The Wall Street Journal recently reported that, under the law of certain states in the US, individuals can be held in jail for seemingly indefinite periods for contempt in the civil courts, without ever receiving a criminal charge.1 Steve McCann and Ruth Lane of Peters & Peters consider the position under English law.
The Wall Street Journal highlighted the case of a Mr H. Beatty Chadwick, a former Philadelphia based lawyer who was ordered to make a payment of $2.5 million into court in the course of his own divorce proceedings. Thus far, Mr Chadwick has not managed to persuade the Delaware Court that he cannot comply with that order and has therefore languished in prison for civil contempt for the last 14 years.
Under US and English law, civil judges have the power to commit a party to serve a term of imprisonment for contempt of civil orders.
Injunctions prohibit a Respondent from engaging in certain activity (e.g. disposing of assets under a freezing injunction) or require certain steps to be taken (e.g. to provide information about what has become of certain assets under the "tracing" information provisions of a freezing order), or comprise a combination of positive and negative obligations. Injunctions can be "interim", imposed as a preservative measure in aid of a final determination, or permanent whereby the injunction prohibiting certain conduct or activity is itself the actual relief sought (e.g. to desist infringing intellectual property rights).
An intention to breach the order in question is not a necessary element for a contempt to be proved. Warrington J observed in Stancomb –v- Trowbridge Urban District Council [1910] 2 Ch 190 at 194:
"If a person or corporation is restrained by injunction from doing a particular act, that person or corporation commits a breach of the injunction, and is liable for process of contempt, if he or it in fact does the act, and it is no answer to say that the act was not contumacious in the sense that, in doing it, there was no direct intention to disobey the order."2
In the case of breaches of undertakings given to the Court, Rimer J in Miller –v- Scorey [1996] 2 All ER 18 at 28 held that:
"The question of whether or not a contempt in the nature of a breach of an undertaking to the Court has been committed involves an essentially objective test, requiring the determination of whether or not the alleged contemnor has acted in a manner constituting a breach of his undertaking. If he has, then a contempt will ordinarily be established regardless of whether or not he acted contumaciously or with the direct intention of breaking his promise, although I accept that whether any, and if so what, punishment or other consequences ought to be imposed on him will, or may be, materially dependent on considerations of this sort."
The purpose of committal (or the imposition of a fine or sequestration of assets) is to provide the court with "teeth" in order to ensure compliance with its orders and also to punish disobedience of its orders.
In England and Wales, prior to the Contempt of Court Act 1981, sentences could be indefinite. Now, section 14(1) of that Act provides that a sentence of imprisonment for contempt of court must be for a fixed term, which must not exceed two years in a superior court, or one month in an inferior court. Furthermore, section 258 of the Criminal Justice Act 2003 provides that a person committed to prison for contempt of court is to be released unconditionally after having served one half of the term for which he was committed. This applies whether the Contemnor has been committed in respect of a civil or criminal contempt.3
The Contemnor's unconditional release after a maximum of one year's imprisonment applies regardless of whether he remains in breach of the order. In addition, the principle that no-one should be punished twice for the same misconduct applies to contempt as well as other areas of penal policy.4 Upon release from his custodial sentence, the Contemnor cannot be faced with a further application for committal for the same breach or breaches as those for which he has already served his sentence. If the Contemnor has not in the meantime "purged" his contempt by doing that which he was originally ordered to do, a new order with a new time limit for compliance has to be obtained if the litigant in whose favour the original order was made still seeks the same relief.
Section 14(1) of the Contempt of Court Act 1981 also gives the judge the power to release a Contemnor at a point earlier than the end of the fixed term, where the Contemnor seeks to purge his contempt (for example, by providing the information that he has been ordered to provide) and the court is convinced of his sincerity.
English law contains a number of safeguards for the Respondent to a committal application. In addition to the two year maximum sentence that can be imposed and the early release provisions whereby the maximum sentence that can be served is one year, even though civil contempt is not a criminal offence the standard of proof is the criminal standard, namely proof beyond reasonable doubt. As The Wall Street Journal observed, some safeguards exist in the US; for example Congress passed a statute in 1970 limiting the length of civil confinement to 18 months for those who refused to testify in federal court or to a federal grand jury. Reformers hope that more States in America enact laws limiting the terms of civil confinement.
Whilst committal for contempt is intended to be coercive and punitive, it follows that by capping the term of imprisonment a Respondent to an English order may assess whether it is worthwhile to trade off up to one year in prison against deliberate non-compliance, safe in the knowledge that once the sentence has been served in respect of the breach or breaches of that order, he cannot be punished twice. Of course, the Contemnor risks a determined opponent seeking a new order requiring the act or acts to be done with a new timetable. If he subsequently disobeys that order, then he may be imprisoned. In the case of a prohibition, a fresh committal application for any new breach could be launched. However, the beneficiary of the order has to fund the subsequent application for committal, with no guarantee of making any costs recovery. Therefore, in a fraud case, a robust fraudster may decide to "sit out" the term of imprisonment in an effort to frustrate the progress of the litigation.
The court can mark its disapproval of a contumacious failure to comply with its order(s) by refusing to hear the Contemnor and in extreme circumstances by striking out the Contemnor's Defence. Whilst strike out of the Defence may represent a victory, such a victory may in fact be hollow if the Claimant is reliant on the co-operation and assistance of the Defendant, for example in providing tracing information to locate assets. Enforcement of a judgment may represent the starting point for the true battle.
In such cases where a party requires information to which only his opponent has access, section 39 of the Supreme Court Act 1981 provides powerful alternative relief. Under this provision, if a party refuses to execute an authority granting permission to third parties to provide information and/or documents to his opponent, any Master of the High Court can be nominated to sign the authority for and on behalf of the defaulting party. Such an authority operates for all purposes as if it were the authority of that defaulting party, the passive efforts of an uncooperative fraudster to block the progress of the litigation can be sidestepped.
Footnotes
1. No Charge: In Civil-Contempt Cases, Jail Time Can Stretch on for Years, WSJ.com, 7 January 2009.
2. That the above statement represents the true position in the law of contempt has been confirmed by the House of Lords in Director General of Fair Trading –v- Pioneer Concrete (UK) Ltd [1995] 1 AC 456 per Lord Nolan at 479-481.
3. Arlidge, Eady and Smith on Contempt,3rd edition, 2005. See also Lexi Holdings plc (in administration) –v- Luqman and Ors 2007 All ER (D) 23 (Jul) at 182.
4. Danchevsky v Danchevsky (No.2) CA Transcript, November 10, 1977, Lawton L.J; Lamb v Lamb [1984] F.L.R 278 at 282, Oliver.L.J, 283, Kerr, L.J; B v B (Contempt: Committal) [1991] 2 F.L.R 588 at 601 C-D, Purchas L.J.
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