AN INTERESTING CASE IN THE COURT OF APPEAL: NO INTEREST AWARDED ON DAMAGES FOR MALICIOUS PROSECUTION AND FALSE IMPRISONMENT

In Rees v Commissioner of Police of the Metropolis [2021] EWCA Civ 49 the Court of Appeal upheld a decision not to award interest on damages for damages for malicious prosecution and misfeasance in public office.

THE CASE

The claimant succeeded in a trial for false imprisonment and malicious prosecution.  Damages of  £155,000 were awarded. The claimant appealed against the size of the award and the judge’s failure to award interest on those damages.

THE APPEAL AGAINST THE AWARD

The appeal against the size of the award was unsuccessfu.

THE JUDGMENT ON THIS ISSUE
30. Mr Lemer nevertheless, taking the AXD case as his chosen bench-mark comparator case, submitted that the award here was far lower than that awarded to the claimant in the AXD case, when one took into account the much longer period of incarceration in prison which the appellant here had undergone.
    1. There are, as I see it, quite a few answers to that objection. First, as the authorities make clear, there is a progressively reducing scale as the period of detention goes on. Second, the award in AXD was a global award. But in the present case, the basic award was split between distress etc. and loss of liberty (and aggravated damages were then also awarded). Third, the facts in AXD were specific to that case: for example, the claimant there was facing the prospect of being returned to a country where he believed he faced torture and persecution; he had been abused and harassed while detained; and so on.
    2. I in any event agree with Mr Beer QC for the respondent that taking one single case as the appropriate comparator can be unwise. Besides, and allowing for the many factual differences between the two cases, the total basic award in the present case is not materially out of line with that made in AXD; and, when one also has regard to various other cases proffered as comparators to the judge (as to us), I cannot see that the conclusion of the judge on the basic award was outside the range of awards reasonably open to her.
    3. That being so, and given that there was no error of law or principle in the way the judge approached the assessment of the basic award, I would conclude that this ground fails.

THE APPEAL AGAINST THE DECISION NOT TO AWARD INTEREST

The appeal against the decision not to award interest was also unsuccessful.  The position here was not the same as in a conventional personal injury case where interest is awarded (normally at 2%) on damages for pain and suffering.

