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Illegality in English law is a potential ground in
English contract law English contract law is the body of law that regulates legally binding agreements in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries ...
,
tort A tort is a civil wrong that causes a claimant to suffer loss or harm, resulting in legal liability for the person who commits the tortious act. Tort law can be contrasted with criminal law, which deals with criminal wrongs that are punishable ...
,
trusts A trust is a legal relationship in which the holder of a right gives it to another person or entity who must keep and use it solely for another's benefit. In the Anglo-American common law, the party who entrusts the right is known as the "sett ...
or
UK company law The United Kingdom company law regulates corporations formed under the Companies Act 2006. Also governed by the Insolvency Act 1986, the UK Corporate Governance Code, European Union Directives and court cases, the company is the primary lega ...
for a court to refuse to enforce an obligation. The illegality of a transaction, either because of public policy under the common law, or because of legislation, potentially means no action directly concerning the deal will be heard by the courts. The doctrine is reminiscent of the Latin phrase " Ex turpi causa non oritur actio", meaning "no cause of action arises from a wrong". The primary problem arising when courts refuse to enforce an agreement is the extent to which an innocent party may recover any property already conveyed through the transaction. Hence, illegality raises important questions for English unjust enrichment law.


Overview

One of the earliest reported cases is '' Everet v Williams'' (1725) where two Highwayman had a legal dispute over the proceeds of their robberies. The court declined to entertain the suit, and both litigants were later hanged. In another early case, ''
Holman v Johnson ''Holman v Johnson'' (1775) 1 Cowp 341 is an English contract law case, concerning the principles behind illegal transactions. It is also possibly the first case in English law where the court explicitly recognised that aspects of a claim befor ...
'' (1775) 1 Cowp 341, 343
Lord Mansfield William Murray, 1st Earl of Mansfield, PC, SL (2 March 170520 March 1793) was a British barrister, politician and judge noted for his reform of English law. Born to Scottish nobility, he was educated in Perth, Scotland, before moving to Lond ...
CJ set out the rationale for the illegality doctrine.


Contract

*'' St John Shipping Corporation v Joseph Rank Ltd''
957 Year 957 ( CMLVII) was a common year starting on Thursday (link will display the full calendar) of the Julian calendar. Events By place Europe * September 6 – Liudolf, the eldest son of King Otto I, dies of a violent fever ne ...
1 QB 267, Devlin J purpose of the statute on overloading ships did not prevent enforceability of a carriage contract *'' Archbolds (Freightage) Ltd v S Spanglett Ltd''
961 Year 961 (Roman numerals, CMLXI) was a common year starting on Tuesday (link will display the full calendar) of the Julian calendar. Events By place Byzantine Empire * March 6 – Siege of Chandax: Byzantine forces under Nikephoro ...
2 QB 374, Devlin LJ, purpose of statute *'' Janson v Driefontein Consolidated Mines Ltd''
902 __NOTOC__ Year 902 ( CMII) was a common year starting on Friday (link will display the full calendar) of the Julian calendar. Events By place Europe * Spring – Adalbert II, margrave of Tuscany, revolts against Emperor Louis I ...
AC 484, Lord Halsbury suggests the courts may no longer 'invent a new head of public policy', but this is doubtful


