR HARRIS: Thank you.

SIR ANTHONY MAY: Thank you.

MR HARRIS: My Lords, those references go some way to show the regard with which Mrs Loveday is held by those that know her and who live alongside her.

My Lords, can I also clear up one matter that arises from the index to the trial bundle. There is reference there to a report from a general practitioner that your Lordships may have expected to see in the trial bundle just before or just after these character references. The position is there, my Lords, is that it had been intended to put before the court a letter from Mrs Loveday's general practitioner. A letter has been obtained. Unfortunately, it has been prepared by the local practitioner who has not had any real dealings with Mrs Loveday. All it says is that she has been under tremendous strain in the last few weeks and months leading up to the hearing that started yesterday. I hope that that is something that the court would accept without having to have it confirmed by a very brief letter from a general practitioner who effectively does not know Mrs Loveday.

SIR ANTHONY MAY: Yes.

MR HARRIS: My Lords, the submission I make in her case is that there are grounds upon which the court can impose a suspended sentence. I concede, to use the parlance that is sometimes used in the criminal courts, that the custody threshold is passed by the dishonesty that has occurred in this case, on the scale that it has occurred. I don't intend to submit that any contrary sentence other than imprisonment can properly be considered by the court. It is certainly the case that Mrs Loveday is not in a position to pay any financial penalty.

My Lord, the grounds that I submit are of assistance in determining whether this is a suitable case for suspending a sentence of imprisonment are these; the admissions made by Mrs Loveday, not at an early stage, I concede, and I accept, of course, they were made on 21 June in the amended defence that was filed on that date. I cannot say that they were made at an early stage, but it is nevertheless very important that they were made at the stage that they were. What Mrs Loveday has, in effect, done at that point was accept that her witness statement was not truthful. It contained dishonest assertions. Her admissions to that effect are something that can properly be taken into account when deciding the appropriate penalty or sanction in her case.

My Lords, the other factors are these. The first one arises from the sentencing that was done in the case of Smith. Your Lordships have the judgment in that case. That was the case in which there had been considerable delay between the initial contempt of court and further delay following the admission that there had been a contempt of court before the sentencing took place. That was regarded in that particular case as a proper basis for a suspended sentence. In this case, the delay has not been on the same scale, I fully accept that, but there has nevertheless been some degree of delay, which I am not critical of any party for, but has had the effect of producing and causing tremendous strain upon Mrs Loveday.

SIR ANTHONY MAY: Well, the proceedings have taken some time, but I think it is difficult to say that they were delayed beyond that which was likely in the first place.

MR HARRIS: My Lord, I accept that. It is for that reason, I am not critical of any party.

SIR ANTHONY MAY: Smith was at least twice as long as in this case.

MR HARRIS: It was, it was longer. What I describe as delay in this case is the following; it was from the --

MR JUSTICE KEITH: You are really talking about lapse of time, aren't you?

MR HARRIS: I am.

MR JUSTICE KEITH: During that period, probably ever since the day the balloon went up, when Mrs Loveday got the fatal call from Ms Jones that they had been sussed.

MR HARRIS: And that was --

MR JUSTICE KEITH: From that moment on, there would have been worry in the family and concerns for the future.

MR HARRIS: That is the point, my Lord.

SIR ANTHONY MAY: It was October 2009.

MR HARRIS: Yes, my Lord. I say this as well; it is a small community in which Mrs Loveday lives. The proceedings are known within that community, and more generally within South Wales. They have been reported quite considerably. It has brought tremendous shame upon Mrs Loveday, and she is highly conscious of the loss of her good name in that community, that is something that is of significant importance to her.

It goes further than that though, to this extent, my Lords; there has been harm done, damage done within family relations. Mrs Loveday has three children. The eldest daughter has two children, aged 10 or thereabouts. There has been a complete breakdown in the relationship between Mrs Loveday and her eldest daughter, following the commencement of these proceedings. The daughter no longer speaks to Mrs Loveday. Contact with those grandchildren has been stopped, and that's entirely a result of this --

SIR ANTHONY MAY: Is this Stephanie or another daughter?

MR HARRIS: It is another daughter, my Lord, yes.

