Restitution for Wrongs: A Structural Analysis

Abstract

In this essay, I seek to provide an account of the scope and justification of gain-based damages for civil wrongs. My starting point is that the main accounts of restitution for wrongs are inconsistent with the structure of the law of damages. My alternative explanation provides a framework which is coherent with the law of obligations and allows a reading of restitution for wrongs in terms of corrective justice. When a wrong affects a proprietary or proprietary-like interest, I argue that the normal response is compensation, not restitution. In this context, I introduce the expression ‘pseudo-restitutionary damages’ to identify those awards in which the claimant’s loss is measured by the defendant’s gain. The true nature of pseudo-restitutionary damages is revealed by their close link to the loss. When the loss disappears, the benefit disappears with it. Unlike pseudo-restitution, proper restitution for wrongs requires a benefit which is independent of the loss and is only connected to the wrong. The benefit cannot be dissociated from the claimant’s loss if it is the consequence of a wrongful direct transfer of wealth from the claimant to the defendant. Corrective justice can account for proper restitutionary damages. It provides a normative ground for the victim to seize the defendant’s gain independently of any loss suffered by the victim. It isolates the wrongdoer and the victim as the parties to a restitutionary claim. The award is granted because it would be unjust if the wrongdoer would go scot-free with his wrongful gains; and it is granted to the victim because any wrongful behaviour is detrimental to the sufferer of the injustice. Although quite distinct, compensation and restitution for wrongs show certain structural similarities. The former aims to place the victim in the same position in which the victim was before the damaging event took place; the latter seeks to place the wrongdoer in the same position in which the wrongdoer was before he performed the wrongful act. Both legal responses aim at neutrality as between the pre- and post-wrong position but in respect of different parties.

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