Academic journal article Boston University Law Review

Restitution of Mistaken Enrichments

Academic journal article Boston University Law Review

Restitution of Mistaken Enrichments

Article excerpt

INTRODUCTION

The restitution of a mistaken payment is generally regarded as the paradigm example of the restitution of an unjust enrichment. The central issues are clear cut, the case law is voluminous, and mistaken payments are commonplace in everyday life. It follows that if we can be clear and content about our law on mistaken payments, we can use it as a model for much of the rest of the law on restitution of an unjust enrichment. This was the precise strategy used by Peter Birks in Unjust Enrichment.1 In the first paragraph, he described the mistaken payment of a non-existent debt as the "core case"; and he went on, "The law of unjust enrichment is the law of all events materially identical to the mistaken payment of a non-existent debt."2 At the end of the first chapter he wrote, Analysis of the receipt of a mistaken payment of a non-existent debt reveals a causative event of a third kind. It is not a manifestation of consent such as a contract, and it is not a wrong. The consequent liability, surprisingly at first, is strict, albeit subject to defences. The generic conception of that causative event is unjust enrichment at the expense of another. That generalization enables us to look for other examples materially identical to the core case.3

We find a similar approach in the Restatement (Third) of Restitution and Unjust Enrichment.4 The introductory note under "Benefits Conferred by Mistake" in chapter 2 reads as follows:

The relatively detailed treatment of restitution for mistake within Chapter 2 should not be taken to indicate that the mistaken transferor receives broader protection from the law of restitution than does, for example, the victim of fraud or duress. . . . Mistake receives more extensive treatment because of its relatively voluminous and accessible case law, and because it offers a reliable template for analogous restitution claims.5

It follows that, in welcoming the Restatement (Third) and in seeking to compare the law in England and the United States, no apology is needed for a paper examining mistaken enrichments.

My particular focus is on four mistaken enrichments issues that are, at present, hotly debated in England. I shall set out in some detail the English law and why it is proving controversial before looking at the position on each under the Restatement (Third).

Before proceeding any further, it is important at the outset to appreciate that the approach taken throughout the Restatement (Third) is more contextual and less conceptual than that which would be adopted by restitution scholars in England. This is not intended as a criticism but rather is designed to ensure that English and American scholars are fully aware that, in trying to learn from each other, we have different starting points. So, for example, in chapter 1 on "General Principles" there are only four black letter propositions;6 none of these four deals with what is meant by "enrichment" or "at the expense of the claimant" or the approach to deciding "injustice"; and no fundamental distinction is drawn in those general principles between restitution of an unjust enrichment and restitution for wrongs.7 Admittedly, there is a sentence on the meaning of "at the expense of" in the commentary to section 18 and some more extensive discussion of "enrichment" in the commentary to section 19 and in relation to some other black letter rules (such as on "benefits other than money" conferred by mistake).10 The distinction between restitution for unjust enrichment and for wrongs is referred to very briefly in the commentary to section 1 where it is said that "nothing practical turns on this . . . except the identification of the applicable period of limitations."11 There is barely any discussion of the "unjust factors" as opposed to the "absence of basis" approach to injustice that has traditionally distinguished common-law and civilian approaches to the subject and underpinned Birks's dramatic change of heart in Unjust Enrichment. …

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