Claiming Disgorgement Remedy

Question: Can I claim disgorgement if someone profited from wrongdoing in Ontario?

Answer: In Ontario, you may ask a paralegal at Paladin LLP to pursue a disgorgement (restitution) remedy when the wrongdoer “profits from wrong” through an underlying legal wrong and ordinary damages are inadequate, as described in Pharmascience Inc. v. Novartis Pharmaceuticals Canada Inc., 2020 ONSC 6534.   Disgorgement is typically used to remove the benefit rather than make you “whole” for a corresponding loss, and courts look for concepts like “corresponding deprivation” where the gain was made possible by the wrongful act.   For practical next steps, share the facts and any related documents with Paladin LLP by calling (289) 925-1572 to discuss whether your situation fits a “profiting from wrong” claim.

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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.

Note: Please contact Paladin LLP by phone at: (289) 925-1572 to discuss any specific questions that you may have.

Understanding Disgorgement Remedy Principles Involving Restitution For Wrongdoings Resulting In Ill Gotten Gains

In some circumstances a wrongdoer may receive a benefit or profit arising from the wrongdoing while little, if any, loss or harm arises to the victim of the wrongdoing. Whereas the law generally forbid a person from suing unless a loss or harm has occurred per no harm, no foul principles, a valid lawsuit may involve claims for the illegitimate benefits or profits arising from the misconduct of the wrongdoer.

The Law

The availability of the remedy of disgorgement was well explained within the case of Pharmascience Inc. v. Novartis Pharmaceuticals Canada Inc., et al, 2020 ONSC 6534, wherein it was said:

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.