The Meaning of ’Unjust’ in the English Law of Unjust Enrichment

Abstract

In 1991 the House of Lords conclusively recognized the existence of the law of unjust enrichment in England and Wales. So began a process of development and refinement that in other branches of private law had begun many decades ago. A central issue was what it was that made an enrichment ?unjust?. In a groundbreaking work in 1985, Professor Birks had argued that the reasons why an enrichment was unjust were protean. He explained that the approach to ?unjust? which was most consistent with the corpus of pre-existing case law required the identification of an ?unjust factor? which had been recognized in judicial decisions. After 1991 many cases followed this approach and recognized, as unjust factors, diverse reasons for restitution which had long existed in the corpus of case law such as mistake, duress, failure of consideration as well as new unjust factors. In his last book in 2003, Professor Birks relied upon a group of cases involving restitution following ultra vires interest rate swaps and argued that English law had changed direction. The new direction, Birks argued, was to ask whether there was any basis upon which a recipient could retain an enrichment rather than looking for any particular, recognized, unjust factor. This article assesses the two views and concludes that whilst the meaning of unjust may not yet be entrenched in English law, and whilst the two approaches will usually lead to the same result, the dominant model is still the unjust factors approach and this is the model which should be preferred.