A recent High Court decision in England & Wales offers insurers the means to pursue not just their own policyholders but also fraudulent third parties who exaggerate their claims through contempt of court proceedings. This would serve as a useful deterrent to prevent claimants from making false allegations in their claims since such proceedings may be brought against those claimants even after their personal injury action has been settled. Under the recent Civil Justice Reform, the approach taken by the court in England & Wales in this case is likely to be followed in Hong Kong.
The High Court of England & Wales has recently found a claimant in contempt of court for exaggerating her injuries in a personal injury claim.
Background facts of the case: Carol Walton v Joanne Kirk  EWHC 703 (QB)
The claimant, Ms. Joanna Kirk, alleged that as a result of a road traffic accident in 2001, she was unable to walk more than 10 paces "on a good day" and had to give up work. She brought proceedings and sought damages in the region of £800,000. However, she eventually accepted a payment into court in the sum of £25,000 and agreed to pay the costs of the insurer (Royal Bank of Scotland (RBS) Insurance ) from 21 days after the payment into court until the date the payment was accepted. Her acceptance of the payment into court was brought about by disclosure of surveillance obtained by RBS which showed that Kirk could walk, drive and shop without any difficulties. Kirk effectively recovered nothing from these proceedings.
Contempt of court
After the settlement, RBS applied for permission to bring contempt of court proceedings against Kirk "for making false statements in documents verified by statements of truth without an honest belief in the truth of the same". The court documents painted a detailed picture of her as having suffered significant and long-term disabilities. Kirk was found in contempt on two grounds for filling out claims for state benefit, without honest belief in them, and subsequently verifying them in the litigation. However, the majority of RBS's allegations as to Kirk's contempt were not made out. She was consequently fined £2,500 (a custodial sentence was considered to be disproportionate in the circumstances).
Underlying principles of the case
The relevant principles adopted by the court in the contempt proceedings are that due to the quasi-criminal nature of contempt proceedings, any genuine doubt had to be resolved in Kirk's favour. Discrepancies between a statement verified by a Statement of Truth, on the one hand, and video evidence on the other, would not automatically give rise to a contempt of court. What mattered was the degree of exaggeration or the circumstances in which any exaggerations were made, or both.
Furthermore, while it is in the public interest that personal injury claimants pursue honest claims before the courts and do not significantly exaggerate those claims for financial gain, if there is credible evidence that the claimant has been injured to some extent by the accident, he/she would be entitled to bring a personal injury claim. In Kirk's case, the court ruled that it was more likely than not that she had fibromyalgia as she alleged and was justified in bringing a personal injury claim.
Possible implications in Hong Kong in light of the Civil Justice Reform
In light of the recent Civil Justice Reform in Hong Kong, the approach taken by the court in Kirk's case is likely to be followed in Hong Kong in the event similar contempt of court proceedings are brought against claimants who make false claims in personal injury cases. Under the Civil Justice Reform, there is a new requirement that all pleadings, particulars of a pleading, witness statements and expert reports must be verified by a statement of truth in accordance with Order 41A of the Rules of the High Court. Anyone who makes a false statement without an honest belief in its truth may be liable for contempt of court. Such proceedings may be brought only by the Secretary for Justice or a person aggrieved by the false statement and with the leave of the Court.
Contempt of court proceedings would hopefully serve as a useful deterrent to claimants who make false allegations to exaggerate their claims given such proceedings may be brought against the claimant even if the personal injury action has been settled.
While this decision is welcomed, it should be reminded that strong evidence will need to be adduced to prove any contempt as the burden of proof required is proof beyond reasonable doubt. Claimants are often given the benefit of doubt because of the fluctuating nature of their condition or because the exaggeration is seen as an understandable attempt to ensure that a genuine condition is not underestimated, nor to mention the sympathy they might attract.
For inquiries related to this Client Alert, please contact:
Angela Yim (email@example.com)