PI Brief Update

Majid Ali v HSF Logistics Polska SP Zoo [2024] EWCA Civ 1479 - Andrew Ratomski, Temple Garden Chambers

24/01/25. Date of judgment: 4 December 2024.

Whilst Ali v HSF is a case arising in credit hire litigation, the Court of Appeal’s recent decision is of broader significance to injury practitioners handling cases arising from road traffic accidents because it considers a number of practical applications of the doctrine of illegality (ex turpi causa). It will be no surprise that an illegality defence is difficult to run and difficult to succeed on.

The facts

The Defendant’s lorry had driven negligently into the Claimant’s Volvo motorcar and the damage rendered it undriveable with repairs taking some time. The trial judge found that the Claimant needed to hire a replacement vehicle. The Court of Appeal noted that there was no evidence that the Volvo was unroadworthy in any way prior to the accident and observed that the last MOT for the vehicle had expired four and a half months prior to the accident.

The arguments

The Defendant had previously relied on the absence of a valid MOT to support its plea of illegality. It also relied on the same fact for what was described as a causation defence meaning the Claimant suffered no loss for which he could be awarded compensation when the vehicle, without a valid MOT, was rendered unroadworthy as a result of the Defendant’s tort.

The illegality defence

Stuart-Smith LJ first summarised the principles applying to claims seeking the recovery of credit hire charges before reviewing the modern authorities on illegality starting with the Supreme Court’s decision in Patel v Mirza [2016] UKSC 42; [2017] AC 467. He also highlighted the importance of “over kill” and there being a “proportionate response by the civil law” to wrong doing as addressed in that judgment. The courts are to avoid being “unduly precious at the first indication of unlawfulness”. Stuart-Smith LJ also accepted that the pre-Patel caselaw distinguished between cases where the illegality barred an entire claim versus where illegality barred the recovery of one or more heads of loss. Several cases distinguished collateral or insignificant illegality, and gave guidance on the level of seriousness of the offending required to engage the doctrine. The flexibility of the common law was also noted as relevant to considering when an illegality defence will be available.

The decision

Stuart-Smith LJ highlighted a number of distinctive features of an MOT certificate, most notable of which is that a certificate only means a car passed an MOT on the test date stated. Failure to hold an MOT is a summary offence punishable with a fine up to £1000 and it will not automatically vitiate an insurance policy.

The judge rejected the Defendant’s assertion as part of its causation argument that the Claimant had suffered no loss as a result of the Defendant’s tort where there was no valid MOT certificate. The failure to obtain an MOT certificate was held to be a relatively minor criminal offence and given the harm to the integrity of the legal system arising from allowing claims for hire charges in those circumstances, it was disproportionate to consider refusing the Claimant relief on the basis of an absent certificate. It was also held that allowing recovery would not undermine the effectiveness of the criminal law.

Comment

The case strikes a cautious note on succeeding on illegality and reminds practitioners that both proportionality in denying an otherwise good claim and respecting the spheres of civil law and punishment through the criminal courts are concerns that should be front and centre to any judge grappling with whether to allow an ex turpi causa defence for all or part of a claim.

https://caselaw.nationalarchives.gov.uk/ewca/civ/2024/1479?court=ewca%2Fciv

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