Zurich Insurance plc v Kay and others [2014] EWHC 2734 (QB)

13 October 2014

Insurance Companies in England and Wales need to prove a criminal standard in contempt of court proceedings for allegedly fraudulent personal injury claims.

Zurich Insurance plc v Kay and others [2014] EWHC 2734 (QB)

Mr Kay allegedly sustained a serious injury as a result of a slipping hazard in a car park which was the responsibility of Westgrove cleaning services who were insured by Zurich.  Mr Kay's account of the accident had been supported in witness statements provided by his wife and stepson who were co-defendants in the proceedings. Mr Kay claimed that he had been made redundant as a result of his injuries, and valued his claim to be in the region of £750,000. Zurich alleged that the Mr Kay sustained the injuries in a fall while on holiday abroad. Disclosure of Kay's personnel file made no mention of his injuries or of their alleged impact on his ability to work. Zurich applied to the court to commit the three defendants to prison for contempt of court on the basis that Kay and his family had attempted fraudulently to repackage a vacation mishap as a very valuable claim for compensation. Zurich submitted that Kay had told work colleagues that he had been injured abroad, his credibility was poor and his route across the car park was implausible. To succeed in the application Zurich had to prove the alleged deception to the criminal standard - beyond a reasonable doubt.

The trial judge was not satisfied that Kay, his wife and stepson had lied about where the accident had happened. It followed that the applications to commit the defendants for contempt had to fail.

It seems unlikely that applications for contempt of court in personal injuries cases could be successfully pursued in Northern Ireland due in part to the differences in procedures. It is still even difficult for insurers to argue that costs should be awarded against a claimant in cases of exaggeration. For example, in Teer v J Kennedy and Company (Contractors) Ltd [2014] NIQB 89 (27 June 2014) Gillen J stated:

...courts in Northern Ireland need to be cautious about deploying the approach adopted in England on CPR which has not yet been implemented in Northern Ireland. That the time may have arrived when this should happen is an entirely separate argument and one that is not for this court to enter into. ( para 25).

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