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ILLEGALITY: Does Patel v Mirza apply in tort?

07 July 2017  

James Goudkamp explores whether the Supreme Court’s policy-based approach to the illegality doctrine will be followed in tort cases

The Supreme Court recently handed down judgment in the appeal in Patel v Mirza [2016]. In this landmark decision, the Supreme Court put to rest a long-running debate that had raged between justices of the Supreme Court regarding the proper approach to the law of illegality. Several justices, spearheaded by Lord Sumption, had preferred a rule-based analysis, with the reliance test constituting the relevant rule. According to the reliance test, the claimant will fail in his or her action if he or she needs to rely on his or her own wrongdoing in order to establish the claim. The rival approach, championed by Lord Toulson, entails a discretionary analysis. The discretion-based test involves examining all of the factors that weigh in favour and against permitting recovery and then reaching a conclusion as to the proper outcome in the light of those considerations. Salient factors might include the need to prevent wrongful profiting, the concern to deter offending, the imperative of maintaining both the dignity of the courts and the coherence of the legal system, any relevant statutory policy, and the importance of guarding against disproportionate reactions to what might be relatively insignificant illegality. In Patel, the Supreme Court rejected, by a majority, the rule-based approach in favour of the policy analysis.

Additional Info

  • Case(s) Referenced:

    Bowmakers Ltd v Barnet Instruments Ltd [1945] KB 65

    Collier v Collier [2002] EWCA Civ 1095

    Gray v Thames Trains & ors [2009] UKHL 33

    Hall v Woolston Hall Leisure Ltd [2000] EWCA Civ 170

    Henderson v Dorset Healthcare University NHS Foundation Trust [2016] EWHC 3275 (QB)

    Hounga v Allen & anor [2014] UKSC 47

    McHugh v Okai-Koi & anor [2017] EWHC 710 (QB)

    Patel v Mirza [2016] UKSC 42

    Singh v Ali [1959] UKPC 29

    Singularis Holdings Ltd v Daiwa Capital Markets Europe Ltd [2017] EWHC 257 (Ch)

    Tchenguiz & ors v Grant Thornton UK LLP & ors [2016] EWHC 3727 (Comm)

    Tinsley v Milligan [1993] UKHL 3

Last modified on 30 June 2017