Patel v Mirza
[2016] UKSC 42
Independent editorial summary — not the official judgment. Read the full judgment via the source link.
Ratio Decidendi
The defence of illegality does not automatically bar a claim for unjust enrichment where money was paid pursuant to an illegal agreement that was not performed. The court should consider the policies underlying the illegality defence.
Facts
Mr Patel paid Mr Mirza £620,000 to bet on share price movements using inside information. The insider dealing did not take place. Mr Patel sought return of his money.
Judgment Summary
The Supreme Court held that Mr Patel was entitled to recover his money. The trio of considerations approach was adopted: (1) the underlying purpose of the prohibition, (2) other relevant public policies, and (3) proportionality.
Key Quotes
"A claimant, such as Mr Patel, who satisfies the ordinary requirements of a claim for unjust enrichment, should not be debarred from enforcing his claim by reason only of the fact that the money which he seeks to recover was paid for an unlawful purpose."
— Lord Toulson at [121](verbatim, verified against the judgment)
Subsequent Treatment
Replaced the previous rule-based approach to illegality with a range-of-factors approach.
What To Do Next
Get Professional Help