In the recent case of Crawford Adjusters & Ors v Sagicor General Insurance (Cayman) Ltd & Anor (Cayman Islands) [2013] UKPC 17 the Privy Council has confirmed that the tort of malicious prosecution applies to civil as well as criminal proceedings.

The decision arose out of legal proceedings brought by a company against a loss-adjuster employee. The claim arose because a vice-president of the company, with a grudge against the employee, had hired an independent loss adjuster to review the employee's work but restricted the independent adjuster's access to certain information. As a result, the independent adjuster's reports were skewed against the employee. The legal proceedings caused him considerable loss.

Days before the trial, the company discontinued its action and judgment was awarded in favour of the employee, who then amended his counter-claim to include malicious prosecution and abuse of process. However, the Cayman Islands Court of Appeal held that the current state of the law was such that the tort of malicious prosecution applied only to criminal proceedings.

The majority of the Privy Council disagreed, holding that the reasoning that limited the application of the tort in respect of civil proceedings was no longer valid. In reaching this view, Lord Wilson JSC referred to the New Zealand decision of Rawlinson v Purnell Jenkinson & Roscoe [1999] 1 NZLR 479. In that case, the High Court had dismissed the plaintiff's claim as there was no 'malice' to the defendant's actions. However, it accepted that a malicious prosecution claim relating to civil proceedings should not be dismissed ex ante, although it noted that the issue could only be resolved by the appropriate appellate Courts.

Against this background, the Sagicor decision will be of interest to the New Zealand courts and may signal a new direction for malicious prosecution claims in this country.