(A) UNJUST ENRICHMENT OR UNJUST BENEFIT?

Whilst the principle of reversing unjust enrichment clearly assumes that it is a precondition of liability that the defendant has been enriched, sometimes the restitutionary action is analysed in terms of whether or not the defendant has been unjustly benefited rather than enriched. For example, in Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd^[1] Lord Wright referred to the principles of both unjust enrichment and unjust benefit. The Law Reform (Frustrated Contracts) Act 1943^[2] uses the word ‘benefit’ in the context of a statutory scheme which comes into operation once a contract has been frustrated and which exists to reverse the defendant’s unjust enrichment.⁵ Does it make any difference whether ‘enrichment’ or ‘benefit’ is used, or can these words be used interchangeably?

Linguistically there is an important difference between ‘enrichment’ and ‘benefit’, and consequently the word which is used may have an important effect upon the ambit of the restitutionary claim. This is because ‘enrichment’ could be interpreted as being limited to those benefits which can be assessed only in terms of monetary value, so that the defendant will only be enriched when he or she has received money or money’s worth. Consequently, Beatson^[3] has assumed that enrichment equates with wealth and concludes that a defendant will only be enriched where he or she received something which has an exchange value, so that, on receipt of the enrichment, the defendant is financially better off than he or she would have been had he or she not received the enrichment. This may be acceptable as an economic definition of what constitutes an enrichment, but is it really acceptable as a legal definition? Colloquially, a defendant may say that he or she was enriched even though he or she has not received something which itself has an exchange value. This is particularly relevant where the defendant has received a ‘pure service’, namely a service which leaves no marketable residuum,^[4] such as attendance at a concert or receiving a massage. Beatson, by virtue of his rigorously economic approach to the definition of enrichment, concludes that pure services cannot be treated as enrichments, save where the service anticipates expenditure which the defendant would necessarily have incurred.^[5]

But the recipients of pure services can, and often will, say that they were enriched by what they had received even though they were not left with anything of any value. There will often be a demand for pure services in the market where reasonable people are prepared to pay for the service, so this suggests that the service is a valuable benefit.^[6] It is for this reason that ‘benefit’ is a better expression than ‘enrichment’, since it emphasizes that the unjust enrichment principle should not be limited by the artificial restrictions of economic analysis.^[7]

The fact that ‘benefit’ is a more flexible and wider expression than ‘enrichment’ has been noted before. For example, Fuller and Perdue in their essay on ‘The Reliance Interest in Contract Damages’^[8] recognized that ‘enrichment’ is a narrower term than benefit, which, if it is used, will have the effect of restricting the potential ambit of the restitutionary response.

Despite this preference for the use of ‘benefit’, the terms ‘enrichment’ and ‘benefit’ will be used interchangeably throughout this book for two reasons. First, this reflects the practice in the cases, where the words are used indiscriminately without any obvious intention that they have different senses. Secondly, the word ‘enrichment’ is explicitly incorporated in the principle of reversing unjust enrichment. It is too late now to rename this ‘the principle for reversing unjust benefit’, even though this would be more accurate. But where ‘enrichment’ is referred to, it must always be remembered that it should be given a wide interpretation; one which is not constrained by economic definitions of wealth, so that it should include pure services.^[9]

• [1] (Lord Wright MR). 4 See Chapter 13.
• [2] 5 BP Exploration Co (Libya) Ltd v Hunt (No 2) [1979] 1 WLR 783, 799 (Robert Goff J).
• [3] J Beatson, The Use and Abuse of Unjust Enrichment (Oxford: Clarendon Press, 1991), 29 ff.
• [4] A marketable residuum will be left where the effect of the service is to leave a valuable end product, forexample a service which improves the defendant’s property and so increases its value.
• [5] Beatson, The Use and Abuse of Unjust Enrichment, 32
• [6] In Re Berkeley Applegate (Investment Consultants) Ltd [1989] Ch 32, Edward Nugee QC sitting as aDeputy High Court Judge apparently rejected Beatson’s contention when, at 50, he said that the suggestion thatservices would constitute an enrichment only where the work added to the assets of the defendant was ‘toonarrow a view of the principles’. See also PBH Birks, ‘In Defence of Free Acceptance’ in AS Burrows (ed),Essays on the Law of Restitution (Oxford: Clarendon Press, 1991), 134.
• [7] AVM Lodder, Enrichment in the Law of Unjust Enrichment and Restitution (Oxford: Hart Publishing,2012), 34, considers ‘benefit’ to refer to anything which has the quality of value.
• [8] LL Fuller and WR Perdue, ‘The Reliance Interest in Contract Damages’ (1936) 46 Yale LJ 52, 72.
• [9] Lodder, Enrichment in the Law of Unjust Enrichment and Restitution, 45, considers enrichment to be amore technical term than benefit, but concludes that there is no basis for the linguistic connection betweenenrichment and economic value.