23rd March 2017
Recognising this, the Supreme Court in Willers v Joyce (2016) signalled a revival of the tort of malicious prosecution.
Mr Willers was a former director of Langstone, a leisure company controlled by the defendant, Mr Gubay. Langstone pursued a claim against Mr Willers for alleged breach of contract and fiduciary duty in causing Langstone to incur costs in relation to third party litigation.
Mr Willers was of the view that Langstone’s claim was part of a campaign by Mr Gubay to do him harm. Langstone's claim was discontinued two weeks before trial, with Mr Willers recovering his reasonable and proportionate costs totalling £1.7m; however his costs in defending the claim exceeded £3.9m. Mr Willers brought a claim against Mr Gubay (who, having died while the appeal was pending, was represented by his executors) for the difference between the costs awarded by the court in the Langstone claim and the full amount of the costs incurred in defending the claim, damage to reputation, damage to health and loss of earnings.
The Supreme Court ruled that a claim in malicious prosecution could be brought in relation to civil proceedings by one individual against another. It reasoned it was “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 having instigated it”. The key is to establish damage as a result of a civil claim which was brought maliciously and without reasonable cause and which was not a bona fide use of the court process.
How the courts shape the boundaries of a civil claim in malicious prosecution remains to be seen. There has been only one case featuring a claim of malicious prosecution since the Supreme Court decision. In CFC 26 Ltd v Brown Shipley & Co Ltd and Others, the court held that “while it is now clear that the tort of malicious prosecution can apply without a criminal prosecution, there remains a requirement that the law has been ‘set in motion by an appeal to some person clothed with judicial authority’ and service of an enforcement notice [relating to breach of planning conditions] cannot…suffice for this purpose”. In other words, the claimant must have issued legal proceedings.
Before considering whether to bring a claim of malicious prosecution, it is best to ascertain if the prospective defendant is worth suing and whether the damages sought are proportionate to the cost of pursuing the action.
Perhaps more important than the right to bring proceedings is the power to deter them in the first place. An individual who is being threatened with a malicious claim may find it helpful to bring Willers v Joyce to the attention of the claimant. Making it clear early on in correspondence that damages will be sought based on the tort of malicious prosecution could encourage the claimant to abandon the claim.
For help and advice on dispute resolution issues, please contact Robert Sear or Tania Pugh.