This judgement makes very interesting reading for everyone in the insurance and legal sectors. No longer can claimants simply `try their luck’ with a bogus sickness claim. By making false statements they leave themselves open to legal action, possible expenses/compensation payments to insurers and their legal advisors, or even prison for contempt.
Horwich Farrelly, the specialist insurance industry law firm, which has been instrumental in working with the travel industry to tackle fraudulent holiday illness claims, has achieved another significant step in the fight against fraud. In the case of Jet2 Holidays Limited vs Hughes and Hughes, Horwich Farrelly has secured a landmark Court of Appeal ruling which will make it easier for travel companies and their insurers to take action against holidaymakers who make fraudulent claims for compensation, even if they do not actually submit legal proceedings.
The case, handled by Alex Wilkinson, Head of Counter-Fraud Technical claims at Horwich Farrelly on behalf of Jet2holidays, saw an initial claim from Mr and Mrs Hughes who, following an all-inclusive holiday to Lanzarote in December 2016, put forward a claim for damages for holiday sickness under the Package Travel, Package Holidays and Package Tour Regulations 1992 and under the Consumer Rights Act 2015. The pair alleged that while on holiday they contracted food poisoning as a result of eating contaminated food/drink and swimming in the hotel’s allegedly insanitary swimming pool.
Both submitted a claim for the alleged illness via legal advisers, and this included signed witness statements with their version of events. After thoroughly investigating the case, Horwich Farrelly, acting on behalf of Jet2holidays, found various images and comments posted by Mr and Mrs Hughes on social media during their break, including Facebook posts, a YouTube video and Twitter posts, which indicated the family were physically well during the holiday and had an enjoyable time while staying at the hotel. Mr and Mrs Hughes did not issue legal proceedings.
Despite this, Jet2holidays commenced proceedings against the pair given the fact that they submitted allegedly false statements, verified by a statement of truth made in each of the original witness statements. However, on 13th November 2018 His Honour Judge Owen QC, sitting as a High Court Judge, rejected the proceedings on the basis that that “the false statements were not ‘persisted in’ for the purpose of using the court process to gain damages for a dishonest claim as no claim for damages had been made.”
Despite this, following advice from Horwich Farrelly, Jet2holidays continued to fight the case because it believed the respondents could be in contempt in respect of the false claims in the original witness statements, which were provided whilst the claim was being dealt with even before proceedings were issued. The case was taken to the Court of Appeal, with judgment handed down on the 8th November 2019 where Master of the Rolls, Sir Terence Etherton, Lord Justice Hamblin and Lord Justice Flaux held in a unanimous decision that “there was a close connection between the original witness statements made by the respondents and the administration of justice and that, if those witness statements were false, as appears strongly to be the case, they interfered with the administration of justice”.
It was further held that “A dishonest witness statement served in purported compliance with a PAP is capable of interfering with the due administration of justice for the purposes of engaging the jurisdiction to commit for contempt because PAPs are now an integral and highly important part of litigation architecture”.
Commenting on the landmark ruling, Ronan McCann, Managing Partner at Horwich Farrelly, said: “This is a truly landmark ruling in the fight against fraudsters. Often fraudulent claims are submitted by solicitors on the basis that if they are rejected the fraudster does not have to issue proceedings and submit a claim elsewhere so is not exposed to any risk. This case confirms that this is no longer the case. If a fraudster is willing to submit such claims, even if they do not litigate, they are now exposed to a prison sentence. The days of submitting risk free fraudulent claims are well and truly over.”
(If this same judgement was applied in Ireland then dozens of fraudulent slip n trip cases would never even be filed – Ed)
“To date Horwich Farrelly has successfully defended almost 3,500 holiday illness claims and we are delighted to see our approach still proving successful. Individuals should now think twice before even submitting a fraudulent claim – our success in this appeal means that dishonesty at any pre-action stage could give rise to an application for committal to prison for contempt. Our approach to this claim reinforces our zero tolerance approach to insurance fraud in any area and further strengthens the fight against fake holiday illness claims.”
“The travel and insurance industries have a key role to play in challenging fraudulent holiday illness claims and Horwich Farrelly will continue to work alongside both to see that such cases are defended robustly.”
Steve Heapy, CEO of Jet2.com and Jet2holidays, said: “Jet2holidays continues to lead the way in the fight against fake sickness claims, and this landmark decision shows that the courts take this issue very seriously.
The decision by the Court of Appeal to allow us to progress with contempt proceedings against Mr and Mrs Hughes, despite no legal proceedings being issued, has wide reaching implications not only for tour operators dealing with false sickness claims, but the insurance industry in general. The ruling send should send a warning to others. If documents are found to contain false information, contempt of court proceedings can and will be brought, even when the claimants have decided not to commit to legal proceedings.”