My Lords, those essentially the submissions I make. It is a case in which I submit that Mrs Loveday is entitled to credit for the admissions that she has made, and that for the other reasons that I have identified, that the court may take the view that this is a proper case for a suspended sentence.

SIR ANTHONY MAY: Thank you very much.

MR HARRIS: My Lord, I am conscious as well that Mr Craven would wish to address the court before sentencing takes place.

SIR ANTHONY MAY: Mr Justice Keith has a question.

MR JUSTICE KEITH: Very often when there are two defendants --

MR HARRIS: Yes.

MR JUSTICE KEITH: -- represented separately, because there may be a conflict of interests --

MR HARRIS: Yes.

MR JUSTICE KEITH: -- it is sometimes said by one of the defendants that the other was more heavily involved in some way.

MR HARRIS: Yes.

MR JUSTICE KEITH: You have not made any suggestion of that kind on behalf of --

MR HARRIS: No.

MR JUSTICE KEITH: -- Mrs Loveday.

MR HARRIS: No.

MR JUSTICE KEITH: I can, of course, understand the reasons for that, because if she were to point the finger at anyone, it would only be at her husband.

MR HARRIS: Yes.

MR JUSTICE KEITH: She would not want to make his position worse than it might otherwise have been. But having said that, one of the things which occurred to me when I read the papers was that this might have been a case in which Mrs Loveday had been presented with a fait accompli by her husband. Her husband had decided to go down this particular road --

MR HARRIS: Yes.

MR JUSTICE KEITH: -- and by the time she was asked to corroborate what he said --

MR HARRIS: Yes.

MR JUSTICE KEITH: -- he had, in a sense, committed them as a couple.

MR HARRIS: Yes.

MR JUSTICE KEITH: That would be some mitigation if it was advanced.

MR HARRIS: Yes.

MR JUSTICE KEITH: As I say, I note that it has not been advanced, but if you were told that anything you said would not be regarded as capable of aggravating Mr Loveday's position --

MR HARRIS: Yes.

MR JUSTICE KEITH: -- but would only be treated as mitigating hers --

MR HARRIS: Yes.

MR JUSTICE KEITH: -- do you wish to take any instructions?

MR HARRIS: My Lord, I would. To do that, I would ask if I could turn my back on the court for a moment.

MR JUSTICE KEITH: Yes, do. But before you do that though, that is something that has just occurred to me, and it may be that Sir Anthony May thinks that that might not be an appropriate course to take.

SIR ANTHONY MAY: Certainly you can take any instructions you like, and you can make any submission that you are instructed to make or think is the right thing to do. Of course you can. I would also go along with the fact that any submission along those lines which you might be instructed to make, would not be taken to aggravate Mr Loveday's position.

MR HARRIS: Yes.

SIR ANTHONY MAY: I would only just like to mention that the possibility that my Lord has suggested does not, to me, leap off the pages we have read.

MR HARRIS: No, I am conscious of that, my Lord.

SIR ANTHONY MAY: I simply mention that.

MR HARRIS: I am conscious that one of the things that the court would have regard to is the level of contact between Mrs Loveday and Ms Jones, and the way in which the claim on behalf of Mr Loveday was being conducted. It can't be said that Mrs Loveday was standing back and letting Mr Loveday get on with dealing with that case.

SIR ANTHONY MAY: We haven't gone into a lot of facts about Mrs Loveday because she made the admission that she did. Do you want us to retire?

MR HARRIS: Yes.

SIR ANTHONY MAY: But by all means take instructions if you wish? Do you want us to retire while we do that?

MR HARRIS: I would be very grateful, my Lords.

SIR ANTHONY MAY: Sorry?

MR HARRIS: I would be grateful.

SIR ANTHONY MAY: Let's do that in a moment. Mr Craven wants to say something.

MR CRAVEN: There was just one further thing I could have said about the liability of costs for the previous action. It is simply something -- I have made a note of this in the past, and I haven't got the letter to hand today. But I made a note that on 6 November 2009, the AA Insurance wrote to Mr Loveday, and they, I think, were the insurers, saying:

"We have been told you have decided to settle. We, as legal expenses insurers, have been seriously misled, and you have breached the policy, so you are personally liable for costs."

