Foreign Currency: Claims, Judgments and Damages

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Restitution and unjust enrichment


8.1 In recent years the law of restitution and unjust enrichment1 has assumed increased importance in commercial litigation: the English courts have handed down a number of significant judgments developing this area of the law,2 and the last 20 years have seen a deluge of academic literature on the law of unjust enrichment and restitution. A number of theories have been advanced in an attempt to explain the case law.3 This area of law even has its very own US-style ‘Restatement’.4 8.2 For the practitioner, a claim focused on a defendant’s gain may prove useful where the defendant’s gain is greater than the claimant’s loss, or where the claimant’s loss will be difficult to prove.5 Therefore an account of the principles governing foreign currency awards would not be complete without an

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examination of the application of these principles in the context of restitution and unjust enrichment. 8.3 The issue of what principles should govern the choice of an appropriate currency for a restitutionary award (whether as response to an unjust enrichment or otherwise) has received remarkably little attention in the textbooks and academic literature. The editors of Goff & Jones devote just one paragraph to the question and then only in the context of statutory restitution under the Law Reform (Frustrated Contracts) Act 1943.6 Burrows has only one footnote on the point. Both The Restatement of 2013 and Virgo’s The Principles of the Law of Restitution, published in 2015, are silent on the question. This is surprising because restitutionary claims (when successful) do not lead the court to award ‘damages’ in the usual sense of that word but rather ‘monetary restitutionary awards’.7 It is therefore somewhat odd that amongst all the literature and commentary produced in this area in recent years, no consideration appears to have been given to the principles by which a court should ascertain the appropriate currency for monetary restitutionary awards. This chapter is intended to be a first tentative attempt to rectify this puzzling omission. 8.4 The structure of this chapter is based on the division of the law of restitution as currently articulated by the courts:8 Paras -29 will consider restitution reversing unjust enrichment; paras -40 will consider restitution for wrongs; and paras -47 cover claims following tracing.

Restitution of unjust enrichment

8.5 In English law defendant D will be liable to make restitution of unjust enrichment to claimant C if four conditions are met:9
  • (i) D has been enriched;
  • (ii) at C’s expense; and
  • (iii) that enrichment was unjust; and
  • (iv) D does not have a defence available.
8.6 C or D may wish to know in which currency D will be liable to make restitution to claimant C, and at what date the exchange rate with sterling will be taken if D wishes to make restitution in sterling. Large sums may turn on the question. 8.7 In BP Exploration Co v Hunt (No 2) 10 Robert Goff J (as he then was) considered

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what general principle should govern the selection of the most appropriate currency for an award of restitution to reverse unjust enrichment. The claim in that case was advanced under the Law Reform (Frustrated Contracts) Act 1943, but Goff J stated that he regarded the provisions of the Act as being a statutory application of the general principle of restitution of unjust enrichment. The general proposition advanced by Goff J was that:

the award of restitution should be made in the currency in which the defendant’s benefit can be most fairly and appropriately valued.

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