THE JUDGMENT ON THE REFUSAL TO AWARD INTEREST

Ground 2
    1. By this ground, the appellant challenges the judge’s decision not to award interest on the damages pursuant to s.35A of the Senior Courts Act 1981.
    2. The claim form had expressly included a claim for interest pursuant to s.35A of the Senior Courts Act 1981, as amended. We were told that counsel for the third claimant – he being separately represented at the hearing – developed that claim, as already set out in written submissions, fully in oral argument. It is to be taken that leading counsel then appearing for the appellant had adopted that argument. The judge rejected the point. She did not spell out her reasoning. She simply said in the last paragraph of her judgment: “Interest from the date of this judgment”.
    3. Mr Lemer complains that the judge gave no reasons for her conclusion on this issue. He said that that amounted to an error of law. He necessarily had to accept that s.35A on its face confers a discretion on the court as to whether to award interest in a case such as this (the position is expressly different, under the section, in personal injury claims). But he submitted that the appellant had been kept out of what was due to him as compensation for his wrongful imprisonment. Interest should, he said, have been awarded from the date when no evidence was offered in the Crown Court (11 March 2011); or, if that was too ambitious, at any rate from the date on which the claim form was issued (10 March 2014) up to judgment. If that was not to be done, the judge should, he said, at least have explained why.
    4. The problem with that submission is that there is an authoritative (and principled) basis for withholding an award of interest in such a context.
    5. Thus in Saunders v Edwards [1987] 1 WLR 1116 the plaintiffs, purchasers of a flat, had succeeded in a claim based on dishonest misrepresentation. The judge awarded damages reflecting the difference between the price paid and the true value of the property had the misrepresentation not been made. He also awarded a further sum, by way of damages, for disappointment and inconvenience. The writ had included a claim for interest under s.35A of the Supreme Court Act 1981 from the date of the issue of the writ. The trial judge made an award of interest on the principal award. But he also awarded interest on the award of damages for disappointment and inconvenience.
    6. It was held by the Court of Appeal that, in the latter respect, that award of interest was erroneous in principle. The judge having taken into account all matters up to the date of judgment, there could be no justification then to award interest on damages for disappointment and inconvenience from the date of the writ: see at p. 1129 D, per Kerr LJ. Having so stated, Kerr LJ went on to say, at p.1129 G:
“As it seems to me, certainly in the present case though without purporting to lay down any rigid rules, it is generally better to award a global sum under this head of damages, without the addition of any interest.”
Nicholls LJ expressly agreed with Kerr LJ on this issue: p.1133 H. Bingham LJ expressed himself in similar, and indeed in more uncompromising, terms. He said this at p.1135 D-G:
The intervention of statute has made general damages for pain and suffering and loss of amenity in personal injuries actions a special case. The damages awarded here for inconvenience and disappointment have no special features. The judge’s award was clearly intended to compensate the plaintiffs for the inconvenience they had suffered throughout their occupation of the flat up to the date of trial and for disappointment during the same period. It was a single global award, modest in amount but intended to cover the past and the future. It is somewhat analogous to an award of general damages to a defamation plaintiff for mental distress and suffering, which have never, as I think, been augmented by interest up to the date of the trial. I consider this approach to be correct in principle, because in neither case can the damages be realistically seen as having accrued due to the plaintiff at a certain time in the past and as having thereafter been wrongly withheld from him.
It is accepted that the judge erred in exercising his discretion so as to award interest at the rate of 12.5 per cent, on these damages. That entitles this court to consider the matter afresh. Doing so, I am of the clear opinion that in this case any award of interest on these damages is inappropriate. The same rule would ordinarily apply in similar or analogous cases.”
    1. A similar issue arose in the case in Holtham v The Commissioner of Police for the Metropolis (The Times, 28 November 1987). That case had involved an award of damages for wrongful arrest and false imprisonment. The Court of Appeal applied the decision in Saunders v Edwards as to whether interest should be awarded. Lord Donaldson MR (with whom the other two members of the court, who included Nicholls LJ, agreed) expressly held that the principle underlying that decision “must apply to general damages for wrongful arrest and false imprisonment.” He went on (page 13 of the transcript):
“This will cause no injustice since juries, when awarding damages, will no doubt take account of how long it has taken plaintiffs to establish that the arrest and unlawful imprisonment was unlawful and of any increase in their suffering due to this delay.”
