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You are here: BAILII >> Databases >> United Kingdom Supreme Court >> Henderson v Dorset Healthcare University NHS Foundation Trust [2020] UKSC 43 (30 October 2020) URL: http://www.bailii.org/uk/cases/UKSC/2020/43.html Cite as: [2021] 2 All ER 257, [2021] AC 563, [2022] MHLR 228, [2020] UKSC 43, [2021] PNLR 7, [2021] PIQR P7, [2020] 3 WLR 1124, (2021) 177 BMLR 1, [2021] Med LR 26, [2020] WLR(D) 592 |
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[2020] UKSC 43
On appeal from: [2018] EWCA Civ 1841
JUDGMENT
Ecila Henderson (A Protected Party, by her litigation friend, The Official Solicitor) (Appellant) v Dorset Healthcare University NHS Foundation Trust (Respondent)
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before
Lord Reed, President Lord Hodge, Deputy President Lady Black Lord Lloyd-Jones Lady Arden Lord Kitchin Lord Hamblen
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JUDGMENT GIVEN ON |
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30 October 2020 |
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Heard on 11 and 12 May 2020 |
Appellant |
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Respondent |
Nicholas Bowen QC |
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Angus Moon QC |
Katie Scott |
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Cecily White |
Duncan Fairgrieve |
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Judith Ayling |
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James Goudkamp |
(Instructed by Russell-Cooke LLP (Putney)) |
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(Instructed by DAC Beachcroft LLP (Bristol)) |
LORD HAMBLEN: (with whom Lord Reed, Lord Hodge, Lady Black, Lord Lloyd-Jones, Lady Arden and Lord Kitchin agree)
I Introduction
4. Similar claims for damages to those made by the appellant were held to be irrecoverable by the House of Lords in Gray v Thames Trains Ltd [2009] UKHL 33; [2009] AC 1339 (“Gray”), also a case of manslaughter on the grounds of diminished responsibility. The appeal raises the question of whether Gray can be distinguished and, if not, whether it should be departed from, in particular in the light of the Supreme Court decision concerning illegality in Patel v Mirza [2016] UKSC 42; [2017] AC 467 (“Patel”).
II The factual background
5. This is set out in detail in the agreed statement of facts appended to the judgments below.
14. Dr Lord’s view in relation to whether the psychiatric evidence supported the insanity defence was that it was clear from all the evidence that the appellant knew what she was doing when she inflicted the stab wounds on her mother, and that what she was doing was morally and legally wrong. He went on to say that she was nevertheless suffering from a profound abnormality of mental functioning at the time of the killing which at the material time substantially impaired her responsibility for the commission of the act and impaired her ability to form a rational judgement and exercise self-control, and so the defence of diminished responsibility was available to her.
“There has … been a full review of the care being given to you at the time, and it is, I think, inappropriate for me to make any comment one way or the other about that, save to say that it is plain that lessons have been learned from it, as I understand, having read the report.
The one thing that is clear, from the report, is a conclusion that there was little, if any, basis for believing that your mother would be a potential victim of any violence that you might display in a psychotic episode, and that conclusion and analysis seems to have been borne out by the two expert opinions that I have read in the context of this case.
When you recovered from that psychotic episode, as you did, you appreciated fully what you had done, and you were distressed beyond measure.
The very detailed and comprehensive reports I have seen from Dr Bradley and Dr Lord, to whom I express my appreciation, demonstrate clearly that your ability to act rationally and with self-control at the time of the incident was substantially and profoundly impaired, because of the psychotic episode to which I have referred, and to the extent that you had little, if any, true control over what you did.
That means that the conviction for manslaughter by reason of diminished responsibility is obviously the appropriate verdict, and the prosecution has undoubtedly correctly accepted that is so.
It is also that mental health background that informs and largely dictates how this case should be disposed of. It is quite plain that in your own interests, and in the interests of the public, if and when you are released, that the most important consideration is the successful treatment and/or management of your condition.
I should say that there is no suggestion in your case that you should be seen as bearing a significant degree of responsibility for what you did. Had there been any such suggestion I would have given serious consideration to making an order under section 45(A) of the Mental Health Act 1983, however, on the material and evidence before me that issue does not arise.
The joint recommendation of Dr Bradley and Dr Lord is that you should be made the subject of a hospital order under section 37 of the Act, with an unlimited restriction order under section 41 of the Act.
Dr Bradley says in her report that your illness is difficult to treat and monitor and that ‘A high degree of vigilance and scrutiny of mental state will be needed to ensure successful rehabilitation’.
