Disgorgement of Profits in Scots Law

Abstract

Scots private law provides what may be called ‘gain-based awards’ as a response to certain types of (in a broad sense) ‘wrongful’ conduct, not just delict (perhaps the paradigm the civil wrong) but also breach of contract, breach of fiduciary duty, and other sorts of conduct which are contrary to legal duties undertaken by, or imposed upon, a party. These awards are not, however, classified as damages. In consequence, in Scots law there are strictly no ‘disgorgement damages’ (or ‘restitutionary damages’) of the sort commonly encountered in English law and the law of other Common Law systems. The disgorgement response is largely (though not entirely) achieved through remedies granted to reverse the retention of unjustified enrichment, though in some circumstances of delictual wrongdoing a disgorgement remedy may be an alternative to a more commonly sought remedy (usually compensatory damages) of a non-disgorgement nature. In such cases the pursuer usually has the freedom to choose whether to pursue the disgorgement remedy or (compensatory) damages, but the classification of the disgorgement remedy (as delictual or unjustified enrichment in nature) is not a wholly clear matter in Scots law.KeywordsDisgorgementRestitutionDamagesRestitutionary damagesDisgorgement damagesProfit-strippingGain-strippingScots law