Zurich Insurance Plc v Romaine

Permission to bring committal proceedings for a knowingly false statement verified by a statement of truth depends ultimately on whether proceedings are in the public interest. The court requires a strong prima facie case and considers the statement’s significance, the maker’s state of mind, proportionality and the proper administration of justice.

Early discontinuance may distinguish a claimant from one who persists after exposure, but it provides no immunity. Courts must consider the risk that discontinuance will be used to evade the consequences of fraudulent claims. A prior warning about contempt will generally carry little relevance where the alleged contemnor brought the underlying claim and was responsible for verified claims documents.

The respondent brought a low-value claim for noise-induced hearing loss against two former employers. Documents verified by statements of truth denied potentially relevant exposure to noise from motorcycling and performing with a live band. An investigation produced material suggesting that those denials were false. The respondent discontinued shortly after the insurer applied to strike out his claim for dishonesty.

The insurer sought permission to commence committal proceedings. Goose J refused permission under the Civil Procedure Rules 1998, concluding that proceedings were not proportionate or in the public interest. His decision is reported at [2018] EWHC 3383 QB.

The insurer appealed. The central issue was whether the judge had misdirected himself concerning the absence of a warning, the respondent’s early discontinuance and proportionality.

1. Appeal allowed and permission granted. The judge had erred in principle in exercising his discretion. The Court of Appeal could therefore remake the decision and granted the insurer permission to bring committal proceedings under rule 81.18(3)(a) of the Civil Procedure Rules 1998.

2. The ultimate permission question is whether committal proceedings are in the public interest. The court does not determine contempt at that stage. It must nevertheless require a strong prima facie case that a verified statement was false and that its maker knew it was false. Relevant matters include the statement’s significance and use, the maker’s state of mind, the resources required, proportionality, the overriding objective and the potential penalty.

3. The absence of an earlier warning is fact-sensitive and is not relevant in every case. The warning principle arose in circumstances where a witness could have been warned before matters progressed. It was inapposite where the alleged contemnor had initiated a personal injury claim and was responsible for claims documents verified by statements of truth. On these facts, the judge wrongly treated the absence of a warning as material.

4. Early discontinuance is relevant because a claimant who withdraws when falsity is exposed differs from one who persists and wastes further time and costs. It is not, however, a bar to committal proceedings. The judge failed to consider the wider mischief of dishonest low-value claims being discontinued whenever resistance or evidence of falsity emerges. Court processes must not become instruments of fraud, and private costs remedies do not necessarily address the public wrong caused by false court documents.

5. There was a strong prima facie case that deliberately dishonest statements had been made about matters directly relevant to causation and breach of duty. The claim’s modest value did not weigh significantly against permission. Insurers handling historic hearing-loss claims may be especially dependent upon claimants’ honesty because insured companies and records may no longer exist.

6. The respondent’s denial that he authorised the statements and his complaints about his solicitors were matters for the substantive committal hearing. His health and personal circumstances went principally to mitigation and penalty. They did not determine whether permission was in the public interest.

Davis LJ agreed entirely with Haddon-Cave LJ. The substantive court remained responsible for deciding whether contempt was proved.

1. Court of Appeal (Civil Division): Allowed the insurer’s appeal from [2018] EWHC 3383 QB, set aside the refusal and granted permission to bring committal proceedings.

2. High Court, Queen’s Bench Division: Goose J refused permission following an oral reconsideration. He found good prima facie evidence of deliberately false statements but concluded that committal proceedings were neither proportionate nor in the public interest.

3. High Court, Queen’s Bench Division: Goose J had earlier refused permission on the papers. He subsequently held that he could reconsider the application orally.