Dr Lord says in his report that the effect of such an order would be that you would be ‘detained in secure psychiatric services for a substantial period of time in order for such treatment and rehabilitation to be completed and to ensure the safety of the public’. The restrictions imposed by section 41, he says in his report and has repeated in what he has said to me, would be ‘invaluable in protecting the public from the risk of serious harm in the future’.
Given those strong and firm recommendations from two experienced psychiatrists, who examined you and your psychiatric history with very considerable care, it seems to me that this is the order that I should make, and I will make.”
III The criminal law background
19. Insanity is a defence to murder. As established in M’Naghten’s case (1843) 10 Cl & F 200, 8 ER 718, in order to establish the defence it must be proved on the balance of probabilities that “at the time of the committing of the act, the party accused was labouring under such a defect of reason, from disease of the mind, as not to know the nature and quality of the act he was doing, or, if he did know it, that he did not know he was doing what was wrong” - per Tindal CJ at p 210. If the defence is established, a special verdict of not guilty by reason of insanity is returned.
(1) the defendant suffers from an abnormality of mental functioning which;
(2) arises from a recognised medical condition;
(3) substantially impaired the defendant’s ability (a) to understand the nature of his or her conduct; and/or (b) to form a rational judgment; and/or (c) to exercise self-control; and
(4) caused or significantly contributed to the defendant’s killing of the deceased.
22. The partial defence only arises where the defendant would otherwise be convicted of murder. As Lord Hughes explained in R v Golds [2016] UKSC 61; [2016] 1 WLR 5231, para 36:
“By definition, before any question of diminished responsibility can arise, the homicide must have been done with murderous intent, to kill or to do grievous bodily harm, and without either provocation or self-defence.”
26. In appropriate cases a mental health disposal under the 1983 Act may be made. In such cases the court should first consider whether to order custody with a hospital and limitation direction under section 45A of the 1983 Act. Such a direction should be made “if a penal element is appropriate and the mental disorder can appropriately be dealt with” by a section 45A direction. If such a direction is not appropriate, then the court must consider whether to make a hospital order under section 37 of the 1983 Act. Such an order may be made with or without a restriction order under section 41 of the 1983 Act.
“No longer is the offender regarded simply as a patient whose interests are paramount. No longer is the control of him handed over unconditionally to the hospital authorities. Instead the interests of public safety are regarded by transferring the responsibility for discharge from the responsible medical officer and the hospital to the Secretary of State … and the Mental Health Review Tribunal.”
IV The proceedings below
28. The appellant claimed damages under six heads of loss:
(1) General damages for personal injury (a depressive disorder and post-traumatic stress disorder (“PTSD”)) consequent on her killing of her mother.
(2) General damages for her loss of liberty caused by her compulsory detention in hospital pursuant to sections 37 and 41 of the 1983 Act.
(3) General damages for loss of amenity arising from the consequences to her of having killed her mother.
(4) Past loss in the sum of £61,944 being the share in her mother’s estate which she is unable to recover as a result of the operation of the provisions of the Forfeiture Act 1982.
(5) The cost of psychotherapy (by way of future loss).
(6) The cost of a care manager/support worker (by way of future loss).
30. The preliminary issue was heard over two days by Jay J who decided the issue in the respondent’s favour: Henderson v Dorset Healthcare University NHS Foundation Trust [2016] EWHC 3275 (QB); [2017] 1 WLR 2673. Jay J held that the facts were materially identical to those in Clunis v Camden and Islington Health Authority [1998] QB 978 (“Clunis”) and Gray and that those decisions were binding on him.
31. The Court of Appeal (Sir Terence Etherton MR, Ryder and Macur LJJ) dismissed the appellant’s appeal against the order of Jay J: Henderson v Dorset Healthcare University NHS Foundation Trust [2018] EWCA Civ 1841; [2018] 3 WLR 1651. Like Jay J, the Court of Appeal held that the facts were materially identical to those in Clunis and Gray and that those decisions were binding on it.
V The issues
32. The principal issues to be determined on the appeal are:
(1) Whether Gray can be distinguished.
(2) If not, whether Gray should be departed from and Clunis overruled.
(3) If not, whether all heads of loss claimed are irrecoverable.
(i) The reasoning in Gray cannot stand with the approach to illegality adopted by the Supreme Court in Patel.
(ii) Gray should be held not to apply where the claimant has no significant personal responsibility for the criminal act and/or there is no penal element in the sentence imposed.
(iii) The application of the trio of considerations approach set out in Patel leads to a different outcome.
(i) Gray
38. Lord Hoffmann summarised the appellant defendants’ argument in the following terms at para 29:
“Their principal argument invokes a special rule of public policy. In its wider form, it is that you cannot recover compensation for loss which you have suffered in consequence of your own criminal act. In its narrower and more specific form, it is that you cannot recover for damage which flows from loss of liberty, a fine or other punishment lawfully imposed upon you in consequence of your own unlawful act. In such a case it is the law which, as a matter of penal policy, causes the damage and it would be inconsistent for the law to require you to be compensated for that damage.”
