The Privy Council has held, by a majority, that a claim for malicious prosecution may be brought in respect of civil as well as criminal proceedings: Crawford Adjusters and others v Sagicor General Insurance (Cayman) Ltd and another [2013] UKPC 17.

Previously it was thought that the tort of malicious prosecution did not extend to civil proceedings (subject to limited exceptions, including maliciously presenting a winding up petition). This decision suggests, on the contrary, that a claim for malicious prosecution may lie where a claimant can establish that he has suffered damage as a result of a civil claim which was brought against him maliciously and without reasonable cause, and which was determined in his favour. The possibility of a claim for malicious defence of proceedings was left open.

Although Privy Council decisions are not binding on the English courts, they are of significant persuasive authority. In strong dissenting judgments, however, Lords Sumption and Neuberger highlighted concerns about the possibility of deterring parties from bringing claims, if they are potentially liable for malicious prosecution, and the risk of prolonging disputes by way of secondary litigation. These concerns are readily understandable, and may be shared by commercial parties engaged in disputes where feelings are apt to run high. As Lord Sumption put it: “It is no answer to these concerns to say that the bar can be set so high that few will succeed. Malice is far more often alleged than proved. The vice of secondary litigation is in the attempt.”

Background

The appeal was brought against an order of the Cayman Islands Court of Appeal in which that court had dismissed P’s claim for damages against Sagicor for (inter alia) malicious prosecution. The Cayman Islands court had held that that all four elements of the tort had been established in that:

  • Sagicor had brought proceedings against P which had been determined in favour of P.
  • In those proceedings Sagicor had alleged fraud and conspiracy against P without reasonable cause.
  • The allegations had been made maliciously.
  • As a result of the allegations, P had suffered substantial financial loss and other damage.

However, the court had found that it was precluded from holding Sagicor liable for malicious prosecution because the tort did not extend to civil proceedings (subject to limited exceptions) based on observations by the House of Lords in Gregory v Portsmouth City Council [2000] 1 AC 419.

Privy Council decision

The majority of the Privy Council (Lords Wilson and Kerr and Lady Hale) held that the tort of malicious prosecution was available for civil proceedings. The majority was influenced by the fundamental principle that where there is a wrong there should be a remedy, unless there is a compelling justification to deny the remedy. Lords Sumption and Neuberger dissented, on the basis that it would represent an unjustified extension of an anomalous tort.

Lord Wilson noted that the holding in the Gregory case was that the tort of malicious prosecution did not extend to disciplinary proceedings. In that case, Lord Steyn had added as a postscript that, although there was a stronger case for an extension to civil legal proceedings than disciplinary proceedings, he was not persuaded that the extension to civil proceedings was necessary taking into account the protection afforded by other related torts. Lord Wilson said that these observations should not discourage the Board from concluding that the tort of malicious prosecution applied to the present case. Since no other tort could address the injustice of the present case (the court having found that an action for abuse of process was not available on the facts) the rationale behind Lord Steyn’s hesitation lost all its force.

Lord Sumption disagreed. Although he recognised that the House’s comments in Gregory were obiter, and therefore not strictly binding, the point had been fully argued both in the Court of Appeal and in the House “and the answer given at both levels was as carefully considered as any ratio decidendi“.

The distinction between civil proceedings and criminal prosecutions was, in Lord Sumption’s view, neither arbitrary nor unsatisfactory. The tort of malicious prosecution was essentially bound up with the notion of abuse of a public function, namely the prosecution of criminal proceedings. He noted that the tort is an exception to two well-established principles of English law: namely the principle of absolute immunity for things done and said in the course of legal proceedings and the principle that malice does not make an otherwise lawful act tortious. These exceptional features were justifiable, he said, only because the tort was a form of misfeasance in public office. In Lord Sumption’s view, to apply the tort to civil proceedings would be to create a wholly new tort; the law had never been prepared to countenance such a tort in the past and should not do so now.

To counter Lord Sumption’s view that the tort of malicious prosecution had never previously applied to civil proceedings, Lord Wilson outlined the early development of the law in this area dating back to the 13th century. Lord Wilson’s view was that the tort had applied equally to criminal and civil proceedings until the Court of Appeal’s decision in Quartz Hill Consolidated Gold Mining Co v Eyre (1883) 11 QBD 674. In that case the court had drawn a distinction between a petition to wind up a company, for which the tort of malicious prosecution was available, and an ordinary civil action, for which the court thought no such action was necessary. This was on the basis that, at the time, allegations in civil proceedings were not made public until they were determined at trial, and therefore (unlike a winding up petition which must be advertised) would not involve damage to the defendant’s reputation. Lord Wilson said that today, in light of the public nature of allegations in civil proceedings, the basis of this distinction had crumbled away. Insofar as the tort was based on an abuse of the coercive powers of the state, that applied as much to civil as to criminal proceedings.