The Illegality Defence - The Next Instalment

As was widely reported in the mainstream press, the Court of

Appeal recently decided that a victim of the Ladbroke Grove

rail crash in 1999, who suffered from consequent post traumatic

stress disorder and went on to commit manslaughter in 2001, can

nevertheless claim for loss of earnings both prior to and

following the killing notwithstanding that he remains detained,

following his conviction, in a secure hospital under the Mental

Health Act.

The claim for loss of earnings after his conviction had been

defeated on the grounds that it was contrary to the illegality

defence since it was closely connected, or inextricably bound

up, with the claimant's commission of manslaughter.

According to a clearly sympathetic Court of Appeal, however,

the claimant was claiming for loss of earnings as a result of

the accident, and not as a result of his detention, although it

is not clear if this meant that the Court of Appeal considered

that he would have suffered this loss of earnings whether or

not he had committed the crime; the claimant had, in fact, been

in work at the time of the manslaughter.

Comment

This case again raises questions on the application of the

illegality defence. The Court of Appeal recently decided that a

company cannot claim against its auditors for failure to detect

and report the company's own fraud (for our LawNow on that

case, please

click here). In that case the Court of Appeal approved the

reliance test: a claimant cannot bring a claim where it relies

on its own illegal conduct. In this case, as noted above, where

the claimant's cause of action arose out of the crash

(rather than his own illegal act) the Court of Appeal adopted a

wider test - namely, is the claimant's claim closely

connected with or inextricably linked to his own criminal

conduct? - but said that a judge would have to decide on the

evidence whether the manslaughter broke the chain of causation

in respect of the claimant's claim for loss of earnings

after his detention.

One direct effect of this decision is to expose liability

insurers to claims for damages by virtue of being liable to

compensate victims of accidents for loss of earnings as a

result of those accidents, even when they have gone on to

commit crimes at least where those crimes can be said to be a

direct result of injuries (most likely to be psychiatric or

psychological conditions) caused by the accident.

The Court of Appeal also suggested that this exposure could

go even further; they described a...