So they seem to be repudiating --

SIR ANTHONY MAY: They seem to have repudiated liability. Your understanding is that Shoosmiths have not done anything about it.

MR CRAVEN: That's it, yes. Neither Shoosmiths or the AA Insurance seem to have taken it any further.

SIR ANTHONY MAY: Okay, we will just retire, Mr Harris, for a moment, and let us know when you are ready.

MR HARRIS: Thank you.

MR HARRIS: My Lords, thank you for the time you gave me. I have taken instructions on the point that was raised. It is right that Mrs Loveday did not want me to say anything that made her husband's position any worse for him. What she would say is this; that the initial contact between Mr Loveday and his insurers, his own motor insurers, that subsequently led to the involvement of Shoosmiths came from Mr Loveday.

SIR ANTHONY MAY: Yes.

MR HARRIS: He initiated the legal process in terms of bringing the claim for damages against Mr Nield, but she accepts that she went along as a willing participant then, in the process that he began, in terms of providing the -- she did. She does not say and has not asked me to say that he put undue pressure on her to provide a statement or behaved in --

SIR ANTHONY MAY: If I may say so, that is to her credit. Yes, thank you very much.

Can someone just help us in one respect? Is there anything peculiar to penalties for contempt of court relating to suspending a sentence?

MR GRANT: I can't assist on that.

MR HARRIS: My Lord, not that I am aware of, there is anything peculiar to the --

SIR ANTHONY MAY: There is no doubt that one can suspend the sentence.

MR HARRIS: Yes. My learned friend and I last night were discussing the position regarding the release scheme operation, whether a sentence of imprisonment passed by this court would be dealt with in the same way as a sentence of imprisonment imposed by the criminal court, and we --

SIR ANTHONY MAY: There is specific provision in the Criminal Justice Act in relation to an immediate prison sentence. I am more concerned with a suspended sentence. It has to be suspended on condition presumably, or what? Mr Craven?

MR CRAVEN: My Lord, my understanding is that you get -- first of all it is the court's power to suspend, it would have to be suspended on some kind of decision, although it could be a fairly nominal condition, such as not committing any further contempts or something like that. That is often the case for people who are before the court for breaching injunctions, that the suspension would just be on the basis that no further breaches were made. Finally, the criminal legislation applicable to how the Crown Court can suspend sentences has no applications, as far as I am aware.

SIR ANTHONY MAY: That is what I was thinking.

MR CRAVEN: So the maximum sentence is two years, and as far as I am aware, there is no restriction to 12 months on the length of the suspended sentence. It to can be two years.

SIR ANTHONY MAY: There is no lower point?

MR CRAVEN: Not that I am aware of.

SIR ANTHONY MAY: I'm sure there isn't.

MR CRAVEN: I don't think Mr Grant knows, otherwise no doubt he would say, but I don't think really there are any particular restrictions.

SIR ANTHONY MAY: Thank you very much. We will retire and consider what we are going to do.

I am so sorry. Everyone has stood up. Let's sit down again just for a moment. Mr Craven and Mr Harris, I think it would be a good idea -- I don't know what you think -- if Mr and Mrs Loveday came forward to hear what we are going to say in a minute --

MR HARRIS: Yes, certainly.

SIR ANTHONY MAY: -- and sat together, if that is okay, in one the front two rows. They could sit in leading counsels' row or in front. It is slightly more uncomfortable in the front, but you might like to consider what is the most appropriate thing is. If they want to have somebody like a solicitor or something sitting with them, that would be fine.

MR HARRIS: Thank you very much.

SIR ANTHONY MAY: You can sit down. That is perfectly all right. Mr and Mrs Loveday, I am going to tell you straight away what we are going to do, so you are not kept in suspense, and then you will be able to listen as best you can to what I have to say about why we are going to do what we are going to do. Mrs Loveday, we are not going to impose an immediate prison sentence on you. We are going to impose a fairly short prison sentence which will be suspended. Mr Loveday, I regret we are going to impose an immediate prison sentence. You may not find that entirely surprising, but I am sure you will be upset.

