This article has been written by Diva Rai, a student, Symbiosis Law School, Noida. In this article she discusses the law of restitution, specific restitution of property, and restitutionary remedies.
Meaning of the term Restitution
Restitution means the return of objects that were lost or stolen or a payment made for a loss or damage. Restitution can either be a legal remedy or it can be an equitable remedy. This depends on the claim made by the plaintiff and the nature of the sought remedies. Restitution generally is an equitable remedy when the property or the money which is wrongfully in the possession of the defendants can be traced In such cases restitution is in the form of a constructive trust or equitable lien.
Law of Restitution
The law of restitution is the regulation of profits-based recovery or restoration. It has to be in contrast with the law of compensation, which is the law of loss-primarily based recovery. When a court orders-
- Restitution- it orders the defendant to surrender the profits or gain to the claimant.
- Repayment- it orders the defendant to pay the claimant for his or her loss.
Restitution according to American Jurisprudence
In the 2nd edition notes the term restitution was used to denote the restoration of or the return of a thing or condition in the earlier common law. In modern legal usage, the meaning of the term is extended to returning something back to its rightful owner, returning to the status quo, reimbursement, compensation, indemnification, reparation for the benefits derived from or the loss for injury caused to another person.
Thus the word implies the relinquishment of a profit or benefit or the return of money or property that has been obtained through an improper means to the person by whom the property has been taken.
Specific Restitution of Property
The third kind of judicial remedy is the specific restitution of property. It is granted where the plaintiff has been wrongly dispossessed of his lands and goods. Thus, a person who is wrongfully dispossessed of immovable property, or of some specific movable property, is entitled to recover such property. When one is wrongfully dispossessed of his movable or immovable assets, the court may order that the specific belongings must be restored back to the plaintiff.
Illustration: Action for ejectment, the recovery of chattels with the aid of an action for detinue etc. According to section 6 of the Specific Relief Act, 1963 a person who is wrongfully dispossessed of immovable assets is entitled to get better the immovable assets. According to section 7 of the Specific Relief Act, 1963 someone who is wrongfully dispossessed of movable assets is entitled to recover the movable property.
Restitutionary Remedies: These are also meant to restore the plaintiff to a position of “wholeness”, as close as possible to their state before the tort occurred. These can include:
- Restitutionary damages: These are similar to damages, except that they are calculated based on the tortfeasor’s gain rather than the plaintiff’s losses.
- Replevin: Replevin allows the victim to recover personal property that they may have lost due to the tort. For example, they may recover property that was stolen. Replevin can be coupled with legal damages in some cases.
- Ejectment: This is where the court ejects a person who is wrongfully staying on real property owned by the plaintiff. This is common in instances of continuing trespass.
- Property Lien: If the defendant cannot afford to pay damages, a judge may place a lien on their real property, sell the property, and forward the proceeds to the tort victim.
These are also intended to repair the plaintiff to a position of “wholeness”, as closely as possible to their state before the tort befell. These include-
- Restitutionary damages: These are similar to damages, besides that they may be calculated based at the tortfeasor’s advantage in preference to the plaintiff’s losses.
- Replevin: Replevin lets in the sufferer to recover private belongings that they will have misplaced due to the tort.
Example- a person may recover assets that were stolen. Replevin may be coupled with legal damages in a few instances.
- Ejectment: This is in which the court ejects someone who is wrongfully staying on actual belongings owned with the aid of the plaintiff. This is common in times of continuing trespass.
- Property Lien: If the defendant can’t find the money for to pay damages, a judge may place a lien on their actual assets, sell the belongings, and ahead of the proceeds to the tort sufferer.
Forms of action in English Law
Under the English law, there are three different classes of action:
In real actions, the plaintiff claims his right to recover lands, tenements and hereditaments. In personal actions, the plaintiff claims a debt, or sought to recover a chattel, or claimed damages for injury done to his person or property. Mixed actions partake of the nature of both.
The most common personal actions are- debt, covenant, assumpsit, trespass the case, detinue, replevin and trover.
- Detinue is the form of action for the recovery of specific goods wrongfully detained, or their value, and also damages occasioned by their detention.
- Replevin is the action to recover specific goods which have either been wrongfully distrained from the plaintiff or had been wrongfully taken out of his possession.
- An action of trover was originally the remedy to recover damages against the person who had found goods and refused to deliver them up on demand to the plaintiff. In course of time, it became the form of action where the plaintiff sought to recover damages from the defendant who had converted the plaintiff’s good to his own use and came to be known as an action of conversion.
Types of Disgorgement Legal Remedies
Restitution is a legal remedy where a particular property at issue cannot be particularly identified. Example- The plaintiff is seeking a judgment imposing personal liability to pay a sum of money.
