(1)In this section—
“unlawful communication” means a communication in relation to which there has been a contravention of section 21(1);
“controlled agreement” means an agreement the making or performance of which by either party constitutes a controlled activity for the purposes of that section; and
“controlled investment” has the same meaning as in section 21.
(2)If in consequence of an unlawful communication a person enters as a customer into a controlled agreement, it is unenforceable against him and he is entitled to recover—
(a)any money or other property paid or transferred by him under the agreement; and
(b)compensation for any loss sustained by him as a result of having parted with it.
(3)If in consequence of an unlawful communication a person exercises any rights conferred by a controlled investment, no obligation to which he is subject as a result of exercising them is enforceable against him and he is entitled to recover—
(a)any money or other property paid or transferred by him under the obligation; and
(b)compensation for any loss sustained by him as a result of having parted with it.
(4)But the court may allow—
(a)the agreement or obligation to be enforced, or
(b)money or property paid or transferred under the agreement or obligation to be retained,
if it is satisfied that it is just and equitable in the circumstances of the case.
(5)In considering whether to allow the agreement or obligation to be enforced or (as the case may be) the money or property paid or transferred under the agreement to be retained the court must have regard to the issues mentioned in subsections (6) and (7).
(6)If the applicant made the unlawful communication, the issue is whether he reasonably believed that he was not making such a communication.
(7)If the applicant did not make the unlawful communication, the issue is whether he knew that the agreement was entered into in consequence of such a communication.
(8) “Applicant” means the person seeking to enforce the agreement or obligation or retain the money or property paid or transferred.
(9)Any reference to making a communication includes causing a communication to be made.
(10)The amount of compensation recoverable as a result of subsection (2) or (3) is—
(a)the amount agreed between the parties; or
(b)on the application of either party, the amount determined by the court.
(11)If a person elects not to perform an agreement or an obligation which (by virtue of subsection (2) or (3)) is unenforceable against him, he must repay any money and return any other property received by him under the agreement.
(12)If (by virtue of subsection (2) or (3)) a person recovers money paid or property transferred by him under an agreement or obligation, he must repay any money and return any other property received by him as a result of exercising the rights in question.
(13)If any property required to be returned under this section has passed to a third party, references to that property are to be read as references to its value at the time of its receipt by the person required to return it.
76.When a customer enters into an agreement or exercises any rights as a result of a communication in breach of the financial promotion prohibition, the agreement will be unenforceable against him. The customer will also be entitled to recover any property transferred and to receive compensation for losses incurred, but if he chooses to recover property transferred or not to continue the contract, he must return any money received.
77.However, in certain circumstances the courts may enforce agreements made in contravention of the prohibition and allow money and property transferred under the agreement to be retained if it is satisfied that this would be just and equitable, having regard to whether:
where the person seeking to enforce the agreement was the illegal promoter, that he reasonably believed that the promotion had not been made in breach of the prohibition; or
where the contravention was by a third party, that the person seeking to enforce it did not know that the agreement resulted from an illegal promotion.