Fraudulent Claims – Consequences Beyond the Financial

Photo by Richard Clyborne of MusicStrive

Bryan Patterson-Whitaker considers the recent High Court decision in Network Rail v Dermody & Anor (2016).

In recent years, a very good many column inches (and pixels) have been given over to the concept of ‘fundamental dishonesty’ in personal injury litigation. Practitioners in the field will be aware of the adverse financial consequences that can befall a claimant through section 57 of the Criminal Justice and Courts Act 2015 and CPR 44.16. However, as Network Rail v Dermody & Anor (2016) demonstrates, dishonesty in court proceedings can have serious consequences well beyond the financial.

Mr Dermody brought a substantial claim for personal injury against his employer following an accident at work. He had told his medico-legal expert that he was ‘very seriously disabled’ from an injury to his thumb and ‘could not do any of the activities he enjoyed before the accident’. His claim was supported by his mother. Both provided witness statements, endorsed with statements of truth, which repeated the allegations made.

In due course, following surveillance by his employer, it became clear that Mr Dermody was in fact an active and enthusiastic bass guitar player in a ‘Guns and Roses’ tribute band. Those familiar with 1980s rock music will appreciate that this was a role which would require a great deal of manual dexterity, particularly of the pollex variety. When the truth emerged, Mr Dermody sought to amend his case in order to accommodate the reality of his ‘injury’. In due course he abandoned the claim altogether. His employer sought permission to bring committal proceedings against both the claimant and his mother.  

CPR 32.14 states that proceedings for contempt may be brought against a person if he makes, or causes to me made, a false statement in a document verified by a statement of truth without an honest belief in its truth. Unless proceedings are brought by the Attorney General, permission of the High Court is required under CPR 81.18. To establish the contempt alleged a Claimant has to prove beyond reasonable doubt (a) the falsity of D’s statements; (b) that those statements had or would have materially interfered with the course of justice; (c) that D had no honest belief in the statements and had known of their likelihood to interfere with the course of justice (see Axa Insurance UK plc v Rossiter [2013] EWHC 3805 (QB)). However, at the application stage, the question for the Court is not whether a contempt has in fact been committed, but whether proceedings should be brought to establish whether it has or not.    

In Network Rail, Edis J held that it was in the public interest for the Applicant to bring committal proceedings as there was such strong prima facie evidence that Mr Dermody and his mother had made false witness statements. Although the court may not grant permission where there were exceptional factors, for example, the age or health of the Defendants, there were no such unusual features in the instant case. Permission was therefore granted.

As Network Rail demonstrates signing a statement of truth is a serious matter, the importance of which is difficult to overstate.         

Bryan Patterson-Whitaker

Pupil Barrister