The Privy Council judgment in the recently reported case of Crawford Adjusters v Sagicor Insurance (Cayman) Ltd [2013] UKPC 17, extends the scope of actions for malicious prosecution to civil cases. Hitherto, save in a very small category of civil cases, malicious prosecution had largely only been available for unsuccessful criminal prosecutions. A majority of three to two in the  Privy Council has now decided that the tort extends to civil cases. The case involved an appeal from the Cayman Islands Court of Appeal which held that malicious prosecution was not available to a claimant in a civil case. The Claimant [P] was a surveyor who was caught up in a dispute with a loss adjustor [D] who was described in paragraph 11 of the judgment to be experienced and able with an aggressive personality. In paragraph 14 of the judgment it is recorded “In July 2005 D stated that he intended to drive P out of business and to destroy him professionally. The Judge found that he meant what he said.”  A civil action for fraud was commenced by the loss adjustors against P which was withdrawn shortly before trial. D was involved in alerting a journalist who reported the allegations against P thus causing massive damage to his reputation and to the willingness of third parties to employ him.

Proceedings for malicious prosecution in civil cases have been possible in the United States for some time. Part of the rationale for the development of the tort in the US related to the absence there of a general power to award costs against a claimant in favour of a successful defendant. Gregory v Portsmouth City Council [2000] 1 AC 419 was decided by the House of Lords as recently as 2000. Lord Steyn gave the leading judgment in support of the finding that the tort of malicious prosecution did not extend to disciplinary proceedings. The facts in Gregory related to an “internal” disciplinary committee set up by the City Council to consider allegations against G that he had used insider knowledge and then purported to remove him from various committees. A court later held that the committee thereby had acted beyond its powers. The House of Lords held that “whatever the extent of the tort of malicious prosecution, its paradigm was of the prosecution of criminal proceedings” and that “in relation to statements made in disciplinary, as opposed to in legal proceedings, privilege under the law of defamation was only qualified, thus defeasible by proof of malice, and that a remedy in defamation was therefore a tort which (together with three other torts) might well be available to the victim of a malicious prosecution of disciplinary proceedings such as G claimed to be”.

In Crawford Lord Wilson conducted a lengthy and learned analysis of the origins of the tort in so far as it related to civil proceedings. He, Lady Hale and Lord Kerr laid considerable weight on the absence of a remedy to P. Lord Sumption dissenting suggested Gregory should have been binding and that to extend the tort of malicious prosecution would lead to the risk of deterring potential litigants and upon witnesses from freely assisting in the administration of justice and also to discourage secondary litigation or “action about actions” thus eroding the finality of litigation. In paragraph 147 of the judgment Lord Sumption debated

 

“Third, the precise ambit of the tort, if it extends to civil proceedings of a private nature will be both uncertain and potentially very wide. The Board would have created a new malice-based tort the gist of which is the malicious initiation of baseless proceedings in a manner which damages the reputation of the victim. But if that is to be the essence of the tort, then it ought in principle to apply to the malicious abuse of disciplinary proceedings, the very proposition which the House of Lords was not prepared to accept in Gregory. Logically, it would also apply to any factual case advanced in civil proceedings which maliciously and baselessly discredited another party, including a case advanced by a defendant or a third party. Logically it would extend to cases where the action was not maliciously brought but the plaintiff gave malicious evidence, or indeed to a case where a witness who was neither the plaintiff nor the directing mind and will of the plaintiff gave malicious evidence. In the case presently before the Board, the particular abuse consisted in the introduction of a baseless allegation of fraud. But if the tort is extended to the conduct of civil proceedings, there is nothing in logic to suggest that liability can be limited to such cases."

Lord Neuberger, also dissenting, analysed the development of the tort in the United States and referred to the position on costs.

The Gregory case involved internal disciplinary proceedings against a councillor. What of disciplinary proceedings against, for example doctors or other health professionals, whereby the disciplinary procedure and consequences are laid down by statute? There are strict rules about the publication of the allegations irrespective of the outcome and these can cause huge reputational and financial damage. Invariably there is no provision for payment of the costs of a successful registrant. In such cases defamation proceedings against a malicious complainer who loses the protection of qualified privilege may not always be possible or provide an adequate remedy. In these circumstances it is difficult to disagree with Lord Sumption when he says malicious prosecution “ought in principle to apply to the malicious abuse of disciplinary proceedings”. For the full dicta of Crawford go to the following link http://www.jcpc.gov.uk/decided-cases/docs/JCPC_2012_0054_Judgment.pdf