    1. We were referred in argument to McGregor on Damages 20th ed. at paragraphs 19-051 to 19-056. The view there vigorously advanced, in line with a dictum relating to interest on damages for pain, suffering and loss of amenities of Lord Denning MR, giving the judgment of the court, in Cookson v Knowles [1977] QB 913 at p.921D, is that in all cases of non-pecuniary loss interest should never be awarded. However, that dictum of Lord Denning MR was not approved in the subsequent House of Lords decision in Pickett v British Rail Engineering Ltd [1980] AC 136. It was there observed that an increase of damages to take account of inflation was designed to preserve the real value of money; whereas interest was designed to compensate for being kept out of that real value. The two matters are thus distinct: see the speech of Lord Wilberforce at p. 151 C-F; and the speech of Lord Scarman at p.173 D-F.
    2. The position nevertheless remains that, by its terms, s.35A of the 1981 Act confers a discretion. Further, awards of damages at trial in a case of the present kind are not necessarily designed simply to include an allowance for intervening inflation: they may also reflect that the claimant has suffered, for example, distress and disappointment and other damage as assessed up to the date of the judgment. That, indeed, was precisely the basis for not awarding interest in Saunders v Edwards and Holtham (decisions which post-dated Pickett); and it is a principled basis.
    3. In the present case, of course, the basic award extended not only to distress etc. but also to loss of liberty itself. But it seems to me at least consistent with the approach taken in Holtham for a judge to be entitled to decline to award interest on any element of the award for non-pecuniary loss in cases of this kind. Whilst Holtham was not a malicious prosecution case as such, the underpinning elements – loss of liberty and distress etc – were effectively, in substance, the same.
    4. I do acknowledge that compensation for wrongful deprivation of liberty on the one hand and compensation for distress etc, (which may lie in the past, present and future) on the other hand are not co-extensive. I acknowledge that it can be said that loss of liberty has an end-point (the date of release or removal of all restrictions on liberty) and is not “forward-looking” in the way that distress and reputational damage can be. It can also be said that, as here, the wrongfulness of the detention in question may have been established prior to the hearing before the judge assessing the damages. But the reality is that, in cases of this kind, there is still some overlap in the elements of the award. That is reflected, for example, in the practice of making global, undifferentiated awards in most wrongful immigration detention cases (and sometimes also in wrongful arrest cases). It is also reflected by the fact that, on a pro-rated basis, an award for a short or initial wrongful detention usually is relatively high: precisely in order to factor in, as stated in Thompson, the initial shock and humiliation and so on. It is therefore pragmatic practice (“generally better”, to adopt the words of Kerr LJ), in my opinion, that the approach to not awarding interest on damages in cases such as this should apply across the board and without differentiation: as was indicated as appropriate in Holtham itself.
    5. In the present case, it is evident that the judge had adjusted her award to take into account inflation, having regard to the criteria indicated in Thompson and having regard to the enjoinder in that case that, in the future, the indicated parameters should be adjusted to allow for inflation. The judge having done that, there is, in my view, no reason to think that the judge had not further calibrated her award by taking account of the fact that it was only at the date of her judgment that the claimants’ rights were being finally vindicated and that their damages were being assessed as at that date. In fact, in his written submissions before the judge counsel for the third claimant had expressly invited the judge to award interest or, if that was not done, to adjust the award upwards. There is every reason to think, given the arguments presented to her, that she had done just that.
    6. Mr Lemer noted that in AXD Jay J had in fact awarded interest under s.35A of the 1981 Act from the date of the issue of the claim form to the date of judgment: see paragraph 53 of the judgment. It is not clear, however, if the issue was debated before him. Likewise, in R (Diop) v Secretary of State for the Home Department [2018] EWHC 3420 (Admin) interest under s.35A on an award of damages for wrongful immigration detention was made. But there the point also was not argued: see paragraph 6 of the judgment of the deputy High Court Judge.
    7. In my view, therefore, having regard in particular to the approach taken as to interest as applied in Saunders v Edwards and then extended in Holtham to cases of wrongful arrest and false imprisonment, the better course for judges in cases of this kind will usually be to fix an award of damages both to reflect intervening inflation (having regard to the Thompson criteria) and then also to reflect the fact that the award of damages is being calculated by assessing the situation up to and as at the date of judgment. If that is done there will then be no call for an award of interest under s.35A of the 1981 Act. On the footing that a judge does proceed on that basis then I consider, all the same, that it would be good practice for him or her expressly to state, albeit briefly, that that is indeed the position being adopted.