Public policy

*'' Pearce v Brooks'' (1866) LR 1 Ex 213, no compensation for a damaged brougham used for prostitution *''
Richardson v Mellish Richardson may refer to: People * Richardson (surname), an English and Scottish surname * Richardson Gang, a London crime gang in the 1960s * Richardson Dilworth, Mayor of Philadelphia (1956-1962) Places Australia * Richardson, Australian Ca ...
'' (1824) 2 Bing 229, 252, Burroughs J, public policy is 'a very unruly horse, and when once you get astride it you never know where it will carry you' *''
Enderby Town Football Club Ltd v The Football Association Ltd ''Enderby Town Football Club Ltd v The Football Association Ltd'' 971Ch 591 is an English contract law case, concerning the scope of contracts and association rules that can be contrary to public policy and illegal. Facts The Football Associatio ...
''
971 Year 971 ( CMLXXI) was a common year starting on Sunday (link will display the full calendar) of the Julian calendar. Events By place Byzantine Empire * Battle of Dorostolon: A Byzantine expeditionary army (possibly 30–40,000 men ...
Ch 591, 606, 'with a good man in the saddle, the unruly horse can be kept in control. It can jump over obstacles.' *'' Franco v Bolton'' (1797) 3 Ves 368, promise to pay someone to be a mistress *'' Lowe v Peers'' (1768) 2 Burr 2225, restraining someone from marriage *
Law Reform (Miscellaneous Provisions) Act 1970 Law is a set of rules that are created and are enforceable by social or governmental institutions to regulate behavior,Robertson, ''Crimes against humanity'', 90. with its precise definition a matter of longstanding debate. It has been vario ...
section 1, abolishing illegality in breach of a promise to marry *'' Bigos v Bousted'' 9511 All ER 92, contract contrary to exchange control regulations *'' Miller v Karlinski'' (1945) 62 TLR 85, contract to defraud the Inland Revenue *'' Beresford v Royal Exchange Assurance''
938 Year 938 ( CMXXXVIII) was a common year starting on Monday (link will display the full calendar) of the Julian calendar. Events By place Europe * Summer – The Hungarian army invades Northern Italy with the permission of King H ...
AC 586, life insurance contract including cover for suicide illegal, and unenforceable because at the time suicide was illegal *'' Clay v Yates'' (1856) 1 H&C 73, contract to publish a libellous statement *'' Elliot v Richardson'' (1870) LR 5 CP 744, agreement to obstruct bankruptcy proceedings *''
Scott v Avery Scott may refer to: Places Canada * Scott, Quebec, municipality in the Nouvelle-Beauce regional municipality in Quebec * Scott, Saskatchewan, a town in the Rural Municipality of Tramping Lake No. 380 * Rural Municipality of Scott No. 98, Sask ...
'',. parties can agree to have a dispute referred to an arbitrator *
Arbitration Act 1996 The Arbitration Act 1996c 23 is an Act of Parliament which regulates arbitration proceedings within the jurisdiction of England and Wales and Northern Ireland. The 1996 Act only applies to parts of the United Kingdom. In Scotland, the Arbitrat ...
sections 68-69, 87, entitlement to appeal to a court after arbitration *'' De Wutz v Hendricks'' (1824) 2 Bing 314, contract to facilitate overthrow of a friendly government *'' Parkinson v College of Ambulance Ltd''
925 Year 925 ( CMXXV) was a common year starting on Saturday (link will display the full calendar) of the Julian calendar. Events By place Byzantine Empire * May 15 – Nicholas I Mystikos, twice the Ecumenical Patriarch of Constanti ...
2 KB 1, agreement to procure a knighthood contrary to public policy


