Contempt of Court – Spring Series: 2/15

Civil Contempt Proceedings: Legal Framework

The legal framework of contempt proceedings

CPR 81 governs committal proceedings.

As applications for committal for contempt can result in imprisonment or other draconian sanctions, including confiscation of assets, specific regard must be had to article 6 of the European Convention on Human Rights (ECHR). For more information, see Inplayer Ltd (formerly Invideous Ltd) v Thorogood [2014] EWCA Civ 1511.

CPR 81.1 explicitly states that the CPR do not amend the pre-existing substantive law in relation to contempt and should therefore be read as consistent with substantive law. Therefore, the pre-existing body of substantive case law that pre-dates the implementation of detailed amendments to CPR 81 which came into force on 1 October 2020, still applies, though caution should be exercised when relying on pre-existing authorities that were concerned, wholly or mainly on the detail of the previous CPR regime.

The version of CPR 81 in force with effect from 1 October 2020 is drafted to be much simpler, and therefore easier to follow. It is likely that the courts will view departure from these simplified rules more harshly than they might have under the previous labyrinthine procedures.

Are contempt proceedings an act of last resort?

In considering a committal application, or giving permission to pursue such an application, the courts always give careful consideration (as clearly enunciated in Sectorguard v Dienne [2009] EWHC 2693 (Ch) – also known as Hare v Legion Group) as to whether:

• the application is proportionate, or the continuation of the proceedings is proportionate
• options that fall short of a committal application may be appropriate, and
• the application is being pursued for legitimate aims, rather than as a device

There are many examples of cases where applications for committal have been brought due to an alleged breach of a court order, often relating to the disposal of assets or disclosure of material, but have ultimately been unsuccessful (for example Public Joint Stock Company Vseukrainskyi Aktsionernyi Bank v Maksimov [2014] EWHC 4370 (Comm)).

The most common reason is that although a breach of an order has been established (sometimes referred to as a technical breach), the defendant did not have the requisite intent, or the breach was insufficiently serious to meet the ‘proportionate’ test for the finding of a contempt. This approach, in essence, refers back to the three considerations set out above in Sectorguard.

Bringing such an application may also have cost consequences. For example, in Maksimov, an overly aggressive claimant was ordered to pay the defendant’s costs, even though technical breaches were established against the defendant.

Legitimate aims, legitimate means and abuse of process

One can easily appreciate how committal applications could be used to bully and cajole an opposing party in litigation.

Where a question arises as to whether an individual who seeks to pursue a committal application is doing so for proper reasons, the courts can be reassured that the application can be legitimately pursued or permission granted, despite that concern, on the proviso that the claimant instructs competent solicitors and counsel to conduct proceedings (JRS v HNL [2015] EWHC 2298 (QB)).

You do therefore need to give careful consideration when advising a client on pursuing committal proceedings.

Conversely, where the court finds that the application was ‘… a tactical move in order to disrupt the Respondents’ [defendants’] preparation for and continuance of that hearing’ the court will have no trouble in finding the application to be an abuse of process (Simon and Simon v Brecher [2015] EWHC 4057 (Ch)). In Brecher, such a tactical application was met with a costs order of over £100,000.

The disapproval shown by the courts as to ‘tactical’ applications is further underlined by Sectorguard, in which Briggs J stated as follows:

‘Committal proceedings are an appropriate way, albeit as a last resort, of seeking to obtain the compliance by a party with the court’s order (including undertakings contained in orders), and they are also an appropriate means of bringing to the court’s attention serious rather than technical, still less involuntary, breaches of them. In my judgment the court should, in the exercise of its case management powers be astute to detect cases in which contempt proceedings are not being pursued for those legitimate ends… Committal proceedings of that type are properly to be regarded as an abuse of process, and the court should lose no time in putting an end to them, so that the parties may concentrate their time and resources on the resolution of the underlying dispute between them.’

Navigator Equities v Deripaska [2020] EWHC 1798 (Comm) provides guidance on when an application for contempt of court may be considered to be an abuse of process (and therefore liable to be struck out, as it was in this case). Baker J noted the quasi-prosecutorial nature of contempt applications, which must therefore be conducted dispassionately and even-handedly and brought solely in the public interest and not to serve any partisan agenda.

Leverage for settlement?

Where a party alleges that a committal application is an abuse of process because the threat of committal is being used as leverage within settlement negotiations, the question for the court to consider is whether the offer to settle is permissible within the context of hard-fought litigation or unambiguously improper (Integral Petroleum v Petrogat [2020] EWHC 558 (Comm)).

In determination of that question, it will not be an abuse unless a ‘real and substantial purpose’ of the application was to use the threat of committal to force the defendant to settle the claim. It can never be proper to seek to use a committal application as a lever to bully a defendant into a settlement. However, the practical consideration that resolving an outstanding committal application will in most cases be necessary to achieve a settlement of the commercial dispute, means that the court should not jump too readily to the conclusion that references in the settlement communications to the disposal or timing of the committal proceedings evidence an improper purpose on the claimant’s part or an improper threat.

In Cole v Carpenter [2020] EWHC 3155 (Ch), the court held that referring to the possibility of contempt proceedings in a without prejudice settlement letter was not improper or abusive, on the basis that it was obvious on the facts that contempt proceedings would be required to be considered at some stage, and if there was going to be settlement of all claims, settling any prospective contempt application would need to be part of the settlement. On the issue of without prejudice communication being used as evidence, the court held this was permissible if there was unambiguous impropriety in the use of contempt proceedings as a threat to obtain a favourable settlement (as outlined in Ferster v Ferster [2016] EWCA Civ 717), however on the facts of this case there was no improper purpose.

Quasi-criminal nature of contempt proceedings

One of the potential outcomes of a committal application is an immediate custodial sentence. As a result, the standard of proof for contempt of court is to the criminal standard and the onus remains on the claimant throughout to establish the contempt; the defendant need not prove their innocence (Masri v Consolidated Contractors International Company [2011] EWHC 1024 (Comm)).

There are additional obligations to the court placed on a claimant when pursuing contempt litigation, over and above those usually faced in civil litigation, because the claimant is acting as a type of ‘prosecutor’, and therefore must act fairly. As set out in Navigator Equities v Deripaska [2020] EWHC 1798 (Comm), there is a need for the applicant as ‘quasi-prosecutor’ ‘to act generally dispassionately, to present the facts fairly and with balance, and then let those facts speak for themselves, assisting the court to make a fair quasi-criminal judgment’.

This should be compared with the standard of proof when seeking permission to bring committal proceedings, the standard being ‘a strong prima facie case’, among other considerations (Tinkler v Elliott [2014] EWCA 564 at [44]).

For other cases which have considered whether the claimant had satisfied the criminal standard of proof, see Sports Direct International v Rangers International Football Club [2016] EWHC 85 (Ch) and JSC Mezhdunarodniy Promyshlenniy Bank v Pugachev [2016] EWHC 192 (Ch)

Notwithstanding the requirement to meet the criminal standard of proof, it may not be necessary for the defendant to have deliberately or consciously intended to breach the relevant order made against them (albeit, that the position may be different in relation to assisting, causing or procuring a breach by a company) (Therium v Brooke [2016] EWHC 2421 (Comm)).

The strict regime

Unless the court permits otherwise, the adherence to the requirements of CPR 81 is mandatory and a claimant should strictly comply with the requirements of CPR 81 to avoid any issues later down the line.

Richard Shepherd
Alex West