Yes No Share to Facebook
Claiming Disgorgement Remedy
Involves Taking Benefits or Profits Away From a Wrongdoer
Question: Can I sue in Ontario to recover a wrongdoer’s profits even if I didn’t suffer much financial loss?
Answer: Yes, in Ontario a claim may seek disgorgement to strip ill-gotten gains where a defendant profited from a legal wrong and ordinary damages are inadequate, as discussed in Pharmascience Inc. v. Novartis Pharmaceuticals Canada Inc., 2020 ONSC 6534. Hall Paralegal Services provides paralegal services in Ontario and can help assess whether your facts support a disgorgement-based remedy and what evidence to gather for a Small Claims Court or tribunal matter.
Is There a Type of Legal Compensation Available From a Wrongdoer Who Profits From a Wrongdoing?
When a Wrongdoer Benefits or Profits From a Wrongdoing, the Victim of the Wrongdoing May Claim Disgorgement of the Benefits or Profits From the Wrongdoer.
Understanding Disgorgement Remedy Principles Involving Restitution For Wrongdoings Resulting In Ill Gotten Gains
There are some circumstances in which a wrongdoer receives a benefit or profit from the wrongdoing and yet the victim is without a corresponding harm or loss. Generally, under legal principles akin to no harm, no foul concepts, a legitimate lawsuit permits compensation for the loss or harm suffered by the victim; however, in some circumstances it is proper to claim disgorgement of benefits or profits received by the wrongdoer.
The Law
Disgorgement remedy, as a stripping of ill gotten gains from a wrongdoer, was well explained within the Pharmascience Inc. v. Novartis Pharmaceuticals Canada Inc., et al, 2020 ONSC 6534, case wherein it was stated:
[19] Under the “profiting from wrong” theory of unjust enrichment, disgorgement may be available if the defendant has committed “an underlying legal wrong against a plaintiff, and the ordinary damages remedy for the underlying wrong is inadequate”. As the Court of Appeal noted, disgorgement in these cases is typically reserved for when there has been a breach of fiduciary duty or a breach of trust. However, in exceptional cases, disgorgement as a restitutionary remedy can also be granted where the “underlying legal wrong” is a crime or a breach of contract or a tort.[6] In cases premised on “profiting from wrong”, the concept of “corresponding deprivation” takes on a slightly different meaning. A plaintiff may be able to prove a corresponding loss by showing that the defendant’s gain was “made possible” by the defendant’s wrongful act towards the plaintiff rather than proving a direct or indirect transfer of wealth.[7]
Explained Principles
There may be circumstances where a person commits a criminal fraud or a civil fraud, among other wrongs, without causing harm or loss to the wronged person and yet benefits or profits arise in favour of the wrongdoer. The law, applied by the courts, seeking to discourage and deter wrongful conduct, may order that the benefits or profits be disgorged from the wrongdoer and provided to the victim. In this way the remedy of disgorgement ensures that the wrongdoer fails to benefit or profit from the wrongdoing and is, presumably, discouraged and deterred from engaging in wrongful conduct.
Summary Comment
Disgorgement is a restitutionary remedy rather than a compensatory remedy, meaning that the law applies disgorgement as a matter of fairness rather than as a matter of making a victim whole for loss or harm suffered by the victim.
NOTE: A considerable number of online searches for “lawyers near me” or “best lawyer in” frequently indicate an urgent requirement for competent legal representation instead of a particular professional designation. In Canada, licensed paralegals are governed by the same Law Society that regulates lawyers and are empowered to represent clients in specified litigation matters. Advocacy, legal evaluation, and procedural expertise are pivotal to that function. Hall Paralegal Services provides legal representation within its licensed framework, focusing on strategic positioning, evidentiary preparation, and persuasive advocacy designed to secure efficient and favourable outcomes for clients.