Claiming Disgorgement Remedy

Question: If I was wronged but suffered little or no loss, can I still ask a court to order disgorgement if the other side profited from the wrongdoing?

Answer: Pollock Paralegal can help you evaluate a “profiting from wrong” unjust enrichment claim for disgorgement in Ontario even when your direct damages are minimal, because disgorgement is a restitutionary remedy that strips ill-gotten gains rather than compensating a victim’s loss; the court may allow it when there is an underlying legal wrong and the ordinary damages remedy is inadequate, and in limited cases the “corresponding deprivation” can be shown by how the defendant’s gain was made possible by the wrongdoing, including scenarios involving breach of trust or fiduciary duty and sometimes other wrongs like fraud or breach of contract, see Pharmascience v. Novartis Pharmaceuticals, 2020 ONSC 6534, 2020 ONSC 6534.  For a clear next step, contact (519) 694-0363 to discuss your facts and whether disgorgement may be available.

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Can a Lawsuit Claim Improper Profits Gained By a 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

Disgorgement remedy, as a stripping of ill gotten gains from a wrongdoer, was well explained within the Pharmascience Inc. v. Novartis Pharmaceuticals Canada Inc., et al, 2020 ONSC 6534, case wherein it was stated:

Explained Principles

There may be circumstances where a person commits a criminal fraud or a civil fraud, among other wrongs, without causing harm or loss to the wronged person and yet benefits or profits arise in favour of the wrongdoer.  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.