A decision of the Court of Appeal in Patel v Mirza.
http://www.bailii.org/ew/cases/EWCA/Civ/2014/1047.html

The case concerns a claim to recover a sum that had been paid in order to make money through insider trading that never actually occurred.

So, one of the conspirators  says he has access to meetings between the bank RBS and the UK government when the former was in crisis. He says he can make money on the spread betting market by using this info to place bets on RBS' share price. A clear example of the crime of insider trading. The claimant hands over cash to facilitate the bets, but the meetings, and hence the bets, never occur. Claimant now wants his money back.

CA unanimously hold that the money is recoverable.

In my view, this result is clearly wrong, but then I don't approve of the recent 'developments' in the law.

The claimant relies on his own illegality in making the claim. He even pleaded it. On its face then, following Tinsley v Milligan, the requirement of legal coherence means the claim fails.

The claimant then relies upon an exception to this rule, the locus poenitentiae doctrine. Rimer and Vos LJJ both consider that the case fell within that exception, and that it did not matter that the claimant's withdrawal occurred after the scheme became impossible to carry out.

But this seems obviously wrong. If the exception exists, we have it to encourage people to withdraw from illegal transactions. If they cannot recover back their money there is no such encouragement, and they may as well carry it through. This is nothing to do with penitence, as Timer LJ thinks.

If, for example, I pay a hitman to kill a colleague of mine in order to further my career, but then discover that my career will prosper even more if he lives, I should be able to recover my money before the murder, regardless of my being wholly impenitent. We don't wish to discourage withdrawal. But in this case the crime was no longer capable of being committed, there was nothing to draw back from.

Gloster LJ gives additional and even more radical reasons for the result. So, rejecting the Tinsley v Milligan approach she engages with a wide ranging discussion of whether the policy underlying the illegality of insider trading is or is not engaged, concluding that it is not. She considers it important that the claimant was not seeking to enforce the agreement, but recover back money paid.

Somewhat oddly, the decision in Parkinson v Royal College of Ambulance, on facts that as far as I can see are materially identical, is not cited by anyone. Presumably it is no longer good law.

The problem with the illegality principle is that it requires the court to do injustice. As between claimant and defendant, it was clearly fair that the money was repaid. It takes a certain firmness from a judge to say that regardless of what fairness between the parties requires, the coherence of the law requires a different conclusion.

If this is not overturned, then I accept that my recently expressed view that this is not a matter worth referring back, with heavy heart, to the Law Commission was wrong.
Rob