Unjustified enrichment: A guide for business owners 

The principle of unjustified enrichment is a fairly new legal concept that might affect you as a business owner at some point during the lifetime of your company. In this article, our business dispute lawyers explain what unjustified enrichment actually is, what the grounds are for making a claim, potential defences the defendant might raise and how you could be compensated if you bring a successful claim. 

Can I make a claim for unjustified enrichment? 

The grounds for making a claim for unjustified enrichment can be broken down into three main elements. This means that, if you’re the claimant, you have to prove all of the following: 

• That the defendant has been enriched by receiving a benefit. 

• That this enrichment is unjustified. 

• That you’ve suffered a loss as a result of the defendant’s enrichment. 

If you’re able to prove all of these elements, the defendant then has the chance to provide a defence. If they do so and the court doesn’t consider the defence to be valid, the outcome may be in your favour and you’ll be entitled to a remedy. 

What are some examples of unjustified enrichment? 

Some examples of situations where there could be unjustified enrichment within a business disputes context are:  

• Goods are received and kept by a company that didn’t place an order for them. 

• Work is undertaken by a business when no contract is in place and the business doesn’t get paid. 

• Money is mistakenly transferred to the wrong company’s bank account and the recipient company doesn’t return the funds to the sender. 

Can I claim for unjustified enrichment even if there was no contract or agreement? 

Yes, it’s possible to make a claim for unjustified enrichment even if there’s no contract or agreement in place between the parties in question. This is because unjustified enrichment can occur in circumstances where, despite the lack of a contract, a party still receives a benefit at the expense of another party. So, for example, if you run a business that manufactures sportswear and you accidentally send an order for one hundred t-shirts to the wrong retailer and the retailer in question refuses to send them back and decides to sell them in their store, you would probably have grounds for a claim. 

What evidence do I need to prove unjustified enrichment? 

There are certain elements that a court will expect you to prove to be successful in a claim for unjustified enrichment, and you’ll need evidence for each. These can be summarised as follows: 

• The defendant has received a benefit: You’ll be expected to demonstrate exactly what benefit the defendant has received, i.e. show how they’ve been unjustly enriched. 

• You’ve suffered a loss: You’ll need to prove that you’ve suffered a loss as a direct result of the defendant’s enrichment. 

• The defendant had no right in law to the enrichment: You must be able to establish that the defendant was not legally entitled to the benefit they’ve received from you. 

All of the above can be proven by gathering any written documents such as any contracts (should there be any in place – or not, as the case may be), receipts, delivery notes, call or email logs, bank statements, witness statements, etc. It’s best to collate as much evidence as possible to maximise your chances of a favourable outcome to your claim. 

How long do I have to bring a claim for unjustified enrichment? 

The general rule is that you must bring a claim for unjustified enrichment within six years from the date of the cause of action accruing. Because it can be tricky to pinpoint exactly when the clock has begun ticking for these purposes, and it can be slightly different depending on whether, for example, there has been negligence or a mistake, it’s wise to seek legal advice at an early stage so that a lawyer can help you with identifying this start date and in turn, the timeframe for bringing your claim (referred to in law as a limitation period), taking all of your circumstances into account.  

How to make a claim for unjustified enrichment 

To make a claim for unjustified enrichment, it’s important to check whether any relevant pre-action protocol applies to your situation: this will determine what you should do before starting court proceedings against the defendant. In most cases, you’ll be expected to try and resolve the matter outside of court if possible and this will include writing a formal Letter of Claim, which should contain details about what’s happened to result in the unjustified enrichment and the remedy you’re seeking. If this approach does not work you may need to bring a claim to court for a judge to decide the outcome. 

It's definitely advisable to seek legal advice from a specialist in unjustified enrichment claims as early as possible, because this should help with resolving the dispute as quickly and as smoothly as possible. 

What are the potential defences the defendant could raise against my claim? 

As with any type of claim, there’s a chance that the defendant will try to defend your claim. Some of the possible defences could be: 

• That the enrichment was a valid gift from you to the defendant. 

• That you as the claimant are obliged to make the enrichment to the defendant due to a reason in law, statute or equity. 

• That you as the claimant enriched the defendant as part of a settlement to a claim. 

How will I be compensated if I am successful with my unjustified enrichment claim? 

The legal term for the principle that applies in cases of unjustified enrichment is known as restitution, which means that the law’s aim is to restore to you, as the innocent party, the gains that the defendant has been unjustly enriched by. This is in effect putting you back in the position you would have been before the enrichment at your expense happened. 

Can I recover the exact benefit, or will I be compensated with its monetary value? 

The nature of the compensation will depend on the scenario you’re in. If it’s possible for you to recover the exact benefit (for example, the return of non-perishable goods delivered to the wrong recipient by mistake) then the court may order this to happen – or it might be more appropriate for you to receive the monetary value of the enrichment. This could happen if the goods in the example have perished or been sold, or if money was the subject of the unjustified enrichment in the first place.  

There are other, more complex restitutionary remedies that might be available to you: one example of this could be receiving the right to assert a lien (a legal right to possession) over the defendant’s assets. 

Summary 

Unjustified enrichment is a fairly niche area of law and it’s important to make sure that you navigate a potential claim carefully. Our team of experienced business disputes solicitors have a demonstrated track record in assisting companies of all sizes with commercial challenges such as these, so you can be sure that you’re in capable hands if you need to bring a claim for unjustified enrichment.