We All Make Mistakes: A ‘Duty of Virtue’ Theory of Restitutionary Liability for Mistaken Payments
| Date | 01 March 2018 |
| DOI | http://doi.org/10.1111/1468-2230.12327 |
| Author | J. E. Penner |
| Published date | 01 March 2018 |
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We All Make Mistakes: A ‘Duty of Virtue’ Theory
of Restitutionary Liability for Mistaken Payments
J. E. Penner∗
In contrast to the moral foundations of contract, tort, and the law of property, which are
generally regarded as elements of Kantian ‘right’, the liability to return the value of mistaken
payments is, it is argued, an example of the law’s enforcing a duty of virtue, the legalisation of
the duty of beneficence in a way similar (though not identical) to how the lawmight instantiate
a duty of easy rescue. Accordingly, one of Birks’s most cherished theses – that the law of unjust
enrichment represents a distinctive element of private law – can be made out: it is distinctive in
having an entirely different normative source: in virtue, not in right. But this result comes at
a cost: (1) a legal system could function more or less justly without such a liability; (2) Birks’s
thesis that liability for mistaken payment is the archetype or paradigmatic case of liability for
unjust enrichment would have to be abandoned; and (3) we would have to recognise that the
ground of this liability is policy-motivated.
INTRODUCTION
This article raises for consideration a particular perspective on the moral foun-
dation of the liability to make restitution of mistaken payments. At the outset
I want to make clear that I am not, to begin with, interested in finding a
justification which underlies the whole of the law of restitution or the law of
unjust enrichment. In my view, there are sufficient differences between dif-
ferent claims for restitution (between, eg, claims for restitution of payments
by mistake, where a change of position defence seems warranted, and claims
for restitution of a payment made on a qualified basis which fails, where it is
not)1to make it doubtful that there is an underlying single principle of unjust
∗Faculty of Law, National University of Singapore. This paper has had a worryingly long genesis.
I would like to thank audiences at King’s College London, University College London, National
University of Singapore, Cambridge, Oxford, Harvard, and Toronto for comments and criticisms,
and in particular I owe thanks to Lisa Austin, Sandra Booysen, Alan Brudner, Joe Campbell, Robert
Chambers, Simon Chesterman, Mindy Chen-Wishart, Hanoch Dagan, Simone Degeling, Mike
Dowdle, DavidFox, John Goldberg, Hock-Lai Ho, Larissa Katz, Dennis Klimchuk, Andrew Halpin,
George Letsas, Tim Liau, Nick McBride, Charles Mitchell, Jason Nyers, Joseph Raz, Pauline Ridge,
Irit Samet, Prince Saprai, Weeliem Seah, Andrew Simester, Henry Smith, Steve Smith, Robert
Stevens, Alec Stone Sweet, John Tasioulas, Stephen Waddams, Charlie Webb, Ernie Weinrib,
Frederick Wilmot-Smith, and Sarah Worthingon for very illuminating observations. There are
certainly others whose names I did not catch or whom I have, quite shamefully, forgotten, and
to those I extend my apologies. I must also thank the MLR’s two anonymous reviewers. None
shares, of course, any liability for the remaining mistakes I have doubtless made. I am also happy
to acknowledge the generous support of the National University of Singapore in the form of grant
WBS no. R-241-000-127-133.
1 See C. Mitchell et al, Goff & Jones: The Law of Unjust Enrichment 9th Ed. (London: Sweet &
Maxwell, 2016), [27-58].
C2018 The Author.The Moder n Law Review C2018 The Modern Law Review Limited. (2018) 81(2) MLR 222–246
Published by John Wiley& Sons Ltd, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA
J. E. Penner
enrichment which accounts for all the law in books with that name.2This is
an issue to which I shall return below.
The particular perspective on restitutionary liability to be considered is, to
put it in quasi-Kantian terms, that in contrast to the moral foundations of
contract, tort, and the law of property, which are generally regarded as being
aspects or elements of ‘right’, liability to return the value of mistaken payments
is an example of the law’s enforcing a duty of virtue. Thus I want to suggest that,
in a way similar (though not identical) to the way the law might instantiate
a duty of easy rescue as the ‘legalisation’ in a particular case of the general
duty of beneficence, liability for mistaken payments counts as a similar legal
institutionalisation of the same duty of beneficence in a different fact situation.
To bolster this perspective I will look in some detail at the conflicting intuitions
(I suggest) we have in regard to this sort of legal liability – the claim will be
that the sorts of intuitions that operate in this neck of the normative woods
seem better explained when understood as groping towards an understanding
of an agent’s virtue, rather than towards an understanding of duties of justice
or right which the law might coercively enforce, duties called for because they
correlate with the basic rights of autonomy that we all have.
If this is right, then one of Birks’s most cherished theses – that the law of
unjust enrichment is a distinctive aspect of private law, not to be assimilated to
contract, tort, or the law of property – can be made out: it is distinctive in hav-
ing an entirely different normative foundation: to understand its fundamental
normative sources one has to look to Part Two of the Metaphysics of Morals,
not Part One.3But it is made out at a price – in the same way that a legal
system can function more or less justly without a duty of easy rescue, a legal
system could function more or less justly without a liability to return mistaken
payments. Moreover, if other liabilities normally held to fall under the rubr ic of
‘unjust enrichment’, such as the liability to return a pre-payment made under a
contract which is later frustrated, are more plausibly cast as liabilities of ‘right’
as opposed to liabilities of ‘virtue’, then it would seem these other liabilities are
more central aspects of the private law than the liability to return the value of
a mistaken payment because private law just is more obviously in the business
of instantiating private right, not private virtue. And if this is on the mark then
another of Birks’s cherished theses would have to be abandoned: that is, of
course, his thesis that liability to make restitution of a mistaken payment is
the archetype or paradigm of liability for unjust enrichment, viz. ‘[t]he law of
unjust enrichment is the law of all events materially identical to the mistaken
payment of a non-existent debt.’4On the duty of virtue explanation of liability
for mistaken payments, this liability is contingently instantiated in the system, a
2 I n this sense the law of unjust enrichment is nearer to tort than to contract: see S. A. Smith,
‘Unjust Enrichment: Nearer to Tort than Contract’ in R. Chambers, C. Mitchell, and J. Penner
(eds), Philosophical Foundations of the Law of Unjust Enrichment (Oxford: OUP, 2009) 181; A.
Drassinower, ‘Unrequested Benefits in the Law of Unjust Enrichment’ (1998) 48 University of
TorontoLaw Jour nal 459, 479-481. See also, F. Wilmot-Smith,‘Reasons? For Restitution?’ Review
of C. Webb, Reasons for Restitution (2016) 79 MLR 1116, 1120-1124.
3I.Kant,The Metaphysics of Morals (1797) M. Gregor (ed & trans) (Cambridge: CUP, 1991).
4 P. Birks, Unjust Enrichment (Oxford: OUP, 2nd ed, 2005) 3.
C2018 The Author. The Modern Law Review C2018 The Modern Law Review Limited.
(2018) 81(2) MLR 222–246 223
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