Date: Thu, 2 Feb 2006 10:26:35 +0200

From: Daniel Friedmann

Subject: Two Questions

Robert,

Q 1: The answer is indeed yes. I suspect that the difficulty stems from the "waiver of tort" approach under which liability in restitution is dependent on the existence of liability in torts (the so called parasitic theory).

This leads to an attempt to translate tort concepts into the law of restitution (is the employer vicariously liable, can a claim in restitution be made where the liability in tort is vicarious etc.). It also leads to the question whether the tort committed is one that can be waived. As you know Jack Beatson and I support a different view under which liability in restitution is independent and therefore there is no need for such an inquiry.

The issue that you present has its historical origin in the in the Roman action of de in rem verso, under which the head of the family though he was not responsible for the act of his family member, was nevertheless liable to the extent of his enrichment (hence the very purpose of liability in restitution was to overcome the absence of any other source of liability).

There is also no difficulty in finding cases supporting liability in restitution once one is free from the parasitic theory and does not look for a corresponding liability in tort. A typical example is that in which an employee of a public authority uses pressure to collect payment that is not due (colore officii) and the money collected goes to his employer (the public authority), it is obvious that the public authority is liable in restitution. The same applies to instances of liability to refund tax that was collected pursuance to a demand that was made ultra vires (Woolwich).

The fact that there is no liability in torts is of no moment for the purpose of restitution. There is also an Israeli case in which the Supreme Court held that where a public official exacted money colore officii he incurs a personal liability in addition to that of the public authority to which the money has been transferred (I discussed this case in Adjustment Among Multiple Debtors - International Encyclopedia of Comparative Law vol. X ch. 11 p. 68 note 400 (with Nili Cohen). As we explained there the employee, if he personally made restitution is entitled by virtue of the benefit principle to indemnity from the public authority that received the money.

You may use another analogy: In Lipkin Gorman a solicitor wrongfully withdrew money from the plaintiff's account and gamble it away at the defendant club. The defendant was held liable (subject to the defence of change of position). It goes without saying that had the rogue been employed by the defendant, liability would a fortiori been imposed.

Dan

----- Original Message -----
From: "Robert Stevens"
Sent: Wednesday, February 01, 2006 6:18 PM
Subject: ODG: Two Questions

I have two questions which I cannot answer for myself arising from what I am working on. Any help, offlist if preferred, gratefully accepted.

 

Problem One

We have recently discussed an employer's vicarious liability for exemplary damages and vicarious liability for an employee's obligation to make restitution of a gain made by the employee.

Are there any cases where an employee, acting in the course of employment, commits a tort which results in a gain for the employer but not the employee? Is the employer obliged to make restitution? In principle I think the answer should, generally, be yes, if this is the sort of tort which permits of this response but are there any cases?

...

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