Contempt of Court in personal injury proceedings
In recent months, I have written both about the consequences of failing to beat a Part 36 offer and how severe a finding of fundamental dishonesty is in a personal injury claim.
The recently decided case of Aviva Insurance Ltd –v- Aleksander Kovacic  EWHC 2772 (QB) involved both a failure to beat a Part 36 offer and findings of dishonesty at first instance which subsequently led to Mr Kovacic being found in contempt of Court. Such a finding is extremely serious; it is a criminal offence and can result in a prison sentence.
Mr Kovacic was involved in a road traffic accident in 2010 in which he suffered serious injuries including fractures of the right scapula, right second rib and right ulna; fractures to both femurs and some spinal fractures as well as a rupture of the left patella tendon. He was admitted to ICU, underwent several surgeries and was referred for physiotherapy. There was no dispute that he had suffered significant injury.
Liability was admitted by Aviva Insurance and Mr Kovacic issued proceedings in 2013. The financial loss was pleaded at in excess of £1 million. During the course of those proceedings, Mr Kovacic claimed that he struggled with many activities of daily living and he signed various statements of truth to that effect. He also told both his own medical experts and those instructed by Aviva that he had difficulty walking; that he needed a stick to walk; that he struggled to bend down and, amongst other assertions, that he could not drive.
Aviva commissioned surveillance evidence which was served on Mr Kovacic’s solicitors. The surveillance footage showed that Mr Kovacic was much more capable than he had made himself out to be in that he was seen walking much further than he claimed he could and without a stick and also driving his car without difficulty, sometimes on long journeys.
Following this, Aviva made a Part 36 offer in the sum of £350,000 which Mr Kovacic rejected. The matter was fixed for an assessment of damages hearing which took place in February 2015, before His Honour Judge Bidder QC, sitting as a High Court judge. Following a three day hearing, the judge found that Mr Kovacic had significantly exaggerated his current condition and his physical limitations and that he had told the medical experts numerous lies. He awarded Mr Kovacic £95,114 in damages. Mr Kovacic had therefore failed to beat Aviva’s Part 36 offer of £350,000 and was ordered to pay Aviva’s costs from 30 December 2013 up to and including the hearing. This was therefore some 14 months of costs and on an indemnity basis. The seriousness of failing to beat a Part 36 offer is clearly demonstrated here. Mr Kovacic could expect that all of his damages would be swallowed up in meeting the costs order.
However, it did not end there for Mr Kovacic. Counsel for Aviva also asked the judge whether he could confirm that he was satisfied as to the criminal standard of proof in respect of the dishonesty findings. The judge confirmed that he was satisfied to that standard.
Mr Kovacic went on to attempt to appeal the result. Permission was firstly refused on the papers and subsequently at a hearing in July 2016. Following this, Aviva applied for permission to bring proceedings against Mr Kovacic for contempt. At a hearing on 5 May 2017, the court granted Aviva permission to bring contempt proceedings. The hearing duly commenced on 16 October 2017 before Mr Justice Spencer.
The judge considered Mr Kovacic’s evidence, the surveillance footage and the findings of the trial Judge Bidder QC. He concluded that 12 allegations of contempt of court had been proved to the criminal standard. Those included the claimed lack of mobility, alleged need to use a stick, inability to bend down and inability to drive. Mr Kovacic therefore not only failed to beat a Part 36 offer, he was also found guilty of a criminal offence. He was sentenced to three months imprisonment for each of the 12 counts of fraud to run concurrently and suspended for 18 months. He was also ordered to pay a £10,000 fine within 12 months.
This case shows how very serious the consequences of exaggerating injuries can be and is a reminder to claimant solicitors to warn their clients about what signing a statement of truth actually means. Insurers are increasingly aware of potential fraud and it is wise to advise clients that they may be the subject of video surveillance. The vast majority of claimants are truthful about the extent of their injuries and they will have nothing to fear.