Lane v Shah

1. LORD JUSTICE LAWS: This is the judgment of the court. This is an application for committal of the three defendants for contempt of court, brought with permission granted by this court, Jackson LJ and Cranston J, on 10 March 2011. The court also gave directions for the conduct of the claim.

2. The contempts in question consisted of Statements of Truth signed by all three defendants in and for the purposes of a personal injury action. The documents to which the Statements of Truth were appended contained calculated, deliberate lies.

3. The first defendant was the claimant in the action. The second defendant is her husband and the third defendant their daughter. The first claimant in these proceedings was the defendant in the action. The second claimant was the first claimant's motor insurer, who was obliged by section 151 of the Road Traffic Act 1988 to satisfy any judgment given against the first claimant in the personal jury action.

4. This class of contempt is specifically provided for in Rules of the Supreme Court 52(1)(16) and CPR 32(14), it is described as:

5. "making a false statement in a document verified by a statement of truth."

6. An application for committal may only be brought in this court and with the court's permission. The claimant upon such an application is required to prove that one or more statements of fact in one or more documents verified by the Statement of Truth was false to the knowledge of the defendant and that it was untrue in such a way as to interfere with the course of justice in a material respect.

7. The personal jury claim arose out of a road traffic accident which occurred on 18 December 2005. The first claimant, as he now is, negligently drove his car into the back of a vehicle being driven by the first defendant's husband, the second defendant. The first defendant was the front seat passenger and was injured. The first claimant's breach of duty was promptly admitted by his insurers, the second claimant, by letter of 3 February 2006. Issues of causation and consequential loss remained outstanding. Proceedings were issued in the Birmingham County Court on 19 December 2008.

8. The first defendant is a 49-year old accountant. Before the accident, and for a time afterwards, she worked part time in that capacity. At length she stopped work but started again in August 2008 and continued in work regularly thereafter. But her claim for damages in the action was calculated and advanced on the basis, the deceitful basis, that she was wholly unable to work by reason of her injuries. She signed a statement of truth on 26 November 2008 verifying her particulars of claim, which asserted that she had had to stop work because of the pain caused by the accident and to which was appended a medical legal report on 13 June 2007 stating that she had not been at work since 20 November 2006.

9. On 18 December 2009 she signed a Statement of Truth verifying an updated schedule of loss claiming losses of £636,959, excluding general damages, of which £467,000 was claimed in respect of care provided or to be provided by the second and third defendants. The schedule stated in terms that she could not carry out her pre-accident work or domestic tasks and that she needed help and assistance from members of her family for specified numbers of hours each day.

10. A little earlier, on 2 November 2009 she had signed a Statement of Truth verifying her list of documents in the action. The list omitted any document evidencing the work she had been doing since August 2008.

11. On 4 December 2009 she signed a Statement of Truth verifying her witness statement describing severe pain and disability said to prevent her from working or carrying out household tasks and asserting that she had not worked since November 2006 and was in receipt of incapacity benefit. Her alleged inability to work was supported in terms by lying witness statements verified by Statements of Truth respectively signed by her husband the second defendant and her daughter the third defendant, both on 18 November 2009.

12. The claimants instructed agents to keep a covert watch on the first defendant on four occasions between August 2009 and March 2010 and to record video footage. The results show the first defendant working at an apparently full time job as at an address in Stanmore and well able to shop, walk, lift, carry and bend.

13. The first defendant was confronted with the surveillance evidence in June 2010. In consequence, she made admissions to her solicitors and counsel, accepting that she had been working part time since August 2008. The solicitors, who, we should emphasise, had of course been duped just as surely as had the claimants and the court, very properly wrote to the court on 13 July 2010 with their client's consent setting out the first defendant's admitted deception. The personal injury claim was in due course compromised on 1 December 2010 for £10,000, plus a sum by way of costs, against which was set off, however, £7500 being the claimants' agreed costs of investigating the fraud. The net balance then payable to the fist defendant was £870.78, but we understand she had earlier received a payment on account.

