Has the Defendant been enriched?
An enrichment will typically be where a Defendant has benefited from something of value such as money, goods, land or services.
Once an enrichment has been identified, the value of the enrichment needs to be determined and is based on the value that applied to the money, service or goods at the time the enrichment was received.
In the case of money, the enrichment will typically be the face value of money that a Defendant has received.
Non-money benefits such as land or goods can be assessed by considering their objective market value or the reasonable price a Defendant would have paid for the benefit.
In the case of services, the value will typically be the reasonable costs a Claimant should receive for providing a service.
Was the enrichment at the expense of the Claimant?
In very simple terms, has the Claimant suffered a loss as a result of a benefit the Defendant received?
A loss will be where a Claimant has given up something of economic value by providing the benefit to the Defendant i.e. provision of money, goods or services to the Defendant.
Was the enrichment unjust?
Scenarios in which the enrichment was unjust include the following:
The transfer of a benefit such as money to the Defendant by mistake. If there is a dispute over the mistake and the Claimant is unsuccessful in reclaiming the value of the benefit, the circumstances surrounding the mistake must be analysed.
Transferring a benefit to the Defendant under a particular condition or basis, that fails to materialise e.g. a Claimant might have done work for a Defendant with the expectation of forming a contract that fails to materialise. The basis or condition under which a Defendant benefited from i.e. the work carried out for the Defendant, must have been known and understood by both parties at the time.
The Defendant benefitting from money, goods or services as a result of duress – this could be where the Defendant has benefitted from receipt of money, goods, or services as a result of violence or the wrongful seizure of goods.
The Defendant benefitting from a transfer of money, goods or services as a result of undue influence i.e. where a claimant was not exercising independent judgement at the time.
Remedy for unjust enrichment
Restitution is the common remedy for claims of unjust enrichment. The remedy is concerned with reversing the enrichment unjustly obtained by a Defendant, by requiring the Defendant return the enrichment to the Claimant or restore them to a position that is reflective of returning/restoring the enrichment that was received.
Defences for unjust enrichment claims
If a Claimant represented to a Defendant they would be entitled to benefit from the transfer of money, goods, services or anything else, and the Defendant relied on this representation, a Claimant is prevented from claiming unjust enrichment. This is known as estoppel.
The circumstances of the Defendant who received the enrichment may have changed for the worse and they no longer have the funds or ability to repay the Claimant. This is known as a change of position.
Determining whether a valid unjust enrichment claim exists is dependent on analysing the facts of a particular scenario or transaction. Unjust enrichment claims may occur between individuals or in the course of larger business transactions between companies. Whether a Defence is available to these claims is also dependent on analysis of the facts and receiving clear advice on your legal position.
Hanne and Co’s dispute resolution team can be instructed for any guidance and advice you need.
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