The Court of Appeal on the illegality defence

The role of illegality as a defence to a claim for damages has always been the subject of much debate. There are two principal rationales that can be proposed for illegality being a defence: (a) that the claimant cannot be allowed to rely on his illegal conduct (reliance-based rationale); and (b) that allowing the claim will result in stultifying the law which rendered the claimant’s conduct illegal (stultification/policy rationale). To take a concrete example, let’s assume that A pays B on the assumption that B has it in his power to ‘arrange’ a knighthood for A. If B subsequently fails to deliver, or if A discovers that B never could have arranged such a knighthood, can A claim damages from B? The English High Court in Parkinson v College of Ambulance held not, and seems clearly right. However, what is debatable is whether the claim is denied because A, in making the claim, necessarily must rely on his being party to an illegal act; or because allowing A to recover the amount would stultify the law rendering the procurement of knighthoods illegal. Over the last few years, English courts appear to have moved from the reliance-based rationale to the policy rationale for illegality as a defence. This was also recognized and affirmed by the latest report of the Law Commission of England on illegality, where it observed that legislative reform was not necessary since the policy rationale was gaining judicial ground.^*

A recent decision of the Court of Appeal in Delaney v Pickett again revisited the issue of illegality as a defence to a civil claim. The claim was by the passenger of a car against the driver, for damages caused by negligent driving. However, since the purpose of the journey in this case was the collection and transportation of illegal drugs for subsequent re-sale, the High Court denied recovery. The High Court judge held that since the negligent driving occurred during the course of an illegal activity, it arose ‘directly ex turpi causa’, and hence no claim could lie. The judge also observed that “the conduct upon which the Claimant was engaged in concert with the first Defendant was sufficiently anti-social that public policy prevents him from pursuing a claim arising out of it”.

On appeal, the Court of Appeal considers two important cases on the meaning of ‘directly’ when used in conjunction with ex turpi causa. In Pitts v Hunt, the claim was by the injured pillion passenger on a motorcycle being driven by his friend, both of them drunk, and deliberately driving in a manner designed to frighten others. The Court held that since the pillion passenger was party to, and encouraged the negligent and reckless driving, he could not claim damages for injuries suffered by him from such driving. Dillon LJ observed that what was important was not the seriousness of the illegality, but the connection between the illegality and the injury sought to be compensated. In his words, “Where the plaintiff’s action in truth arises directly ex turpi causa, he is likely to fail … Where the plaintiff has suffered a genuine wrong, to which allegedly unlawful conduct is incidental, he is likely to succeed”. This causal view of the ex turpi causa rule was further explained by Lord Hoffman in Gray v Thames Trains Limited, where he observed:

It might be better to avoid metaphors like “inextricably linked” or “integral part” and to treat the question as simply one of causation. Can one say that, although the damage would not have happened but for the tortious conduct of the defendant, it was caused by the criminal act of the claimant? Or is the position that although the damage would not have happened without the criminal act of the claimant, it was caused by the tortious act of the defendant?

Lord Hoffman held that if the criminal act of the claimant caused the injury, no claim would lie. But if the tortuous act caused the injury, even if the tortuous conduct was occasioned by the criminal activity, a claim would still lie.

Relying on this passage from Gray, Ward LJ in Delaney v Pickett holds that,

We are not concerned with the integrity of the legal system. We do not need to ask whether the claim would be an affront to the public conscience. There is no need for an analysis of the pleadings to establish whether or not the claimant is relying on his illegality to found his claim. It is not a question of the claimant profiting from his own wrongdoing. Here the crucial question is whether, on the one hand the criminal activity merely gave occasion for the tortious act of the defendant to be committed or whether, even though the accident would never have happened had they not made the journey which at some point involved their obtaining and/or transporting drugs with the intention to supply or on the other hand whether the immediate cause of the claimant’s damage was the negligent driving. The answer to that question is in my judgment quite clear. Viewed as a matter of causation, the damage suffered by the claimant was not caused by his or their criminal activity. It was caused by the tortious act of the defendant in the negligent way in which he drove his motor car. In those circumstances the illegal acts are incidental and the claimant is entitled to recover his loss. (emphasis supplied)

The underlined lines from the passage are clear support for the growing body of judicial and academic opinion that reliance by the claimant on his illegal act is immaterial to the applicability of the illegality defence. However, the passage is unclear as to whether the policy-based rationale is always applicable. The suggestion appears to be that the only question to be asked on the facts of this case was one of causation. While that is certainly one of the important questions to be answered, it is doubtful whether it can be conclusive. In Gray, the claimant, who had suffered post-traumatic stress disorder caused by a train accident, killed a person due to the disorder and was convicted of manslaughter. In a claim against the train operator, he also sought damages for loss of earnings after his detention and for loss of his liberty and damage to reputation and for his feelings of guilt and remorse consequent on the killing. It was denying this claim that Lord Hoffman held that since the detention and damage to reputation was caused by his illegal act and not the train accident, no damages would be recoverable. However, that does not suggest that the causal test is determinative of the illegality question. Undoubtedly, it is possible to ‘explain’ the decision in Delaney on policy grounds, given that it is not inconsistent with the stultification rationale. However, the absence of a specific mention of the rationale, and the emphasis placed on the causal view of the ex turpi causa principle suggests that the case was actually not decided on the policy-basis either.

In sum, the role of illegality as a defence to civil claims is still unclear. While the stultification/policy-based rationale appears to have the most appeal, and does explain several of the cases, it does not seem easy to apply and is not universally followed. Delaney is another example where on facts, causation or some other test may be conclusively applied, without reference to the underlying rationale of the illegality defence.

^*The only exception is the landmark decision in Tinsley v Milligan, where the majority held that in the context of presumed resulting trusts, as long as the claimant does not need to rely in his pleadings on the illegality, the claim will succeed. Although Lord Millet in Tribe v Tribe does appear to have narrowed Tinsley to its facts, this narrowing is not very convincing, and is arguably obiter.