Illegality and barred claims

By Levis on

It is established law that no court will lend its aid to a man who founds his cause of action upon an immoral or illegal act and it is an argument often used by defendants, to say that they should not have to pay out what a claimant is seeking to recover, where immorality and/or illegality are involved.

This defence, known commonly as ex-turpi causa”, has in the course of the last week, been restated by the Supreme Court in the case of Patel v Mirza [2016] UKSC 42 and the test for establishing the defence has been clarified.

Previously the test, established in the case of Tinsley v Milligan [1994] 1 AC 167, was that if the claimant is obliged to rely on his illegal act in support of his claim, the claim is barred. This was known as the “reliance test”.

Following the decision in Patel v Mirza, a claim will now not be enforceable if it would be harmful for the integrity of the legal system, which is more of a public interest/public policy defence. The court will now consider:

• The underlying purpose of the prohibition of the illegal/immoral act and whether that would be undermined    by allowing the claim;

• Any other relevant public policy on which the denial of the claim may have an impact;

• Whether the denial of the claim would be a proportionate response to the illegality.

The above is now a much broader test and the departure from the reliance test will likely give much greater flexibility to the courts where they are minded to deny claims by those engaging themselves in immoral and/or illegal acts.

To review the case judgement in full, please click here

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