These are our reasons. You have heard the judgment which Mr Justice Keith has just given in your case, Mr Loveday. The court has to decide what penalty to impose for the contempt of court which you, Mrs Loveday, have admitted, and which the court has found surely proved against you, Mr Loveday. I hope that what I am about to say will be as sympathetic as the circumstances allow, but you will understand that Mr Justice Keith and I have a public duty to perform. At the heart of it all is the fact that you both signed as being true witness statements in Mr Loveday's proceedings against Mr Nield, which you knew perfectly well to be untrue, to the extent that you, Mrs Loveday, have admitted, and to the gross, I regret, extent that we have found proved against you, Mr Loveday. Those witness statements, as you also knew perfectly well, were intended for use in your personal injury claim against Mr Nield, with the intention of fabricating a personal injury claim, which in truth was comparatively small, into a large five or six figure claim. That, in the language of the law, was likely to interfere with the course of justice. That, as Sir Richard Scott said in the case of Malgar, which you have heard referred to, is a public wrong, not just a private matter between you and an insurance company. Mr Justice Keith and I have to have well in mind, and you should understand, that telling deliberate lies in court proceedings undermines the fabric of justice, which itself is part of the fabric of society.

Mrs Loveday, we approach your case on the limited basis that you have admitted. Mr Justice Keith referred to it in his judgment, but I shall say it again; you have admitted that your witness statement was untrue in certain respects at the date it was signed, and you admit that you knew that it was not true that your husband required a wheelchair to mobilise, that the description of the level of care provided by you and your son to him was no longer true, that the description of your husband as housebound and reclusive was no longer true, that the description of his phobia to travel by car was no longer true, and the description of his inability to perform day to day activities was no long true.

In your case, Mr Loveday, we have found that those falsehoods in the witness statement and particulars of claim alleged against you, which Mr Justice Keith has identified, not all of them, but most of them, are surely proved, if we may say so now, by overwhelming evidence. The most outstanding example perhaps is the pack of lies about travelling to Italy with huge physical difficulties by air from Swansea, when in fact you yourself drove the Landrover and a newly acquired caravan by road all the way to Lake Garda. The observation logs and video gave the lie to many of the other false statements that you know you made in your witness statement. We have also seen and found established that you told lies to more than one doctor, whose diagnosis and opinion took account of and accepted as true your false account of your physical difficulties. You also, as we have found, forged or had forged a false offer of employment with the very date of the accident, although that has not led to that particular allegation of contempt being found against you for the reasons which Mr Justice Keith gave. It is not, we regret, a happy catalogue.

You will understand, I believe, that if this were a criminal trial, which technically it is not, a defendant who pleads guilty normally gets credit for the courage and remorse which that infers in mitigation of any penalty. By analogy, Mrs Loveday, you do get credit for admitting a substantial part of that which was alleged against you. You didn't do it straight away, but you did do it significantly before the hearing, and we shall mitigate your penalty accordingly.

You, Mr Loveday, have not got that credit, because you did not, as your wife did, admit the contempt which we have found against you. You were eventually constrained to make certain factual admissions, but they did not go on to carry through to admissions of contempt. You should be clear that the fact that you didn't make admissions does not increase the penalty, but there is no basis for a reduction such as we shall accord to your wife. You were fully entitled to defend these proceedings, and the fact that you did so does not count against you. It does not, however, help your case that both Mr Justice Keith and I consider that, having seen you in the witness box, and we regret to say this at this stage, that you attempted unsuccessfully in the event to continue, to an extent, the fabrication in the witness box. We shall have a word to say about Dr Reeves, whose report we take into account in a minute. But our judgment is that you gave, I regret, a bit of a show of staggering to your seat to give evidence, that you pretended not to remember things when your memory is much better than you would have us believe, as your later evidence showed, and that you were, after a while, just as able as we judges are to find your place in the bundle of documents to which you were referred. You also continued your unworthy and untrue blaming of your former solicitor, Ms Jones, for those parts of your witness statement which were, as you knew quite well, untrue. These matters do not increase your penalty, but they don't help to reduce it.

