When a Rule Defeats Its Purpose
Article by Ayman Fouad Abdelgawad
Patel v Mirza
A court should not help people profit from unlawful conduct. But refusing all assistance can sometimes leave the money with another participant in the same wrongdoing. Patel exposed the gap between a forceful moral slogan and a coherent legal response.
The dispute
Patel transferred money to Mirza for a proposed scheme involving insider information. The contemplated transactions did not take place, and Patel sought his money back. The question was whether the unlawful purpose barred restitution.
The court’s reasoning
The Court permitted recovery. Lord Toulson's majority approach examined the purpose of the prohibition, other relevant public policies, and whether denying the claim would be proportionate. Restoring money was distinguishable from enforcing the prohibited bargain. Other judges agreed with the result while differing over the proper method. The decision did not make unlawful contracts generally enforceable or provide an unrestricted discretion to do whatever seems fair.
Personal reflection
I find the judgment compelling because it asks the law to account for the result produced by its own refusal. Saying that a claimant has behaved badly cannot complete the analysis when the practical consequence is a windfall to someone else. An institution should be able to explain how its response advances the principle it invokes.
The objection about predictability is substantial. A flexible assessment may be more responsive to context while making advice harder to give and litigation harder to settle. Justice that depends on expensive argument can become less accessible even as its reasoning becomes more nuanced.
The problem therefore resists a simple choice between rules and fairness. Good rules organise judgement; they should not replace attention to consequences. My question after reading Patel is whether an institution uses its principles to understand a difficult case or uses them to stop thinking about it. The difference can decide who benefits from the language of moral seriousness.
Reading the decision
These are historical readings of the named judgments, with separate personal commentary. They do not survey every later decision or legislative change and are not advice for an individual case.
The cited sources distinguish the judgment from any official press summary; the judgment is the authoritative account.