K​embaraXtra - Case Law - Crawford Adjusters v Sagicor General Insurance [2013]

​Case Overview

• Citation: [2013] UKPC 17, [2013] 4 All ER 8
• Court: Privy Council
• Judges: Lord Neuberger, Lady Hale, Lord Kerr, Lord Wilson and Lord Sumption
• Date: 22, 23 January, 13 June 2013

II. Facts

• Original Claim: Sagicor (insurance company) sued Paterson (chartered surveyor/loss adjuster) and building companies for deceit and conspiracy in the Cayman Islands.
• Counterclaim: Paterson counterclaimed for fees owed under his contract with Sagicor.
• Discontinuation: Sagicor discontinued the action shortly before trial, following advice from counsel deeming the fraud and conspiracy claims professionally improper to pursue after disclosure of documents.
• Judgement: Judgment entered for Paterson and the building companies, with costs awarded on an indemnity basis.
• Abuse of Process Claim: Paterson granted leave to amend counterclaim to include a claim for abuse of process.

III. Trial Judge's Findings

• Motive of D (Sagicor Officer):
  • D noted suspicious payments but unreasonably believed Paterson had defrauded Sagicor.
  • Dominant motive: D's strong dislike and resentment of Paterson, revenge, and determination to destroy him professionally.
• Abuse of Process: Court found Sagicor not liable for abuse of process because they did not sue Paterson to secure an object for which legal action was not designed. Improper motive was insufficient to convert the use of process into abuse.
• Malicious Prosecution:
  • Trial Judge found the elements of malicious prosecution were met, but felt bound by precedent to deny the claim due to the belief that the tort did not extend to civil proceedings.
    • (i) Prior Proceedings: determined in favor of P.
    • (ii) No Reasonable Cause: allegations of fraud and conspiracy were made without reasonable cause.
    • (iii) Malice: allegations were made maliciously.
    • (iv) Damage: P suffered substantial financial loss and other significant damage.

IV. Appeal History

• Cayman Islands Court of Appeal: Dismissed Paterson's appeal.
• Privy Council: Paterson Appealed.

V. Held (Privy Council Decision)

• Majority Decision: (Lord Neuberger and Lord Sumption dissenting)
  • The tort of malicious prosecution does extend to civil proceedings.
  • Rationale:
    • Reputational Damage: False allegations in civil proceedings can cause substantial damage before vindication.
    • Historical Context: Common law originally recognized the tort's applicability to civil proceedings.
    • Changing Circumstances: Limitation of the tort based on the availability of costs orders is no longer valid.
    • Abuse of Coercive Power: The tort's essence is the abuse of state power, not solely in criminal contexts.
    • Public Policy: Wrongs should be remedied; no policy arguments justified overriding this principle.
• Outcome: Appeal allowed.

VI. Key Takeaways

• This case extends the tort of malicious prosecution to civil proceedings in the common law.
• It emphasizes the importance of reputation and the potential for damage even in civil contexts.
• It clarifies that improper motive alone does not automatically constitute abuse of process.
• It reiterates the policy that wrongs should be remedied, absent strong countervailing arguments.