Willers v Joyce (Re: Gubay deceased) [2016] UKSC 43

A director, Mr Willers, was sued by a company at the behest of Mr Gubay. After successfully defending the claim, Willers sued Gubay’s estate for malicious prosecution. The Supreme Court confirmed the tort can apply to civil as well as criminal proceedings.

Facts

Mr Willers, a former director of a company called Langstone, was the subject of a civil claim brought by Langstone for alleged breach of contractual and fiduciary duties. Mr Willers contended that the claim was instigated and pursued by Mr Albert Gubay, the ultimate owner of the company, for malicious reasons. Willers successfully defended the litigation brought by Langstone but incurred substantial legal costs, not all of which were recoverable through the standard costs-shifting rules. Following this, Mr Willers commenced an action against Mr Gubay (and, following his death, his executors) for the tort of malicious prosecution, seeking to recover his unrecovered costs and other damages. The defendants applied to strike out the claim, arguing that the tort of malicious prosecution did not extend to civil proceedings in English law.

Issues

The central legal issue before the Supreme Court was whether an action for malicious prosecution could be brought in respect of civil proceedings, or whether the tort was confined only to the malicious institution of criminal proceedings. The court also had to consider whether the existence of other remedies, such as costs orders against a party or a non-party, and the tort of abuse of process, precluded the need for or justification of extending the tort to civil actions.

Judgment

The Supreme Court, by a narrow majority of 5-4, allowed the appeal, holding that the tort of malicious prosecution does apply to civil proceedings.

The Majority Opinion

Lord Toulson, giving the leading judgment for the majority, conducted an extensive historical review of the tort. He concluded there was no binding authority from the House of Lords that prevented the tort from applying to civil actions. He found persuasive authority in the Court of Appeal case of Quartz Hill Consolidated Gold Mining Co v Eyre (1883) 11 QBD 674, which suggested its potential application. Lord Toulson reasoned that there was no principled distinction between the malicious prosecution of a criminal case and a civil case, as both could cause significant harm to the defendant.

He stated the core question as follows:

The core question on this appeal is whether the tort of malicious prosecution, for which the claimant must prove that the proceedings were brought without reasonable and probable cause and with malice, is capable of being committed in relation to civil proceedings.

The majority concluded that the policy arguments against extension, such as a potential ‘chilling effect’ on litigation, were overstated. The stringent requirements to prove the tort—namely, the absence of reasonable and probable cause and the presence of malice—provided a sufficient safeguard against a flood of unmeritorious satellite litigation. Lord Toulson summarised the majority’s conclusion:

There is no principled reason why the tort should be confined to criminal proceedings. Consistently with the reasoning of the majority in the Quartz Hill case, it should apply to civil proceedings where the claimant can establish the necessary ingredients, including the suffering of damage as a result of the proceedings, of a kind which is not a necessary consequence of the litigation.

The Dissenting Opinion

Lords Neuberger, Mance, Sumption, and Reed dissented. They argued strongly against creating liability for the malicious prosecution of civil proceedings. They contended that existing legal mechanisms, including summary judgment, strike-out applications, and adverse costs orders (including against non-parties), were sufficient to deal with unmeritorious claims. Lord Sumption, in a forceful dissent, argued that allowing the tort would have a detrimental effect on the administration of justice:

In my opinion, the slow and messy death of this tort in the context of civil proceedings is a tribute to the wisdom of our judicial predecessors. They recognised a basic truth about litigation in a contentious legal system such as ours. The courts do not exist to see that everyone who has a grievance against his neighbour should have a remedy. They exist to provide a framework for the resolution of civil disputes which is workable, and as fair as it can be in a necessarily imperfect world.

The dissenting judges were concerned that recognizing the tort would deter genuine litigants for fear of a retaliatory malicious prosecution lawsuit, thereby impeding access to justice.

Implications

The decision definitively establishes in English law that the tort of malicious prosecution is available for civil proceedings. It provides a potential remedy for individuals and businesses subjected to baseless and maliciously motivated litigation who suffer loss that is not recoverable through the ordinary costs regime. However, the judgment also reinforces the high threshold required to succeed in such a claim. A claimant must prove not only that the original proceedings were terminated in their favour but also that they were instituted without reasonable and probable cause and with malice. The decision balances the need to provide a remedy for wrongs with the public policy of ensuring access to the courts is not unduly chilled.

Verdict: The appeal was allowed. The Supreme Court held by a majority that an action for malicious prosecution can be brought in respect of civil proceedings. The strike-out application was dismissed and the case was allowed to proceed to trial.

Source: Willers v Joyce (Re: Gubay deceased) [2016] UKSC 43