The Court of Appeal recently considered the question of how to deal with parties who are dishonest witnesses in Lloyds v Shanley. In this case, the respondent’s dishonesty was held to be fatal to only part of his original breach of copyright claim against the appellant banks.
Shanley had agreed with Halifax to re-write part of its computerised claims management system using his own proprietary software - a scoping tool. After its 2009 takeover of HBOS, Lloyds began using the software. Shanley commenced proceedings for breach of copyright, claiming that he had not given his permission and relying in part on an alleged written agreement. The banks asserted that the agreement was a forgery, which Shanley denied. However, shortly before the trial, he admitted he had indeed fabricated the agreement.
Shanley was nevertheless partially successful in his claim. The court held that Shanley’s lies were not fatal to his claim in respect of the activities of Lloyds. Kitchin LJ concluded “Mr Shanley has prevailed in his claims in respect of … Lloyds despite his manifest and repeated dishonesty. But… the fact that a claimant tells lies does not necessarily lead to the conclusion that the whole of his case is without substance.” Notwithstanding the fact the written agreement was a forgery, Shanley had not given his permission.
Following this, the banks sought Shanley’s committal for contempt. The High Court imposed a three month custodial sentence following the observation that it was “difficult to see… how there could be a more serious or flagrant contempt”.