“The inconsistency is between the criminal law, which authorizes the damage suffered by the plaintiff in the form of loss of liberty because of his own personal responsibility for the crimes he committed, and the claim that the civil law should require someone else to compensate him for that loss of liberty.”
“… it has been submitted in this case that the sentence of detention in a hospital reflected the fact that Mr Gray was not really being punished but detained for his own good to enable him to be treated for post-traumatic stress disorder. But the sentence imposed by the court for a criminal offence is usually for a variety of purposes: punishment, treatment, reform, deterrence, protection of the public against the possibility of further offences. It would be impossible to make distinctions on the basis of what appeared to be its predominant purpose. In my view it must be assumed that the sentence (in this case, the restriction order) was what the criminal court regarded as appropriate to reflect the personal responsibility of the accused for the crime he had committed. As one commentator has said ‘Tort law has enough on its plate without having to play the criminal law’s conscience’: see EK Banakas [1985] CLJ 195, 197. …”
41. He affirmed the narrower rule and held that it barred the narrow claim. As he stated at para 50:
“Mr Gray’s claims for loss of earnings after his arrest and for general damages for his detention, conviction and damage to reputation are all claims for damage caused by the lawful sentence imposed upon him for manslaughter and therefore fall within the narrower version of the rule which I would invite your Lordships to affirm.”
“In the present case the plaintiff has been convicted of a serious criminal offence. In such a case public policy would in our judgment preclude the court from entertaining the plaintiff’s claim unless it could be said that he did not know the nature and quality of his act or that what he was doing was wrong. The offence of murder was reduced to one of manslaughter by reason of the plaintiff’s mental disorder but his mental state did not justify a verdict of not guilty by reason of insanity. Consequently, though his responsibility for killing Mr Zito is diminished, he must be taken to have known what he was doing and that it was wrong. A plea of diminished responsibility accepts that the accused’s mental responsibility is substantially impaired but it does not remove liability for his criminal act … The court ought not to allow itself to be made an instrument to enforce obligations alleged to arise out of the plaintiff’s own criminal act and we would therefore allow the appeal on this ground.”
“… it is offensive to public notions of the fair distribution of resources that a claimant should be compensated (usually out of public funds) for the consequences of his own criminal conduct.”
“However the test is expressed, the wider rule seems to me to cover the remaining heads of damage in this case. Mr Gray’s liability to compensate the dependants of the dead pedestrian was an immediate ‘inextricable’ consequence of his having intentionally killed him. The same is true of his feelings of guilt and remorse.”
45. In his judgment, Lord Rodger considered various Australian and Canadian authorities, including the decision of the Supreme Court of Canada in British Columbia v Zastowny [2008] 1 SCR 27. That case concerned a claim for wage loss during time spent in prison as a result of various offences which were alleged to have been committed as a consequence of sexual assaults by a prison officer during an earlier period of incarceration. At para 68 Lord Rodger cited with approval from the unanimous judgment of the court delivered by Rothstein J:
“22. Zastowny’s wage loss while incarcerated is occasioned by the illegal acts for which he was convicted and sentenced to serve time. In my view, therefore, the ex turpi doctrine bars Zastowny from recovering damages for time spent in prison because such an award would introduce an inconsistency in the fabric of law. This is because such an award would be, as McLachlin J described in Hall v Hebert [1993] 2 SCR 159, 178, ‘giving with one hand what it takes away with the other’. When a person receives a criminal sanction, he or she is subject to a criminal penalty as well as the civil consequences that are the natural result of the criminal sanction. The consequences of imprisonment include wage loss. …
23. Preserving the integrity of the justice system by preventing inconsistency in the law is a matter of judicial policy that underlies the ex turpi doctrine.
…
30. … In asking for damages for wage loss for time spent in prison, Zastowny is asking to be indemnified for the consequences of the commission of illegal acts for which he was found criminally responsible. Zastowny was punished for his illegal acts on the basis that he possessed sufficient mens rea to be held criminally responsible for them. He is personally responsible for his criminal acts and the consequences that flow from them. He cannot attribute them to others and evade or seek rebate of those consequences …”
“77. In British Columbia v Zastowny [2008] 1 SCR 27, 38, para 23, Rothstein J treated the need to preserve the integrity of the justice system, by preventing inconsistency in the law, as a matter of judicial policy that underlay the ex turpi causa doctrine. In other words, in the circumstances of that case the application of the ex turpi causa doctrine helped to promote the more fundamental legal policy of preventing inconsistency in the law. That such a policy exists is beyond question. In Zastowny and the preceding cases, the need was to ensure that the civil and criminal courts were consistent in their handling of the plaintiff’s criminal conduct and its consequences. But that is simply one manifestation of a desirable attribute of any developed legal system. … Likewise, in the present case, when considering the claim for loss of earnings, a civil court should bear in mind that it is desirable for the criminal and civil courts to be consistent in the way that they regard what the claimant did. As Samuels JA observed in State Rail Authority of New South Wales v Wiegold 25 NSWLR 500, 514, failure to do so would generate the sort of clash between civil and criminal law that is apt to bring the law into disrepute.”