We take account for both of you of our understanding, which we are sure in general is correct, that your lives will have fallen apart since 23 October 2009, when Ms Jones telephoned you to tell you about the surveillance logs and the video. You had no choice then but to settle the personal injury claim on what for you were disastrous terms, and you have since faced these proceedings for contempt for quite a long time, and it must have been a great strain. Your lives which fell apart were, however, in part sustained by lies and false claims, and we note that the Department of Work and Pensions withdrew your disability living allowances which they judged to be falsely claimed. We have not, of course, taken into account their judgment in the factual findings we have made, but it is part of the narrative.

Your incomes are in consequence much less that then were, and the evident falling out with Mrs Fields is probably, as Mr Harris has told us in any event, one manifestation only of lives which have become practically and emotionally destabilised, and we take all that into account.

In your case, Mr Loveday, we take account of Dr Reeves' opinion that you suffer from depression and post-traumatic disorder, and we also accept, as the videos show, that you do have a longstanding back condition which to a variable extent hampers your mobility. You often, but not always, use a walking stick. You have been able to sit in court throughout these proceedings, and it may well be that your condition today is worse than it was in 2008 and 2009, as shown on the videos. We take that into account. We also take account of the fact that you are of effective good character for present purposes, and that you have always wanted to be able to work hard, as no doubt you have in the past.

Mr Justice Keith has described very briefly your age and family circumstances, and I will not repeat it. Your counsel has explained, and I have no doubt, that these proceedings have been a crippling loss to you in relation to your house and money and to your health and fitness. We take account of the fact that prison will be a hard place for you with your physical and mental condition, and he submits and we accept that this may be not the most serious case of contempt of the court that could be imagined. He submits that it was not a sophisticated deception, although there seems to us to have been some sophistication about it. Certainly, it was a serious case of contempt of its kind, in the sense that this is an example of insurance fraud, or attempted insurance fraud, in relation to road traffic accidents or other personal injuries. We understand that you owe something in the order of £40,000 in relation to the costs of the previous proceedings, maybe a small amount should come off that because you had a small award of costs in your favour. We also take into account, although it doesn't seem to have happened, that you may be at risk of costs from your former solicitors, Shoosmiths, or the insurers. It is quite plain that you are unable to sustain a financial penalty, but that is not in itself a reason for imposing an immediate prison sentence.

As to you, Mrs Loveday, we take account of your good character, and of the esteem with which you are held in the community, as is evidenced by the seven references which we have read from neighbours, teachers and a retired registrar of birth, deaths and marriages, as we see, and it is perhaps just worth quoting from one of these, where the writer of this reference, Jennifer Morris, says:

Others have spoken of your friendly nature as a neighbour, and your good standing in the community and we take all that into account. We note that you have had your own health problems. We note, and are sure, that this has all been a great strain for you over the last 18 months or more. As we have said, we take account of the admissions that you made in June of this year, and we take account of the lapse of time, not enormously great, that has taken place in these proceedings. No doubt that you do live in a small community where this will have an effect, and no doubt you have problems, perhaps quite severe, with relationships within your family and that, of course, applies to Mr Loveday as well.

As to the penalty, we have noted that when she sent you the witness statement for signature, Ms Jones told both of you to check the witness statements carefully, and warned you explicitly that you risk a finding of contempt of court, which could lead to imprisonment, if you knowingly signed the statement as being true, when you knew that they were not true. You were, it is fair to say, properly warned by your solicitor at that stage. You will have heard in the course of the proceedings, today and yesterday, reference to this case recently in this court, that happens to come from South Wales, called South Wales Fire and Rescue vs Smith, which has a Crown Office reference of 1778 of 2010, which provides some guidance as to what this court ought to be doing today. It was on that case that Lord Justice Moses said this:

However, in that case there had been considerable delay between the acts of contempt and the hearing. The acts had occurred in 2007, and the hearing was in May 2011. In Lord Justice Moses' judgment, it was in that case futile to seek to bring a message of deterrence home by imprisoning the defendant in respect of his admitted falsity, so long after the offence of contempt was committed.

