Privy Council rules tort of malicious prosecution extends to civil proceedings.
It is a regrettable but unavoidable incident of civil litigation that the judicial process is capable of being abused by unscrupulous litigants. A civil claim may, whether through applications to strike out or after full trial, be ultimately demonstrated to be wholly frivolous, vexatious, unmeritorious and an abuse of process. But unless steps are taken to have a person declared as a vexatious litigant, generally speaking there can be no denial of a litigant’s fundamental right of access to the courts. A defendant who is dragged into litigation is forced to defend himself whether he likes it or not. The question is whether the law affords him a remedy once legal proceedings, which are revealed to be malicious and brought for a collateral purpose, are concluded in his favour.
The availability of a remedy is important, because quite apart from the ordinary strain of litigation on a defendant in terms of time and costs, civil proceedings which are truly malicious and which are calculated to harass, oppress or ruin a defendant are more than capable of causing irreparable harm or prejudice to a defendant which can neither properly nor adequately be compensated by an award of costs.
Take the following example. A, a washed-out celebrity, has been promised an “important” role in an upcoming major motion picture. A is bitter and furious to discover that she has lost out on the lead role to B, a promising young star. A then sues B alleging that B has wrongfully induced a breach of contract by causing the producer of the film to cast B in the lead role instead of A. In her pleadings and in her evidence at trial, both of which are publicly available, A deliberately makes the wholly false and malicious allegation that B had slept with the director (who is married with children) to secure the lead role. This is widely reported in the press and on social media. A’s claim is dismissed on the ground that A failed to prove she was promised the lead role, and B is awarded costs of RM50,000.00. However, B’s career is ruined due to the extremely negative publicity generated by the trial.
B cannot succeed in a claim against A for defamation, because A’s statement made in the course of legal proceedings are protected by absolute privilege. B cannot succeed in a claim against A based on the tort of abuse of process, because B was unable to prove that A had commenced legal proceedings for the predominant purpose of ruining her career. B cannot succeed in a claim against A based on the tort of malicious prosecution, because the tort only applies to malicious prosecution of criminal proceedings.
Instincts tell us that something is seriously wrong with the above scenario. Notions of fairness and justice dictate that B should be compensated for A’s malicious prosecution. B has suffered a serious wrong, but the law affords no real remedy to B.
In this regard, the Privy Council, in the recent decision of Crawford Adjusters (Cayman) Ltd and others v Sagicor General Insurance (Cayman) Ltd  UKPC 17 (13 June 2013), has sought to remedy this anomaly of the law by ruling, albeit by a bare 3-2 majority, that the tort of malicious prosecution applies to civil proceedings as well as criminal proceedings.
Lord Wilson, delivering the leading judgment, observed that in light of the public availability of pleadings in most civil proceedings, false allegations made in civil proceedings could cause substantial irreparable damage to a defendant’s reputation, even if the defendant is vindicated after trial. The policy of the law was that where there was a wrong there should be a remedy. Costs, even on an indemnity basis, may not be sufficient. As such, the tort of malicious prosecution should be extended to civil proceedings to allow recovery of damages for foreseeable economic loss beyond legal costs and out-of pocket expenses.
It is uncertain whether the decision of the Privy Council in Crawford will be followed by the English Courts, or the courts in other common law jurisdictions for that matter. In England, a very strong panel of the House of Lords (Lord Browne-Wilkinson, Lord Nicholls of Birkenhead, Lord Steyn, Lord Hobhouse of Woodborough and Lord Millett) in Gregory v Portsmouth City Council  1 AC 419 appeared to have ruled out the possibility of extending the tort of malicious prosecution to civil proceedings. In Crawford itself, there were 2 powerful dissents registered by Lord Neuberger (President of the UK Supreme Court) and Lord Sumption, who may very well have the last word on the matter.
In Malaysia, Mahadev Shankar J (as he then was) doubted the existence of a tort of malicious prosecution of civil proceedings in Gasing Heights Sdn Bhd v Aloyah bte Abdul Rahman & Ors  3 MLJ 259 (although on the facts it was not necessary to decide the issue, as a claim based on the tort of malicious prosecution was struck out due to defective pleading). In Malaysia Building Society Bhd v Tan Sri General Ungku Nazaruddin bin Ungku Mohamed  2 MLJ 425, the Court of Appeal in a decision authoritatively recognising the tort of abuse of process in Malaysia appears to have implicitly accepted that Malaysian law did not recognise a tort of malicious prosecution of civil proceedings. The Federal Court has not spoken (yet).
It is of course desirable that the law should be capable of providing adequate remedies for true cases of malicious prosecution. However, extending the tort of malicious prosecution to civil proceedings may not be the best solution (or even a proper solution to begin with). There is a real danger that such a tort would equally be abused by litigants who successfully defend civil proceedings as a means of “revenge” against the unsuccessful plaintiff. Genuine claims brought in good faith will not necessarily succeed due to various reasons including lack of evidence or even mistakes made by lawyers. Even so, a defendant may very well be tempted to let the plaintiff have a taste of his own medicine by bringing a claim against the plaintiff based on the tort of malicious prosecution, even if such claim is wholly frivolous, vexatious and without basis as well. When such a claim fails, the plaintiff (now a defendant) will have every incentive to resort to the same tort, ad infinitum.
It is for this reason that the dissenting judgment of Lord Sumption is both persuasive and powerful (see in particular paragraphs  – ), especially his Lordship’s observations as follows:
“ … [I]f the law is to be developed, it must be done in a manner which is principled, leaves it coherent across cognate subject areas, and does not simply resolve one problem at the cost of creating many more. Even if judges were Herculean, it would be pointless for them cut off the head of the Lernaean Hydra merely to see it grow two more in its place.”
“… there are real concerns about the practical consequences of any extension of the law in this area which would offer litigants an occasion for prolonging disputes by way of secondary litigation. It is no answer to these concerns to say that the bar can be set so high that few will succeed. Malice is far more often alleged than proved. The vice of secondary litigation is in the attempt. Litigation generates obsession and provokes resentment. It sharpens men’s natural conviction of their own rightness and their suspicion of other men’s motives. It turns indifference into antagonism and contempt. Whatever principle may be formulated for allowing secondary litigation in some circumstances, for every case in which an injustice is successfully corrected in subsequent proceedings, there will be many more which fail only after prolonged, disruptive, wasteful and ultimately unsuccessful attempts.“