“The civil courts must therefore proceed on the basis that, even though the claimant’s responsibility for killing Mr Boultwood was diminished by his PTSD, he nevertheless knew what he was doing when he killed him and he was responsible for what he did. Similarly, it must be assumed that the disposals adopted by the criminal courts were appropriate in all the circumstances, including the circumstance that he was suffering from PTSD. Rafferty J imposed a hospital order and a restriction order. While it is correct to say that a hospital order, even with a restriction, is not regarded as a punishment, this does not mean that the judge was treating the claimant as not being to blame for what he did.”
48. He held that the narrow claim should be rejected on the grounds of inconsistency:
“79. By imposing the hospital order with a restriction, the judge was ensuring that, because he had committed manslaughter, the claimant would not be free to move around in the community unless and until authorised to do so by the Secretary of State. … In my view, it would be inconsistent with the policy underlying the making of the orders for a civil court now to award the claimant damages for loss of earnings relating to the period when he was subject to them.
…
81. In short, the civil court should cleave to the same policy as the criminal court.”
“85. In British Columbia v Zastowny [2008] 1 SCR 27, 41-42, para 30, quoted at para 68 above, Rothstein J observed that a person is not entitled to be indemnified for the consequences of his criminal acts for which he has been found criminally responsible. He cannot attribute them to others or seek rebate of those consequences. Yet that is precisely what the claimant is trying to do, both in his claim for any sum he is found liable to pay in damages to Mr Boultwood’s dependants and in his claim for his feelings of guilt and remorse.
86. In Meah v McCreamer (No 2) [1986] 1 All ER 943 Woolf J rejected an attempt to recover the damages which the plaintiff had been found liable to pay to two women whom he had subjected to criminal attacks. His main reason for rejecting the claim was that the damages were too remote. But he would also have rejected it, at pp 950h-951f, on the public policy ground that the plaintiff was not entitled to be indemnified for the damages which he was liable to pay as a result of his criminal attacks. That seems to me to be an appropriate application of the ex turpi causa rule.
87. In the same way, in this case the claimant should not be entitled to an indemnity for any damages he had to pay in consequence of his having assaulted and killed Mr Boultwood. The same goes for his claim for feelings of guilt and remorse.”
“14. The comments of both Mustill LJ and Lord Bingham recognised that a mentally disordered offender whose mental condition did not satisfy the test of insanity or render him unfit to plead might none the less have no significant responsibility for his offence. Furthermore, while a conviction for an offence punishable with imprisonment is necessary to confer jurisdiction on a judge to impose a hospital order under section 37, the offence leading to that conviction may have no relevance to the decision to make the hospital order. Thus in R v Eaton [1976] Crim LR 390 a hospital order with a restriction order unlimited as to time was made in respect of a woman with a psychopathic disorder where her offence was minor criminal damage.
15. In such an extreme case, where the sentencing judge makes it clear that the defendant’s offending behaviour has played no part in the decision to impose the hospital order, it is strongly arguable that the hospital order should be treated as being a consequence of the defendant’s mental condition and not of the defendant’s criminal act. In that event the public policy defence of ex turpi causa would not apply. More difficult is the situation where it is the criminal act of the defendant that demonstrates the need to detain the defendant both for his own treatment and for the protection of the public, but the judge makes it clear that he does not consider that the defendant should bear significant personal responsibility for his crime. I would reserve judgment as to whether ex turpi causa applies in either of these situations, for we did not hear full argument in relation to them. In so doing I take the same stance as Lord Rodger.”
55. The reservation made by Lord Rodger at para 83 was as follows:
“The position might well be different if, for instance, the index offence of which a claimant was convicted were trivial, but his involvement in that offence revealed that he was suffering from a mental disorder, attributable to the defendants’ fault, which made it appropriate for the court to make a hospital order under section 37 of the 1983 Act. Then it might be argued that the defendants should be liable for any loss of earnings during the claimant’s detention under the section 37 order, just as they should be liable for any loss of earnings during his detention under a section 3 order necessitated by a condition brought about by their negligence. That point does not arise on the facts of this case, however, and it was not fully explored at the hearing. Like my noble and learned friend, Lord Phillips of Worth Matravers, I therefore reserve my opinion on it.”
