Zurich Insurance Plc v Kay & Ors

Contempt of court must be proved to the criminal standard. A court may find that a witness has told deliberate lies on peripheral matters without concluding that the central allegation of contempt is proved. Earlier dishonesty is relevant, but it is not conclusive. The court must assess the evidence concerning the essential allegation in the round, allowing for weaknesses such as delay, inconsistent recollections and possible cross-contamination between witnesses. Discontinuance of an underlying claim does not, without more, establish that the claim was fraudulent. Where the evidence leaves a reasonable possibility that the defendants’ account is true, committal applications must fail.

Zurich Insurance Plc applied to commit Mark Kay, Karen Margaret Kay and Daniel Kay for contempt of court. Mr Kay had discontinued a substantial personal injury claim in which he alleged that he had slipped in a shopping-centre car park. Zurich alleged that the accident had instead occurred abroad and that the defendants had deliberately fabricated the car-park account in statements supporting the claim.

The evidence included contemporaneous medical records, statements from Mr Kay’s former colleagues, evidence from his wife and stepson, and material concerning his inconsistent presentation of loss of earnings in separate proceedings. The central issue was whether the court could be sure that the defendants had lied about the location of the accident.

1. The applications were dismissed. Zurich had to prove the alleged deception to the criminal standard. The court was not sure that Mr Kay, Mrs Kay or Daniel had lied about where the accident occurred.
2. Evidence that Mr Kay had told deliberate lies on other matters materially damaged his credibility, but did not compel the conclusion that he had lied on the central issue. Peripheral dishonesty could reflect attempts to embellish an otherwise viable claim rather than proof that the whole claim was fabricated.
3. The evidence from Mr Kay’s former colleagues provided a prima facie case, but its force was reduced by the substantial passage of time, conflicting accounts, the colleagues’ knowledge of his foreign holidays and the risk of cross-contamination of recollections. These matters required particular caution when applying the criminal standard.
4. Mrs Kay was found to be a compelling witness. Her evidence raised sufficient doubt to prevent the criminal standard being satisfied. Daniel’s evidence was less persuasive and appeared rehearsed, but that finding did not establish that the underlying accident had been fabricated.
5. The discontinuance of the personal injury claim was not determinative. The disclosed legal advice indicated that the prospects of success had fallen to 40–45 per cent and that continuation under a conditional-fee arrangement was not economically viable. The discontinuance therefore did not prove that the claim was fraudulent.
6. The applications were accordingly refused because the court could not be sure that the defendants had lied about the accident’s location.

The judgment records that HHJ Wood QC granted permission for the committal proceedings on 1 November 2013. The present court determined the first-instance committal applications.