Identified types of disgorgement legal remedies are-
- Unjust enrichment
- Quantum meruit
These kinds of damages restore benefits conferred to the non-breaching party and the plaintiff receives the value of whatever that was conferred to the defendant when there existed a contract. The two general limits to recovery are:
(i)- The contract needs to be completely breached.
(ii)- If restitution damage exceeds then damages will be capped at the contract price.
Restitution for Wrongs
Illustration- If A commits a wrong against another person B and the latter sues A for the wrong, then A will be liable to compensate B for the loss. If B demands compensation then the court would measure the loss due to A’s action by reference and compensation would be awarded. But, in certain situations, B may seek restitution over compensation. If the profit made by A’s wrongful action is greater than the loss suffered by B then restitution would be in B’s interest.
Whether a claimant can or cannot seek restitution for a wrong depends on the particular wrong in question to a large extent. Example- Restitution for breach of fiduciary duty in English law is widely available but restitution for breach of contract is comparatively exceptional. The wrong could be of any one of the following types:
- Criminal offences
- Breach of contract
- Statutory tort
- Common law tort
- Equitable wrong
The law responds to each and everyone of them by implementing an obligation to pay compensatory damages. Restitution for wrongs is the issue which deals with the problem of when precisely the law responds through enforcing a responsibility to make restitution.
In Attorney General v Blake, an English court was facing the claim in which the defendant had made a profit someplace in the location of £60,000 as a result of breach of contract with the claimant. The claimant was entitled to claim compensatory damages, however he had suffered very little loss. It was consequently decided to seek restitution for the breach of agreement. The claimant won the case and the defendant had to pay his profits to the claimant. However, the court made a point that the ordinary legal response of a breached contract is awarding compensation. An order to make restitution was said to be available only in exceptional circumstances.
Difference Between Restitution and Civil Damages
It is ordered after the offender has been found guilty by the criminal court.
It is ordered after the winning of a lawsuit in a civil court.
Victims cannot collect twice for the same loss.
Damages imposed just to punish the defendant can be claimed.
Example- payment for pain and suffering, punitive damages.
Even when the offender has been ordered to pay, a victim can sue an offender restitution.
Civil damages can include losses not covered by restitution.
Difference Between Restitution and Compensation
Restitution is court-ordered payment from a convicted offender.
It is a state government program that pays many of the out-of-pocket expenses of victims
It can only be ordered in cases where someone has been convicted.
The victim is required to report the offense within a certain amount of time to be eligible for compensation.
It can be ordered for a wider variety of losses, including property loss.
It covers medical expenses, most cover counseling, and very few cover any property loss.
Courts may order full or partial restitution
When courts order restitution, they look no longer only at the sufferer’s losses but additionally at the culprit’s capability to pay. In some states, the court can also reduce the whole amount of restitution ordered if the offender is not likely on the way to pay that quantity. In different states, courts will order the culprit to pay for the overall amount of the loss, however then set a price agenda based totally at the offender’s finances, which may also only be a minimal amount in per month.
Collection of restitution is regularly restrained with the wrongdoer’s capability to pay. As a result, many victims wait years before they acquire any restitution, and they will by no means acquire the full amount of restitution ordered. Collection additionally relies upon on enforcement of the courtroom’s order of restitution, either by the criminal justice system or the victim. There are many laws and methods used to make certain the wrongdoer pays as ordered.
For instance, in which payment of restitution is made a circumstance of probation or parole, the probation or parole officer ought to display whether bills are being made on time. The sufferer might also assist to provide this data to the probation or parole officer. If the culprit is set to be released from probation or parole, however has now not paid restitution as ordered, this has to be conveyed to the court or parole board. Victims who have now not received restitution as ordered need to ask the probation or parole officer how this information can be furnished to the court or parole board. In some states, probation or parole can be prolonged when the offender has willfully failed to pay restitution.
In those states with prison work programs, restitution payments are generally collected out of the wages of these programs. Some states collect restitution from state profits tax refunds, prisoner money accounts, lottery winnings, or damage awards from proceedings towards the jail.
Where the perpetrator has not paid restitution as ordered-has “defaulted” in charge-restitution frequently can be collected by using the identical methods used to put into effect other court judgments, consisting of attachments of belongings or garnishment of wages. In some states, the sufferer is authorized to take these moves; in different states, enforcement is as much as the prosecutor, the court, or another official.
Many states provide that restitution orders become civil judgments. This expands the potential of sufferers to collect restitution and also manner the orders can live in impact for many years, usually ten to twenty years. In many jurisdictions, civil judgments may be renewed, with a view to stay in impact even longer. During that point, the wrongdoer’s financial circumstances may additionally change: he or she may also have inherited belongings, won a prison judgment, or grow to be hired. Depending on the state, the civil judgment can be enforceable without delay, or enforceable while the culprit defaults on payment, or enforceable after the criminal justice method is completed and the wrongdoer has been released from probation, prison, or parole. A victim may need to hire a legal professional attorney to help enforce the civil judgment.