Restitution
front page

What's new?

Archive front page

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2007

2006

2008

2009

Some further comments on what is obvious and what is a claim in unjust enrichment.

The Archer example (I learn, incidentally, from reading German papers at my temporary home in Munich, that he remains a Lord, but no longer a member of the conservative fraction in the UK's upper chamber) is a good illustration for the various models of classifying unjust enrichment claims and how they interact with other areas of the law.

What is obvious to anyone but a lunatic, as Steve Hedley puts it, is that the money paid under the judgment which now turns out to be based on false and apparently fabricated facts, should be returned - at least if the judgment is reversed. I agree that this looks obvious, but not much more obvious that if the government requires the payment of taxes which later are found not to be exigible it must pay them back. It took the House of Lords to sort out in Woolwich Building Society v IRC that these overpaid taxes can be claimed back, and English law was fairly hostile towards such a claim before the House of Lords ruled otherwise.

Peter Birks reminds us that the law of gravity was discovered because somebody (Isaac Newton, if I am not mistaken) no longer thought it obvious that an apple, once detached from a tree, falls to the ground. Law is more culturally charged than physics. In law, usually, anything which is "obvious" has a base in beliefs which are widely shared within a given population, but which may be considered "lunatic" by a different population. It is obvious in the UK that any person has the right to change his or her name by title deed. It is obvious in Germany that this is impermissible and would lead to chaos, a rise in the crime rate, and the downfall of occidental society in general.

So, the "obvious" in law is usually consensus. If we are lucky, we discover a rational reason behind such consensus which allow us to distinguish, particularly in less "obvious" cases, between claims which should be allowed and those which should not.

Now back to Archer. I suppose that in all those societies from which we have received contributions to this debate people would generally agree that under the assumed circumstances Lord Archer should give the money back to the Daily Star - certainly if the judgment is overturned. But would they agree on why it should be given back? I think the easiest explanation is "because he should not have got it in the first place". This may or may not be coupled with sentiments of "because he cheated".

The condictio indebiti follows the first explanation. It allows for the recovery of an enrichment made at another person's expense which is not supported by a valid legal ground, and has no problem in turning the seemingly obvious into a legal claim. But the simplest explanations are not always the best, and are not always simple if looked at from a different angle. If we return to physics: the geocentric explanation that the sun and the planets move around the earth looks simpler from the perspective of a person on the earth looking at the sun than the heliocentric explanation. The same geocentric explanation, however, creates terrible problems when looking at the complicated cycles and epicycles which the planets appear to pursue from the viewpoint of the earth. (Present wisdom has it, at any rate, that the sun and all planets rotate around each other, although this is not noticed much in the movement of the sun because of its large mass.)

The law of unjust enrichment is highly interlinked with other areas of the law and can wreak considerable havoc on them by allowing or not allowing a claim. The contractual rule that a contract for the performance of an illegal act (beating up another person) becomes irrelevant if the thug, after having beaten up the victim, can claim a quantum meruit. The procedural rule that a judgment is final after all possibilities of appeal have been exhausted becomes equally irrelevant if we allow unjust enrichment claims to return payments made under this judgment while leaving the judgment itself intact.

The condictio indebiti approach functions in a legal system which has written its substantive law (contract in particular, but also property) with a view towards something like a general unjust enrichment action. Somebody agrees to help a friend to paint his rooms, and after having fallen out with the friend, claims a quantum meruit. No problem in continental legal systems which have gratuitous contracts for work or services which give a valid legal cause for keeping the enrichment. The requirement of an unjust factor protects the recipient of the help in English law where there is no such gratuitous contract. The "friend" cannot claim under mistake, because he was not mistaken, nor under failure of consideration, because no consideration was to be expected. The combination of a condictio indebiti with the lack of gratuitous contracts is more problematic.

Likewise, in continental legal systems, form requirements will often contain an additional provision which will validate a transaction once it has been completed without observance of this form - namely, in order to prevent unjust enrichment from undoing a contract which has been fully performed. English statutory form requirements will not always have such a similar rule - traditionally, once such a transaction was completed, it could not be undone by actions for money had and received, or for quantum meruit, because this always required a specific ground or unjust factor.

Similar problems arise within gaming and betting contracts. The combination of a prohibitory norm and a condictio indebiti means that a disappointed gambler can claim back his or her stake. A condictio indebiti approach requires a contractual rule which defends a completed gaming or betting transaction against unjust enrichment claims - e.g., by making this a "non-actionable" contract.

This is why I think that, in English law, it is not helpful to resort to either "the obvious", or a very broad "failure of basis", or the condictio indebiti, to explain why Archer should give the money back - this creates a host of problems elsewhere (I would be interested to hear from our Canadian colleagues, though, how Canadian law copes with all these problems). I said in my last contribution that restitution for wrongs looks like the best bet. Another avenue, though, would be to modify the "illegitimate" requirement for compulsion to allow for the illegitimate use of a perfectly legal or legitimate means in order to pursue a claim which, under the given facts, was without merit. Broadening compulsion (as suggested by Jonathon Moore) would help English law to cope with some cases where it has so far distributed rather harsh justice.

Gerhard Dannemann
--
Dr. Gerhard Dannemann
Erich Brost University Lecturer in German Civil and Commercial Law
University of Oxford
Tel/Fax +49 (0)89 2899 6695 (until March 2000)

http://iuscomp.org