The Four Perspectives
The four-limb structure of Rethinking Unjust Enrichment enables us to understand the current problems of unjust enrichment on the deepest levels of its history, sociological forces, doctrinal fallacies and normative deficiencies. This treatment of the subject will provide the basis for a comprehensive reform across jurisdictions
The Rethinking Unjust Enrichment project aims to collect a contrary range of views which question the dominant position of unjust enrichment. These essays are a collective expression of doubt. The contributions will cast doubt on the various parameters of the unjust enrichment movement from an analytical standpoint representing the following four interrelated perspectives: (1) historical; (2) sociological; (3) doctrinal; and (4) conceptual. In many ways, these parameters follow the trajectory of the intellectual development of unjust enrichment.
This perspective casts doubt on the prominent historical claims made by the unjust enrichment movement, according to which: (1) unjust enrichment has deep historical roots that go as far as the Roman law tradition; (2) the common law unjust enrichment movement well correlates with the much older German tradition of unjust enrichment, which in turn explains the presence of the principle in German-influenced legal systems such as China; (3) many of the traditional common law doctrines were effectively based on the underlying principle of unjust enrichment. The historical attribution of these doctrines to the traditional categories of property and contract is a product of a historical mischaracterisation that the unjust enrichment movement has remedied.
To various extents, Rethinking Unjust Enrichment challenges each one of the above-mentioned historical claims. It will show that historically Roman law did not really have the principle of unjust enrichment. The German principle of unjust enrichment was enacted in paragraphs 812-822 of the German Civil Code (BGB) in 1900. Albeit stated in different terms than its common law counterpart, the German principle does appear to be based on similar grounds. However, a careful assessment of the German tradition suggests that BGB’s unjust enrichment provisions are a product of a complex and highly contentious synthesis made by a powerful German jurist- Friedrich Carl von Savigny, who married certain aspects of Roman law and natural right thought. Finally, a careful review of the traditional common law concepts, principles and doctrines of private law suggests that these were not based on unjust enrichment but represent the very traditional institutions of contract and property, the historical significance of which the law of unjust enrichment aims to undermine. The doctrine of ‘quasi contract’ is one of the primary examples of the concern relating to the doubtful historical narrative made by the unjust enrichment movement.
The sociological perspective focuses on the following aspects: (1) legal academics; (2) legal change; and (3) the relationship between unjust enrichment and the law of equity. Clearly, academics have played a key role in the successful advances of the unjust enrichment movement across the globe. The success has led to the generalisation of the principle as a separate private law category, the creation of an independent analytical framework, with further advances and aspirations of the principle in other systems. Another sociological angle relates to the role of unjust enrichment law as an agent of legal change. One could argue that the remarkable success of the unjust enrichment movement could be explained through the institutional features of various systems.
Another sociological angle tackles the relationship between unjust enrichment and the law of equity. Interestingly, early proponents of unjust enrichment based their argument upon a critique of equity as a social institution that lives aside common law. In their support of unjust enrichment, the critics pointed to the inherent flexibility and arbitrariness of equity. The opposition doubted equity as jeopardising legal and economic certainty, and perhaps the rule of law. It appeared that unjust enrichment could serve as a better option, preferable to equity. One could however, challenge both parts of the argument made by the early supporters of unjust enrichment by: (1) demonstrating the critical social function of equity within the UK and UK-based legal systems; (2) challenging the position of unjust enrichment supporters according to which the law of unjust enrichment can perform the traditional function of equity. From this perspective, the replacement of equity by unjust enrichment seems to be premature and socially undesirable.
The doctrine of unjust enrichment has gained strong academic and judicial support. It was explicitly recognised by the House of Lords thirty years ago in Lipkin Gorman and reaffirmed since then on several occasions. Canada and South Africa followed a similar path. After a period in which the High Court was more ambivalent about unjust enrichment, Australia may be on the verge of such recognition with the firm support of the newly appointed judge into the High Court of Australia. In a similar vein, the unjust enrichment principle is gaining academic support in the US, a country that has traditionally disfavoured this principle.
There is the question whether the introduction of the law of unjust enrichment brought a doctrinal coherency to the law. This is important. If the organising principle of unjust enrichment and its analytical framework is capable of placing a wide range of previously interconnected doctrines, principles, rules and concepts under a single organising basis, this would be a great achievement. This would lead to more coherency and predictability of law and would enhance the stability and fairness of interpersonal interactions. The doctrinal section of Rethinking Unjust Enrichment will show that the introduction of unjust enrichment under its current framework did not enhance stability and fairness in the systems that adopted the principle, such as the UK, Canada, and Germany. The principle did not contribute to a better operation or understanding of private law. It appears that the opposite phenomenon took place: not only did the law of unjust enrichment fail to bring coherency to private law, apparently in some cases it stripped the traditional doctrines of their important elements and imposed foreign doctrinal elements on certain situations.
The conceptual perspective doubts the normative foundations of the unjust enrichment organising principle. Consider each one of the four key elements of the analytical framework of the principle: (1) the defendant’s enrichment; (2) the enrichment is at the expense of the claimant; (3) the enrichment is unjust; (4) unavailability of one of the defences to the defendant.
First, consider the enrichment element that has been characterised by many of unjust enrichment supporters as referring to the notion of a ‘transfer of value’. The notion of ‘value’ seems to indeed be important and clearly plays a central role in the contract law category: any contract for the transfer of property or delivery of services involves the transfer of something of value. However, one can challenge the question of the significance of the transfer of value outside of contract law. Further, the notion of ‘transfer of value’ is hard to accommodate with a central pillar of private law that relates to the parties’ rights and duties. If it could be argued that contract law protects claimants’ right of contractual performance and that tort law protects claimant’s right to bodily integrity and property, which right does the transfer of value protect?
Second, the notion according to which enrichment is at the expense of the claimant seems to simply follow the general insight of private law that situates the litigating parties’ rights and duties in a relational manner. This notion reflects the bipolar relationship between the litigating parties. However, this relational aspect of the unjust enrichment doctrine appears to simply reflect the obvious nature of private law; it does not provide a normative uniqueness to the structure of unjust enrichment. One of the immediate conceptual questions relates to the exact nature and magnitude of the required interaction between a particular claimant and a particular defendant.
Third, the justice element of unjust enrichment requires pause. Clearly, all normative elements of the private law liability should reflect the needs of justice. Not surprisingly, unjust enrichment supporters have not tried to make an example of interpersonal relationships that are ‘just’. Rather, the unjust enrichment movement has referred to a broad range of so-called ‘unjust factors’ that satisfy the ‘justice’ element in the unjust enrichment formula. The shift towards ‘unjust factors’ raises serious conceptual questions about the possibility that such a shift imposes external considerations on the unjust enrichment framework which are internally unique to each one of the ‘unjust factors’. This point suggests that the unjust enrichment framework could not claim a normative independency.
Finally, there is a conceptual difficulty related to the various defences developed by unjust enrichment scholars. Take for example, the so-called ‘change of position’ defence which states that in certain circumstances the defendant does not need to make restitution to the claimant. A situation when the defendant acts in good faith, relies on the enrichment and ‘spends’ the benefit, represents a paradigmatic example of this defence. However, the conceptual difficulty with this defence is that it seems to be completely unrelated to the interpersonal relationship between a particular defendant and a particular claimant. The fact, for example, that the defendant relied on the claimant’s benefit and spent it, is not a factor which relates to the claimant. This not only seems to be unfair to the claimant, but also challenges the conceptual coherency of this doctrine.