Restitution and unjust enrichment

Restitution and unjust enrichment is the field of law relating to gains-based recovery. In contrast with damages, restitution is a claim or remedy requiring a defendant to give up benefits wrongfully obtained. Liability for restitution is primarily governed by the "principle of unjust enrichment": A person who has been unjustly enriched at the expense of another is required to make restitution.
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. In civil law systems, it is also referred to as enrichment without cause or unjustified enrichment.
In pre-modern English common law, restitutionary claims were often brought in an action for assumpsit and later in a claim for money had and received. The seminal case giving a general theory for when restitution would be available is Lord Mansfield's decision in Moses v Macferlan, which imported into the common law notions of conscience from English chancery. Blackstone's Commentaries also endorsed this approach, citing Moses.
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]. This may be treated as a distinct basis for restitution, or it may be treated as a subset of unjust enrichment.
Unjust enrichment is not to be confused with illicit enrichment, which is a legal concept referring to the enjoyment of an amount of wealth by a person that is not justified by reference to their lawful income.

History

Roman law

In civil law systems, unjust enrichment is often referred to as unjustified enrichment. Its historical foundation of enrichment without cause can be traced back to the Corpus Iuris Civilis. While the concept of enrichment without cause was unknown in classical Roman law, Roman legal compilers eventually enunciated the principle of unjustified enrichment based on two actions of the classical Roman period—the condictio and the actio de in rem verso.
The condictio authorized recovery by the plaintiff of a certain object or money in the hands of the defendant. The defendant was considered a borrower who was charged with returning the object or money. For the actio de in rem verso, the plaintiff bore the burden of specifying the cause for his demand, namely, demanding the restitution of assets that had exited the plaintiff's patrimony and entered the defendant’s patrimony through the acts of the defendant’s servants.
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. In the Justinian Code, condictiones were grouped into categories, such as when the plaintiff had given a thing or money:

in contemplation of a future result that did not follow;
for a reason disapproved by law or repugnant to public policy;
by mistake because payment was not actually due; or
without a good reason for the transaction.

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".

Civil law

For the School of Salamanca members, like Tomás de Mercado, the prohibition of unjustified enrichment finds directly its source in natural law, which doesn't allow a privileged party, and in the principle of commutative justice. Thus it manages apply to the entire law on propriety and contract. It had, for example, a strong influence on the reflexions regarding contracts of prostitution.
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. Domat developed the French unjustified enrichment principles based on the actio de in rem verso, as well as a modified version of the Roman concept of causa, which renders contracts actionable even when they are not normally recognized under Roman law. 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. Equitable tracing is a particularly well suited remedial tool.

Common law

See also: English unjust enrichment law
In systems of law derived from the English common law, the historical core of the law of unjust enrichment lies in quasi-contract. These were common law 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. The principle said to underlie these actions was eventually recognized as unjust enrichment. Subsequent scholarship has sought to expand the explanatory power of the principle of unjust enrichment and it is now often said to encompass both common law and equitable claims.

Framework

Cases of unjust enrichment can be examined in the following way:

Was the defendant enriched?
Was the enrichment at the expense of the claimant?
Was the enrichment unjust?
Does the defendant have a defense?
What remedies are available to the claimant?

These questions are a familiar part of the modern English law of unjust enrichment, having been popularised by the writing of Professor Peter Birks and expressly endorsed by English courts. The framework provides a useful taxonomical function in Australian law, although the concept of unjust enrichment has been subject to inconsistent treatment by Australian courts, as discussed below. Stated at this level of abstraction, the framework is a useful grounding for comparative study between common law and civil law jurisdictions.

The meaning of ''unjust'': unjust factors vs. absence of basis

Generally speaking, the mere receipt of a benefit from another is unobjectionable and does not attract legal consequences. The exception is where such receipt is "unjust" or "unjustified". Both civil and common law legal systems have bodies of law providing remedies to reverse such enrichment.
A conceptual split, albeit one not necessarily coextensive with the common law - civil distinction, is between systems based on an "unjust factor" approach and systems based on an "absence of basis" approach.

Common law systems such as those of England, Australia, Canada and the United States typically adopt the "unjust factor" approach. In this analysis, the claimant must point to a positive reason why the defendant's enrichment is unjust. Examples of "unjust factors" that ground a claim for restitution include: mistakes of fact or law; total failure of consideration, duress, undue influence, and the Woolwich ground.
Civil law systems such as those of France and Germany typically adopt an "absence of basis" approach. On this analysis, the defendant is obliged to make restitution if there is no "basis" for his receipt: for example, because the contract under which the defendant received the benefit was void ab initio. Some common law systems have shown signs of a possible shift towards this approach.

In most cases, the conceptual approach does not affect the outcome of a case. For example, suppose that A makes an oral contract with B under which A will pay $100 for certain services to be provided by B. Further suppose that A pays the money but B discovers that, pursuant to legislation, contracts for such services are void unless in writing. B refuses to perform. Can A recover his payment? On both approaches, B is unjustly enriched at A's expense. On the "absence of basis" approach, B's enrichment has no legitimate explanatory basis because the contract was void. On the "unjust factor" approach, there has been a total failure of considerationthat is, A has received no part of the bargained-for counter-performance; restitution follows automatically from the fact of invalidity.

Remedies for unjust enrichment: personal and proprietary restitution

The remedy for unjust enrichment is restitution: the restoration of what was conferred to the claimant. In short, the correcting of the injustice that occurred when the claimant suffered a subtraction of wealth and the defendant received a corresponding benefit. Restitution can take the form of a personal or a proprietary remedy.
Where a personal remedy is awarded, the defendant is ordered to pay the money value of the benefit received. This personal money award is the typical form of restitution ordered.
Where a proprietary remedy is awarded, the court recognises that the defendant has a beneficial or security interest in specific property of the defendant. Whether proprietary remedies can be awarded depends on the jurisdiction in question.

In English law, the orthodox view is that unjust enrichment generally triggers personal, rather than proprietary remedies. This is because the law of quasi-contract only generate personal money awards: either a liquidated debt or a sum assessed by a civil jury or the court itself. Scholars seeking to expand the explanatory power of unjust enrichment have argued that other areas of the law such as subrogation and claims to traceable substitutes form part of the law of unjust enrichment. This view has been accepted, though its implications remain unclear.
In Australian law, actions derived from the common money counts continue to generate only personal remedies. The doctrinal basis of subrogation is not unsettled: it has nothing to do with unjust enrichment. Claims to traceable substitutes are a part of the law of property, not unjust enrichment.