Gray v Thames Trains & Ors

The House of Lords considered whether the public policy defence expressed by the maxim ex turpi causa non oritur actio precludes a claimant from recovering damages in negligence for consequences that follow from his own criminal act. The court distinguished two forms of the rule: a narrower rule precluding recovery for damage that is the consequence of a sentence imposed for a criminal act, and a wider rule precluding recovery for damage that flows directly from the claimant's unlawful conduct. The court applied the narrower rule to hold that Mr Gray could not recover loss of earnings or general damages for detention, conviction and damage to reputation that resulted from his manslaughter conviction and the hospital order under the Mental Health Act 1983. The wider rule was applied to bar recovery of an indemnity for liability to the deceased's dependants and damages for guilt and remorse because those losses were direct consequences of his unlawful act.

The claimant, Mr Gray, developed post-traumatic stress disorder (PTSD) after injuries sustained in the Ladbroke Grove rail crash, for which the defendants admitted liability in negligence. While suffering from PTSD he killed a third party and pleaded guilty to manslaughter on grounds of diminished responsibility. He was detained first in custody and later in hospital pursuant to section 37 of the Mental Health Act 1983 with a restriction order under section 41. Mr Gray sued the defendants for damages including loss of earnings during his detention and general damages arising from the killing.

The trial judge (Flaux J) held that public policy precluded recovery for losses consequent upon the claimant's criminal act. The Court of Appeal allowed the claim for loss of earnings after the killing but rejected claims for general damages tied to the conviction and detention. The defendants appealed to the House of Lords and the claimant cross-appealed on a point.

The central legal issues were (i) whether the public policy defence of ex turpi causa prevents a claimant from recovering damages in negligence where the immediate cause of the complained-of loss is the claimant's own criminal act, and (ii) whether the claimant could recover loss of earnings after the date of the killing on the basis that his earning capacity had been reduced by the defendants' negligence prior to the killing.

The House: (i) affirmed that a narrower public policy rule prevents recovery for damage which is the consequence of a lawful criminal sentence (consistency principle) and applied it to bar recovery for loss of earnings and other consequences flowing from the conviction and detention; (ii) endorsed the wider rule which bars recovery where the claimed loss flows directly and inextricably from the claimant's unlawful act, and applied it to bar indemnity claims and damages for guilt and remorse; (iii) rejected the claimant's counterfactual approach that the killing could be ignored for assessment of post‑offence loss of earnings, relying on Jobling and the principle that known subsequent events and the criminal court's disposals must be taken into account. The appeal was allowed and the trial judge's order was restored.

Appeal allowed. The House held that public policy bars recovery for losses which are the consequence of the claimant's own criminal act or of the sentence imposed for that act. On the facts, Mr Gray could not recover loss of earnings or general damages for detention and conviction, nor an indemnity for liability to the deceased's dependants or damages for guilt and remorse; these were either consequences of the criminal act or otherwise excluded by the public policy/causation principles.

Trial before Flaux J (trial judgment restored). Appeal to the Court of Appeal [2008] EWCA Civ 713; reported at [2009] 2 WLR 351 (Court of Appeal allowed part of the claimant's claim). Appeal to the House of Lords [2009] UKHL 33 which allowed the defendants' appeal and restored the trial judge's decision.