JICL

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VOLUME
4:1
JUNE 2017
1-131
  • LIABILITY FOR THE MALICIOUS INSTITUTION OF CIVIL PROCEEDINGS

    Stephen Todd
Abstract

Should a person who maliciously institutes civil proceedings without any reasonable and probable cause be held liable in the same way as the malicious prosecutor in criminal proceedings? Early case law in England is equivocal, but a decision of the House of Lords in 2000 specifically rejected it.1 However, two recent decisions have brought about a significant change. In Crawford Adjusters (Cayman) Ltd v Sagicor General Insurance (Cayman) Ltd,2 the Privy Council, in a three to two majority decision,3 upheld the action. Then in Willers v Joyce,4 the same question arose for determination by the UK Supreme Court, and this time by a five to four majority, it was again resolved in favour of allowing the action. Let us consider first the background to these two decisions and then look at the reasoning underlying the majority and the minority views.

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Introduction

In English law, there is a long-established category of claim, laid down authoritatively in Quartz Hill Consolidated Gold Mining Co v Eyre,5 where an action does lie, namely civil proceedings which attack the credit of the person sued, like bankruptcy proceedings or a winding up petition against a company. There are a few other special cases,6 but in all other circumstances, the courts in England have in the past denied a remedy even in the case of civil claims making serious allegations of fraud or immorality. One justification for this restrictive view lies not in any matter of high principle but in the theory propounded in Quartz Hill Consolidated Gold Mining Co v Eyre, that the bringing of an ordinary civil action, unlike an action which may wreck credit the moment it becomes known that it has been started, does not naturally or necessarily involve any injury to reputation, person or property. First, it is argued that the defendant suffers no loss of reputation or standing, because his character will be cleared by the successful defence of the charge.7 But this view may be criticised on the grounds that public suspicion may be aroused by the mere bringing of charges, irrespective of their outcome, and that in any event, no similar argument applies where a person successfully defends a criminal charge. Second, it is said that the defendant’s only pecuniary damage will be the costs of defending the action and he will already have been compensated for this in the first action.8 This ignores the reality of the matter that the award of costs in a civil action is unlikely to be an adequate compensation for the costs actually incurred. Furthermore, any disparity as regards the costs of defending criminal proceedings has been held recoverable.9 Other possible relevant considerations are the potential to deter resort to the justice system, to which the reply is that honest litigants would not be deterred, and the need for finality in litigation, which argument could be applied equally in the case of prior criminal proceedings.

These arguments suggest that a distinction between malicious criminal and malicious civil proceedings is not easy to justify. Indeed in Gregory v Portsmouth City Council,10 Lord Steyn accepted that one traditional explanation — that the poison and the antidote were presented simultaneously — was no longer plausible. But he considered that the extension of the tort to civil proceedings generally had not been shown to be necessary because adequate protection was afforded by other related torts. But this is hardly true as a general proposition, and there was in fact no other available action which could assist Mr Gregory.

This brings us to the decision of the Privy Council in Crawford Adjusters (Cayman) Ltd v Sagicor General Insurance (Cayman) Ltd,11 on appeal from a decision of the Cayman Islands Court of Appeal. The plaintiff claimed damages in respect of the defendant having maliciously instituted proceedings against him, alleging that he was guilty of deceit and conspiracy to defraud, and in a majority decision, it was held that an action for malicious prosecution of civil proceedings should lie and that the claim succeeded. Lord Wilson surveyed the early development of the law of malicious prosecution and was satisfied that the tort had indeed applied to civil proceedings.12 His Lordship noted the disparate situations in rather more recent times where a civil action had been held to lie,13 and also that decisions in Australia, New Zealand and the United States recognised the tort (as to which see further below). As regards the policy of the matter, he considered that none of the objections stood scrutiny. In particular, insofar as the rationale for the tort of malicious prosecution was the inability of a successful defendant to sue a claimant for defamation in respect of allegations made maliciously in legal proceedings, it applied as much to civil as to criminal proceedings. In that a distinctive feature of the tort was that the defendant had abused the coercive powers of the state, it again applied as much to civil proceedings. There was no principle behind a redefinition of the distinctive feature as being an abuse of the coercive powers of the state only in criminal proceedings. The law needed to be true to the reason for its very existence. His Lordship thought that denying a remedy to the victim of a wrong doing should always be regarded as exceptional, and any justification needed to be necessary, strict and cogent. In his opinion, the force of all suggested justifications for denying the plaintiff a remedy failed to measure up to these demanding standards.