Three defendant law firms are named in the latest twist in long-running litigation over the fabrication of evidence about the cost of hiring courtesy cars for road accident claimants. Seven expert witnesses who fabricated evidence to argue down credit hire compensation claims on behalf of insurers were today found in contempt of court.
The High Court found that the seven, as employees of defunct survey company Autofocus Limited, had each engaged in conduct which interfered with the due administration of justice. They now face prison after committing what a previous judgment described as ‘perjury on an industrial scale’.
Autofocus provided forensic services to motor insurers when a dispute arose over the daily rate that could be recovered by a car hire company when a claimant had hired a replacement car on credit hire terms. The case centres on allegations that between 2005 and 2010 insurance companies used Autofocus' expert evidence reports, which turned out to be fabricated, to persuade judges that charges were unreasonable or inflated.
The judgment names three firms of solicitors as among the defendants in related proceedings commenced in the commercial court in July 2015 for a claim worth more than £126m.
The three firms - Keoghs, Lyons Davidson and Morgan Cole (since merged with Blake Lapthorn) - are alleged to have 'conspired and/or combined with' Autofocus 'with the sole or predominant intention to injure or cause financial loss to those businesses operating in the credit-car hire industry’.
The defendants in the commercial court proceedings are alleged to have embarked upon 'concerted action' with an intention to use unlawful means by creating, producing and deploying false and misleading expert evidence at trial in order to reduce the amount owed to insurers.
The claimant in the contempt case, claims management company Accident Exchange Limited, estimated that 30,000 cases were affected by the defendants signing false statements of truth after making rates reports. The dishonest actions of Autofocus and the defendants hit the share price of Accident Exchange, and led to substantial losses and 300 redundancies, the High Court heard.
Stephen Evans, chief executive of Automotive and Insurance Solutions Group plc (formerly Accident Exchange Group plc), told the court that the Autofocus fraud 'resulted in a large volume of appellate litigation that was necessary in order to expose the deceit and to resolve the number of cases determined on a false premise at first instance'.
The Autofocus defendants - Nathan Broom, Elaine Walker, Andrew Watts, David James, Laurence Gray, Keel Broom and Duncan Sadler - each produced written surveys, reports and/or witness statements setting out details of telephone enquiries purporting to show basic hire rates. In some cases each of the defendants went to court to argue why claimed credit hire rates were too high, but they had failed to check what rates were actually being quoted.
Estimates studied in a sample of cases were found to be false and proof the defendants had committed contempt.
In Accident Exchange Ltd v Broom & Ors, the Honourable Mr Justice Supperstone ruled today: 'The evidence that [Autofocus] was involved in the systematic, endemic fabrication of evidence in which the defendants and each of them knowingly and actively participated throughout the material time is overwhelming.'
In a statement, Lyons Davidson said: 'A claim has been issued by Accident Exchange in relation to evidence provided by Autofocus in defendant litigation between 2005 and 2010 and we are named as ninth defendants in those proceedings. We are satisfied that Accident Exchange’s claim will be shown to be groundless. The claim is in the hands of our insurers and is being vigorously defended.’
A spokesman for Keoghs said the contempt decision does not suggest any impropriety on the part of Keoghs and it intends to 'vigorously' defend the commercial case, which is in the hands of its indemnity insurers and solicitors.
Morgan Cole has been approached for comment.