THE IMPORTANCE OF THE STATEMENT OF TRUTH (3): THE SCARY STUFF (THE REALLY SCARY STUFF)

This is the third (and final) post in the series that examines the importance of the statement of truth.  Here we look at the clear and start warnings given by the courts about the importance of the statement of truth. This includes the (almost inevitable) order for committal to prison if the statement of truth is made knowing that it is false or the declaration is given recklessly.

“We say at once, however, that the deliberate or reckless making of a false statement in a document verified by a statement of truth will usually be so inherently serious that nothing other than an order for committal to prison will be sufficient.”

RECOVERY PARTNERS

In Recovery Partners GP Ltd & Anor v Rukhadze & Ors [2018] EWHC 2918 (Comm) Mrs Justice Cockerill made some cogent observations about the defendant’s approach to the statement of truth.

 

THE  JUDGE’S OBSERVATIONS IN RELATION TO THE STATEMENT OF TRUTH

The Statements of Truth
  1.  Before entering on the full consideration of this case I should deal with one troubling aspect of the procedural position. A number of issues arose as to apparent inconsistencies between the Defendants’ pleaded case and the evidence of the Individual Defendants. The Defences advanced for the First to Fourth Defendants featured a statement of truth signed only by Mr Marson. Thus, Mr Rukhadze and Mr Alexeev had not ever signed a statement of truth in relation to  the pleading served on their behalf.
  2.  Mr Rukhadze plainly did not see that this was a matter of moment, and said this was a matter for his lawyers. Mr Alexeev took the matter fairly lightly, although acknowledging that the signing of a statement of truth was a serious matter. Neither of them appeared to comprehend exactly what a statement of truth was, or to have been taken through the pleading in detail by Mr Marson, ensuring that they approved all relevant factual allegations before the statement of truth was signed. The impression which I received was that Mr Marson had provided a copy for the other Defendants to review and had simply taken their OK to sign it : Mr Marson suggested that ” I called or emailed him and said, you know, do I have your authority to sign?” . That was broadly consistent with Mr Rukhadze’s view that Mr Marson “assumed probably that I had read it and was okay with it”. The evidence of course did not cover, and I do not know, what dialogue Mr Rukhadze and Mr Alexeev had with their legal team in this regard.
  3.  This illustrates precisely why the rules as to the signing of a statement of truth were introduced. There was a concern under the previous regime for signing of pleadings that it made it too easy for parties to put forward a case which they knew to be untrue or unsupported by evidence, or plead aspirationally, hoping that something would turn up in the course of proceedings: Clarke v Marlborough Fine Art (London) Ltd and another [2002] 1 WLR 1731 at [20-21]. The importance of the requirement of the statement of truth is underpinned by the fact that it is given a whole rule, Rule 22 in CPR, and by the fact that the sanction for breach can be contempt of court.
  4.  The bottom line is that the process which was adopted here was defective. It is important that where there are multiple defendants; each defendant reviews and provides either his own statement of truth or his authority to his legal representative to make that statement for him. If composite defences are served, care should be taken to ensure that provision is made for each defendant to review and verify each element of the case as it pertains to him. It is troubling that this question, of ensuring that each individual defendant has signed  or approved the appropriate person to sign a statement of truth following a proper consideration of the document, appears to have been be missed; not least because it indicates that a sense of the very real importance of statements of truth may have been lost in the years which have passed since they were introduced.
  5.  What was most troubling however, was Mr Marson’s evidence on this subject. Mr Marson may not have been a litigation lawyer by training, but he was trained at one of the most prestigious firms in London. Further his role for Hunnewell after the events with which this case is concerned involved his being in day to day charge for Hunnewell of substantial litigation. Yet his evidence was surprising on this point in two respects.
  6.  The first is that he gave it as his view that there was no issue with this procedure – he said that he was entitled to sign statements of truth on behalf of the other Defendants as “someone given authorisation”. This is not correct. What CPR 22 says is:
“6) The statement of truth must be signed by –
(a) in the case of a statement of case, … –
(i) the party or litigation friend; or
(ii) the legal representative on behalf of the party or litigation friend; …”
  1.  Mr Marson was, as regards Mr Rukhadze and Mr Alexeev, neither their litigation friend nor their legal representative. He plainly regarded this as an irritating formality – he had not checked the position once the issue became live in the proceedings and he appeared completely untroubled by the point even when it was put to him squarely in cross examination.
  2.  The second point is that it was quite apparent that he did not seem to grasp, even as he gave his evidence, that it was a matter of real moment that the essential requirement of CPR 22, that the litigant have checked and verified that the factual case which is being advanced on his behalf is true had not been complied with. My impression was that he would not see any reason to change his approach to statements of truth in future litigation.
  3.  I note these points not because they have any impact on the issues which I have to determine, but because the facts that Mr Marson, despite his training, could give such evidence and (putting Mr Marson aside) that this situation had been allowed to come about indicates that a clear reminder as to the importance of Statements of Truth and a careful observance of the requirements pertaining to them may not go amiss.