“…the integrity of the justice system depends upon its consistency. The law cannot at one and the same time incarcerate someone for his criminality and compensate him civilly for the financial consequences. I shall refer to this henceforth as the consistency principle. It is the underlying rationale for the application of the ex turpi causa non oritur actio doctrine in the present context.”
(1) Both the narrow claim and the wide claim failed on the grounds of public policy.
(2) All judges considered that the relevant policy in connection with the narrow claim was the need to avoid inconsistency so as to maintain the integrity of the legal system - “the consistency principle”.
(3) Lord Hoffmann did not consider that this applied to the wide claim but held that a related policy did, namely that “it is offensive to public notions of the fair distribution of resources that a claimant should be compensated (usually out of public funds) for the consequences of his own criminal conduct.” I understand this to mean that allowing a claimant to be compensated for the consequences of his own criminal conduct risks bringing the law into disrepute and diminishing respect for it. It is an outcome of which public opinion would be likely to disapprove and would thereby undermine public confidence in the law - “the public confidence principle”.
(4) The public confidence principle is also applicable to the narrow claim. It is related to the consistency principle since one of the reasons that the public would be likely to disapprove of the outcome is the inconsistency which it involves between the criminal law and the civil law.
(5) Although Lord Rodger appeared to consider that the consistency principle did not apply to the wide claim, the policy reasons he gives for rejecting the claim reflect that principle. The reason that a person cannot “attribute … to others” acts for which he has been found criminally responsible, or “seek rebate” of the consequences of those acts, is that it would be inconsistent with that finding of criminal responsibility. If a person has been found criminally responsible for certain acts it would be inconsistent for the civil courts to absolve that person of such responsibility and to attribute responsibility for those same acts to someone else.
(6) Whilst the consistency principle more obviously applies to the narrow claim, on analysis it applies to the wide claim as well. In relation to the narrow claim the inconsistency is with both the criminal court’s finding of responsibility and the sentence it has imposed. In relation to the wide claim it is with the former only.
“… the inconsistency of awarding damages representing loss arising from a criminal sentence is more obvious and direct than it is when the claimant is claiming other damages causally flowing from his commission of a crime. But it seems to me, as it did to McLachlin J and those who have adopted her approach more generally, that the internal coherence of the law is also the reason why it will not give effect in a civil court to a cause of action based on acts which it would punish in a criminal court. As Lord Hughes put it in Hounga v Allen [2014] 1 WLR 2889, para 55, a dissenting judgment but not on this point, ‘the law must act consistently; it cannot give with one hand what it takes away with another, nor condone when facing right what it condemns when facing left’.”
(ii) Clunis
60. The facts of Clunis and the essential reasoning of the Court of Appeal in reaching its decision have been summarised above. On the facts of the case it concerned a narrow claim and, as the courts below held, was authority binding on them in relation to such a claim. As Lord Hoffmann observed at para 35 in Gray, however, the reasoning of the court in Clunis would have applied to a wide claim - “the court ought not to allow itself to be made an instrument to enforce obligations alleged to arise out of the plaintiff’s own criminal act”: [1998] QB 978, 990.
(iii) Patel
61. In Patel a panel of nine justices sat to consider what was the proper approach to the defence of common law illegality. The background to the decision was that there had been a divergence of views between different constitutions of the court as to whether the appropriate test was the reliance-based approach, applied by the House of Lords in Tinsley v Milligan [1994] 1 AC 340, or an approach based on the balancing of public policy considerations. In Hounga v Allen (Anti-Slavery International intervening) [2014] UKSC 47; [2014] 1 WLR 2889 the majority of the court, Baroness Hale, Lord Kerr and Lord Wilson, had adopted a policy-based approach, as set out in the judgment of Lord Wilson. In Les Laboratoires Servier v Apotex Inc [2014] UKSC 55; [2015] AC 430 the majority of the court, Lord Sumption, Lord Neuberger and Lord Clarke, had adopted the reliance-based approach, with the leading judgment being given by Lord Sumption.
“One is that a person should not be allowed to profit from his own wrongdoing. The other, linked, consideration is that the law should be coherent and not self-defeating, condoning illegality by giving with the left hand what it takes with the right hand.”
65. At para 100, in reliance on the “valuable insight” provided by McLachlin J’s judgment in Hall v Hebert [1993] 2 SCR 159, Lord Toulson stated the underlying policy question to be:
“…whether allowing recovery for something which was illegal would produce inconsistency and disharmony in the law, and so cause damage to the integrity of the legal system.”
