Subjected to Groundless Litigation? You Could Win Compensation!

A ground-breaking Supreme Court decision has for the first time opened the way for compensation claims by those who are subjected to groundless civil proceedings which have been brought maliciously without reasonable or probable cause.

The case concerned a businessman who was sued by a leisure company for alleged breach of fiduciary and contractual duties following his dismissal as a director. The claim was later withdrawn and the businessman contended that the proceedings had been part of a campaign by a former colleague to do him harm. He launched a claim for malicious prosecution but his case was struck out by the High Court.

In allowing his appeal against that decision, the Supreme Court noted that claims for malicious prosecution had long been familiar in the criminal context. Extending the cause of action to civil cases, the Court noted that it would be instinctively unjust should those who are maliciously subjected to civil proceedings without reasonable cause not be entitled to compensation for the harm intentionally caused.

Those who launch such proceedings in the knowledge that they are without foundation, or to achieve some collateral benefit to which they have no right, are deliberately misusing the legal process. The concept of malice also embraces those litigants who are indifferent as to whether their claims have any foundation. In the circumstances, the Court directed a full hearing of the businessman’s claim.