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Wednesday 21 August 2019

Richard Curran: 'Doing time for perjury would help insurance fraud battle'

Claim game: Insurers have raised concerns over scams and high awards
Claim game: Insurers have raised concerns over scams and high awards
Richard Curran

Richard Curran

Swearing on a Bible when taking the stand in a court case is probably the oldest way of 'ensuring' the witness tells the truth, the whole truth and nothing but the truth. It seems we may need something a little more robust than the individual's conscience and, depending on their beliefs, the idea they may face an eternity in hell.

Punishment in this life, rather than the next, seems to be the way to go. The question of telling lies in court cases, tribunals of inquiry or other investigations has been around for many years.

But more recently, the issue has grabbed the headlines in relation to insurance fraud.

Everybody agrees that the punitive cost of insurance on motorists and businesses is a real scandal, but there is fundamental disagreement on the main drivers behind that.

Insurance companies say it has to do with scammers, high costs of litigation and high claims awards. The legal profession says it has to do with profiteering insurers.

Lots of business people who have been on the receiving end of massive insurance premiums or, indeed, sizeable bogus personal injury claims say that not enough is being done to prosecute individuals who lie, exaggerate or invent stuff during court cases. Perjury has been around for a very long time but, ironically, it is not even properly defined in Irish law.

There is no specific criminal offence of perjury, but rather it is covered under common law.

This can make it more difficult to prosecute and the number of cases taken in Ireland is tiny.

Businessman and Senator Pádraig Ó Céidigh has drafted a bill to cover perjury as a specific offence and place it on a statutory footing. The bill has passed the Seanad, and it is now being backed by Minister for Justice Charlie Flanagan, after some amendments. It looks very likely that it will be passed in the Dáil.

People found guilty of perjury could face 10 years in prison and a fine of up to €100,000 under the proposals. The Perjury and Related Offences Bill (2018) will make it a criminal offence to give a material statement in a court case or judicial proceeding which is false, and the person making the statement knows to be false.

It goes further to include statements made under oath outside of court but as part of the wider proceedings - in other words, sworn statements or affidavits.

And it goes further again by including persons who persuade, induce or otherwise cause another person to make a false statement. The bill has been widely welcomed, not least by Ó Céidigh's Seanad colleague and former attorney general Michael McDowell, along with small business group ISME and Minister Flanagan too.

The Law Society has also welcomed the bill, but has pointed out there is already a common law crime of perjury and key provisions in the Civil Liability and Courts Act 2004.

Law Society director-general Ken Murphy has said that where perjury occurs, it should be prosecuted vigorously and those convicted should go to jail.

However, some in the profession have questioned whether the bill will have any real impact on insurance fraud.

They argue that under the 2004 Act, a person can be prosecuted for insurance fraud, inventing accidents, exaggerating or feigning injuries.

This raises the question of whether the perjury bill will be necessary or make a real impact on insurance fraud. Murphy has suggested there is a lack of will to use the 2004 legislation to bring about prosecutions.

There may be a lack of will, but it isn't the only obstacle to taking prosecutions under the existing legislation.

The Civil Liability and Courts Act (2004) has enabled judges to throw out cases they believe to be bogus or fraudulent. But few prosecutions have been taken.

Section 25 of the Act applies to anyone giving false or misleading evidence in a personal injuries action with intention to mislead the court.

Section 14 requires the plaintiff specifically to swear an affidavit as to the truth of all assertions, allegations and information provided to the defendant.

This seems pretty clear-cut. Yet, when the Cost of Insurance Working Group looked at the use of the legislation, it found no instance of a prosecution or conviction under Section 14.

One of the reasons why personal injuries fraud cases are not being pursued is that the original court action takes place in the civil courts. Having a follow-up criminal prosecution requires the Gardaí to go right back to the original events.

If a Garda was not called to the scene of the alleged accident at the time, they won't have been involved in the events at all.

So somebody can refer a case of suspected fraud to the Gardaí, but the chances of securing a criminal prosecution for fraud may be very slim. The Garda resources required would be significant.

We have seen from a recent Oireachtas committee hearing with insurance company executives how few cases they refer to the Gardaí. Under questioning from Sinn Fein's Pearse Doherty, it became evident that while insurers claim there are lots of frauds going on, they are not making many Garda referrals.

Perjury cuts to the heart of the fraudulent, bogus or exaggerated claim. It is also quite specific in nature. The new bill defines perjury for the first time in Irish law. A follow-up criminal case would ask not whether someone had taken a fraudulent claim but whether they had lied in court documents or evidence.

By enshrining it in law as a specific statutory offence, we are sending out a signal to ourselves as a society that we take this seriously. Take the tribunals or High Court inspectorships, for example.

These were no 'slip and sue' jobs. They involved serious political corruption, tax evasion or corporate fraud. I remember reading the transcript of evidence given to a High Court inspector by a prominent businessman.

The businessman was giving a particular explanation regarding his use of an Ansbacher account when he was confronted with evidence to the contrary by the High Court inspector. He then asked for a brief break while he consulted with his lawyer.

He re-entered the room, fundamentally changed his story and put his hands up as to his use of the account.

There appeared to be no penalty for this. Why not try it on and see how much evidence this court-appointed officer has?

Perhaps it is cultural and even historical as to why we seem to treat lying to the courts so lightly. Perhaps it boils down to limited Garda resources and very high burdens of proof which might use up those limited resources only to be unfruitful.

In the UK, they have specific perjury legislation. But even there, perjury cases can be hard to win.

The most famous one is probably Jeffrey Archer in England, who was sentenced to several years in prison in 2001 for perjury in a libel action some years before. After a slam-dunk case, it still took the jury four days of deliberation to find him guilty.

Having a specific offence of perjury will not automatically reduce insurance premiums. But it will go some way towards setting a new tone. It could provide a more workable deterrent from telling lies or facilitating others in doing so, in judicial inquiries and courts. And this would apply whether you are a lying politician, a solicitor facilitating lies, or just an ordinary Joe out for a few thousand quid.

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