Lloyds TSB Insurance Services Ltd v Shanley

Deliberately advancing a substantial civil claim by relying on a fabricated and forged document is a serious contempt of court. In an appropriate case, immediate imprisonment is required to mark the gravity of the misconduct, deter similar abuse and protect the administration of civil justice. A custodial sentence may be suspended where there is strong personal mitigation, unacceptable delay or a need to secure future compliance. Good character, first-offender status, family circumstances, late admission and the withdrawal of the false claim may reduce the sentence, but will not necessarily justify suspension. Falsehoods or misconduct by the opposing party may be taken into account in mitigation, but cannot justify the contemnor’s conduct.

The claimants sought the committal of the defendant for contempt arising from his use of a fabricated written agreement bearing a forged signature in earlier copyright and licensing proceedings. He had relied on the document in pleadings, a reply, witness statements and disclosure, and maintained the deception for several months. He admitted all the allegations, so the hearing concerned mitigation and penalty.

The court considered whether the contempt warranted immediate imprisonment, the appropriate length of any custodial term, and whether the sentence should be suspended. The defendant relied on his good character, first-offender status, family circumstances, late admissions and the alleged deception by the claimants which had preceded the fabrication.

1. Disposition. The defendant was committed to prison for three months for contempt of court. The allegations had been admitted, so they were not required to be proved at trial.
2. Seriousness of the contempt. Maintaining a substantial claim by reliance on a fabricated agreement and forged signature, despite repeated opportunities to correct the position, was exceptionally serious. The conduct undermined the openness and honesty on which adversarial civil justice depends. A contempt of this level would ordinarily merit an immediate six-month custodial sentence.
3. Applicable principle. Applying the principles stated in South Wales Fire and Rescue Service v Smith [2011] EWHC 1749 (Admin), those who make deliberate false claims should expect imprisonment. Suspension is an exception, particularly where there has been substantial delay or exceptionally strong personal mitigation.
4. Mitigation. The court allowed for the defendant’s good character, first-offender status, family circumstances, withdrawal of the false claim shortly before trial, full admissions and the effect of imprisonment on his family. It also took account of the false statements contained in the claimants’ earlier letter, while emphasising that this did not justify the defendant’s conduct.
5. Suspension. A suspended sentence was inappropriate. The defendant’s mitigation reduced the term to three months, but did not overcome the seriousness of misconduct maintained over many months. Suspension could not properly be used to coerce truthful evidence in ongoing proceedings, since truthfulness was already his legal duty.