“(a) considering the underlying purpose of the prohibition which has been transgressed, (b) considering conversely any other relevant public policies which may be rendered ineffective or less effective by denial of the claim, and (c) keeping in mind the possibility of overkill unless the law is applied with a due sense of proportionality.”
“107. In considering whether it would be disproportionate to refuse relief to which the claimant would otherwise be entitled, as a matter of public policy, various factors may be relevant. Professor Burrows’ list is helpful but I would not attempt to lay down a prescriptive or definitive list because of the infinite possible variety of cases. Potentially relevant factors include the seriousness of the conduct, its centrality to the contract, whether it was intentional and whether there was marked disparity in the parties’ respective culpability.”
68. Lord Toulson’s conclusion is set out at para 120:
“120. The essential rationale of the illegality doctrine is that it would be contrary to the public interest to enforce a claim if to do so would be harmful to the integrity of the legal system (or, possibly, certain aspects of public morality, the boundaries of which have never been made entirely clear and which do not arise for consideration in this case). In assessing whether the public interest would be harmed in that way, it is necessary (a) to consider the underlying purpose of the prohibition which has been transgressed and whether that purpose will be enhanced by denial of the claim, (b) to consider any other relevant public policy on which the denial of the claim may have an impact and (c) to consider whether denial of the claim would be a proportionate response to the illegality, bearing in mind that punishment is a matter for the criminal courts. Within that framework, various factors may be relevant, but it would be a mistake to suggest that the court is free to decide a case in an undisciplined way. The public interest is best served by a principled and transparent assessment of the considerations identified, rather by than the application of a formal approach capable of producing results which may appear arbitrary, unjust or disproportionate.”
“… although my analysis may be slightly different from that of Lord Toulson JSC, I do not think that there is any significant difference between us in practice. I agree with his framework for arriving at an outcome …”
“(i) Whatever rationale one adopts for the illegality principle, it is manifestly designed to vindicate the public interest as against the interests and legal rights of the parties. That is why the judge is required to take the point of his own motion even if the parties have not raised it, as the deputy judge did in this case. The operation of the principle cannot therefore depend on an evaluation of the equities as between the parties or the proportionality of its impact upon the claimant.
(ii) The ‘range of factors’ test largely devalues the principle of consistency, by relegating it to the status of one of a number of evaluative factors, entitled to no more weight than the judge chooses to give it in the particular case. …
(iii) … If the application of the illegality principle is to depend on the court’s view of how illegal the illegality was or how much it matters, there would appear to be no principle whatever to guide the evaluation other than the judge’s gut instinct.
(iv) The ‘range of factors’ test discards any requirement for an analytical connection between the illegality and the claim, by making the nature of the connection simply one factor in a broader evaluation of individual cases and offering no guidance as to what sort of connection might be relevant. …”
(iv) The application of Patel
75. In relation to contractual illegality, this is explained by Underhill LJ in Okedina v Chikale [2019] EWCA Civ 1393; [2019] ICR 1653, para 12, drawing on the formulations set out in Burrows: A Restatement of the English Law of Contract:
“(1) Statutory illegality applies where a legislative provision either (a) prohibits the making of a contract so that it is unenforceable by either party or (b) provides that it, or some particular term, is unenforceable by one or other party. The underlying principle is straightforward: if the legislation itself has provided that the contract is unenforceable, in full or in the relevant respect, the court is bound to respect that provision. That being the rationale, the knowledge or culpability of the party who is prevented from recovering is irrelevant: it is a simple matter of obeying the statute.
(2) Common law illegality arises where the formation, purpose or performance of the contract involves conduct that is illegal or contrary to public policy and where to deny enforcement to one or other party is an appropriate response to that conduct …”
78. This is well illustrated by the decision of the Court of Appeal in Okedina v Chikale. In employment law the touchstone for the availability of the defence of common law illegality to employee claims has long been recognised as being whether the employee has knowingly participated in the illegal performance of the contract, as stated in the Court of Appeal decision in Hall v Woolston Hall Leisure Ltd [2001] 1 WLR 225, paras 31-32 per Peter Gibson LJ. In Okedina v Chikale that approach had been followed by the Employment Tribunal and the Employment Appeal Tribunal. It was submitted on appeal that this was inadequate and that the matter should have been addressed by going through the Patel trio of considerations. The Court of Appeal rejected the submission that it was “necessary for the tribunal on the facts of this case to carry out an elaborate analysis by reference to the particular factors enumerated”. As Underhill LJ explained at para 62:
“In his judgment in Patel v Mirza [2017] AC 467 Lord Toulson was attempting to identify the broad principles underlying the illegality rule. His judgment does not require a reconsideration of how the rule has been applied in the previous case law except where such an application is inconsistent with those principles. In the case of a contract of employment which has been illegally performed, there is nothing in Patel v Mirza inconsistent with the well-established approach in Hall v Woolston Hall Leisure Ltd [2001] ICR 99 as regards [common law illegality] cases. As Mr Reade put it, Hall is how Patel v Mirza plays out in that particular type of case.”