Statute

*'' Ashmore, Benson & CO Ltd v AV Dawson Ltd''
973 Year 973 ( CMLXXIII) was a common year starting on Wednesday (link will display the full calendar) of the Julian calendar. Events By place Byzantine Empire * Spring – The Byzantine army, led by General Melias (Domestic of the S ...
1 WLR 828, tube banks on overloaded lorries breaching a regulation, knowledge of illegality matters *'' Nash v Stevenson Transport Ltd''
936 Year 936 ( CMXXXVI) was a leap year starting on Friday (link will display the full calendar) of the Julian calendar. Events By place Europe * June 19 – At Laon, Louis IV, the 14-year old son of the late King Charles the Simp ...
2 KB 128, ignorance of the law is no defence *'' Re Mahmoud and Ispahani''
921 __NOTOC__ Year 921 ( CMXXI) was a common year starting on Monday (link will display the full calendar) of the Julian calendar. Events By place Byzantine Empire * March – Battle of Pegae: Bulgarian forces under ''kavhan'' (first ...
2 KB 716, linseed oil and license *
Gaming Act 1845 The Gaming Act 1845 (8 & 9 Vict., c. 109) was an Act of the Parliament of the United Kingdom. The Act's principal provision was to deem a wager unenforceable as a legal contract. The Act received royal assent on 8 August 1845. Sections 17 and ...
section 18, "all contracts or agreements, whether by parole or in writing, by way of gaming or wagering shall be null and void" *
Financial Services Act 1986 The Financial Services Act 1986 (1986 c.60) was an Act of the Parliament of the United Kingdom passed by the government of Margaret Thatcher to regulate the financial services industry. The Act used a mixture of governmental regulation and sel ...
*
Gambling Act 2005 The Gambling Act 2005 (2005 c 19) is an Act of the Parliament of the United Kingdom. It mainly applies to England and Wales, and to Scotland, and is designed to control all forms of gambling. It transfers authority for licensing gambling from t ...
section 335, and new
Gambling Commission The Gambling Commission is an executive non-departmental public body of the Government of the United Kingdom responsible for regulating gambling and supervising gaming law in Great Britain. Its remit covers arcades, betting, bingo, casinos, ...


Restraint of trade

*''
Esso Petroleum Co Ltd v Harper's Garage (Stourport) Ltd ''Esso Petroleum Co Ltd v Harper's Garage (Stourport) Ltd'' 967UKHL 1is an English contract law case, concerning the restraint of trade through a tying arrangement. Facts Harper's Garage agreed to accept all petrol for its two stations from Ess ...
''
968 Year 968 ( CMLXVIII) was a leap year starting on Wednesday (link will display the full calendar) of the Julian calendar. Events By place Byzantine Empire * Emperor Nikephoros II receives a Bulgarian embassy led by Prince Boris ( ...
AC 269, a garage agreed to accept all petrol from Esso exclusively, valid if protecting a legitimate interest *'' Herbert Morris Ltd v Saxelby''
916 __NOTOC__ Year 916 ( CMXVI) was a leap year starting on Monday (link will display the full calendar) of the Julian calendar. Events By place Europe * Sicilian Berbers in Agrigento revolt and depose the independent Emir Ahmed ibn Kh ...
1 AC 688, to sue to enforce a contract restraining an employee from competing one must show "some proprietary right, whether in the nature of a trade connection or in the nature of trade secrets" *'' Fitch v Dewes''
921 __NOTOC__ Year 921 ( CMXXI) was a common year starting on Monday (link will display the full calendar) of the Julian calendar. Events By place Byzantine Empire * March – Battle of Pegae: Bulgarian forces under ''kavhan'' (first ...
2 AC 158 *'' Forster and Sons v Suggett'' (1918) 35 TLR 87 *'' Wyatt v Kreglinger and Fernau''
933 Year 933 (Roman numerals, CMXXXIII) was a common year starting on Tuesday (link will display the full calendar) of the Julian calendar. Events By place Europe * Spring – Hugh of Italy, Hugh of Provence, king of Kingdom of Italy ...
1 KB 793 *'' Nordenfelt v Maxim Nordenfelt''
894 __NOTOC__ Year 894 ( DCCCXCIV) was a common year starting on Tuesday (link will display the full calendar) of the Julian calendar. Events By place Byzantine Empire * Byzantine–Bulgarian War: Stylianos Zaoutzes, leading minister and ...
AC 535 *''
Schroeder Music Publishing Co Ltd v Macaulay ''Macaulay v Schroeder Music Publishing Co Ltd'' 9741 WLR 1308 is an English contract law decision of the House of Lords relating to restraint of trade. Facts Macaulay, a novice songwriter aged 21, entered a standard form agreement with Schroe ...
''
974 Year 974 ( CMLXXIV) was a common year starting on Thursday (link will display the full calendar) of the Julian calendar. Events By place Europe * Battle of Danevirke: Emperor Otto II defeats the rebel forces of King Harald I, who ha ...
1 WLR 1308 *''
Alec Lobb (Garages) Ltd v Total Oil (Great Britain) Ltd is an English contract law case relating to undue influence. Facts Mr. Lobb was the managing director of a small petrol station in South Street, Braintree, Essex. It had to buy petrol only from British branch of French oil company Total S.A. I ...
''
985 Year 985 ( CMLXXXV) was a common year starting on Thursday (link will display the full calendar) of the Julian calendar. Events By place Europe * Summer – Henry II (the Wrangler) is restored as duke of Bavaria by Empress Theoph ...
1 WLR 173


