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Sulaman v AXA Insurance Plc & Anor, Court of Appeal, 11 December 2009

12 January 2010
The issues

False statement – litigant lying in evidence – lie – costs – conduct.

The facts

A number of people insured genuine cars against third party fire and theft. An initial instalment premium was paid and a direct debit system set up. Soon after the insurance was on foot claims were made that the car had been involved in an accident for which the owner was to blame. There was therefore an innocent, and usually fictitious victim who had a claim and who was bound to succeed against the driver (who was himself sometimes fictitious and sometimes genuine but unaware that proceedings were to be taken against him). Claims for repairs, hire charges, etc would be made by a claims management firm and those claims would be paid by the insurers to the claims management firm or as that firm directed. Large sums of money were involved and made their hands into fraudulent pockets.

After AXA found out what was happening they refused to pay further claims and sought to recover the sums they had paid out in consequence of the false claims.

The Trial lasted from January to March 2008 and the insurers succeeded against most of the Defendants but failed to prove their case as against Sughra Sulaman. Her costs amounted to £450,000.00. In November 2007 she had made a Part 36 offer of £7,600.00 and after her success at Trial applied for her costs up to the 6th December on an indemnity basis thereafter. The Trial Judge awarded her only one-third of her costs on the basis that she had lied in two respects at Trial.

Ms Sulaman Appealed against the costs Order.

The decision

It was argued on behalf of Ms Sulaman that the lies that she told were not consequential to the case as a whole and that it was too harsh to deprive her of two-thirds of her costs for those reasons; and, moreover, that the Judge had not satisfactorily explained his reasoning for his Order, nor had he adequately separated the concepts of increase in the length of the Trial because of her lies or the concept that she should be penalised for the lies she told. It was also argued that the Judge had ignored the Part 36 offer made by Ms Sulaman.

Firstly, the Court would be reluctant ever to agree that a decision on costs after a long Trial was insufficiently reasoned. The initial Judgment spoke for itself and did not need to be extensively referred to in the costs Judgment. Elaborate Judgments on costs were to be strongly discouraged. It had been complained that there was insufficient calculation by the Judge of the time and expense taken up by these lies. This was a misconceived complaint. Any such calculation would be speculative. Lies maintained and repeated in a complex case were insidious. The litigation had been made more difficult and the Judge’s task more intractable as a result of the lies. The Judge was undoubtedly entitled to express his disapproval, a fact that had been recognised in Widlake v BAA in the way he had.

There was no need for the Judge to apportion different parts of his Order between lies which prolonged the Trial process and lies of which he merely disapproved.

The Judge had not ignored the Part 36 offer. It had been recognised in the costs Order he had made. It was true that insurers had not replied to or negotiated around the offer. This however was a very different case from Painting v University of Oxford. Insurers were bringing an action in order to establish a principle that fraudsters could not assume that they would get away with their frauds because it would be too expensive and time consuming to prove the frauds to the satisfaction of the Judge. The decision to award only one-third of the Claimant’s costs was within the wide area of the Judge’s discretion, the Court noting that in Widlake a lying Claimant had been deprived of the whole of her costs.


Lord Justice Sedley dissented in part, taking the view that the depravation of two-thirds of the Claimant’s costs was disproportionate. The Claimant had lied, possibly under pressure of events or possibly under a misplaced sense of family loyalty or possibly fear. The lies had not appreciably prolonged the Trial and not to an extent commensurate with the reduction. The reduction was punitive in character and whilst that was permissible it still had to bear some proportion to the issues as a whole. Lord Justice Sedley would have allowed the Appeal to the extent of Ms Sulaman receiving two-thirds of her costs.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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