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On appeal from: [2018] EWCA Civ 1841

The appeal considered whether a claimant who, during a serious psychotic episode, committed a criminal offence which she would not have committed but for the defendant’s negligence, could recover the damages for the consequences of having committed the offence, including her subsequent loss of liberty. The Supreme Court unanimously dismissed this appeal and the appellant’s claim against the respondent was barred by the illegality defence.

On 25 August 2010, the appellant, who had previously been diagnosed as suffering from paranoid schizophrenia or schizoaffective disorder, stabbed her mother to death whilst expiring a serious psychotic episode. It is common ground between the parties that this would not have happened but for the respondent’s breaches of duty in failing to respond in an appropriate way to the appellant’s deteriorating mental health at the time.

The appellant pleaded guilty to manslaughter by reason of diminished responsibility and has been subject to a hospital order under section 37 of the Mental Health Act 1983 and detention pursuant to section 41 of the same Act ever since.

The appellant brought a negligence claim against the respondent, seeking damages for personal injury and other loss and damage. The respondent admitted liability for its negligent failure to return the appellant to hospital when her psychiatric condition deteriorated. It accepted that, if it had done this, the tragic killing of the appellant’s mother would not have taken place. However, it argued that the appellant’s claim is barred for illegality, because the damages she claims result from: (i) the sentence imposed on her by the criminal court; and/or (ii) her own criminal act of manslaughter.

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 (“Gray”). The recoverability of the damages claimed was, therefore, ordered to be tried as a preliminary issue. The High Court judge determined the preliminary issue in favour of the respondent, and the Court of Appeal dismissed the appellant’s appeal. Both the High Court and the Court of Appeal held that the facts of the appellant’s claim are materially identical to those in Gray, which was binding upon them.

The appellant appealed to the Supreme Court. The appeal raised the question of whether Gray can be distinguished and, if not, whether it should be departed from, in particular in the light of the more recent Supreme Court decision concerning illegality in Patel v Mirza [2016] UKSC 42 (“Patel”).

The Supreme Court unanimously dismissed the appellant’s appeal, and held that her claim against the respondent was barred by the illegality defence. Lord Hamblen gave the judgment, with which all members of the Court agreed.

The appellant’s appeal raised three main issues.

Issue 1: Can Gray be distinguished?

In Gray, the House of Lords held that Mr Gray’s negligence claim was barred by the defence of illegality because the damages he sought resulted from: (i) the sentence imposed on him by the criminal court; and/or (ii) his own criminal act of manslaughter. The courts below held that the facts of the appellant’s and Mr Gray’s claims are materially identical, so the appellant’s claim is barred for illegality for the same reasons as Mr Gray’s. However, the appellant argues that the reasoning in Gray does not apply or can be distinguished, because Gray concerned a claimant with significant personal responsibility for his crime. In contrast, in the appellant’s criminal trial, the judge said that there was no suggestion that the appellant should be seen as bearing a significant degree of responsibility for what she had done.

The Court rejects the appellant’s argument and finds that Gray cannot be distinguished. The crucial consideration in Gray was that the claimant had been found to be criminally responsible for his conduct, not the degree of personal responsibility which that reflected. Lord Phillips reserved judgment in Gray on whether the illegality defence would apply to a case where the claimant did not bear significant personal responsibility for their crime, but this was not the view of the majority.

Issue 2: Should the Court depart from Gray?

In Patel, the Supreme Court held that the proper approach to the illegality defence at common law was one based on a balancing of public policy considerations rather than a reliance-based approach. The majority held the underlying policy question to be whether allowing recovery for something which is illegal would produce inconsistency and disharmony in the law and so cause damage to the integrity of the legal system. In assessing whether the public interest would be harmed in that way, the court should consider a “trio of considerations”, namely: stage (a) the underlying purpose of the illegality in question, and whether that purpose would be enhanced by denying the claim; stage (b) any other relevant public policy on which denying the claim may have an impact; and stage (c) whether denying the claim would be a proportionate response to the illegality.

