Claiming Disgorgement Remedy

Question: Can a plaintiff in Ontario seek disgorgement when they suffered little or no loss but the defendant profited from the wrongdoing?

Answer: Denali Paralegal can help Ontario families and individuals understand when a disgorgement (restitutionary) claim may be available even if you cannot easily show a traditional damages loss, by focusing on the “profiting from wrong” theory of unjust enrichment, where the defendant’s gain was made possible by an underlying legal wrong and an ordinary damages remedy would be inadequate, as described in Pharmascience Inc. v. Novartis Pharmaceuticals Canada Inc., 2020 ONSC 6534.  This remedy is not meant to fully compensate for harm like damages, but to strip ill-gotten gains to deter wrongdoing.  If you think the other side benefited without corresponding deprivation, call (877) 414-4377 to discuss your next steps.

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What Can a Victim of Wrongdoing Claim In a Lawsuit If the Victim Was Without the Suffering of a Loss But the Wrongdoer Received a Benefit or Profit From the 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.

Note: Please contact Denali Paralegal by phone at: (877) 414-4377 to discuss any specific questions that you may have.

Understanding Disgorgement Remedy Principles Involving Restitution For Wrongdoings Resulting In Ill Gotten Gains

There are some circumstances in which a wrongdoer receives a benefit or profit from the wrongdoing and yet the victim is without a corresponding harm or loss.  Generally, under legal principles akin to no harm, no foul concepts, a legitimate lawsuit permits compensation for the loss or harm suffered by the victim; however, in some circumstances it is proper to claim disgorgement of benefits or profits received by 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

Imagine a situation where a person commits a criminal fraud or a civil fraud upon another person.  In some circumstances, the victim may experience little harm or was able to mitigate all or most of the harm that resulted from the fraud and thus little loss, if any occurs; however, the wrongdoer may have significantly benefited or profited from the fraud.  Courts, seeking to discourage wrongful conduct, may order that the ill gotten gains be disgorged, meaning taken away, from the wrongdoer and granted to the victim.  Essentially, disgorgement remedy is used to ensure that a wrongdoer fails to benefit or profit from acts of wrongdoing especially in circumstances where the victim was unharmed, or suffered only little harm, by the misconduct of the wrongdoer.

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.