Last Updated: , 73 days ago.
Can I sue to get improper profits disgorged even if I was not harmed?
In Ontario, a lawsuit may request disgorgement to strip ill-gotten gains when a wrongdoer “profits from wrongdoing” and ordinary damages are inadequate, often focusing on fairness rather than fully compensating your losses, as explained in Pharmascience v. Novartis Pharmaceuticals Canada Inc., 2020 ONSC 6534. Disgorgement is commonly tied to breaches involving trust or fiduciary duties, but in exceptional cases it can be linked to other underlying legal wrongs like certain frauds or breach of contract, where you can show “corresponding deprivation” by proving the gain was made possible by the wrongful act. For paralegal support in Ontario, DK Legal Practice can help you assess whether your claim fits a disgorgement remedy and what evidence to gather, call (416) 906-6663.
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What Can a Victim of Wrongdoing Claim In a Lawsuit If the Victim Was Without the Suffering of a Loss But the Wrongdoer Received a Benefit or Profit From the 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: For immediate help, please contact DK Legal Practice by phone at: (416) 906-6663 to retain services or 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:
[19] Under the “profiting from wrong” theory of unjust enrichment, disgorgement may be available if the defendant has committed “an underlying legal wrong against a plaintiff, and the ordinary damages remedy for the underlying wrong is inadequate”. As the Court of Appeal noted, disgorgement in these cases is typically reserved for when there has been a breach of fiduciary duty or a breach of trust. However, in exceptional cases, disgorgement as a restitutionary remedy can also be granted where the “underlying legal wrong” is a crime or a breach of contract or a tort.[6] In cases premised on “profiting from wrong”, the concept of “corresponding deprivation” takes on a slightly different meaning. A plaintiff may be able to prove a corresponding loss by showing that the defendant’s gain was “made possible” by the defendant’s wrongful act towards the plaintiff rather than proving a direct or indirect transfer of wealth.[7]
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.
NOTE: A significant amount of online queries featuring “lawyers near me” or “best lawyer in” typically indicate a demand for prompt and skilled legal assistance instead of searching for a particular professional designation. In Ontario, “licensed paralegals” are under the regulation of the same Law Society that governs lawyers and have the authority to represent clients in specific litigation issues. Advocacy, legal analysis, and procedural expertise are fundamental to this function. DK Legal Practice provides legal representation within its licensed scope, focusing on strategic positioning, evidentiary preparation, and compelling advocacy aimed at securing efficient and advantageous outcomes for clients.
