Malicious prosecution divides Privy Council

By Christopher Russell

It is a frequent and necessary function of the law to create a balance between competing and conflicting desirable aims. Three such are: (1) no wrong should go without remedy; (2) there should be an end to litigation; and (3) there should be no deterrence from bringing justified proceedings. These, in some respects conflicting, policies lie at the heart of the recent decision of the Judicial Committee of the Privy Council, on appeal from the Cayman Islands Court of Appeal, in Crawford Adjusters v Sagicor General Insurance (Cayman) Ltd [2013] UKPC.

The appeal was decided by the narrowest of margins — 3:2 — and led to a sharp and, in judicial terms, at times acrimonious difference of views between the judges. In short, the majority, led by Lord Wilson, with Lady Hale and Lord Kerr, held that the tort of malicious prosecution is not, as had been the law of England (and Cayman) for centuries, confined to the prosecution of criminal offences (and a small disparate collection of civil claims) but is available as a tort generally and extends to all civil claims.

All three principles arose starkly in the Sagicor case, of which the facts were as follows: hurricane damage was insured against by the proprietors of a Cayman residential complex with the respondent to the appeal (Sagicor). Hurricane Ivan, in 2004, caused extensive damage to the complex, and the proprietors claimed on the insurance. Sagicor appointed a local loss adjustor (Mr Paterson); on his advice, CI$2.9m (£2.15m) advance payments were made by Sagicor to Hurlstone, the construction company engaged to carry out the repair work. A newly appointed senior vice-president of Sagicor (Mr Delessio) became concerned about the amount of the payments to Hurlstone, and what he saw as the lack of supporting documentation. Sagicor retained a different loss adjustor, from England, who valued the work done by Hurlstone at CI$0.8m of which CI$0.7m was the responsibility of Sagicor…

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