Well, this does not, I regret, apply in your case, Mr Loveday, because the defendant in that case had admitted knowingly making four false statements of truth, which regrettably you did not, and also partly because, in the present case, there is no comparable delay. Nevertheless, we endorse what Lord Justice Moses had said about people making such false claims, expecting to go to prison. We should perhaps explain that a deterrent sentence sometimes means a sentence which is more severe than it otherwise might have been, because the offence is prevalent in a particular area more generally, and the severity of the sentence is intended in part to deter others. Mr Loveday, we do not intend to increase your sentence for deterrent purposes, but we do take account in sending you to immediate prison today, that it is the court's direct experience that fraudulent insurance claims of this kind in road traffic cases or personal injury cases are endemic. As Lord Justice Moses said, those who are caught should expect to go prison. Those are our reasons for doing what we are about to do.

In your case, Mrs Loveday, we will give a sentence of imprisonment of six months, but it will be suspended, conditional on you not committing any further contempt of court during the period of 18 months. Do you understand that?

THE SECOND DEFENDANT: Yes.

SIR ANTHONY MAY: In your case, Mr Loveday, there will be an immediate sentence of imprisonment of nine months. You will be released unconditionally after four and a half months by reason of Section 258 of the Criminal Justice Act 2003, and accordingly, when we leave court, which we will be doing shortly, you must surrender yourself to the Tipstaff , who I believe is present in court. But don't move for the moment, because there may be other things to talk about. Those are the penalties that we impose for the contempts that are before the court.

Mr Grant, you were talking about a costs order?

MR GRANT: Yes, my Lord, the claimants ask that in addition to the penalties the court has given for the public wrong, that the court reflects that in order to bring this public wrong before the court, costs had to be incurred on a private basis, and we would ask for an order that the claimants’ costs be paid by the defendants. I suspect some clarity to that order will have to be reflected in the fact that significantly more costs have been incurred, particularly in relation to the hearing, in respect of the claim against the first defendant, because of the failure to make any admissions.

SIR ANTHONY MAY: Well, there is only one set of costs.

MR GRANT: There will be one set of costs, but in the costs order, if some wording could be used to reflect that the costs of the hearing were incurred in large part because of the need to prove the claim against the first defendant.

SIR ANTHONY MAY: Yes, Mr Craven.

MR CRAVEN: My Lord, I can't resist the claim for costs in principle, save to ask that there be an issue-based costs, and some deduction for the fact that this morning there was a concession regarding one of the alleged contempts. It ceased to be an issue. Up to that stage and it had been a live issue and it had been something we had had to prepare for.

SIR ANTHONY MAY: That is certainly a submission you can make. It won't have any effect on costs though, will it, that particular concession?

MR CRAVEN: It might have meant somewhat less work. It is always difficult to say in these cases.

SIR ANTHONY MAY: There are also certain respects in which the contempt wasn't fully proved, or at least one respect. Yes.

MR CRAVEN: And then, as I said, I can't resist the claim in principle, and I simply have a different application that there be an order for the assessment of the publicly funded costs.

SIR ANTHONY MAY: You can certainly have that. Mr Harris?

MR HARRIS: My Lord, I don't oppose the principle of costs. As far as the concession that my learned friend was seeking in relation to Mrs Loveday and the costs of the hearing, perhaps the order could be that the second defendant do pay the claimant's costs of the action, excluding the costs of the hearing.

SIR ANTHONY MAY: Yes, well, we will certainly consider that. It seems quite a neat way of doing it. Are you content with that.

MR GRANT: I am very content with that.

SIR ANTHONY MAY: Are you content with that, Mr Craven.

MR CRAVEN: Yes, my Lord.

SIR ANTHONY MAY: There is only one lot of costs. Yes, okay. Does anyone want to say anything more about costs? No? There is public funding in both cases, presumably?

MR HARRIS: There is my Lord, yes.

SIR ANTHONY MAY: The costs should therefore not be enforced until there has been a means assessment.

MR HARRIS: Yes.

MR GRANT: Yes.

MR HARRIS: (inaudible) clear, yes.

MR GRANT: They have protection.

SIR ANTHONY MAY: Sorry?

MR GRANT: They are subject to costs protection.

SIR ANTHONY MAY: Yes. Well, we will make an order for costs. In the case Mr Loveday, for the full amount, and in the case of Mrs Loveday, excluding the costs of the hearing. There will be an order for public funding assessment of the defendant's costs, and there will be the usual order that the costs order is not enforced, until there has been a means assessment for the purposes of legal aid. Thank you very much. We are grateful to everyone.