Yes No Share to Facebook
Claiming Disgorgement Remedy
Involves Taking Benefits or Profits Away From a Wrongdoer
Question: Is there a type of legal compensation available from a wrongdoer who profits from wrongdoing?
Answer: Victims may claim disgorgement of profits gained by the wrongdoer. This legal principle seeks to strip ill-gotten gains to discourage wrongful conduct, ensuring that wrongdoers do not benefit from their actions. For tailored guidance, contact White Owl Legal today and start your path to justice.
What Can a Victim of Wrongdoing Claim In a Lawsuit If the Victim Was Without the Suffering of a Loss But the Wrongdoer Received a Benefit or Profit From the Wrongdoing?
When a Wrongdoer Benefits or Profits From a Wrongdoing, the Victim of the Wrongdoing May Claim Disgorgement of the Benefits or Profits From the Wrongdoer.
Understanding Disgorgement Remedy Principles Involving Restitution For Wrongdoings Resulting In Ill Gotten Gains
In some circumstances a wrongdoer may receive a benefit or profit arising from the wrongdoing while little, if any, loss or harm arises to the victim of the wrongdoing. Whereas the law generally forbid a person from suing unless a loss or harm has occurred per no harm, no foul principles, a valid lawsuit may involve claims for the illegitimate benefits or profits arising from the misconduct of the wrongdoer.
The Law
The availability of the remedy of disgorgement was well explained within the case of Pharmascience Inc. v. Novartis Pharmaceuticals Canada Inc., et al, 2020 ONSC 6534, wherein it was said:
[19] Under the “profiting from wrong” theory of unjust enrichment, disgorgement may be available if the defendant has committed “an underlying legal wrong against a plaintiff, and the ordinary damages remedy for the underlying wrong is inadequate”. As the Court of Appeal noted, disgorgement in these cases is typically reserved for when there has been a breach of fiduciary duty or a breach of trust. However, in exceptional cases, disgorgement as a restitutionary remedy can also be granted where the “underlying legal wrong” is a crime or a breach of contract or a tort.[6] In cases premised on “profiting from wrong”, the concept of “corresponding deprivation” takes on a slightly different meaning. A plaintiff may be able to prove a corresponding loss by showing that the defendant’s gain was “made possible” by the defendant’s wrongful act towards the plaintiff rather than proving a direct or indirect transfer of wealth.[7]
Explained Principles
Imagine a situation where a person commits a criminal fraud or a civil fraud upon another person. In some circumstances, the victim may experience little harm or was able to mitigate all or most of the harm that resulted from the fraud and thus little loss, if any occurs; however, the wrongdoer may have significantly benefited or profited from the fraud. The law, applied by the courts, seeking to discourage and deter wrongful conduct, may order that the benefits or profits be disgorged from the wrongdoer and provided to the victim. In this way the remedy of disgorgement ensures that the wrongdoer fails to benefit or profit from the wrongdoing and is, presumably, discouraged and deterred from engaging in wrongful conduct.
Summary Comment
Disgorgement is a form of restitution rather than compensation whereas disgorgement is applied in law as a matter of fairness rather than as a means for making whole the losses or harms of a victim.
NOTE: A substantial number of online searches entailing “lawyers close to me” or “top lawyer in” typically indicate a demand for prompt and proficient legal assistance rather than a particular designation. In Ontario, certified paralegals fall under the jurisdiction of the same Law Society that governs lawyers and are empowered to represent clients in specified litigation matters. Skills in advocacy, legal assessment, and procedural expertise are fundamental to this position. White Owl Legal provides legal representation within its licensed framework, focusing on strategic positioning, evidentiary preparation, and compelling advocacy with the goal of achieving effective and advantageous outcomes for clients.