The High Court has handed down judgment striking out damages claims against a police force valued in excess of £30million

25 April 2022

The judgment in Breeze and Wilson v Chief Constable of Norfolk Constabulary [2022] EWHC 942 (QB) in which Jason Beer QC and Charlotte Ventham acted for the Chief Constable, can be found here.

The Claimants are suing Norfolk Police in malicious prosecution and misfeasance in public office following their discontinued prosecution in 2009 on a charge of conspiracy to defraud. The Claimants were major shareholders and directors in companies whose business included the provision of private sector mental health care to the National Health Service at Cawston Park Hospital. The criminal charges related to the running of the business.

The Claimants sought damages for financial losses associated with the demise of the business (which they claim is attributable to the Defendant’s tortious conduct). Initially, such losses were said to arise from, and equate to, the diminution in the Claimants’ respective share values in the company (which were alleged to be around £15m each).

At an earlier stage in the litigation, upon the Defendant’s strike out application, Master McCloud ruled that such losses were not recoverable by virtue of the reflective loss principle, that is, the rule of law that a shareholder may not sue for losses which are merely reflective of the company’s loss: [2018] EWHC 485 (QB). The Claimants were, however, permitted to amend their claim to rely on what was understood at the time to be an exception to the reflective loss rule articulated in the case of Giles v Rhind [2003] Ch 618 (broadly speaking, where the company had somehow been disabled from pursuing a claim through the actions of the wrongdoer).

The Defendant issued a further strike out application following the Supreme Court’s decision in Sevilleja v Marex Financial Ltd [2021] AC 39 in which the reflective loss principle was subject to wholesale re-consideration and the so-called Giles v Rhind exception held to be wrong in law. The application was resisted – the Claimants arguing, unsuccessfully, that on a proper interpretation of Marex, the Giles v Rhind exception remained intact. The Claimants in any event applied to amend their claims, seeking to re-fashion the share value claims for £30m as different species of claims which, despite amounting to the same sum, were said to fall outside the reflective loss principle.

In a comprehensive judgment, Master Stevens struck out the claims inasmuch as they depended upon the existence of the so-called Giles v Rhind exception and dismissed the Claimants’ application to amend insofar as it related to the re-fashioned claims equivalent in value to the shareholder claims. The Court also disallowed a claim for pecuniary losses arising from the Claimants’ alleged loss of “standing, reputation and track record” as senior executives and owners of a successful company (in circumstances where such losses had not been particularised and where non-pecuniary damages for loss of reputation are available in the tort of malicious prosecution).

As well as providing a helpful and detailed explanation of the reflective loss principle and its application in the somewhat unusual context of a civil claim for damages against the police, the judgment also illustrates the dangers of failing to prosecute claims with appropriate expedition, clarity and analytical rigour – such factors forming an important part of the Court’s decision to refuse the amendments to the claim.

 

 


Authors

Jason Beer KC

Call 1992 | Silk 2011

Charlotte Ventham KC

Call 2001 | Silk 2024

Related areas

Police Law

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