So the maxim goes, "He who comes to equity must approach the court with clean hands".
What does this mean?
It looks clear and unqualified in its intention.
However, the maxim does not apply as broadly as it says. It's not a rule of law. It's a statement of public policy enforced by courts.
It's commonly understood that the maxim means that a claimant should be deprived of all court-based remedies, because of some dishonesty, misrepresentation, illegality or unfairness.
That's not correct. The principle does not always exclude all remedies. It doesn't apply as widely as you might first think.
The remedies that are excluded are equitable remedies. These include an injunction, a constructive trust, laches (ie loss of a remedy caused by delay) and equitable damages.
When does the principle of unclean hands apply?
However, the conduct must relate to the relief sought by the claimant. It only relates to equitable relief, and not common law relief, such as damages.
Whether or not a clean hands argument is worth running depends upon the relief claimed. There is no point raising the defence if equitable relief is not claimed.
It might be said that you are assumed to have clean hands in law unless they have been dirtied by conduct in the legal proceedings or that connected to it.
The principles apply all in all civil legal proceedings, not simply patent law, intellectual property rights cases or contract claims. It is a legal principle of general application.
The Clean Hands Doctrine
The maxim does not come into play “unless the depravity, the dirt in question on the hand, has an immediate and necessary relation to the equity sued for”.
Clean hands might relate to giving untruthful evidence to the Court. It may be use of deplorable means to pursue an objective.
Simply because a claimant has behaved poorly doesn’t necessarily mean that the litigant has dirtied their hands.
There is no fixed rule or standard of conduct required. The conduct must relate to the remedy sought to be obtained. So,
"… it is long-established practice that an equitable remedy should not be granted to an applicant who does not come before the court with 'clean hands'.
The grime on the hands must, of course, be sufficiently closely connected with the equitable remedy that is sought in order for an applicant to be denied a remedy to which he ordinarily would be entitled. And whether there is or is not a sufficiently close connection must depend on the facts of each case."
That connection is "an immediate and necessary relation to the equity sued for".
It does not mean a general depravity. It must have an immediate and necessary relation to the equity sued for; it must be a depravity in a legal as well as a moral sense".
Unclean Hands in legal terms
To decide whether a party has unclean hands, a series of legal tests are applied. Expanding on the statements above, they are:
- whether the party seeking the relief has been guilty of or responsible for some misconduct which is “sufficiently closely connected” with the equitable relief sought
- whether the misconduct is sufficiently closely connected to the relief sought depends on the facts of each case. The more precise test commonly cited is that it must have an "immediate and necessary relation to the equity sued for”
- whether the conduct was in some way immoral and deliberate and not trivial. Trivialities don’t have the requisite importance for the consequence to have the effect of disqualifying a party from obtaining equitable relief
- assess the gravity (ie seriousness) and effect (ie the consequence) of misconduct cumulatively. Individual elements of misconduct may too trivial. Together, they might be sufficient.
The enquiries by the court are fact-sensitive.
In each case it is a matter of assessment by the judge.
All the relevant factors in the case are likely to be examined to see if the misconduct of the claimant is sufficient to warrant a refusal of the relief sought.
Make no mistake. Depriving a party of a remedy is reserved for exceptional cases.
Adverse orders are made when the party acts with serious immorality or deliberate misconduct. Beyond the pale, as they say.
The overall result of depriving the party of equitable remedies is seen to be fair, due to the deplorable conduct.
Courts are also able to consider whether the misconduct has continued, or whether the claimant has since the misconduct, "washed his hands". Other factors will include other matters, such as hardship caused to the other parties. That is, the prejudice caused to others.
The defence is available to defendants where claimant behaves badly. Likewise to claimants where the defendant behaves badly.
Unclean Hands Case law
The unclean hands rule was explained long ago in 1775. As a matter of public policy:
The objection, that a contract is immoral or illegal as between plaintiff and defendant, sounds at all times very ill in the mouth of the defendant. The principle is based on principles of public policy. The principle of public policy is this; ex dolo malo non oritur actio.
Courts will not support claims which rely on immoral or illegal acts. If, from the plaintiffs own stating or otherwise, the cause of action appears to arise ex turpi causa, or the transgression of a positive law of this country, there the court says he has no right to be assisted.
There is authority to say that there nothing in principle preventing a fraudster obtaining equitable relief where they approach the court for relief, where the fraud has been waived by the other party and no further facts renders the grant of the particular relief sought unjust. As you can imagine, these cases are rare.
The overwhelming position in the cases is that if the misconduct is detected, and it is serious enough, that is enough to deprive the litigant of the remedy sought, even where the misconduct is not pursued or continued.
