Recovering Losses from Unjust Enrichment

Have you ever felt that someone unfairly benefited at your expense? Whether it’s a mistaken payment, a failed agreement, or uncompensated services, such situations can leave you frustrated and out of pocket. The law may recognise this as unjust enrichment, and the remedy of restitution can be sought to restore fairness and balance in such circumstances.

What Is Unjust Enrichment?

Unjust enrichment occurs when one person benefits unfairly at another’s expense. Unlike claims based on breach of contract or negligence, claims of unjust enrichment don’t depend on a prior agreement or wrongdoing. Instead, they address situations where a transfer of value (money, goods, or services) has taken place in circumstances the law deems unjust.

Examples of Unjust Enrichment

Unjust enrichment can arise in a variety of situations, including:

• Mistaken Payments: A person pays money they did not owe due to a misunderstanding or error.
• Failure of Basis: A benefit is provided with an understanding that a specific condition or event will occur, but it does not materialise.
• Services Without Consent: A service is provided without prior agreement but with reasonable expectation of compensation.

Four Key Questions To Establish Unjust Enrichment

To establish a claim for unjust enrichment, courts typically examine four key questions:

1. Was the other party enriched? Enrichment can involve receiving money, goods, or services, or even having a liability discharged.
2. Was the enrichment at your expense? This requires showing a direct or indirect transfer of value from you to the other party.
3. Was the enrichment unjust? This could arise due to mistakes, coercion, or the failure of a basis for the transfer.
4. Are there any defences? The other party might argue that restitution is not required due to a change in circumstances or legal entitlement to the benefit.

Restitution as a Remedy

Restitution aims to reverse the unjust enrichment. Instead of compensating for losses, it requires the enriched party to return the benefit, often through a monetary payment equivalent to the value received. This remedy is not penal; it simply seeks to restore fairness.

For example, if you accidentally overpay a supplier, restitution allows you to recover the excess amount. Similarly, if someone benefits from services you provided but refuses to pay, restitution can compel them to make payment.

Common Defences To Unjust Enrichment

Defendants in unjust enrichment cases often raise defences such as:

• Change of Position: They have already spent or otherwise relied on the benefit, making repayment inequitable.
• Legal Entitlement: The defendant may claim they were legally entitled to the benefit under a valid contract or statute.

When to Seek Legal Advice

If you believe you’ve suffered a loss due to unjust enrichment, acting promptly is crucial. Evidence such as contracts, payment records, or correspondence can significantly strengthen your case. Consulting with a solicitor experienced in restitution ensures you’ll receive tailored advice and representation.

For further advice on unjust enrichment and restitution claims, please get in touch with our Dispute Resolution department at info@bhwsolicitors.com or alternatively on 0116 289 7000.