Employment rights

*'' Hounga v Allen'' . *''
Hall v Woolston Hall Leisure Ltd ''Hall v Woolston Hall Leisure Ltd'' 000EWCA Civ 170is a UK labour law case, concerning the illegality in the contract of employment. Facts Mrs Hall was dismissed from being head chef at the Epping Forest Golf Club because she became pregnant. ...
''.


Tort

In the law of
tort A tort is a civil wrong that causes a claimant to suffer loss or harm, resulting in legal liability for the person who commits the tortious act. Tort law can be contrasted with criminal law, which deals with criminal wrongs that are punishable ...
, the principle would prevent a criminal from bringing a claim against (for example) a fellow criminal. In '' National Coal Board v England'''' National Coal Board v England''
954 Year 954 ( CMLIV) was a common year starting on Sunday (link will display the full calendar) of the Julian calendar. Events By place Europe * Spring – A Hungarian army led by Bulcsú crosses the Rhine. He camps at Worms in th ...
AC 403,
House of Lords The House of Lords, also known as the House of Peers, is the upper house of the Parliament of the United Kingdom. Membership is by appointment, heredity or official function. Like the House of Commons, it meets in the Palace of Westminst ...
(UK).
Lord Asquith said, In ''
Hewison v Meridian Shipping Services Pte Ltd is an English tort law case, concerning an employer's liability for an employee's illegal acts. Facts Mr Hewison had epilepsy and needed anti-convulsant drugs. He concealed his illness so that he could do offshore work with his employer, Merid ...
'',. an employee who had obtained his position by concealing his epilepsy was held not to be entitled to claim compensation for future loss of earnings as a result of his employer's negligence, since his deception (resulting in a pecuniary advantage contrary to the Theft Act 1968) would prevent him from obtaining similar employment in future. It is not absolute in effect. For example, in '' Revill v Newberry''. an elderly
allotment Allotment may refer to: * Allotment (Dawes Act), an area of land held by the US Government for the benefit of an individual Native American, under the Dawes Act of 1887 * Allotment (finance), a method by which a company allocates over-subscribed ...
holder was sleeping in his shed with a
shotgun A shotgun (also known as a scattergun, or historically as a fowling piece) is a long-barreled firearm designed to shoot a straight-walled cartridge known as a shotshell, which usually discharges numerous small pellet-like spherical sub- pr ...
, to deter
burglar Burglary, also called breaking and entering and sometimes housebreaking, is the act of entering a building or other areas without permission, with the intention of committing a criminal offence. Usually that offence is theft, robbery or murd ...
s. On hearing the plaintiff trying to break in, he shot his gun through a hole in the shed, injuring the plaintiff. At first instance, the defendant attempted to raise the defence of ''ex turpi'' to avoid the claim; this failed and he appealed against the decision. The
Court of Appeal A court of appeals, also called a court of appeal, appellate court, appeal court, court of second instance or second instance court, is any court of law that is empowered to hear an appeal of a trial court or other lower tribunal. In much ...
dismissed the defendant's appeal, holding that he was
negligent Negligence (Lat. ''negligentia'') is a failure to exercise appropriate and/or ethical ruled care expected to be exercised amongst specified circumstances. The area of tort law known as ''negligence'' involves harm caused by failing to act as a ...
to have shot blindly at body height, without shouting a warning or shooting a warning shot into the air, and that the response was out of all proportion to the threat. The precise scope of the doctrine is not certain. In some cases, it seems that the illegality prevents a
duty of care In tort law, a duty of care is a legal obligation that is imposed on an individual, requiring adherence to a standard of reasonable care while performing any acts that could foreseeably harm others. It is the first element that must be establi ...
arising in the first place. For example, in '' Ashton v Turner'''' Ashton v Turner''
981 Year 981 ( CMLXXXI) was a common year starting on Saturday (link will display the full calendar) of the Julian calendar. Events Births * Abu'l-Qasim al-Husayn ibn Ali al-Maghribi, Arab statesman (d. 1027) * Giovanni Orseolo, Venetian ...
QB 137,
High Court of Justice The High Court of Justice in London, known properly as His Majesty's High Court of Justice in England, together with the Court of Appeal and the Crown Court, are the Senior Courts of England and Wales. Its name is abbreviated as EWHC ( Engl ...
(England and Wales).
the defendant crashed a car in the course of getting away from the scene of a burglary, injuring the plaintiff. Ewbank J held that the court may not recognise a duty of care in such cases as a matter of
public policy Public policy is an institutionalized proposal or a decided set of elements like laws, regulations, guidelines, and actions to solve or address relevant and real-world problems, guided by a conception and often implemented by programs. Public ...
. Similarly, in ''
Pitts v Hunt Pitts may refer to: People *Allen Pitts, American born Canadian football player *Antony Pitts (1969), British composer * Boozer Pitts, American college football coach *Byron Pitts, American reporter for CBS * Chester Pitts, American football play ...
'',. Balcombe LJ of the Court of Appeal rationalised this approach, saying that it was impossible to decide the appropriate standard of care in cases where the parties were involved in illegality. However, the other two judges, although reached the same conclusion, took different approaches. Beldam LJ favoured a public conscience approach which considers whether the general public would be outraged or view the court as indirectly encouraging a criminal act if they were to award damages. Dillon LJ meanwhile provided little practical guidance in his approach where the defence of illegality is successful when a claimant's cause of action arises "directly ex turpi causa".


