Rationalising the Scottish law of unjustified enrichment

• Jurisdiction: South Africa
• Published date: 30 May 2019
• Pages: 50-70
• Author: Phillip Hellwege
• Date: 30 May 2019
• Citation: (2000) 11 Stell LR 50

Rationalising the Scottish law of unjustified enrichment 1

2000 Stell LR 50

Phillip Hellwege

MJur (Oxon)

Research Assistant, Universität Regensburg, Bundesrepublik Deutschland

1. Introduction

The Scottish law of unjustified enrichment has had a long history. However, until

recently it was dominated by three terms: restitution, repetiti on and recompense.

The three R’s, as they are called, provided the framework in which the law was

classified. However, the rationale of this classification an d the exact meaning of the

three R’s remained obscure. Th e law was regarded as unsatisfactory by the courts,

the Scottish law commission and academics. However, ther e was no consensus as to

how to overcome th e problems of the taxonomy based on the three R’s. There were

even some who f elt that only parliament could tackle the task. In the recent case of

Shilliday v Smith 2 the Court of Session solved many of the problems that bedevill ed

the law. Given the amount of li terature that has been generated by the di fficulties of

the internal taxonomy of the Scottish law of unjustified enrichment over the last

couple of years, the manner in which the Court of Session dealt with the problem is

interesting: it simply restated the law of unjustified enrichment wi thout paying any

attention to the hitherto respected principles. Whereas in the past it was thought

that restitution, repetiti on and recompense were classifications that related to

different causes of action, the Shilliday case simply presented them as different

remedies available in a claim of unjustified enrichment. In this respect the Shilliday

case is to be welcomed. However, Shilliday in fact only completed half the job.

Although it abolished the three R’s as a means of classifying the different causes of

action in unjustified enrichment, it did not offer a new taxonomy in their place. The

search for a new classification of the causes of action of unjustified enrichment

therefore continues.

2. The history

Before discussing the Shilliday case, I shall briefly revisit the historical development

of the Scots law of un justified enrichment in order to set the scene f or a proper

analysis of its signi ficance. I shall start wi th a classification of obligations devised by

the famous seventeenth century Scottish institutional writer, Stair: Stair did not

recognise a distinct law of

2000 Stell LR 51

unjustified enrichment. 3 It is well known in Scots law that Stair divided obligations

into obediential and conventional obligations. His obediential obligations were then

subdivided into restitution, recompense and reparation according to the content of

the di fferent obli gations. Repa ration is th e oblig ation to make good a minus in the

pursuer’s 4 assets. Restitution and recompense are both concerned with a plus in

the defender’s hands. Resti tution is an obligati on to return a certum which has been

received by the defender, eg to return a moveable or a sum of money which A

received from B that was not owed. R ecompense is the obli gation to make good an

incertum, for example, in error B has performed a service to A that was not due.

1 I would like to thank Niall Whitty for his helpful comments on a draft of this article. Any remaining

errors are of course mine.

2 1998 SC 725.

3 See Evans-Jones & Hellwege “Some Observations on the Taxonomy of Unjustified Enrichment in Scots

Law” 1998 Edinburgh Law Review 180 181–183.

4 In Scots law the “pursuer” is the plaintiff or claimant, while the “defender” is the defendant, or person

facing the claim.

(2000) 11 Stell LR 50

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Repetition does not appear as a di stinct category of obligations. As a classification

according to the different content of obligati on, the three R’s cut directly through

the causes of action arising from unjustified enrichment. The problem is that a

single cause of action may arise within restitution or recompense depending on

whether the content of the obligati on is to restore a certum or an in certum.

However, Stair makes it perfectly clear that an obligation to make restitution can

turn into an obligation to recompense i f, for example, the moveabl e which B

transferred to A has ceased to exist. 5 In this case A can no longer restore the

moveable but he has to make recompense in respect of any enrichment which he

still holds in hi s hands. Both restituti on and recompense were classifications which

comprised causes of action which fell out with unjustified enrichment. The oblig ation

to give back a certum appear s also in the context of property: the vindicatio. 6 The

obligation to make good an incertum also arises most promi nently in the context of

negotiorum gestio. 7 Thus, Stair’s cl assification based on restitution and recompense

was not one which related solely to the law of unjustified enrichment; reparation,

restitution and recompense were introduced to classify all obediential obligations.

This was presented as a better alternati ve to the Roman classifi cation of obli gations

as ex contractu, quasi ex contractu, ex d elicto and quasi ex delicto. The Roman

classification i s made according to di fferent sources of obligations. Scottish l awyers

had become accustomed to the Roman classification 8 which had re-asserted itself

despite the natural law scheme used by Stair. It was the interplay between those

two taxonomi es which caused great harm to the understanding of th e Scottish law

of unjustified enrichment. Both classifications became muddled in the course of legal

development. In the works of the later i nstitutional writers we can observe that both

restitution and recompense were slowly narrowed down to causes of action which

arose only from unjustified enrichment.

2000 Stell LR 52

Repetition was only introduced as a separate classification as late as 1860 in the

fifth edition of Bell’s Principles. 9 As this term came to be understood, it denoted

claims in unjustified enrichment for the return of money that had been received by

the defender. Restitu tion was understood to concern claims for the recovery of

objects and recompense for payment where t he benefit received wa s services. It

was also understood that distinct causes of action arose within restitution and

repetition on the one hand and recompense on the other. However, it was still

recognised in the tenth edi tion of Bells’s Principles (publi shed in 1899) that

restitution, repetition, recompense and reparation was an alternati ve model to the

Roman classification into quasi ex contractu, ex delicto, and quasi ex delicto. 10 It

was only in this century that we find for the fi rst time that restitution, repeti tion and

recompense were us ed to cl assify obligations described as arising from quasi ex

contractu and later obligations arising from unjustified enrichment.

Whereas it was not harmful to classify obediential obligations according to the

content of obligation as long as one understood that most causes of action might

elicit obligations with different cont ent, the modern use of the three R’s was harmful

because lawyers began to believe that some causes of action, namely those

described by the condictiones, were restricted to an obligation in restitution or

repetition, whereas other causes of action were restricted to an obligation in

recompense. It was Birks who first recognised this oddity of the Scots law of

unjustified enri chment. 11 Since then, a nu mber of theories have been proposed to

5 The Institutions of the Law of Scotland (1981) 1 7 11.

6 Stair Institutions 1 7 2.

7 Stair Institutions 1 8 3–1 8 5.

8 See especially Mackenzie Institutions of the Law of Scotland (1684) book 3 title 1.

9 See Evans-Jones & Hellwege 1998 ELR 185–186

10 See Principles s 525.

11 Birks “Six questions in search of a subject — unjust enrichment in a crisis of identity” 1985 JR 227;

Birks “Restitution a view of Scots law” 1985 Current Legal Problems 57.

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