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The general doctrine of ‘illegality’, in commercial litigation, is based on two related principles: Firstly, that no person should benefit from his or her own illegal act or wrong; and Secondly, that the law (and the Court) should not condone, reward, or enforce, illegal behaviour. In jurisdictions such as Bermuda, the British Virgin Islands, and the Cayman Islands, the alleged ‘illegality’ of one party or another is often relied upon, in practice, as a defence to a claim, whether the claim is asserted in contract, tort, equity, or restitution. It is quite often asserted, for example, that a claim should be dismissed because the claimants (or, in the case of a company in insolvent liquidation, the company’s former directors and officers) have allegedly been guilty of some fraud, dishonesty, breach of statute (such as an immigration or tax law), or regulatory non-compliance (such as a breach of Anti-Money Laundering, Beneficial Ownership, or Sanctions regulations).

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