14. All three defendants have made witness statements in these proceedings admitting their contempt and liability to be published for it. Some points are raised in the statements in mitigation which, however, we regard in considerable measure as either footling or disingenuous, or not mitigation at all. The first defendant apparently thinks it right to state -- witness statement paragraph 6 B -- that she was not initially advised by her solicitors as to the consequences of signing a Statement of Truth which was false. That seems to us to aggravate rather than mitigate what she has done. She says -- paragraph 6 C -- that a misunderstanding of something on the DSS website led her to think, inadvertently as she put it, that she did not have to disclose her part time earnings to the first claimant. But of course her lies included the express statement that her injuries prevented her working. The only real mitigation in this case is that the defendants are of previous good character and have admitted their contempt.

15. In South Wales Fire and Rescue Service v Smith [2011] EWHC Admin 1749 in this court, Moses LJ said this:

"5. 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.

6. The public and advisers 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."

We wholly agree with those observations.

16. The case of Nield v Loveday [2011] EWHC Admin 2324, bears some resemblance to the present case. It also arose out of a personal injury claim whose value the defendants, husband and wife, sought to exaggerate. However the principal defendant, the husband and original claimant, contested the contempt proceedings. He was sentenced to an immediate prison term of 9 months. His wife, who had supported his lies but had a positive good character and admitted the offence, received a sentence of 6 months suspended for 18 months.

17. It has been stated and repeated in the cases that this species of contempt is a public wrong and needs to be recognised and published as such. Corrupting the stream of public justice is generally more poisonous than the mere telling of a lie by one man to another. Many would think that the litigant who dishonestly perverts the process of litigation should recover nothing through the courts, even if otherwise her case has some justice. There is much to be said for that point of view.

18. Mr Swirsky for the defendants has addressed us, if we may say so, with great dignity. He has urged that it may be appropriate to pass suspended sentences of imprisonment. He prays in aid first the fact that nearly two years have passed since the last contempt and the defendants were warned of these proceedings as long ago as September last year. The most important fact on which he relies is the fact of his clients' admissions. They are also, as we have indicated, of previous good character. All three are employed. There is a younger brother at University who is dependent upon his parents.

19. In our judgment the administration of justice and its protection require that these three defendants be sent to prison. We see no case for a suspended sentence as regards any of them. The first defendant will be sentenced to six months' imprisonment. The second defendant to three months' imprisonment and the third defendant also to three months. They will, having regard to the material statutory provisions, each serve half of the time so specified. They should surrender to the tipstaff as they leave the court. Thank you very much.

20. MR GRANT: My Lord, I get to my feet to ask that the court make an order that the defendants repay the claimant's costs of bringing these proceedings, as was ordered in both the other cases. In the Smith case there were extenuating circumstances because a number of mistakes had been made that resulted in the gross delay.

21. LORD JUSTICE LAWS: Yes, we have seen that.

22. MR GRANT: In the Nield case, the order made was that costs be subject to a detailed assessment. That is what I ask this court, because whilst I do have a summary costs schedule, it does not have the detail within it to illustrate where the time, considerable time, spent by my instructing solicitor in getting this case ready for the two hearings has been spent. So we would ask that there be an order that the defendants do pay the claimants' costs of the action to be subject of --

23. LORD JUSTICE LAWS: A detailed assessment if not agreed, yes. Mr Swirsky?

24. MR SWIRSKY: My Lord, I appreciate in civil proceedings costs almost invariably follow the events. What I would say is that these are quasi criminal proceedings and you have imposed sentences of imprisonment upon my client that will inevitably lead to them losing their employment, as a consequence of which they are very unlikely to be in a position to pay the costs. I think there is very little more than that I can say other than to urge the court not to award costs in this case.

25. LORD JUSTICE LAWS: They are not, I assume, without assets?

26. MR SWIRSKY: They have no significant savings, but the first and second defendants do own a property.

27. LORD JUSTICE LAWS: Yes. We make a joint and several order against the defendants that they pay the costs of this application to be subject to a detailed assessment if not agreed. Thank you. We are indebted to counsel.