Martin Hogg

Disgorgement of Profits in Scots Law

Scots private law provides what may be called ‘gain-based awards’ as a response to certain types of (in a broad sense) ‘wrongful’ conduct, not just delict (perhaps the paradigm the civil wrong) but also breach of contract, breach of fiduciary duty, and other sorts of conduct which are contrary to legal duties undertaken by, or imposed upon, a party. These awards are not, however, classified as damages. In consequence, in Scots law there are strictly no ‘disgorgement damages’ (or ‘restitutionary damages’) of the sort commonly encountered in English law and the law of other Common Law systems. The disgorgement response is largely (though not entirely) achieved through remedies granted to reverse the retention of unjustified enrichment, though in some circumstances of delictual wrongdoing a disgorgement remedy may be an alternative to a more commonly sought remedy (usually compensatory damages) of a non-disgorgement nature. In such cases the pursuer usually has the freedom to choose whether to pursue the disgorgement remedy or (compensatory) damages, but the classification of the disgorgement remedy (as delictual or unjustified enrichment in nature) is not a wholly clear matter in Scots law.

Scottish Jurisdictional Notes

Part I. Introduction John Cartwright and Martijn Hesselink Part II. Case Studies: 1. Case 1: Negotiations for premises for a bookshop 2. Case 2: Negotiations for renewal of a lease 3. Case 3: Mistake about ownership of land to be sold 4. Case 4: An architects preparatory work for a contract which does not materialise parallel negotiations 5. Case 5: A broken engagement 6. Case 6: An express lock-out agreement 7. Case 7: The breakdown of merger negotiations 8. Case 8: A shopping centre without a tenant 9. Case 9: Breakdown of negotiations to build a house for a friend 10. Case 10: Public bidding 11. Case 11: A contract for the sale of a house which fails for lack of formality 12. Case 12: Confidential design information given during negotiations 13. Case 13: Misrepresentation or silence about a harvesters capacity Part III: From the common law to the civil law: the experience of Israel Nili Cohen Part IV. A Law and Economics Perspective on Precontractual Liability Eleonora Melato and Francesco Parisi Part V. Conclusions John Cartwright and Martijn Hesselink.