LIVERPOOL VICTORIA: YOU SHOULD EXPECT TO GO TO JAIL…

The judgment in Liverpool Victoria Insurance Company Ltd v Zafar [2019] EWCA Civ 392 goes much further than a warning to errant experts.  The case was about a doctor who had been reckless in amending a witness statement in a relatively minor personal injury claim.  The doctor had not been motivated (directly) by money and the error was not deliberate.

ANYONE MAKING A RECKLESS STATEMENT CAN EXPECT TO GO TO JAIL

“We say at once, however, that the deliberate or reckless making of a false statement in a document verified by a statement of truth will usually be so inherently serious that nothing other than an order for committal to prison will be sufficient. That is so whether the contemnor is a claimant seeking to support a spurious or exaggerated claim, a lay witness seeking to provide evidence in support of such a claim, or an expert witness putting forward an opinion without an honest belief in its truth. In the case of an expert witness, the fact that he or she is acting corruptly and makes the relevant false statement for reward, will make the case even more serious; but it will be a serious contempt of court even if the expert witness acts from an indirect financial motive (such as a desire to obtain more work from a particular solicitor or claims manager), or without any financial motivation at all”

THE FACT THAT THIS IS A SMALL CLAIM DOES NOT MATTER

“Because this form of contempt of court undermines the administration of justice, it is always serious, even if the falsity of the relevant statement is identified at an early stage and does not in the end affect the outcome of the litigation. The fact that only a comparatively modest sum is claimed in the proceedings in which the false statement is made does not remove the seriousness of the contempt. The sum in issue in the proceedings is however relevant, because contempt of court by an expert witness will be even more serious if the relevant false statement supports a claim for a large sum, or a sum which is grossly exaggerated above the true value of any legitimate claim.”

THE FACT THAT THIS IS A “RECKLESS” RATHER THAN DELIBERATELY FALSE STATEMENT MAY MAKE LITTLE DIFFERENCE

“As we have noted in [36] above, the essential feature of this form of contempt of court is the making of a false statement without an honest belief in its truth. In principle, where a false statement is made without an honest belief in its truth, a contemnor who acts recklessly is less culpable than one who acts intentionally. The extent of that difference in culpability will, however, depend on all the circumstances of the case. Without seeking to lay down an inflexible rule, we take the view that an expert witness who recklessly makes a false statement in a report or witness statement verified by a statement of truth will usually be almost as culpable as an expert witness who does so intentionally. This is so, because the expert witness knows that the court and the parties are dependent on his or her being truthful, and has made a declaration which asserts that he or she is aware of his or her duties to the court and has complied with them (see [33] above). To abuse the trust placed in an expert witness by putting forward a statement which is in fact false, not caring whether it be true or not, is usually almost as serious a contempt of court as telling a deliberate lie.”

THE COUNTY COURT ONLINE PRACTICE DIRECTION

This provides an even starker reminder of the duties of the legal representative signing a statement of truth.

“If the legal representative signs a statement of truth in a document without an honest belief in the truth of what is contained in the document, proceedings for contempt of court may be brought against that person.