Clarity for illegality as stare decisis lives to fight another day: Henderson v Dorset Healthcare NHS Trust [2018] EWCA Civ 1841

This blog is written by Helen Waller, a pupil barrister at 12 King’s Bench Walk.

In Henderson v Dorset Healthcare NHS Trust [2018] EWCA Civ 1841 the Court of Appeal reviewed the jurisprudence on the defence of illegality in tort, having been invited to reconsider the present position in light of arguments based on the doctrine of precedent. The Court rejected these arguments and provided a clear statement of the operation of the defence.

The Factual Background

This was a tragic case with a set of facts presenting legal questions that would not look out of place in an undergraduate Law exam. The claimant, Ms Henderson, was a long-time sufferer of mental health conditions variously diagnosed as paranoid schizophrenia or schizoaffective disorder. At the relevant time in 2010 her condition had recently worsened and on 25 August of that year, whilst experiencing a serious psychotic episode, she stabbed her mother to death. Ms Henderson was, at that time, under the care of a mental health team managed and operated by the defendant Trust. An independent NHS investigation found failings by the Trust in Ms Henderson’s care and treatment. However, it also found that, “while the killing of Ms Henderson’s mother could not have been predicted, a serious untoward incident of some kind was foreseeable based upon Ms Henderson’s previous behaviour when experiencing a psychotic episode” (at [4] of the judgment).

Mr Henderson was charged with the murder of her mother. A plea of manslaughter by reason of diminished responsibility was accepted by the prosecution. Ms Henderson was made subject to a hospital order under s.37 of the Mental health Act 1983 with a restriction order under s.41.

The First Instance Proceedings

Ms Henderson issued proceedings against the defendant in 2013 claiming damages pursuant to negligence and as well as the Human Rights Act 1998. The Schedule of Damages attached to Ms Henderson’s particulars (which she was not allowed to amend, the particulars making no mention of the HRA 1998: Henderson v Dorset Healthcare NHS Trust [2016] EWHC 3932 (QB)) set out six heads of loss:

  1. General damages for personal injury (a depressive disorder and PTSD) consequent on the killing of her mother;
  2. General damages for her loss of liberty caused by her compulsory detention in hospital pursuant to ss.37 & 41 MHA 1983;
  3. General damages for her loss of amenity arising from the consequences to her of having killed her mother;
  4. Past loss in the sum of £61,944, that being the share in her mother’s estate which she was unable to recover as a result of the operation of the provisions of the Forfeiture Act 1982 (a policy rule precluding, in certain circumstances, a person who has unlawfully killed another from acquiring a benefit in consequence of the killing);
  5. The future cost of psychotherapy; and
  6. The future cost of a care manager / support worker.

The Trust’s primary position was that the entirety of the claim should be defeated on illegality or public policy grounds. Indeed, Jay J dismissed all of Ms Henderson’s claim, finding in favour of the Trust on the preliminary issue of illegality.

The Appeal

The key issue in the appeal was whether there was binding Court of Appeal or House of Lords authority that precluded some or all of Ms Henderson’s claims. The relevant authorities were Clunis v Camden and Islington Health Authority [1998] QB 978 and Gray v Thames Trains Ltd [2009] UKHL 33.

By way of refresher, Clunis was a claim for damages for loss of liberty due to hospital detention under the MHA following a conviction for manslaughter on the ground of diminished responsibility after Mr Clunis stabbed and killed a man while suffering from a schizoaffective disorder. This was a disorder that the defendant health authority had, in breach of duty, failed to treat. The Court of Appeal struck out Mr Clunis’ claim, holding that it was barred by public policy.

Gray involved similar issues. Mr Gray brought proceedings against the defendant train operator seeking damages for his PTSD that he developed as a result of the a rail disaster caused by the defendant’s breach of duty. That PTSD in turn caused Mr Gray to kill a man, for which he was convicted of manslaughter on the ground of diminished responsibility. He sought damages for his resultant loss of liberty.

The grounds of appeal were that the first instance judge was wrong to conclude that:

  • He was bound by Gray when the majority limited the ratio of that case to those who had significant responsibility for the offences that they committed; and
  • He was bound by Clunis on the basis that Clunis did not fall within one of the exceptions to stare decisis outlined in Young v Bristol Aeroplane Co Ltd [1944] KB 718 (its reasoning being inconsistent with the discretionary approach favoured by the majority of the Supreme Court in Patel v Mirza [2016] UKSC 42).

In a unanimous judgment, the Court of Appeal held that, on a wide reading of Clunis, it provided a defence of illegality to all of Ms Henderson’s claims. On a narrow reading of that case, however, it would provide a defence only to Ms Henderson’s second head of loss, that of damages for her loss of liberty caused by her compulsory detainment. That is, if Clunis were the only precedent to be considered.

Considering Gray, the Court noted that none of the judgments in that case considered Clunis to have been wrongly decided and all that remained to assess was the scope of its authority. The Court in Henderson neatly encapsulated the issue of scope at [52] as follows:

“Lord Hoffmann identified (at [32]) the two forms of the relevant rule of public policy that we have referred to as the wider and narrower rules. He said that, in its wider form, the rule is that you cannot recover compensation for loss which you have suffered in consequence of your own criminal act; and, in its narrower form, the rule is that you cannot recover for damage which flows from loss of liberty, a fine or other punishment lawfully imposed upon you in consequence of your own unlawful act. In a case falling within the narrower rule, he said, it is the law which, as a matter of penal policy, causes the damage and it would be inconsistent for the law to require you to be compensated for that damage.”

It’s clear, therefore, that the majority of the House in Gray viewed the narrower rule as being justified by reason of it avoiding the inconsistency that would result from the criminal law imposing a sentence for an offence and the civil law compensating the offender for that same sentence. The wider rule could not be so justified. Rather, it fell to be justified on the grounds of public policy and causation. It was held that it is offensive to public notions of the fair distribution of resources that a claimant should be compensated (often out of public funds) for the consequences of his own criminal conduct. To fall within the wider rule the illegal act must be an immediate cause of the loss claimed (see [64]).

The Court in Henderson found that the critical elements of Clunis and Gray are “materially identical so far as concerns the application of public policy” (at [77]). The result of this is that those two cases would be binding authority for Ms Henderson’s claim being debarred unless Clunis has been overruled and the Supreme Court in Patel decided to depart from its previous decision in Gray in a material respect.

Patel was a case that involved a claim in contract to recover money paid to the defendant pursuant to an agreement to use that money for (illegal) insider trading. The analysis of the law in that case, however, was not restricted to contract cases. Nonetheless, the Court of Appeal in Henderson held that, in view of the contractual and unjust enrichment issue in Patel, it was impossible to discern any suggestion in the majority judgments of that case that Clunis or Gray were wrongly decided or to discern that they cannot stand with the reasoning in Patel (see [87]-[89]).

For these reasons, Gray remains binding precedent, as does Clunis.

Whilst it will not be altogether welcomed by claimants, this is a sensible judgment, applying basic principles of precedent to see off an attempt to re-write the defence of illegality in tort. It is now clear (if it weren’t before) that illegality will be a successful defence if:

  1. The losses claimed arise as a direct result of the sentence imposed by the criminal justice system for the illegal act (narrow rule); or
  2. The illegal act was an immediate cause of the losses claimed and it would be against public policy to award compensation for them (wider rule).

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