Disgorgement Damages Research Articles

Punitive damages under the new Chinese Civil Code – a critical and comparative analysis

ABSTRACT Punitive damages have their roots in the common law system. Recently, punitive damages have been increasingly discussed also in non-common law jurisdictions. This Article scrutinizes whether it is viable for a jurisdiction with a civilian legal system to adopt punitive damages in the realm of tort law. It is argued that societal development has brought unprecedented challenges to tort law where merely compensatory damages can no longer provide sufficient remedies to victims. We conduct research mainly from the perspective of China, which has been very progressive in introducing punitive damages into various areas of private law in the past decades and recently codified it in its new Chinese Civil Code. The discussion of Chinese law is proceeded with a comparison with the German law, which is also a civilian legal system that used to have a great influence on the making of Chinese law. We find that the German private law put much emphasis on disgorgement damages, while the Chinese legislator put his trust in punitive damages. German disgorgement damages and Chinese punitive damages focus both on the avoidance of efficient breaches of ubiquitous individual legal rights, such as personality rights or intellectual property rights, but the Chinese legislator makes punitive damages also available in several other legal situations. We provide recommendations for the future implementation of the Chinese punitive damages law in order to maintain a balance between efficient protection for claimants and sanctions on wrongdoers.

Public interest damages

AbstractThis paper argues that punitive, nominal, contemptuous, vindicatory, and disgorgement damages (commonly referred to as non-compensatory damages) can be collectively analysed as public interest damages because all these awards are justified by violations of public interests in addition to violations of the claimant's rights. To the extent they are awarded in the public interest, non-compensatory damages feature a distinctively public element in private law. In contrast to compensatory damages, public interest damages are justified by ‘non-correlative wrongdoing’, ie infringements of interests which are valuable to the community rather than to the claimant. This helps us to understand how public interest damages differ from traditional damages awards and why public interest damages should be treated as an exceptional remedy. In support of these claims, the paper offers an original analytic framework of reasons that justify damages awards.

Disgorgement, Compensation and Restitution: A Comparative Approach

AbstractThe article aims at defining the scope of disgorgement in Italian law, which draws on common law experience, and asks whether the Italian legal system can provide similar recourses. English and US law have conceived “disgorgement damages” as a distinctive concept. I verify whether a rule of disgorgement of profits is principled in the Italian legal system as a generally available private law remedy or is just applicable in certain specific cases. I propose 3 hypothetical cases to measure the attitude of different legal systems. The theoretical foundations of disgorgement as a private remedy are located in different branches of private law (compensation, restitution, property law). English and U.S. law place disgorgement in the more general framework of the law of unjust enrichment and restitution. However, disgorgement can be attracted to other branches of law, as I demonstrate with reference to the Italian legal system. By highlighting the functions that disgorgement may perform in each case proposed, I conclude whether disgorgement is applicable by Italian judges, in addition to the express provisions laid down by legislation.

Disgorgement Damages for Accidents

Under the usual tort rules, damages for an accident equal the victim’s loss (compensation). This paper departs from current law by proposing damages equal to the injurer’s gain from untaken precaution divided by the probability of liability. Known as disgorgement damages for accidents (DDA), it is the minimum liability necessary to provide injurers with efficient incentives for care. We distinguish three forms of DDA with different information requirements and the same incentive effects. Because DDA is smaller than compensation, it typically induces more activity by injurers and less activity by victims. Calculating DDA generally requires different information than calculating compensation. Consequently, some imperfections in information cause courts to distort incentives for care under compensatory damages and not under DDA, while others have the opposite effect. Furthermore, the smaller disgorgement damages compared with compensation damages can shrink or magnify the distortion in incentives for care caused by courts’ and injurers’ errors.

Disgorgement for Accidents

Under the usual tort rules, damages for an accident equal the victim’s loss (compensation). This paper departs from current law by proposing damages equal to the injurer’s gain from untaken precaution divided by the probability of liability (disgorgement damages for accidents, or DDA). DDA is the minimum liability necessary to provide injurers with efficient incentives for care. DDA is smaller than compensation, so it typically induces more activity by injurers and less activity by victims. Calculating DDA generally requires different information than compensation. Consequently, some imperfections in information cause courts to distort incentives for care under compensatory damages and not DDA, while others have the opposite effect. Furthermore, the smaller size of damages under DDA compared to compensation can shrink or magnify the distortion in incentives for care caused by court and injurer errors. We distinguish three forms of DDA with different information requirements and the same incentive effects.

Contract Law, Liability Rules, and Property Rules

Calabresi and Melamed’s concepts of property rules and liability rules apply to contractual entitlements. The structure of consumer’s contractual entitlements resulting from the consumer sales directive fits with the model of property rules. In keeping with such a model, whenever performance-oriented remedies are not available, consumers should be allowed to choose between expectation damages and disgorgement damages.

Contract Law: Trends and Shifts in 2010

This paper presents an overview of some of the main developments in the general body of contract law in Israel during the 2009-2010 law-year and examines their possible impact on the rights of contracting parties. The author claims that these developments reflect a general pattern that characterized Israeli contract law in recent decades: On the one hand, a continuous, step-by-step progress is observed in numerous cases in which the Supreme Court introduced minor changes into existing rules or made an effort to clarify and improve the existing doctrine. Such developments are seen, for example, in the law on formation of contracts, the law of remedies, and the principles of public policy and good faith. On the other hand, the past law-year has also witnessed more radical shifts in contract law doctrine, which may turn out to have a far-reaching impact on our contract law. Such a potential shift may be seen in the field of interpretation, where, for first time since its enactment, the Statute on General Contract Law has been substantially amended to incorporate a more conservative element into the existing doctrine. A not less important development took place in the law of Remedies. In the case of Agrifarm Int. v. Meirson, discussed towards the end of the article, not only did the Supreme Court reaffirm its commitment to the rule allowing the award of disgorgement damages for breach of contract, but took an even more radical step forward by recognizing an innovative doctrine of deterrent disgorgement damages.

CONTRACTUAL PERFORMANCE, CORRECTIVE JUSTICE, AND DISGORGEMENT FOR BREACH OF CONTRACT

This paper is about the remedy of disgorgement for breach of contract. In it I argue for two conclusions. I first argue that, prima facie at least, disgorgement damages for breach of contract present something of a puzzle. But second, I argue that if we pay close attention to the notion of contractual performance, this puzzle can be resolved in a way that is consistent with principles of corrective justice. In particular, I suggest that even if a contract gives the promisee a right to only the promisor's performance of the contract, such a right can sometimes entail the acquisition by the promisee of certain rights of ownership. And in situations in which such rights are acquired, the disappointed promisee is entitled to the gains realized by the promisor in breach of contract by reason of the fact that such gains are something to which the promisee has an antecedent right.

Contract and Fiduciary Duty

During the last two centuries, courts have been adapting this duty of loyalty and its remedy to other agency relations, under the title "fiduciary" duty.1 That is adaptation, not extension. The many agency relations that fall under the "fiduciary" banner are so diverse that a single rule could not cover all without wreaking havoc. Courts have applied the term to relations as diverse as guardian-ward, attorney-client, and bank-borrower. Does anything other than the word "fiduciary" and an appeal to a duty of loyalty (in its strong form, a duty that the agent work for the "exclusive benefit" of the principal) unite these situations? Principles of ethics? Is the fiduciary morally bound to act in a particular way, perhaps? Or are the different situations wholly distinct, so that a union's fiduciary "duty of fair representation" in labor law is unrelated to a corporate manager's fiduciary obligations to investors?