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(iii) Restitution for Wrongs

The principle that restitutionary relief will be available if the parties are not in pari delicto will also be relevant where the restitutionary claim is founded on wrongdoing. For, where the claimant is innocent of the wrong and it was the defendant who had acted illegally, the defendant cannot rely on the defence of illegality to retain an enrichment. [1]

(iv) Failure of Basis

Although it is a generally recognized rule that a restitutionary claim grounded on total failure of basis will be defeated if the claimant participated in an illegal transaction,[2] [3] this will not be the case where the claimant is not as blameworthy as the defendant. This is illustrated by Mohamed v Alaga and Co,122 where the claimant sued the defendant firm of solicitors for work done in preparing and presenting asylum claims. A contract between the claimant and the defendant concerning payment to the claimant for the introduction of clients to the defendant was illegal as it was an unlawful fee-sharing agreement, but the claimant’s restitutionary claim succeeded as regards the professional work he had legitimately done. This work could be severed from the illegal fee-sharing part of the contract because the claimant was less responsible for the illegality than the defendant firm of solicitors, which was assumed to know the rules of the profession.[4] [5]

(v) Summary

The not in pari delicto mechanism is very significant in restricting the ambit of the illegality defence as regards claims in unjust enrichment. Despite the taint of illegality, it enables the court to focus on the comparative responsibilities of the parties and enables the public policy of the illegality defence to be trumped by the need to secure justice between the parties.

  • [1] See, for example, Chapter 19.
  • [2] See Parkinson v College of Ambulance [1923] 2 KB 1, p 711, above. But note the interpretation of thewithdrawal exception as embodying total failure of basis as a ground of restitution. See p 353, above.
  • [3] [2000] 1 WLR 1815.
  • [4] Cf Awwad v Geraght and Co [2001] QB 570 where the claimant was a partner in the firm of solicitors.
  • [5] See also PBH Birks, ‘Recovering Value Transferred Under an Illegal Contract’ (2001) 1 Theoretical
 
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