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Illegal transactions: chaos or discretion?

The provisional proposals of the Law Commission for reform of the law relating to illegal transactions are examined in relation to proposals for reform of the same area of the law in other Commonwealth jurisdictions. The working in practice of the New Zealand Illegal Contracts Act 1970 is considered, and judicial development of the law in Canada and Australia is contrasted with the reluctance of the judiciary in England to embark upon systematic reform. The conclusion is reached that there is a proven need for a move away from rigidity and literalism towards a legitimated judicial discretion enabling the great variety of factors in illegality cases to be weighed. Furthermore, the artificial and arbitrary notion of ‘reliance’ upon illegality should be abrogated. Only statutory reform of the law along the lines provisionally proposed by the Law Commission is capable of bringing about these changes in England.