Dear Colleagues,

The England and Wales Court of Appeal yesterday decided Gibb v Maidstone & Tunbridge Wells NHS Trust [2010] EWCA Civ 678 http://www.bailii.org/ew/cases/EWCA/Civ/2010/678.html. It concerned a claim arising under a compromise termination agreement between an NHS Trust and its former Chief Executive. The claimant sought the balance of her compensation payment, which the Trust resisted on the basis that it was so generous as to be ultra vires. In the alternative, she submitted that she had a claim in unjust enrichment. The Court of Appeal unanimously held that the compensation package was not ultra vires (though a novel point in itself) and so the restitution issue was obiter.

But Laws LJ nevertheless considered the restitution claim (at [23]-[37]) and it is interesting because it shows that, even in England today, counsel may still seek to rely on Lord Diplock's statement in Orakpo that:

"My lords, there is no general doctrine of unjust enrichment recognised in English law. What it does is to provide specific remedies in particular cases of what might be classified as unjust enrichment in a legal system which is based upon the civil law."

The benefit to, or enrichment of the Trust were identified as follows:

"(1) the value of the statutory unfair dismissal claim which she forewent and the costs of contesting that claim which the Trust saved, (2) the confidentiality requirement imposed on the appellant, (3) the immediate cessation of the appellant's employment, and (4) the avoidance of any internal grievance procedure of which the appellant might have contested to the detriment of the Trust in terms of "significant human and/or financial resources"."

Laws LJ then goes on to suggest (at [26]-[27]) that

"with all due deference, I wonder whether Lord Hoffmann's formulation in Banque Financière de la Cité v Parc (Battersea) Limited [1999] 1 AC 221<http://www.bailii.org/cgi-bin/redirect.cgi?path=/uk/cases/UKHL/1998/7.html> at 234C – D has not too much of a broad-brush or legislative flavour. He states there are four components to a claim in unjust enrichment. First, the defendant must be enriched by receipt of a benefit. Secondly, the benefit must be at the claimant's expense. Thirdly, the defendant's retention of the benefit must be shown to be unjust. Lastly, there must be no policy reasons for denying a remedy. The third requirement seems to be quite unqualified.

If one looks at the matter from what is perhaps a more modest standpoint, we may see at once that clear reasoning is at least required for the elaboration of any extension of unjust enrichment. Clear reasoning, if it allows a claim in seemingly new circumstances, will provide clear analogues with other cases.

Laws LJ does go on to find that a unjust enrichment is plausible in the circumstances:

Notwithstanding Miss McNeill's tenacity and ingenuity it seems to me that the facts of this case are readily aligned to established categories of unjust enrichment. If everything else is equal I can see no principled distinction between a benefit consisting in money paid and a benefit consisting in a claim foregone. For the purpose of this branch of the law the material benefit may take many forms. In Way v Latilla [1937] 3 AER 759 it consisted in providing information about gold mines and effecting introductions.

So there are some interesting observations as to what counts as an enrichment, and causation.

Best wishes,

James

--

James Lee

Lecturer

Director of the LLB Programme

Birmingham Law School

University of Birmingham

Edgbaston

Birmingham

 B152TT, United Kingdom

Tel: +44 (0)121 414 3629

E-mail: j.s.f.lee@bham.ac.uk

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