    8. Since, in the light of the arguments addressed to her, the judge is, in my opinion, to be taken as having adopted that course here, even if she did not in terms spell it out, there is no proper basis for interfering with the exercise of her discretion not to award interest under s.35A of the 1981 Act.
Cross-Appeal
    1. I turn to the cross-appeal.
    2. It was not entirely clear to me if Mr Beer was, at the hearing before us, positively pursuing a challenge to the judge’s decision to make an award of exemplary damages at all. To the extent that he was, I would reject that challenge. (I should here mention that the court had queried whether this cross-appeal was even viable, given that the global award for exemplary damages was £150,000 before allocation between the three claimants and given that the other two claimants were not party to this appeal. But Mr Beer gave an assurance to us that there would be no challenge to the awards of exemplary damages in their cases.)
    3. The fact remains that not only was this a notorious murder but also the prosecution case had collapsed in circumstances of notoriety. The officer authorising the prosecution on so tainted a basis had been of very senior rank – Detective Chief Superintendent (a rank which is certainly capable, in an appropriate case, of attracting a maximum award of damages, as Thompson itself states at p.517 C-D). The judge’s remarks in this regard, which I have referred to above, were justified. Further, she had considered whether an award of aggravated damages, on top of the basic award, would suffice; and had decided that it would not. She also rejected, as she was entitled to, the suggestion that there had been sufficient public exposure and scrutiny of the police misconduct (for example, in the ruling of the trial judge in the Crown Court and in the more recent decisions of Mitting J and of the Court of Appeal). It is true, as Mr Beer emphasised, that the respondent was only exposed to such an award on the basis of vicarious liability, not of personal responsibility. That is a relevant consideration (see Thompson at p.512 H). But it cannot of itself be decisive: indeed, almost invariably in these kinds of cases the defendant is potentially liable on a vicarious basis. Overall, in my opinion, there is no proper justification for interfering with the judge’s decision, in the circumstances of this particular case, to award exemplary damages.
    4. The main attack of Mr Beer, however, was as to the size of the award for exemplary damages. He in particular stressed that the “absolute maximum” for such an award, as stated in Thompson at p.517C-D (and repeated at p.520 A), was £50,000. Adjusted for inflation, that corresponds, as it was said, to a figure of around £91,500. But here, it was complained, the judge had made a global award of £150,000, before then allocating the award equally between the three claimants.
    5. In my opinion, however, the statements made in Thompson as to the “absolute maximum” available by way of award of exemplary damages are not to be read in so limited a way. Indeed, the Court of Appeal in Thompson had itself stated at p.516 A-B:
“We appreciate, however, that circumstances can vary dramatically from case to case and that these and the subsequent figures which we provide are not intended to be applied in a mechanistic manner”.
Precisely so.
    1. In particular, the guidance given in Thompson was, as I see it, directed at the paradigm of a single plaintiff (claimant). It was not directed at cases where there were several claimants: and plainly the greater number of persons wrongly detained by reason of malicious prosecution or misfeasance in public office in a particular case must at least be capable of bearing on the quantum of any award of exemplary damages. (In saying that, I bear in mind that where there is a large class of claimants, some of whom may not even be before the court, then an award of exemplary damages may not be appropriate at all: see R (Lumba) v Secretary of State for the Home Department [2011] UKSC 12[2012] 1AC 245, at paragraph 167 of the judgment of Lord Dyson. But the present is not such a case.) Overall, I see no reason for a court being required in a case such as this to confine its total award of exemplary damages to a total figure of £50,000 (adjusted for inflation); and every reason for it not being so confined.
    2. In the (exceptional) circumstances of the present case, the judge was, I conclude, entitled to reach a global figure of £150,000 for exemplary damages, before then allocating it equally between the three claimants. It may also be noted that the resulting individual awards are well within the maximum figure, adjusted for inflation, proposed in Thompson.
    3. Mr Beer did also briefly submit that by such an award the judge failed sufficiently to have regard to the sizeable awards of basic and aggravated damages and failed sufficiently to consider whether those awards of themselves afforded adequate punishment to the respondent. The short answer to that submission, however, is that the judge had considered such matters. She had further directed herself as to the need to avoid double counting. She had directed herself correctly as to the underlying principles relating to awards of exemplary damages. She had also directed herself as to the need to stand back and look at matters in the round. Here too, as I see it, there is, overall, no proper basis for the appellate court interfering.
Conclusion
  1. I would, for my part, affirm the award of damages made by the judge. I would dismiss the appeal and I would also dismiss the cross-appeal.