| Synopsis: |
This final report, "The Illegality Defence ("HC 412")" concludes a long-running review of the illegality defence, which has considered how the defence applies to the law of contract, unjust enrichment, tort and trusts. The illegality defence arises when the defendant in a private law action argues that the claimant should not be entitled to their normal rights or remedies because they have been involved in illegal conduct which is linked to the claim. If the courts accept the illegality defence, it often involves granting an unjustified windfall to the defendant, who may be equally implicated in the illegality. However, if the courts refuse they may be seen to be helping a claimant who has behaved illegally. The courts have attempted to set out rules to govern this area but the rules are complex and confused. The Commission's final recommendations follow the provisional recommendations in a 2009 consultative report, "The Illegality Defence: A Consultative Report (Consultation Paper 189)".In contract, tort and unjust enrichment cases, the courts are showing more willingness to explain the policy reasons that underlie their decisions, and the Commission believes the law should be left to develop through the case law. However in the area of trusts, the Commission recommends a short, targeted bill to amend the law, and a seven clause draft bill is included in the report, along with explanatory notes on the draft bill and an impact assessment. |