Making a Disgorgement Remedy claim
involves removing gains or profits from an offender
Page last modified : December 04 2023
If the wrongdoer received a benefit or profit from the wrongdoing but the victim did not suffer a loss, what might the victim of wrongdoing claim in a lawsuit?
When someone commits a wrongdoing and reaps the benefits or profits from it, the victim of the wrongdoing may be entitled to disgorgement of those gains.
Recognizing the Principles of Disgorgement Remedy Concerning Compensation for Wrongs That Cause Unfair Gains
Here are a few situations where the perpetrator benefits or makes money from their misdeeds but the victim suffers no equivalent harm .
defeat. Legal doctrines similar to “no harm, no foul” generally allow a valid lawsuit to be filed in order to recover damages for the victim’s loss or injury; nevertheless, there are some situations in which it is appropriate to demand that the wrongdoer forfeit any benefits or profits they may have earned.
The Law
A clear explanation of the disgorgement remedy—which involves taking away an offender’s illicit gains—was provided in the Pharmascience Inc. v. Novartis Pharmaceuticals Canada Inc., et al., 2020 ONSC 6534 case. The ruling therein stated:
[19] If the defendant has committed “an underlying legal wrong against a plaintiff, and the ordinary damages remedy for the underlying wrong is inadequate,” disgorgement may be recoverable under the “profiting from wrong” principle of unjust enrichment. Disgorgement in these situations is normally reserved for situations in which there has been a violation of trust or a breach of fiduciary obligation, as the Court of Appeal pointed out. Disgorgement as a restitutionary remedy, however, may also be awarded in extraordinary circumstances in which the “underlying legal wrong” is a tort, a felony, or a violation of contract.[6] The idea of “corresponding deprivation” assumes a slightly different connotation in situations when the foundation is “profiting from wrong.” A plaintiff could be able to demonstrate a commensurate loss by demonstrating that
Explained Principles
Consider a scenario in which someone defrauds another individual either criminally or civilly. However, the offender may have benefitted or benefited greatly from the fraud. In other cases, the victim may have suffered little injury or been able to ameliorate all or most of the harm that arose from the fraud and hence little loss, if any happens. Courts may order that the wrongdoer’s ill-gotten assets be disgorged, or taken away, and given to the victim in an effort to deter future wrongdoing. Disgorgement is essentially a tool used to make sure that an offender cannot profit or gain anything from their crime, especially when the victim was not injured or only little harmed by the offender’s misconduct.
Summary Comment
Since disgorgement is a restitutionary remedy as opposed to a compensatory remedy, the law uses it fairly rather than with the intention of making up for the victim’s losses or injuries.
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