VI Issue (1) - Whether Gray can be distinguished
79. The argument unsuccessfully advanced by the appellant below was that Lord Phillips’ second reservation in Gray at para 15, concerning cases where the defendant has no significant personal responsibility, was agreed with by both Lord Brown and Lord Rodger, and therefore reflects a majority view. Reliance was placed on Lord Phillips’ reference to taking “the same stance as Lord Rodger”, and Lord Rodger’s statement at para 83 that: “Like my noble and learned friend, Lord Phillips of Worth Matravers, I therefore reserve my opinion on it.” In oral submissions, this argument was maintained on the appeal. In agreement with the courts below, I reject it.
80. As explained above, whilst both Lord Phillips and Lord Rodger were agreeing that a reservation should be made, they were not in agreement as to the nature of that reservation. In particular, Lord Rodger’s reservation at para 83 did not relate to a case where there was no significant personal responsibility, but rather to a more specific example of Lord Phillips’ first reservation. There was therefore no agreement between them on Lord Phillips’ second reservation.
81. As the Court of Appeal concluded at paras 74 and 75:
“74. It is impossible to see that those passages can provide any support for Ms Henderson’s appeal. Lord Phillips’ speculation on the factual scenario postulated in para 15 was not only obiter but was expressly made on the footing that it had not been explored at the hearing, and he reserved his position on it. For his part, Lord Rodger did not address at all the scenario postulated by Lord Phillips in para 15. Lord Rodger’s speculation was, moreover, limited to a case where the index offence of which a claimant was convicted was trivial - a case which, he accepted, had not been explored at the hearing and on which he reserved his opinion.
75. Accordingly, a majority of the appellate committee (Lords Hoffmann, Rodger and Scott) did not agree with the observations of Lord Phillips at para 15 of his speech, at the very least in so far as those observations were intended to apply to a serious crime such as manslaughter.”
VII Issue (2) - Whether Gray should be departed from and Clunis overruled
87. If Gray is to be departed from it is necessary for the appellant to show that it is an appropriate case in which to do so under the 1966 Practice Statement: Practice Statement (Judicial Precedent) [1966] 1 WLR 1234. As this court has recently emphasised, it will be “very circumspect before accepting an invitation to invoke the 1966 Practice Statement” - Knauer v Ministry of Justice [2016] UKSC 9; [2016] AC 908, para 23. It is important not to undermine the role of precedent and the certainty which it promotes. Circumstances in which it may be appropriate to do so include where previous decisions “were generally thought to be impeding the proper development of the law or to have led to results which were unjust or contrary to public policy” - per Lord Reid in R v National Insurance Comr, Ex p Hudson [1972] AC 944, p 966. Even then the court needs to be satisfied that a departure from precedent “is the safe and appropriate way of remedying the injustice and developing the law” - per Lord Scarman in R v Secretary of State for the Home Department, Ex p Khawaja [1984] AC 74, p 106.
(i) Whether the reasoning in Gray cannot stand with the approach to illegality adopted by the Supreme Court in Patel.
“The Law Commission drew from the various judgments a readiness on the part of the judges to examine the policy reasons which justified the application of the illegality defence and to explain why those policies applied to the facts of the case.”
(ii) Whether it should be held that Gray does not apply where the claimant has no significant personal responsibility for the criminal act and/or there is no penal element in the sentence imposed.
“A.5 Our principal conclusion is that people should not be held criminally responsible for their conduct if they lack the capacity to conform their behaviour to meet the demands imposed by the criminal law regulating that conduct. This lack of capacity might consist in an inability to think rationally, or in an inability to control one’s actions. The reason for that lack of capacity might lie in a mental disorder, or in a physical disorder.”
101. That there is no inconsistency is said to be further borne out in this case by the fact that the sentence imposed on the appellant involved no penal element. A sentence under the 1983 Act only contains a penal element if an order under section 45A is made - see, for example, R v Edwards [2018] 4 WLR 64, paras 12 and 34. To decide whether a penal element to the sentence is necessary, the judge should assess the offender’s degree of responsibility together with the harm caused by the offence. In this case, the judge declined to make such an order precisely because of the appellant’s lack of significant personal responsibility.
