![]() ![]() The Supreme Court upheld the trial judgement in favour of the plaintiff awarding disgorgement with respect to Strother’s personal financial gains earned as a result of his conflict of interest, even though the plaintiff had suffered no provable loss. The plaintiff had sued their former lawyer, Strother, for breach of confidence and breach of fiduciary duty. Strotheris another leading Supreme Court decision on disgorgement, looking this time at the remedy in the context of fiduciary relationships. Babstock held that “courts should consider whether the plaintiff had a legitimate interest in preventing the defendant’s profit-making activity” and that disgorgement is appropriate where the claimant’s interest “cannot be vindicated by other forms of relief”.Ītlantic Lottery is the Supreme Court’s most recent pronouncement on the issue of disgorgement. The Supreme Court in Atlantic Lottery Corp Inc. The remedy has also been awarded for breach of contract in exceptional circumstances, where damages are inadequate and where the circumstances of the case warrant such an award. Disgorgement is also ordered in cases involving corporate oppression where it would have been unjust that the responsible party benefit from the oppressive conduct. Disgorgement is most commonly awarded as a remedy for breach of fiduciary duty and breach of trust. When is disgorgement available?ĭisgorgement requires a wrongdoer to give up the wrongfully-acquired gains. This remedy may be an alternative to compensatory damages in fraud cases. Where a wrongdoer’s profits are so intimately connected with the wrong and these profits would not have been earned but for the wrongful acts, a plaintiff may turn to gain-based disgorgement remedy as a more appropriate measure of damages.ĭisgorgement aims to deprive a wrongdoer of his or her ill-gotten gains and has the practical effect of transferring the wrongfully-obtained profits. For example, a wrongdoer who improperly uses trust funds, profits from that breach of trust, and later returns the monies to the trust account, but seeks to keep the gains. In some cases, a plaintiff may have suffered no damages, but the defendant has gained significantly. However, this does not always fit the circumstances of the breach. When a plaintiff suffers a loss due to the misconduct of a defendant, the typical approach is to award damages that reflects the loss. ![]()
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