Factual and Procedural Background
This appeal arises from a decision by Master Yoxall dated 25 August 2017, which struck out the counterclaim and part of the Defence filed by the Appellants, a solicitor firm ("the firm") and its principal ("Appellant"), containing allegations of wrongdoing by employees of the Legal Aid Agency ("LAA") and others in judicial review proceedings against the Lord Chancellor. The LAA is the successor to the Legal Services Commission ("LSC").
The firm had a legal aid contract with the LSC for immigration matters until November 2010, which ended after a public procurement exercise in which the firm was unsuccessful. The firm challenged the procurement decision by judicial review, which was dismissed in October 2017. Meanwhile, the LAA demanded repayment of sums paid on account under the contract, leading to a claim for repayment issued in June 2016. The firm filed a Defence and Counterclaim alleging fraudulent and improper conduct by LAA employees and others, which was struck out by the Master.
The Appellants obtained permission to appeal the Master's decision from Walker J on 6 December 2017. The Lord Chancellor filed a Respondent's Notice seeking to set aside that permission or uphold the Master’s order on additional grounds. The appeal and related applications were heard together.
Legal Issues Presented
- Whether the principle of witness immunity applies to bar the counterclaim alleging wrongdoing by LAA employees in judicial review proceedings.
- Whether the allegations of fraud, deceit, and misfeasance in public office fall outside the scope of witness immunity.
- Whether the counterclaim was sufficiently particularised as required by the Civil Procedure Rules and Practice Direction.
- Whether permitting the counterclaim to proceed would amount to an abuse of process by collateral attack on the judicial review proceedings.
- Whether permission to appeal granted by Walker J should be set aside for failure to disclose material judgments and facts.
Arguments of the Parties
Appellants' Arguments
- The Master erred in applying witness immunity broadly to bar claims of fraud, fabrication of evidence, deception, and misfeasance in public office.
- Witness immunity does not extend to what witnesses did not disclose to the court, only to what was said.
- Summary judgment should not have been granted in a fraud case without exceptional circumstances.
- Their pleadings, though defective in particularity, should not have been struck out without opportunity to amend, considering the Appellant’s limited experience in private law pleading.
- They seek permission to file full particulars of their counterclaim within 21 days.
Respondent's Arguments
- Permission to appeal should be set aside due to the Appellants' failure to disclose the dismissal of the judicial review and related facts, amounting to a breach of duty of candour and misleading the court.
- The counterclaim is barred by absolute witness immunity, as it concerns evidence given in judicial proceedings.
- The counterclaim is an abuse of process amounting to a collateral attack on the judicial review decision.
- The counterclaim lacks necessary particulars and has no real prospect of success.
- The decision not to cross-examine LAA witnesses in the judicial review and the dismissal of that claim demonstrate the counterclaim's futility.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Darker v Chief Constable of West Midlands Police [2001] 1 AC 435 |
Limits of witness immunity; immunity does not extend to fabrication of false evidence. |
Applied to hold witness immunity bars claims except for fabrication or acts outside participation as witness. |
| Baxendale-Walker v Middleton [2011] EWHC 998 (QB) |
Witness immunity extends to misfeasance in public office claims. |
Court held immunity applies to misfeasance in public office claims arising from judicial process participation. |
| Roy v Prior [1971] AC 470 |
Witness immunity bars civil actions for false evidence; exceptions for malicious prosecution/arrest. |
Reinforced immunity for witnesses giving evidence, including false evidence claims barred. |
| Taylor v Director of the Serious Fraud Office [1999] 2 AC 177 |
Extension of immunity to statements made out of court as part of investigating crime with view to prosecution. |
Applied to extend immunity beyond in-court evidence to investigative statements. |
| Jones v Kaney [2011] 2 AC 398 |
Expert witness immunity abolished for negligence; general principle of immunity for witnesses remains. |
Distinguished expert witness immunity from fact witness immunity; did not assist Appellants' case. |
| Chief Constable of South Wales Police v Daniels [2015] EWCA Civ 680 |
Immunity does not cover deliberate or reckless failure to disclose, fabrication, or concealment of evidence. |
Held immunity limited to giving evidence; alleged misconduct outside immunity and allowed pleadings to proceed. |