111. It is not sufficient simply to say that this will be a matter of fact for the trial judge to determine in the civil claim. As the Law Commission’s Discussion Paper illustrates, the issue of responsibility raises questions of great complexity and difficulty. This fundamental building block of the appellant’s case was barely addressed in the appellant’s written case or in the 77-page speaking “note” provided on the first day of the hearing, a clear abuse of the written case procedure and its required page limits. Instead, the court was provided with a five-page insert to the speaking note which put forward the test of whether the claimant lacked capacity to conform their behaviour to the demands imposed by the criminal law. What the justification is for that proposed test was not really explained, nor was its meaning. Not only is it a recipe for uncertainty, but it risks being tantamount to judicial legislation.
112. Finally, the appellant advances a related argument that the lack of significant personal responsibility means that there is insufficient turpitude to give rise to an illegality defence. This again ignores the seriousness of a criminal conviction for manslaughter. It is an indictable-only offence punishable by a sentence of life imprisonment. It is a “serious offence” for the purposes of the provisions regarding dangerous offenders in the Criminal Justice Act 2003. The plea of guilty to manslaughter by reason of diminished responsibility means acceptance by the appellant that she possessed the mental prerequisites of criminal responsibility for murder, namely an intention to kill or to cause grievous bodily harm. In the present case, the expert psychiatrists also agreed that the appellant knew that what she was doing was morally and legally wrong when she inflicted the stab wounds on her mother. In Les Laboratoires Servier v Apotex Inc [2015] AC 430 Lord Sumption stated at para 23 that: “The paradigm case of an illegal act engaging the defence is a criminal offence.” As Lord Sumption explained at para 29, there may be some exceptional cases where a criminal act will not constitute turpitude. The reservation made in Gray in relation to trivial offences may be an example of such a case, as may be strict liability offences where the claimant is not privy to the facts making his act unlawful. The serious criminal offence of manslaughter by reason of diminished responsibility does not come close to falling within such an exception and clearly engages the defence.
(iii) Whether the application of the trio of considerations approach set out in Patel leads to a different outcome.
113. The trio of considerations set out by Lord Toulson at para 120 of his judgment are:
(a) the underlying purpose of the prohibition which has been transgressed and whether that purpose will be enhanced by denial of the claim (“the first stage” or “stage (a)”);
(b) any other relevant public policy on which the denial of the claim may have an impact (“the second stage” or “stage (b)”); and
(c) whether denial of the claim would be a proportionate response to the illegality, bearing in mind that punishment is a matter for the criminal courts (“the third stage” or “stage (c)”).
“So it is necessary, first, to ask ‘What is the aspect of public policy which founds the defence?’ and, second, to ask ‘But is there another aspect of public policy to which the application of the defence would run counter?’”
“By this, I understand Lord Toulson JSC to mean the reasons that a claimant’s conduct should operate to bar him or her from a remedy which would otherwise be available.”
“143. Lord Toulson JSC’s solution to this question also permits readier access to investigation of the traditional justifications for the ex turpi causa maxim - preservation of the integrity of the legal system and preventing profit from wrongdoing. If, on examination of the particular circumstances of the case, these can be shown to weigh heavily in the balance, it is more likely that the defence will be upheld.”
122. I would respectfully agree with that approach.
123. Fourthly, questions arise as to whether proportionality always has to be considered and as to how it is to be addressed. In some cases, of which Hounga v Allen is an example, it may be apparent that the balancing of policy considerations comes down firmly against denial of the claim. If so, it will not be necessary to go on to the third stage and the issue of proportionality. This is consistent with Lord Toulson’s statement at para 107 that these factors relate to “whether it would be disproportionate to refuse relief to which the claimant would otherwise be entitled” and at para 101 that they fall to be considered to avoid “the possibility of overkill”. In other words, they are a disproportionality check rather than a proportionality requirement.
(a) Stage (a) - The underlying purpose of the prohibition which has been transgressed and whether that purpose will be enhanced by denial of the claim
(b) Stage (b) - Any other relevant public policy on which the denial of the claim may have an impact
132. The appellant suggests four countervailing public policies.
137. I recognise that there is force in at least some of the policy considerations relied upon by the appellant, but I do not consider that they begin to outweigh those which support denial of the claim. In particular, as Gray makes clear, the resulting inconsistency in the law is such as to affect the integrity of the legal system. The underlying policy question identified in Patel is accordingly engaged. As stated by McLachlin J in Hall v Hebert [1993] 2 SCR 159 at 182, “concern for the integrity of the legal system trumps the concern that the defendant be responsible”.
(c) Stage (c) - Whether denial of the claim would be a proportionate response to the illegality, bearing in mind that punishment is for the criminal courts
144. For all these reasons, the application of the trio of considerations approach set out in Patel does not lead to a different outcome.
(iv) Conclusion on issue (2)
VIII Issue (3) - Whether all heads of loss claimed are irrecoverable
IX Conclusion
150. For all the reasons outlined above, I consider that the appeal should be dismissed.