English unjust enrichment law

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English unjust enrichment law is a developing area of law in unjust enrichment. Traditionally, work on unjust enrichment has been dealt with under the title of "restitution". Restitution is a gain-based remedy, the opposite of compensation, as a loss-based remedy. But the event it responds to is the "unjust enrichment" of one person at the expense of another.

Framework of claim[edit]

A core example (whatever the theoretical analysis) is a mistaken payment. Imagine I purchase a book off you for £10, but I mistakenly give you a £20 note. If you took the money knowing that it was £10 too much, then you will be liable for the £10 in conversion (since money passes in currency only when paid 'fairly and honestly upon a valuable and bona fide consideration'[1]). But what if that's not the case? Unjust enrichment, and the duty to reverse unjust enrichment, operates regardless of awareness. You are strictly liable to reverse it.

However, unlike in conversion, there is always a "change of position" defence available. If you (unaware that you now have £10 too much in your wallet) go and consume £10 worth of chocolate, which you would not have done had you not had that extra £10, your position has changed. If I were to demand my £10 back, you could legitimately say, "but then I would be worse off, and that is unfair". This is the change of position defence.


At expense of another[edit]


  • ‘It is evident that in these situations the strict liability from which we recoil is actually the only acceptable regime. The reason is that the [demand for a repayment of windfall gain] does not aim to make you bear a loss or to inflict a deterrent punishment on you. Strong facts are needed to justify unpleasant outcomes of that kind which will leave you worse off. The [enrichor] is not trying to make you worse off. He seeks only that you should give up the gain obtained at the shop’s expense.’ (Birks, 7)

Unjust(ified) factors[edit]

Other than mistakes, a variety of categories of "unjust factors" are said to generate unjust enrichment situations. Undue influence, duress, incapacity and illegality are examples of vitiating factors in contract. Contract law's analysis has been used to explain why courts do not uphold contracts in these situations. These are cases of unjust enrichment. The following eleven categories are examples of "unjust factor" (or what Peter Birks argued could be unified under one principle of a basis of a right being absent) which may ground a claim of restitution for unjust enrichment.[2]

Failure of consideration[edit]

  • Meaning of consideration
  • Contracts discharged for breach
    • Claim by the innocent party for the recovery of money paid
    • Claim by the innocent party for the value of work done
    • Claim by the party in breach for the recovery of money paid
    • Claim by the party in breach for the value of the work done
  • Contracts which are unenforceable for want of formality

Lack of information[edit]


  • Benefits in kind rendered by mistake
  • Rescission of an executed contract entered into by mistake


  • Re Diplock, strict liability subject to defences as an exception

Defective consent[edit]


Main article: Duress in English law

Undue influence and exploitation[edit]

  • The role of unconscionable conduct
  • Exploitation of the mental inadequacy of the claimant
  • Exploitation of the economic weakness of the claimant
  • Exploitation of the difficult circumstances of the claimant
  • Illegality to protect vulnerable persons from exploitation

Legal compulsion[edit]

Compulsory discharge of another's liability can happen (1) to recover one's goods, or (2) if someone falls under a common liability for another.




  • Hazell v Hammersmith and Fulham LBC [1992] 2 AC 1. Banks paid councils a lump sum (for Islington, £2.5m). The councils then paid the banks back at the prevailing interest rate. Banks paid councils back a fixed interest rate (this is the swap part). The point was that councils were gambling on what interest rates would do. So if interest rates fell, the councils would win. As it happened, interest rates were going up and the banks were winning. Islington was due to pay £1,354,474, but after Hazell, it refused, and waited to see what the courts said. At first instance Hobhouse J said that because the contract for the swap scheme was void, the council had been unjustly enriched with the lump sum (£2.5m) and it should have to pay compound interest (lots) rather than simple interest (lots, but not so much). But luckily for local government, three law Lords held that Islington only needed to repay with simple interest. There was no jurisdiction for compound interest. They said this was because there was no ‘resulting trust’.
  • Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669, the council had no authority to enter into a complex swap transaction with the German bank. So the House of Lords held that the council should repay the money they had been lent and a hitherto unknown ‘unjust’ factor was added to the list. Birks argued that the better explanation in all cases is an ‘absence of basis’ for the transfer of property. Searching through or adding to a list of open ended unjust factors simply concludes on grounds of what one wishes to prove, grounds that ‘would have to be constantly massaged to ensure that they dictated an answer as stable as is reached by the shorter ‘non basis’ route.’ (Birks (2005) 113)
  • Deutsche Morgan Grenfell plc v IRC [2006] UKHL 49 at [26] Money was paid as tax under a statutory regime, which the ECJ later held to have infringed the EC Treaty. The House of Lords held that a claim could be made on grounds of a ‘mistake as to the law’. Professor Charles Mitchell prefers the reasoning of Park J at first instance, which recognised that there is not really a ‘mistake’ in terms of an ‘impairment of a claimant’s actual thought processes’. Lord Hoffmann recognised it only implicitly at [32].

Tracing and proprietary restitution[edit]

Tracing at common law
Tracing in equity
Proprietary restitution



Mixing two claimants' money or money mixed with an innocent claimant

Backwards tracing

M Conaglen ‘Difficulties with Tracing Backwards’ (2011) 127 LQR 432

Swollen assets theory


Change of position[edit]

Main article: Change of position


Bona Fide Purchaser[edit]

It means that good value is given for receipt of assets without notice of breach of trust. It is a complete defence to any knowing receipt claim.


Another available defence is ministerial receipt, i.e. the recipient defendant receives the assets as agent for another.

Counter restitution impossible[edit]

Passing On[edit]



Foreign comparisons[edit]

Unjust enrichment is a developed and coherent field in continental civil law systems. Continental lawyers say someone is unjustly enriched when there is no basis for their possession or title to some right or property. A more correct way of saying it is that someone has been "unjustifiedly enriched". In German, the term is Ungerechtfertigte Bereicherung (§812 BGB) and in France the term is Enrichissement sans cause. English lawyers, however, have been accustomed to identify an "unjust factor". The difference between "unjust factors" and "absence of basis" as a unifying principle has generated a lot of debate, particularly since Peter Birks changed his mind in his second edition of Unjust Enrichment (2005) in the Clarendon Law Series, and argued that the continentals had got it right.

The two leading theorists that have revived unjust enrichment were Lord Goff, who produced Goff and Jones on Restitution and Professor Peter Birks.

See also[edit]


  1. ^ Lipkin Gorman v Karpnale [1991] 2 A.C. 548 per Lord Templeman quoting Lord Mansfield, p.563 at D
  2. ^ Burrows et al., 133


  • P Birks, Unjust Enrichment (2nd Ed, Clarendon, Oxford, 2005)
  • A Burrows, J Edelman and E McKendrick, Cases and Materials on the Law of Restitution (2nd Ed, OUP, Oxford, 2007)