In contrast with damages (the law of compensation), restitution is a claim or remedy requiring a defendant to give up benefits wrongfully obtained.
[1] This principle derives from late Roman law, as stated in the Latin maxim attributed to Sextus Pomponius, Jure naturae aequum est neminem cum alterius detrimentum et injuria fieri locupletiorem[2] ("By natural law it is just that no one should be enriched by another's loss or injury").
The seminal case giving a general theory for when restitution would be available is Lord Mansfield's decision in Moses v Macferlan (1760), which imported into the common law notions of conscience from English chancery.
[3] Where an individual is unjustly enriched, modern common law imposes an obligation upon the recipient to make restitution, subject to defences such as change of position and the protection of bona fide purchasers from contrary equitable title.
Liability for an unjust enrichment arises irrespective of wrongdoing on the part of the recipient, though it may affect available remedies.
And restitution can also be ordered for wrongs (also called "waiver of tort" because election of remedies historically occurred when first filing a suit).
[7] The coherent concept of unjustified enrichment then appeared in the Justinian Code, based on Roman pragmatism with equitable considerations and moral principles of Greek philosophy.
[4] In the Justinian Code, condictiones were grouped into categories, such as when the plaintiff had given a thing or money:[4] Further, the actio de in rem verso gradually expanded to cover instances in which third parties were enriched at the expense of the impoverished obligee, and unjustified enrichment was recognized as a source of obligations under the heading of "quasi-contract".
[4] For the School of Salamanca members, like Tomás de Mercado, the prohibition of unjustified enrichment finds directly his source in natural law,[8] which doesn't allow a privileged party, and in the principle of commutative justice.
[10] The interpretations of Roman law principles on unjustified enrichment, by the French jurist Jean Domat and the German jurist Friedrich Carl von Savigny, formed the respective origins of the modern French and German law on unjustified enrichment.
[4] In contrast, the concept of unjustified enrichment is considerably broader and more frequently invoked in Germany and Greece to address issues of restitution as well as restoration for failed juridical acts.
These were common law (as distinct from equitable) claims giving rise to a personal liability to pay the money value of a benefit received from another.
Legal scholars from Oxford, Cambridge and Harvard at the turn of the 20th century began to rationalise these disparate actions into a coherent body of law.
[14] Subsequent scholarship has sought to expand the explanatory power of the principle of unjust enrichment and it is now often said (albeit not without controversy)[15] to encompass both common law and equitable claims.
On the "unjust factor" approach, there has been a total failure of consideration – that is, A has received no part of the bargained-for counter-performance; restitution follows automatically from the fact of invalidity.
In short, the correcting of the injustice that occurred when the claimant suffered a subtraction of wealth and the defendant received a corresponding benefit.
If B seeks compensation then the court award will be measured by reference to the loss that B has suffered as a result of A's wrongful act.
In Pavey & Mathews v Paul (1987) 162 CLR 221 the concept of unjust enrichment was expressly endorsed by the High Court of Australia.
The equitable basis for the action for money had and received has instead been emphasised and in Australian Financial v Hills [2014] HCA 14 the plurality held that the concept of unjust enrichment was effectively 'inconsistent' with the law of restitution as it had developed in Australia.
It is worth noting that the analytic framework had been expressly endorsed by the High Court just two years before in Equuscorp v Haxton [2012] HCA 7.
In Scotland, the law developed in a piecemeal fashion through the twentieth century, culminating in three pivotal cases in the late 1990s.
A claim of restitution for unjust enrichment “results from a transaction that the law treats as ineffective to work a conclusive alteration in ownership rights.”[33][34] The Third Restatement and its predecessor, the Restatement on Restitution (1937),[b] advocate for treating restitution as a unified and cohesive body of law, rather than a muddled variety of miscellaneous legal and equitable claims, remedies, and doctrines such as quantum meruit, quantum valebant, account of profits, quasi-contract, constructive trust, money had and received, and so forth.
(The decision focused on other questions, including whether the case should have been brought in admiralty and whether in deciding a writ of error the court could take notice of certain facts.)
The Supreme Court identified recovery of profits under the Copyright Act as a form of equitable relief for “unjust enrichment” in Sheldon v. Metro-Goldwyn Pictures Corp. (1940).
In Central Railroad & Banking Co. of Georgia v. Pettus (1885), the court held that the representative plaintiff could not, however, recover a salary for the time spent litigating.
2004), Judge Richard Posner held that restitution for wrongs is generally "available in any intentional-tort case in which the tortfeasor has made a profit that exceeds the victim's damages."
(The Third Restatement puts further qualifications, including that restitution for wrongs is not available where an injunction to prevent the tort would have been inequitable.