Claiming Disgorgement Remedy

Question: Can I still sue in Ontario if the wrongdoing victim had no measurable financial loss, but the wrongdoer profited from the wrongdoing?

Answer: In Ontario, Olson Craig Legal can help you assess whether you can seek disgorgement (a restitutionary remedy that strips ill-gotten gains) even when you have little or no corresponding loss, because under the “profiting from wrong” theory unjust enrichment may allow disgorgement if there is an underlying legal wrong and ordinary damages are inadequate; courts often reserve it for fiduciary duty or breach of trust but can grant it in exceptional cases involving crimes, breach of contract, or tort where the defendant’s gain was made possible by the wrongful act against you.  For guidance on evidence, pleading strategy, and whether disgorgement is available in your situation, contact Olson Craig Legal at (226) 886-2001 to speak with their lawyer & paralegals serving clients across Ontario.

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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.

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.  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 restitutionary remedy rather than a compensatory remedy, meaning that the law applies disgorgement as a matter of fairness rather than as a matter of making a victim whole for loss or harm suffered by the victim.