Liverpool Victoria Insurance Company Ltd v Thumber (2014)
The applicant insurance company (L) applied for a committal order against the respondent (T) on the basis that there was powerful evidence of fraud and dishonesty in relation to his claim arising out of a road traffic accident.
T had claimed that his Audi, valued at £6,000, had been written off in a collision with a BMW. He claimed that he had suffered whiplash and had incurred car hire costs in excess of £130,000. The BMW driver took no part in the proceedings but his insurer, L, was joined as a second defendant and served a defence alleging fraud.
On the day of the trial, T discontinued his claim. He was ordered to pay costs on the indemnity basis. L applied for a committal order. T obtained an adjournment on the basis that he had insufficient notice of the hearing to arrange legal representation. T was told that there would be no further adjournments unless he was seriously ill and could provide proper medical evidence in support.
Ten days before the instant hearing a doctor’s certificate was sent to the court stating that T was suffering from a depressive episode, sufficiently serious to leave him unfit to work. T’s brother told the court that T’s mental health had seriously deteriorated to the extent that he might be admitted to hospital.
The issues for the court were:
- Should a further adjournment be granted?
- Should T be committed?
It was held that if T was actually unfit to attend court then the doctor’s certificate should have said so. Whilst T may have been depressed, that was not, in itself, a reason not to attend. Accordingly, no further adjournment would be granted.
In relation to the committal application, L’s evidence showed that the damage to the vehicles was incompatible with the version of the accident circumstances alleged by T. There was also evidence of a link, via a third party, between T and the driver of the BMW. It was held that there was powerful evidence of fraud and dishonesty and the excessive amount claimed for car hire had been T’s undoing.
This was plainly a fraudulent claim involving false witness statements and if T had proceeded to trial he would have sought to gain money by perjury. Giving evidence dishonestly was clearly a contempt of court and the seriousness of insurance fraud had been emphasised in South Wales Fire and Rescue Service v Smith  EWHC 1749 (Admin) and Liverpool Victoria Insurance Co v Bashir  EWHC 895 (Admin)  ACD 69. Smith and Bashir considered, the appropriate sanction was twelve months’ imprisonment.
This is a useful case for defendant insurers for obvious reasons. It can be galling to be faced with a claimant whom all the evidence suggests is a fraudster, only to see the claim discontinued with no sanction imposed, leaving the offending party free to simply move on to the next one. In this case, the insurer’s determination to see an appropriate penalty imposed bore fruit.
This is also, however, a useful case for claimant solicitors. Often, when dealing with a claimant who faces an allegation of fraud, it can be difficult to impress upon them just how serious the result of a finding of fraud could be. When seeing such a claimant in conference and setting out their options, a summary of this case might prove sobering enough to prompt some into reconsidering whether or not they really wish to proceed to trial.
The case is also useful in that the judge, Bean J, dealt robustly with the request for a second adjournment. It is not sufficient for a party to simply say that he is unfit to attend without properly evidencing that. Vague medical issues, last-minute trips abroad and so on are not necessarily good enough reasons to adjourn, and this case should serve as a reminder that such conduct may lead to a party being dealt with in his absence.