Malicious prosecution of civil proceedings: Claimants should proceed with caution

10th May 2019

In 2016 the Supreme Court established the tort of malicious prosecution in civil proceedings. In the first such claim to be tried, Willers v Joyce, the High Court has now provided essential legal and practical guidance on this new legal cause of action. Walker Morris’ Litigation & Dispute Resolution expert Gwendoline Davies explains.

Why is this case important?

Walker Morris has reported previously on the 2016 Supreme Court case of Willers v Joyce, which established the new tort of malicious prosecution in civil proceedings.

Following the Supreme Court’s recognition of this new cause of action, which allowed the claimant’s innovative claim to proceed, the substantive trial in Willers v Joyce has now taken place.  It has provided guidance as to the legalities and practicalities of bringing such a claim.  The case confirms:

• Malicious prosecution proceedings are possible in the civil context, but they can be fraught with difficulty.
• Malicious prosecution claimants have high legal and factual hurdles to overcome.
• Where personal vendettas flow from corporate relationships, a malicious prosecution claimant’s failure to strictly identify the correct defendant is likely to be fatal to the claim.
• The criminal test as to what constitutes ‘reasonable and proper cause’ for bringing court proceedings applies in civil malicious prosecution claims.
• However, it is difficult to mirror the criminal test of malice in the civil context. That constituent element of a civil malicious prosecution claim therefore remains unresolved.
• Questions as to what sorts of damages might be contemplated for malicious pursuit of a prior civil action, and how these would be calculated, also remain unanswered.

What happened in Willers v Joyce?

Mr Willers was director and chief legal advisor to a group of companies. He ceased working for the group in 2009 when his relationship with the group broke down. In 2016, court action (known as the ‘Langstone Action’) was initiated against him, alleging breach of his contractual and fiduciary duties to one of the group companies, ‘Langstone’. Mr Willers claimed this was a personal vendetta, hence his civil malicious prosecution claim, in which he would have to establish:

• proceedings had been brought against him by the [now] defendant
• proceedings had been determined in his favour
• the proceedings were brought without reasonable and probable cause
• the proceedings were brought maliciously
• he suffered loss and damage as a result.

These legal requirements were evaluated by the High Court when the matter proceeded to trial in late 2018 [1].

The trial

The malicious prosecution proceedings were issued against the defendant, Mr Gubay, personally. It was claimed that Mr Gubay had the ‘controlling mind’ of Langstone, and accordingly, was the supposed prosecutor of the Langstone Action. This was rejected by the court, however, which made clear that, in pursuing such a claim, it was necessary for a claimant to take a more targeted approach and ‘examine in detail [the defendant’s] role in the particular decision taken.’ The court concluded that whilst Mr Gubay may have demonstrated a strong opinion, this alone was not enough to deem him the prosecutor, as the board of directors would still have brought the action regardless.

The court also provided guidance as to what constitutes reasonable and probable cause, confirming that the criminal test should also be applied to civil matters: (a) whether the prosecutor had an honest, subjective belief in the guilt of the accused and (b) whether, objectively, there were reasonable grounds for concluding that, if the facts were true, the person would be guilty of the imputed crime/allegations. Applying that test to the facts, the court held that there was a clear and probable cause underlying the Langstone Action, as opposed to an uncommercial vendetta.

As to the requirement to demonstrate malice, there is still a significant amount of uncertainty. The court found great difficulty in mirroring the element of malice in criminal law to a civil context and, given that Mr Willers failed to establish other requisite elements, the judge left open the question whether or not malice could be established.

Finally, Mr Willers’ claim was for damages representing the difference between the full amount of costs incurred in defending the 2016 proceedings and the amount of costs ordered in his favour; and for damages in respect of distress, injury to health, injury to reputation and loss of earnings. Unfortunately for civil litigators who were hoping that the case would explain what sorts of damages might be contemplated for malicious pursuit of a prior civil action, and how these would be calculated, the question of what loss may be recoverable was left open.

WM Comment

Maliciously pursued litigation can place severe strain on businesses and individuals alike. The recently established civil tort of malicious prosecution offers an ability for claimants to sue wrongdoers, obtain remedies for loss suffered and deter misuse of the court process as a means of pursuing spiteful vendettas.

However, the substantive trial in Willers v Joyce confirms that civil malicious prosecution is unlikely to be an easy option.  Whilst some clarity on the parameters of the tort has been provided, the case demonstrates that the thresholds to be met before a claim can succeed are high.  In addition, proving that proceedings were brought without reasonable and probable cause and maliciously can be very difficult because it involves analysis and assessment of a party’s subjective views, plus there may be practical difficulty in obtaining relevant, but privileged, material.  The case also leaves crucial legal questions as to the test for malice and what loss is recoverable unanswered. Further guidance may have to come from future case law.  Walker Morris shall monitor the development of this new area of law with interest, and will report on any key developments.

________________

[1] [2018] EWHC 3424 (Ch) (the judgment has only recently become available)