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(C) SHOULD THE UNJUST ENRICHMENT PRINCIPLE HAVE A NORMATIVE FUNCTION?

Although the unjust enrichment principle has traditionally been treated as having a formulaic function, there is some evidence that the principle may be shifting towards a more normative function. The trigger for this shift may be an important dictum of Lord Goff in Westdeutsche Landesbank Girozentrale v Islington LBC[1] where he recognized that:

An action of restitution appears to me to provide an almost classic case in which the jurisdiction should be available to enable the courts to do full justice... The seed is there, but the growth has hitherto been confined within a small area. That growth should now be permitted to spread naturally elsewhere within this newly recognised branch of the law. No genetic engineering is required, only that the warm sun of judicial creativity should exercise its benign influence rather than remain hidden behind the dark clouds of legal history.

Whilst it cannot follow from this that we must throw away the recognized principles which underlie the award of restitutionary relief, this dictum does suggest that there is a shift of emphasis away from a backward-looking, principled approach towards a forwardlooking approach, which is much more prepared to enter new territory and award restitutionary relief in circumstances where such relief has not been awarded before. Is this desirable?

Such an approach has been adopted in Canada, where the courts have been much more prepared to award restitutionary remedies by reference to a general notion of unjust enrichment rather than the pre-existing grounds of restitution.79 But such an approach is surely unsatisfactory. The virtually unconstrained discretion of the judge to decide whether or not the receipt of an enrichment was in circumstances of injustice will result in great uncertainty. Such discretion is alien to the Common Law tradition where judges reach their decision by reference to what has gone before. The introduction of such a discretion would mean that judges would be more concerned with the circumstances of the case and balancing the conduct of the parties to see where the balance of justice lies. This danger is particularly well illustrated by the decision of Knox J in Hillsdown plc v Pensions Ombudsman80 who said:

As to its being unjust... one only has to compare the position of Hillsdown who successfully wielded a big but misguided stick with that of the members of the... scheme who were never told anything of what was being done as regards the payment of surplus to Hillsdown to see which way the scales of justice fall.

Although judges must be allowed a degree of discretion when determining whether the defendant should be liable to make restitution and what the nature of the restitutionary remedy should be, this discretion must never be at the expense of principle.

  • [1] [1996] AC 669, 697.
 
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