Lloyd's Maritime and Commercial Law Quarterly
THE ENGLISH RECOGNITION OF UNJUST ENRICHMENT
Peter Birks*
Two cases decided early this summer have transformed the English law of restitution. The House of Lords’ decision in Lipkin Gorman v. Karpnale Ltd.1 followed hard upon the scarcely less important judgment of the Court of Appeal in Woolwich Equitable Building Society v. I.R.C.
2 The latter will almost certainly go on to the House of Lords, where it may of course be modified. But nothing can reverse the most important change which these two cases combine to bring about. Historically the law of restitution has been so effectively concealed by clouds of impenetrable language that its very existence has been debatable. And it has laboured under the extraordinary handicap of having to manage without any intelligible generic name for the events to which it, restitution, is the remedial response. All that is over now.
It is not so much that restitution has found a place in the sun as that it has at last escaped from under the shadow of a great deal of time-wasting semantic nonsense. Those who teach the subject will be able to move more quickly to really difficult things. And practitioners will find complex analyses less often sidetracked by the false logic of the forms of action. It should not now be necessary to mount complex experiments to prove that the law of restitution, based on the principle against unjust enrichment and packed with cases of the greatest practical importance, is an essential category of our law. This is a great advance. The flat-earthers have sometimes seemed likely to get the better of the argument, and it is fitting that the outlook should have been transformed in the year which marks the 25th anniversary of the book to which the change is ultimately due.3
I. RECEIPT BY A STRANGER
By the time the appeal reached the House of Lords, the relevant facts of Lipkin Gorman v. Karpnale Ltd. could be boiled down to a story so simple that the man in the street might be forgiven for wondering how the law could be in doubt. The plaintiff-appellants were a firm of solicitors. They had a partner, Cass, who was
* F.B.A., Regius Professor of Civil Law, Fellow of All Souls College, Oxford.
1. [1991] 3 W.L.R. 10 (H.L.); [1989] 1 W.L.R. 1340 (C.A.); [1987] 1 W.L.R. 987 (Alliott, J.).
2. [1991] T.L.R. 258 (C.A.); [1989] 1 W.L.R. 137 (Nolan, J.). For the associated proceedings for judicial review, see Reg. v. I.R.C. ex p. Woolwich Equitable Building Soc. [1990] 1 W.L.R. 1400 (H.L.).
3. Lord Goff of Chieveley and Gareth Jones, The Law of Restitution, 1st edn. (London, 1966), 3rd edn. (London, 1986). See especially the account in the section “The Legacy of History: The Implied Contract Theory”, 3rd edn., 5–12. The implied contract approach, still present in an extreme form in the 21st edn. of Chitty on Contracts (London, 1955), surfaced in the House of Lords as recently as Guinness Plc. v. Saunders [1990] 2 A.C. 663.
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