UK High Court Imposes Custodial Sentence for Contempt

August 09, 2021

In XL Insurance Company SE v. IPORS Underwriting Ltd, Paul Alan Corcoran & Others [2021] EWHC 1407 (Comm), Mrs. Justice Cockerill DBE imposed an immediate maximum sentence of two years’ imprisonment following an application issued under the new Part 81 of the UK Civil Procedure Rules in respect of serious and repeated breaches of freezing injunctions and proprietary injunctions.


IPORS, a company of which Paul Alan Corcoran is the sole director and shareholder, was, pursuant to a contract with XL Insurance Company SE (XL), obliged to hold on trust for XL premiums collected from insureds, declare the premiums received, and remit those sums to XL. XL contends that the majority of those funds were transferred to Corcoran’s personal account and expended for his personal use.

The Injunctions

XL obtained injunctions against the defendant companies controlled by Corcoran and against Corcoran himself, which precluded Corcoran from (1) removing from England and Wales any assets in England and Wales up to the value of £4.5 million (approx. $6.2 million); and (2) disposing of, dealing with, or diminishing the value of assets, up to the same value. The caveat was that Corcoran was permitted to spend £500 (approx. $693) a week on ordinary living expenses and a reasonable sum on legal advice and representation. This permitted expenditure was subject to Corcoran first informing XL where the money was to come from, and such money could not come from XL’s proprietary funds.

The injunctions further required Corcoran to inform XL’s legal representatives of, and swear an affidavit in respect of, (1) the value, location, and details of all assets worldwide exceeding £10,000 (approx. $13,868); and (2) the details of the funds which were subject to the proprietary injunction.

Application for Contempt of Court

XL applied to the court, alleging that Corcoran was in contempt for the following reasons:

  1. He disposed of the assets which were the subject of the injunctions. Corcoran had made several payments out of his Nationwide and Coutts account which far exceeded the £500-per-week cap on ordinary living expenses. Examples of such expenditures included multiple payments to luxury hotels in London, Paris and the Maldives, and multiple payments to Selfridges. Corcoran did not inform XL’s legal representatives of the source of these payments.
  2. He failed to comply with the disclosure obligations.

Decision on Contempt

In order for Corcoran to be found in contempt of court, XL had to show that (1) he had knowledge of the terms of the order; (2) he breached the order; and (3) he had knowledge of the facts which made his conduct a breach of the order. The judge decided that each of these elements was made out on the facts.

The email correspondence of Corcoran and his solicitors and the fact that the injunctions had been served on Corcoran were sufficient to demonstrate that he had knowledge of the terms of the order. The judge held that Corcoran’s expenditure was in breach of the injunctions. If he held assets exceeding £4.5 million, Corcoran’s expenditure (in excess of the permitted £500 per week) would not have been in breach of the freezing injunction, provided that it did not come from the funds subject to the proprietary injunction. However, this was not the case.

Corcoran had provided no asset disclosure, nor had he provided a sworn affidavit to confirm his disclosure. It was “self-evident” that Corcoran was aware that he was in breach when he made the identified payments and failed to provide disclosure. The injunctions were served and endorsed with the relevant penal notices (which named him directly) and the correspondence between XL and Corcoran (or his solicitors). Corcoran was the sole holder of the Nationwide and Coutts accounts from which payments were made.


In light of the “serious, persistent and deliberate breaches of court orders” by Corcoran, the judge “required no persuasion” that, following the principles set out in case law, imprisonment was the appropriate sentence. The judge imposed an immediate custodial sentence of 24 months (being the maximum sentence for contempt) and stated that the court would issue a warrant for Corcoran’s arrest, as he had not attended the hearing.

The judge did not agree with XL that it should be left open to Corcoran to “purge his contempt by compliance.” The judge found no relevant mitigating factors: Corcoran did not admit, or appreciate the seriousness of, the breaches and he was unwilling to engage with proceedings. This sentence was subject to Civil Procedure Rules (CPR) Part 81.10, pursuant to which Corcoran may apply to discharge the committal order.


This is one of the first reported cases concerning a defendant in contempt of a freezing injunction under the new CPR Part 81. It serves as a stark reminder of the potential that a custodial sentence will be imposed for breach of a freezing injunction and it provides helpful guidance as to the considerations of the court when considering the repercussions for breaching a freezing injunction.

Those who are subject to a freezing injunction would be well advised to strictly follow its terms.


If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

David Waldron
Paul Mesquitta