With regard to the application of Patel, the Court confirms, first, that it concerned common law illegality rather than statutory illegality; secondly, that although it concerned a claim in unjust enrichment, the Court’s decision provides guidance on the proper approach to the common law illegality defence across civil law generally; and thirdly that the principles identified in Patel are derived from the pre-existing case law and earlier decisions on the illegality defence remain of precedential value, unless they are incompatible with the Court’s reasoning in Patel.

The appellant contends that the Court should depart from Gray on three grounds. The first ground is that the reasoning in Gray is incompatible with the approach to illegality adopted by the Supreme Court in Patel. The Court finds, however, that the essential reasoning in Gray is consistent with Patel, and so remains good law.

The second ground is that Gray should 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 on them by the criminal court. The Court rejects this argument because allowing a claimant to recover damages for loss that results from: (i) the sentence imposed by the criminal court; and/or (ii) an intentional criminal act for which the claimant has been held to be criminally responsible would give rise to inconsistency that is damaging to the integrity of the legal system. The criminal under the criminal law would become the victim under the civil law. Requiring the civil court to assess whether or not a civil claimant has a significant degree of personal responsibility for their crime would create a clear risk of inconsistent decisions being reached in the criminal and civil courts. In any case, it is unclear why significant personal responsibility is the appropriate threshold, and how the civil courts should decide whether a claimant meets that threshold. There may be some exceptional trivial or strict liability offences which do not engage the illegality defence. However, the serious criminal offence of manslaughter by reason of diminished responsibility is not one of those exceptions.

The third ground is that the appellant’s claim would be allowed under the trio of considerations approach in Patel. With regard to the trio of considerations, the Court confirms first that they should usually be capable of being addressed as a matter of argument and at a level of generality that does not make evidence necessary; secondly, that they involve a balancing between policy considerations arising under stages (a) and (b) and that stage (c) relates to proportionality and factors specific to the case rather than general policy considerations; thirdly, that, where they arise, it is appropriate to give great weight to the policy considerations that a person should not be allowed to profit from his own wrongdoing and that the law should be coherent; fourthly, that where the policy considerations come down firmly against denial of the claim it will not be necessary to consider stage (c) and proportionality; and fifthly, that in relation to proportionality, centrality and the closeness of the causal link between the illegality and the claim will often be factors of particular importance.

In relation to stage (a), the policy reasons which support denial of the appellant’s claim include the consistency and public confidence principles identified in Gray. They also include: (i) the gravity of her criminal offence; (ii) the public interest in the proper allocation of NHS resources; (iii) the very close connection between her claim and her offence; and (iv) the public interest in deterring, protecting the public from and condemning unlawful killing. Although a claimant in the appellant’s position may not be deterred from unlawful killing by being deprived of a civil right to compensation, there may well be a broader deterrent effect in a clear rule that unlawful killing never pays. Any such effect is important given the fundamental importance of the right to life. To have such a rule also supports the public interest in public condemnation and due punishment.

In relation to stage (b), the policy reasons relied upon for allowing the appellant’s negligence claim do not begin to outweigh those which support the 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 and the underlying policy question identified in Patel is accordingly engaged.

In relation to stage (c), the four factors relevant to proportionality identified in Patel do not show that denial of the claim would be disproportionate. It follows that the trio of considerations approach in Patel does not lead to a different outcome in the appellant’s case. Gray should therefore be affirmed as being “Patel compliant” and should be applied and followed in similar cases.

Issue 3: Can the appellant recover damages for any of the heads of loss she has claimed?

The Court answers this question “no”. The appellant cannot claim damages for loss of liberty or for loss of amenity during her detention in hospital because these heads of loss result from the sentence imposed on her by the criminal court. The other heads of loss cannot be recovered because they result from the appellant’s unlawful killing of her mother. It would be inappropriate for the Court to subvert the operation of the Forfeiture Act 1982, which prevents the appellant from recovering her full share of her mother’s estate.

For judgment, please see: Judgment

For press summary, please see: Press summary

For non-PDF version of the judgment, please see: BAILII

Watch hearing
11 May 2020 Morning session Afternoon session
12 May 2020 Morning session

 

Watch Judgment summary
30 Oct 2020 Judgment summary