Rights of relief, subrogation and unjustified enrichment in Scots law
| Jurisdiction | South Africa |
| Author | None |
| Pages | 493-528 |
| Published date | 24 December 2019 |
| Citation | 2019 Acta Juridica 493 |
| Date | 24 December 2019 |
493
Rights of relief, subrogation and
unjustied enrichment in Scots law
NIALL WHITTY*
This essay gives an overview of the Scots law on rights of relief
(contribution) of cautioners (sureties), co-debtors and indemniers
(mainly insurers). The personal rights of relief of cautioners, co-debtors
and double indemniers attract the civilian benet of cession of actions
(benecium cedendarum actionum). By contrast, a paying insurer (or other
indemnier) is not an assignee of the insured but is subrogated to
the insured’s rights against the person primarily liable for the loss, so
he sues a subrogated action in the insured’s name. Subrogation is an
eighteenth-century English doctrine transplanted later to Scots law,
along with English insurance law. The law of relief (with cession of
actions) and subrogation has the unique function, within the law of
obligations, of ranking the liabilities of a plurality of debtors liable to
the same creditor or insured in respect of the same debt or damage.
Since it is a distinct source of obligation and a separate (albeit small)
legal regime with rules of its own, it resembles negotiorum gestio rather
than a branch of unjustied enrichment. Nevertheless, since the 1990s
a handful of Scottish judicial opinions and decisions, reecting a trend
in English law, have sought to reconceptualise relief as a branch of
the law of unjustied enrichment. The essay ventures to criticise this
trend arguing, among other things, that it is based on a misreading of
Scottish legal history and a failure to recognise the unique character
of obligations of relief, and that it overlooks binding Court of Session
Inner House authority that holds that in actions of relief the measure of
recovery is the pursuer’s expenditure and not the defender’s enrichment.
***
* MA LLB FRSE; Honorary Professor of Law at the University of Edinburgh.
The author is very grateful to Jacques du Plessis, Sonja Meier and Hector
MacQueen as well as the peer reviewers for their wise and extremely helpful
comments at various stages of the drafting, to Robert Weir for his most
ecient editorial assistance, and to Helen Scott for her unfailing patience and
encouragement. All errors are my responsibility.
2019 ACTA 493
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494 PRIVATE LAW IN A CHANGING WORLD
It appears in the rst place agreeable to principles of justice and
humanity, that creditors having bound to them dierent persons or
their eects, should not be allowed arbitrarily to load one and exempt
others.
(Henry Home (later, Lord Kames) ‘Benecium cedendarum
actionum’ in Essays upon Several Subjects in Law (1732) 19)
I INTRODUCTION
Daniel Visser is among the foremost scholars in the world today
writing on the comparative law of unjustied enrichment, as well
as an acknowledged master of South African law.1 Attaining this
international stature is no mean feat, considering the explosion of
writing on enrichment law since the 1980s. In his lifetime his chosen
speciality became the most dynamic and exciting branch of the law
of obligations, fuelled by the recent rapid development of unjust
enrichment in common-law legal systems. This essay in Danie’s honour
concerns a fault line between common-law systems (which in the last
few decades have reconceptualised contributions between co-debtors
and subrogation as categories of unjust enrichment) and civilian legal
systems, which classify rights of relief and the benecium cedendarum
actionum (hereafter benecium c.a.) under other branches of the law of
obligations, such as solidary obligations or personal securities.
This essay argues that the Scots law on the rights of relief of
debtors, together with the anomalous but entrenched doctrine of
subrogation of indemniers, should continue in their traditional
path and therefore not be reconceptualised ‘through the prism
of unjust enrichment’.2 Instead, their unique function, ordering
liability among a plurality of debtors, justies their continued
separate existence as a sui generis regime within the Scots law of
obligations, separate from unjustied enrichment.
In his celebrated book on the South African law of unjustied
enrichment, Danie Visser remarks that ‘the general view in South
Africa is that subrogation is not part of the law of unjustied
1 See eg his author ship of the comparatist chapter on unjustied enrichment
in M Reimann & R Zimmermann (eds) The Oxford Handbook of Comparative Law
2 ed (2019) and in J Smits (ed) Elgar Encyclopedia of Comparative Law (2006).
2 This phrase is taken from Menelaou v Bank of Cyprus UK [2015] UKSC
66; [2016] AC 176 at para 108, per Lord Carnwath: ‘I am less convinced with
respect of the case for “rationalizing” the older cases “through the prism of unjust
enrichment”.’
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RIGHTS OF RELIEF IN SCOTS LAW 495
enrichment,3 but that it is important to take note of the close
relationship between them.’4 Jacques du Plessis comments that the
nature of the surety’s right to claim contribution from a co-surety
remains unresolved.5 Sandra Eden and JT Pretorius comment that
there are features of suretyship and cautionary obligations ‘that do
not t well with certain characteristics of the law of unjustied
enrichment’.6 South African and other legal scholars will make up
their own minds, but I do hope that this essay may be of some
interest to them when considering the complex issues involved.
II RIGHTS OF RELIEF AND SUBROGATION: AN
OVERVIEW
(1) Three regimes: Terminology and classication
The following description of pro rata rights of relief in Scots law by
Professor WM Gloag is still author itative: ‘It is a general principle,
dependent on equity, that where several debtors are liable for the
same debt, each, though he may be liable in solidum to the creditor,
is liable only for a proportionate share, in a question with his co-
debtors, and if he is forced to pay more, has a r ight of relief against
them.’7 On the other hand, where one of the co-debtors pays the
whole debt and another co-debtor bears the ultimate responsibility
for paying it, the paying debtor is regarded as a ‘secondary’ debtor
having a right of ‘total’ relief against the latter who is regarded as the
‘primary’ debtor. Co-cautioners and co-debtor s are liable among
themselves in what was traditionally called ‘mutual’ relief and is
nowadays sometimes called ‘pro rata’, ‘proportionate’ or ‘rateable’
relief. This terminology reects the rule of apportionment of shared
liability in relief to the paying co-cautioner or co-debtor.
3 See D Visser Unjustied Enr ichment (2008) 138–47, 644–50; J du Plessis The
South African Law of Unjustied Enrichment (2012) 318–21.
4 Visser (n 3) 147.
5 Du Plessis (n 3) 321.
6 S Eden & J Pretor ius ‘Suretyship and cautionary obligations’ in R Zimmer mann,
D Visser & K Reid (eds) Mixed Legal Systems in Comparative Perspective: Property and
Obligations in Scotland and South Africa (2004) 335 at 354–5; A Clark & S Eden
‘Cautionary obligations’ in The Laws of Scotland: Stair Memor ial Encyclopaedia vol 3
(1994) paras 935–55; E West The Nature of Rights of Relief Arising from a Cautionary
Relationship (unpublished PhD thesis, University of Aberdeen, 2018).
7 WM Gloag The Law of Contract 2nd ed (1929) 206; followed in BP Petroleum
Development Ltd v Esso Petroleum Co Ltd 1987 SLT 345 OH at 347H–I.
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