The Supreme Court has held, by a majority of 5 to 4, that the tort of malicious prosecution is available for civil as well as criminal claims: Willers v Joyce [2016] UKSC 43.

This settles an important point that was previously uncertain, as there were conflicting views expressed by the House of Lords and Privy Council. In Gregory v Portsmouth City Council [2000] 1 AC 419, the House of Lords held that the tort did not extend to disciplinary proceedings and, although it was not necessary for its decision in that case, expressed the view that there should not be an extension to civil proceedings either. However, in Crawford Adjusters (Cayman) Ltd v Sagicor General Insurance (Cayman) Ltd [2014] AC 366 (considered in this blog post), the Privy Council held, by a majority, that the tort should be available for civil proceedings.

As in Crawford, the majority was not persuaded by concerns expressed in the dissenting judgments, in particular that there was a risk of deterring parties from bringing valid claims and of prolonging disputes by way of secondary litigation. The majority decision emphasises that the requirement to prove not only absence of reasonable and probable cause for the proceedings but also that there was no bona fide reason to bring them means that the claimant has a "heavy burden to discharge".

The decision leaves open a number of questions, including whether there may be a further extension of liability to malicious defence of proceedings, or malicious applications or allegations in proceedings which would not otherwise be malicious. The minority clearly considered this to be a logical further extension, if the appeal was allowed, but the majority did not consider that it would necessarily follow. Neil Blake and Maura McIntosh consider the decision further below.

In a separate decision in the present appeal, the Supreme Court also addressed the question of whether and in what circumstances a lower court may follow a Privy Council decision which conflicts with previous Supreme Court, House of Lords or Court of Appeal authority. See our separate blog post on that decision.

Background

The defendant to the action, Mr Gubay, controlled a leisure company, Langstone. The claimant, Mr Willers, was a director of Langstone but was later dismissed. Langstone sued Mr Willers for alleged breach of contractual and fiduciary duties in causing Langstone to incur costs in pursuing certain third party litigation. Mr Willers defended the action and claimed an indemnity from Mr Gubay on the grounds that he had acted under Mr Gubay's directions in pursuing the litigation.

On 28 March 2013, Langstone discontinued its claim against Mr Willers. Mr Willers brought the current action for malicious prosecution, alleging that the claim brought against him by Langstone was part of a campaign by Mr Gubay to do him harm. The heads of damage claimed were damage to reputation, damage to health, loss of earnings and the difference between the full amount of the costs incurred in defending Langstone’s claim (£3.9m) and the amount of costs he had recovered on the standard basis on discontinuance (£1.7m).

The question was whether a claim in malicious prosecution could be brought in relation to civil proceedings by one individual against another individual.

At first instance, the deputy judge struck out the claim, finding that she was bound by the House of Lords decision in Gregory. She granted a "leapfrog" certificate to allow any appeal to proceed directly to the Supreme Court, and the Supreme Court gave permission to appeal.

Decision

The Supreme Court allowed the appeal by a majority of 5 to 4, finding that a claim for malicious prosecution can be brought in relation to civil proceedings. The lead judgment was given by Lord Toulson, with whom Lady Hale, Lords Kerr and Wilson agreed. Lord Clarke gave a concurring judgment. Dissenting judgments were given by Lords Neuberger, Mance, Sumption and Reed.

Although both the majority and minority decisions contain a detailed review of the historic case law, dating back to the seventeenth century, none of the justices rested their conclusions solely, or even principally, on that analysis. Lord Toulson commented that the early case law was "capable of more than one respectable interpretation" and the decision to be made by the court "should not depend on which side has the better argument on a controversial question about the scope of the law some centuries ago". The question for the court was whether the tort should now extend to the malicious and groundless prosecution of a civil claim. That was a question of policy, which required consideration of the justice and the practical consequences of a decision in either direction. Lord Neuberger, however, commented in his dissenting judgment that the fact that (on his preferred analysis) the boundaries of the tort had always been heavily circumscribed placed a "tolerably heavy burden" on the argument that those boundaries should be removed or substantially widened.

The majority view, in essence, was that there is no sensible basis for accepting that there is a tort of malicious prosecution of a crime but not a civil action. As Lord Toulson put it:

"It seems instinctively unjust for a person to suffer injury as a result of the malicious prosecution of legal proceedings for which there is no reasonable ground, and yet not be entitled to compensation for the injury intentionally caused by the person responsible for instigating it. It was that consideration which led the judges to create the tort of malicious prosecution, as can be seen in the case law."

The question, he said, was whether there were countervailing factors which meant it should not be applied to civil proceedings, save in the limited categories of case where it had previously been applied – including ex parte applications to secure a claim and petitions for bankruptcy or insolvency.

Lord Toulson considered various countervailing factors which had been suggested, and which influenced the dissenting judgments, including:

  • The risk of deterring pursuit of valid civil claims, for fear of facing a vindictive action for malicious prosecution if the claim fails. Lord Toulson said he was not persuaded that this argument had greater merit in relation to civil proceedings than criminal proceedings.
  • The public interest in avoiding unnecessary satellite litigation. This had not been considered a sufficient reason to disallow a claim for malicious prosecution of criminal proceedings.
  • Inconsistency with the rule that witness evidence is protected by immunity from civil action, even if the evidence is perjured. Again, this was no different from the position in relation to criminal proceedings.
  • Inconsistency with the absence of a duty of care by a litigant towards the opposing party. Lord Toulson commented that there is a great difference between imposing a duty of care and imposing a liability for maliciously instituting proceedings without reasonable or probable cause. And again, the same distinction is established in relation to criminal cases.
  • The suggestion that if a claim could be made for malicious prosecution of civil proceedings, there should logically be a right to sue for the malicious defence of a civil claim without reasonable or probable cause. Lord Toulson said that for an English court to recognise the existence of such a cause of action "would be bold, to say the least", but he did not accept it was a necessarily counterpart of the finding that malicious prosecution extends to civil proceedings. He said there was an obvious distinction between the initiation of the legal process itself and later steps which may involve bad faith but did not go to the root of the institution of legal process.
  • The suggestion that allowing the appeal would take the courts into "new and uncertain waters about the meaning of malice". Lord Toulson commented that there was a volume of case law about malice for the purposes of the tort of malicious prosecution, and that it was well established that it is a separate requirement to the absence of reasonable and probable cause for the action. In Lord Toulson's (obiter) view, it requires the claimant to prove that the defendant deliberately misused the process of the court in bringing the claim, in that there was no bona fide reason to bring the claim.

He concluded that that none of the factors identified were sufficient to outweigh the argument that simple justice dictates such a claim should be sustainable in English law.

Lord Toulson also considered whether the claimant should be entitled to pursue the claim for excess costs, as part of the damages sought. He noted that the decision to award costs to Mr Willers on a standard basis following Langstone's discontinuance of the claim against him was readily understandable, as the judge would not have been able to determine whether he should recover indemnity costs without conducting what would have amounted to a trial of the present action. If Langstone’s action had gone to a full trial and the judge had refused an application for indemnity costs, then it would have been an abuse of process to attempt to secure a more favourable costs outcome by bringing an action for malicious prosecution. But those were not the circumstances here and so the claim for excess costs was not an abuse of process.