Also, the deception or misconduct does not need to take place in the litigation or even in "the face of the court" to secure equitable relief.
The standard of bad behaviour has also been described as "to derive advantage from his dishonest conduct in so direct a manner that it is considered to be unjust to grant him relief".
Case law Examples
Examples of cases and circumstances where unclean hands as resulted in denial of a remedy include:
- attempts to mislead courts, such advancing a false case or to bolster genuine evidence with fabricated evidence, such as forged documents
- claims which are brought about based on contracts based in bribery or corruption
- fixing sporting contests
- concealing assets where they are relevant to the outcome of legal proceedings
- illegal attempts to obtain confidential and/or legally privileged information. Examples include sweeps of rubbish bins and computer hacking
- taking information confidential and used it for own business purposes, and then denying that the information has been taken in legal proceedings
- suborning witnesses to give evidence, not give evidence or evidence not consistent with their oath “to tell the truth, the whole truth and nothing but the truth”
- harassment, such as intrusive stalking and surveillance
- where the process of litigation is abused for the purpose of obtaining leverage and harassing others
The common factor amongst all of the cases is whether the conduct of the grimed party has sufficiently jeopardised a fair trial or prevented the court from doing justice. This might be called an ultimate overriding test.
Assessment of unclean hands might take place at an interim application or at the trial of the proceedings. It is unlikely that a trial judge will be bound by a previous decision where new information of wrongdoing has come to light since an interim application.
1. Forged documents
Documents were manufactured by a party to create a deliberately false impression that they were executed on the dates put on them.
The documents did not exist on the dates applied to them.
It was done to bolster their case and to deceive the court.
The manufactured documents had been put forward initially as being genuine documents.
The major witnesses had perpetual problems telling the truth, They delivered perjured evidence in the witness box. The judge referred to the behaviour as “a flagrant and continuing affront to the Court”.
With regard to a claimant the sanction is clear; it is the dismissal of the action which it was sought to bring with the use of illegitimate material.
He is seen to be the victim of his own misconduct and “one should not weep over it”. Usually, claims such as these would be struck out.
Putting it another way: if both sides have their ability to adduce evidence removed because of their misconduct, one falls back on the principle that the case is decided on the basis that the party on whom the burden of proof lies, and whether they have failed to satisfy that burden.
Then there were the sanctions for the perjury.
2. Documents and Diary entries infecting other Evidence
Two minority shareholders produced documents which they knew to be forged in the course of standard disclosure. The forgeries were discovered.
An application was made to strike out the claim.
It failed. The judge decided at that stage that because the shareholders had been caught, it wouldn’t happen again.
Well, then guess what happens.
Further evidence emerged during the trial that diary entries had been forged by one of the shareholders.
Ultimately, the court found that the existence of the forged documents and the diaries was likely to have infected evidence contained in affidavits and witness statements, which would have been prepared in reliance on those documents and diaries.
In this case, the shareholder demonstrated that he was determined to pursue proceedings with the object of preventing a fair trial. He forfeited his right to take part in a trial. His object was contrary to the process which he tried to invoke (ie obtain justice).
Where there is a substantial risk that:
- the litigant’s conduct puts the fairness of the trial in jeopardy,
- it is such that any judgment in favour of the litigant would have to be regarded as unsafe, or
- it amounts to such an abuse of the process of the court as to render further proceedings unsatisfactory and to prevent the court from doing justice,
that conduct makes a fair trial impossible. There was no case for relief which remained to be tried.
The litigant to take further part in the proceedings and (where appropriate) to determine the proceedings against him. That would take place by dismissing the claim or striking it out.
The function of the court is to do justice between the parties; not to allow its process to be used as a means of achieving injustice. That includes overseeing a fair trial to both parties.
What is a fair trial?
A fair trial is a trial which is conducted without an undue expenditure of time and money; with a proper regard to the demands of other litigants upon the finite resources of the court.
The effect of unclean hands is that the court can't do justice for the other parties to the proceedings, if it allows the judicial process to be abused. The real issues in dispute subordinated to an investigation that fraudulent conduct of one party has had on the fairness of the trial itself.
Courts won’t have it.
3. Evidence in Witness Box
In the UK case named BSky B -v- HP Enterprises , the evidence of a witness was so tainted and far-reaching that it was considered useless.
A witness appeared to give evidence for one of the parties. The answers he gave were shown to be dishonest. This led to the view that the witness had a propensity to be dishonest whenever it suited him or interests in his business dealings.
This likelihood to be dishonest contributed (more or less) to the likelihood that the witness would have dealt with the claimant (ie BSky B) dishonestly in the main claim.