Insurer denied committal chance against dishonest claimant

An insurer has been denied the chance to bring contempt proceedings against a dishonest claimant after it failed to show it had any authority to make such an application. The High Court found no evidence the insured defendant had consented to the action and the insurer failed to establish any alternative legal basis for bringing it in her name.

His Honour Judge Pearce, sitting as a judge of the High Court in Advantage Insurance v Shaw, found that the insurer had failed to show it had any subrogated legal ground to bring the contempt application in the absence of evidence of the client’s consent.

Advantage tried to argue before the court that the defence of the litigation had been under its control, so it should be able to raise a contempt application. The judge responded to this point by saying: ‘I mean no disrespect if I raise the simple question, “So what?”’

The court heard that Matthew Shaw had been involved in a road traffic accident in 2018 where liability was admitted. Quantum issues went to trial and the judge found that, while Shaw’s true loss amounted to more than £1m, his claim had been far larger and was exaggerated to the point of being fundamentally dishonest. The claim was dismissed in its entirety.

Advantage suggested this might have been one of the largest ever cases of fundamental dishonesty and the judge said it was ‘understandable’ that the insurer had wanted to apply for permission to bring committal proceedings against Shaw.

However the judge said the insurer had got itself into a ‘procedural tangle’ by bringing the application in the name of its client and then making a late proposal to amend it so it would be from Advantage. This would cause ‘considerable unfairness’ to Shaw, especially as he had been subject to the threat of committal proceedings for some time.

The court found there was no evidence of consent from the client and that the insurer had failed to show that it had any subrogated or similar recognised legal ground to bring an application. The application was struck out as an abuse of process.