| Easyair v Opal Telecom [2009] EWHC 339 (Ch) |
Requirement for real prospect of success to resist summary judgment. |
Applied to assess whether counterclaim had reasonable prospects of success. |
| Alpha Rocks Solicitors v Alade [2015] 1 WLR 4534 |
Summary judgment in fraud cases requires exceptional circumstances. |
Distinguished; not applicable as Appellants failed to plead properly or provide evidence. |
| Henderson v Henderson (1843) 3 Hare 100 |
Abuse of process doctrine barring re-litigation of matters that could and should have been raised earlier. |
Applied to bar counterclaim as an abuse of process and collateral attack on judicial review. |
| R (Khan) v Secretary of State for the Home Department [2016] EWCA Civ 416 |
Duty of candour on applications for permission to appeal. |
Applied to assess whether Appellants misled the court by non-disclosure in permission application. |
| Three Rivers District Council v Governor and Company of the Bank of England (No 3) [2003] 2 AC 1 |
Requirement of proving damage in torts such as misfeasance in public office. |
Applied to conclude Appellants failed to show damage from alleged misconduct. |
| Lipkin Gorman v Karpnale Ltd [1989] 1 WLR 1340 |
Particularity required in pleading fraud and dishonesty. |
Applied to find Appellants’ pleadings deficient in particulars of fraud and bad faith. |
| Belmont Finance Corporation Ltd v Williams Furniture Ltd [1979] Ch 250 |
Requirement for clear and particular pleading of dishonesty. |
Applied to criticize Appellants’ vague and unparticularised allegations. |
| Secretary of State for the Home Department v Rehman [2003] 1 AC 153 |
Standard of proof for serious allegations such as fraud. |
Referenced in support of requirement for cogent evidence of dishonesty. |
Court's Reasoning and Analysis
The court began by considering the principle of witness immunity, which provides absolute protection to witnesses for statements and conduct in judicial proceedings, extending to pre-trial evidence preparation and statements made as part of investigations related to prosecution. This immunity applies regardless of the cause of action pleaded, including claims of misfeasance in public office, except for specific exceptions such as malicious prosecution or perjury.
The court found that the Appellants’ allegations primarily concerned evidence given or statements made by LAA employees in judicial review proceedings, thus falling squarely within the scope of witness immunity. The fact that the Appellants framed the allegations as concerning what witnesses did not say was rejected as a distinction, since false or misleading evidence includes omissions and is barred by immunity.
Where the pleadings alleged conduct outside the scope of witness immunity, such as suppression or manipulation of evidence, the court found these were inadequately particularised and amounted to an abuse of process. The Appellants failed to provide necessary particulars of fraud, bad faith, dishonesty, or recklessness as required by the Civil Procedure Rules and established case law, rendering the pleadings defective.
The court also addressed the Appellants’ claim that summary judgment was inappropriate in fraud cases without exceptional circumstances. It held that summary judgment was properly granted here because the defective pleadings left no viable counterclaim after strike-out.
Regarding abuse of process, the court held that the counterclaim amounted to an improper collateral attack on the earlier judicial review proceedings. The Appellants did not pursue their allegations of wrongdoing in the judicial review, which was the proper forum for those issues, and so raising them subsequently was abusive under the Henderson v Henderson principle.
Finally, the court considered the Respondent’s application to set aside permission to appeal granted by Walker J on the basis of material non-disclosure. Although the Appellants failed to disclose the dismissal of the judicial review and related facts, the court was not satisfied that permission would definitely have been refused had the full picture been known. Therefore, the application to set aside permission was refused.
Holding and Implications
The court DISMISSED the Appellants' appeal against the Master's decision striking out the counterclaim and parts of the Defence.
This decision confirms the broad application of witness immunity to bar civil claims arising from evidence given in judicial proceedings, including claims of misfeasance in public office related to such evidence. It reinforces the requirement for proper particularity in pleading serious allegations of fraud or dishonesty and affirms the principle that collateral attacks on concluded litigation constitute abuse of process. The refusal to set aside permission to appeal underscores the importance of candour in applications for leave to appeal. No new precedent was established; rather, existing principles were applied to the facts.