Restitutionary Remedies in UK Law

The restitutionary and compensatory provisions of section 5 do not in terms identify the person or persons against whom the remedies are available. But it is difficult to see how the section 5 restitutionary remedy could be available against anyone other than the other party to the transaction in question or the party to whom, under the transaction in question, the investor's money or property had been paid or transferred.

The crucial question, however, is whether the retrospective application of that limitation period to claims based on mistake was in conformity with the principles of equivalence and effectiveness, as explained by the Grand Chamber in its judgment in these proceedings: Case C-446/04 [2007] STC 404, para 203. There may be other differences, depending on the facts and circumstances of each case.

Many of these considerations present no difficulty in the present case. There is no risk of double recovery, because the claimants have in effect exhausted their remedies against the Managers. The Managers have obtained the maximum repayments from HMRC available under the domestic statutory scheme, and have passed on those repayments in full to the claimants. I am also satisfied that no claim for breach of contract could lie against the Managers at the suit of the claimants.

But the term is also used to describe an equitable remedy to reverse or prevent unjust enrichment which is not based upon any agreement or common intention of the party enriched and the party deprived. But the term is also used to describe an equitable remedy to reverse or prevent unjust enrichment which is not based upon any agreement or common intention of the party enriched and the party deprived.

The general rule is that damages for breach of contract are compensatory not restitutionary, that is to say, they are measured by the loss to the plaintiff and not by the gain to the defendant. It is unnecessary to cite authority for this proposition, since it is beyond dispute. It is accepted to be the general position by the Law Commission in its Consultation Paper No. 132, Aggravated, Exemplary and Restitutionary Damages (31 August 1993) paragraph 7.7 p.159.

Remedies are the law's response to a wrong (or, more precisely, to a cause of action). When, exceptionally, a just response to a breach of contract so requires, the court should be able to grant the discretionary remedy of requiring a defendant to account to the plaintiff for the benefits he has received from his breach of contract.

The Woolwich claims here will be subject to an (EU law compliant) 6-year limitation period which will reduce Littlewoods’ claims for compound interest to a relatively small amount. On the other hand, if the mistake-based restitutionary claims were to be allowed, it is common ground that the limitation period must be extended under section 32(1)(c) so as to allow the full extent of Littlewoods’ claims.