Trusts

The courts view ''ex turpi'' as a
defence Defense or defence may refer to: Tactical, martial, and political acts or groups * Defense (military), forces primarily intended for warfare * Civil defense, the organizing of civilians to deal with emergencies or enemy attacks * Defense indus ...
where otherwise a claim would lie, again on grounds of public policy. In '' Tinsley v Milligan'''' Tinsley v Milligan'' 992Ch 310,
Court of Appeal A court of appeals, also called a court of appeal, appellate court, appeal court, court of second instance or second instance court, is any court of law that is empowered to hear an appeal of a trial court or other lower tribunal. In much ...
(England and Wales).
Nicholls LJ in the Court of Appeal spoke of the court having to "weigh or balance the adverse consequences of granting relief against the adverse consequences of refusing relief". The plaintiff was ultimately successful in ''Tinsley v Milligan'' in the
House of Lords The House of Lords, also known as the House of Peers, is the upper house of the Parliament of the United Kingdom. Membership is by appointment, heredity or official function. Like the House of Commons, it meets in the Palace of Westminst ...
, which allowed the claim on the grounds that the plaintiff did not need to rely on the illegality.. '' Gray v Thames Trains''. upheld the basic rule of public policy that disallowed recovery of anything stemming from Plaintiff's own wrongdoing.


