Illegality in the Civil Law

The English Court of Appeal has ruled on the impact of illegal activity on a plaintiff’s case. Can the owner of a car not lawfully permitted to drive claim for loss of use damages against a person causing damage to that car?

Mr Ali’s Volvo was hit by the defendant’s truck when the Volvo was parked. Through a credit hire company Mr Ali claimed the cost of hiring a replacement vehicle. At the time of impact Mr Ali’s car had no MOT (which is the same as a WOF). The car was still roadworthy and safe to drive.

The two Courts below the Court of Appeal held that the claim was barred by the fact the car could not be legally driven.

The Court of Appeal set out a three-part legal test for assessing the impact of a plaintiff’s illegality in a tort claim:

1. What is the underlying purpose of the prohibition which has been transgressed? In other words, how serious was Mr Ali’s unlawful conduct?
2. Conversely, was there any relevant public policy consideration which may be rendered ineffective by the denial of a claim? In other words, how serious would it be to deprive Mr Ali of damages because of his illegality?
3. The law needs to be applied with a due sense of proportionality. It should not prevent a plaintiff from recovering damages where that would be “overkill”.

The Court referred to some case examples as follows.

The plaintiff was employed as a crane operator, even though he suffered from epilepsy. That condition prohibited him from working as a crane operator. He failed to disclose the condition to his employers, which amounted to the criminal offence of obtaining a pecuniary advantage by deception. He suffered a serious injury at work in 1995. In 1997 he suffered an epileptic seizure at work, which led to his dismissal. In pursuing his claim for damages for the 1995 accident, the Court found that he could pursue his cause of action of negligence, but he was barred from recovering any loss in respect of his future earnings because those earnings were the direct result of unlawful conduct.

In another example, the Court referred to a situation where a person was disabled by the defendant’s tort from carrying out legitimate work but for which that person had not been paying tax on their income. The Court said the appropriate response would be to recover the loss of income but net of tax.

Finally, the Court referred to another credit hire claim where the plaintiff was claiming £145,524.48 hire charges for a vehicle with a pre-accident value of under $5,000. The car had numerous faults, meaning it was not roadworthy, and it did not have a MOT. This claim was barred in its entirety.

In Mr Ali’s case, applying the proportionality test, the Court observed that the fine for driving without an MOT was £1,000, whereas his damages for loss of use were over £20,000. It found that his claim was not barred by the absence of an MOT.

Defendants should be alive to any aspects of a plaintiff’s case which involves an element of illegality. Whether that bars the claim will always involve a balancing of the seriousness of the illegality against the consequences of depriving relief to someone with an otherwise valid claim.

This publication is intended as a general overview and discussion of the content dealt with. It should not be used in any specific situation, in which case you should seek specific legal advice.