Companies

The effect of illegality under English law was most recently considered by the United Kingdom Supreme Court in ''
Jetivia SA v Bilta (UK) Limited (in liquidation) (sometimes referred to as ''Bilta (UK) Limited v Nazir'') is a UK company and insolvency law decision of the Supreme Court of the United Kingdom in relation to (i) the attribution of unlawful acts of a director to the company where the compa ...
''.. *''
Moore Stephens v Stone Rolls Ltd is a leading case relevant for UK company law and the law on fraud and ''ex turpi causa non oritur actio''. The House of Lords decided by a majority of three to two that where the director and sole shareholder of a closely held private company d ...
''. *'' Safeway Stores Ltd v Twigger''.


Unjust enrichment

*'' Strongman (1945) Ltd v Sincock''
955 Year 955 ( CMLV) was a common year starting on Monday (link will display the full calendar) of the Julian calendar. Events By place Europe * August 10 – Battle of Lechfeld: King Otto I ("the Great") defeats the Hungarians (also ...
2 QB 525 *'' Shelley v Paddock''
980 Year 980 (Roman numerals, CMLXXX) was a leap year starting on Thursday (link will display the full calendar) of the Julian calendar. Events By place Europe * Peace is concluded between Emperor Otto II, Holy Roman Emperor, Otto II (the ...
348, innocent person can recover damages after fraudulent misrepresentation *'' AL Barnes Ltd v Time Talk (UK) Ltd'' 003EWCA Civ 402 *'' Hughes v Liverpool Victoria Legal Friendly Society''
916 __NOTOC__ Year 916 ( CMXVI) was a leap year starting on Monday (link will display the full calendar) of the Julian calendar. Events By place Europe * Sicilian Berbers in Agrigento revolt and depose the independent Emir Ahmed ibn Kh ...
2 KB 482, not being ''
in pari delicto ''In pari delicto (potior/melior est conditio possidentis)'', Latin for "in equal fault (better is the condition of the possessor)", is a legal term used to refer to two persons or entities who are equally at fault, whether the malfeasance in que ...
'' *'' Taylor v Bowers'' (1876) 1 QBD, repudiating illegal purpose *'' Tribe v Tribe''
996 Year 996 ( CMXCVI) was a leap year starting on Wednesday (link will display the full calendar) of the Julian calendar. Events By place Japan * February - Chotoku Incident: Fujiwara no Korechika and Takaie shoot an arrow at Retired Emp ...
Ch 107, Millet LJ *'' Bowmakers Ltd v Barnet Instruments Ltd''
945 Year 945 ( CMXLV) was a common year starting on Wednesday (link will display the full calendar) of the Julian calendar. Events By place Byzantine Empire * January 27 – The co-emperors Stephen and Constantine are overthrown barel ...
KB 65 *'' Tinsley v Milligan''
994 Year 994 ( CMXCIV) was a common year starting on Monday (link will display the full calendar) of the Julian calendar. Events By place Byzantine Empire * September 15 – Battle of the Orontes: Fatimid forces, under Turkish gener ...
1 AC 340, recovery without relying on illegality *'' Euro-Diam Ltd v Bathurst''
990 Year 990 ( CMXC) was a common year starting on Wednesday (link will display the full calendar) of the Julian calendar. Events By place Europe * Al-Mansur, ''de facto'' ruler of Al-Andalus, conquers the Castle of Montemor-o-Velho (mode ...
1 QB 1


See also

* ''
In pari delicto ''In pari delicto (potior/melior est conditio possidentis)'', Latin for "in equal fault (better is the condition of the possessor)", is a legal term used to refer to two persons or entities who are equally at fault, whether the malfeasance in que ...
'' * ''
Nemo auditur propriam turpitudinem allegans ''Nemo auditur propriam turpitudinem allegans'' is a civil law maxim which may be translated into English as "no one can be heard to invoke his own turpitude" or "no one shall be heard, who invokes his own guilt". The maxim operated with another, ...
'', civil law maxim * NZ Illegal Contracts Act 1970


Notes

{{reflist, 2


References

*Law Commission, ''Illegal Transactions: The Effect of Illegality on Contracts and Trusts'' (1999) Law Com 154 English contract law English tort law English trusts law