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Saturday, November 21, 2015

Goals of Remedies: Beyond Compensation

Remedies for civil litigation serve a variety of important goals. It is too often assumed that all cases must involve the compensation goal. Of course many cases have a compensatory purpose. Further, that purpose may be one of many remedial ends in a given case such as a particularly outrageous, malicious tort that warrants a punitive award supplementing compensation. Some cases, however, have no compensatory component. Distinct remedial functions may operate without a compensatory anchor in appropriate cases. Beyond compensation goals may include: symbolic, dignitary, substitutionary, litigation incentives, deterrence, prevention, and punishment.

Commonly in civil causes of action, the core remedy seeks to compensate—to make whole. The underlying goal to undo harm by making whole is intuitive. How we achieve that goal is more complicated. In easy cases, the converter might return a taken item belonging to the other (of course if time is lost or the item diminished, other relief will be available as well). Another simple example involves harm easily monetized by the money it takes to cure the injury.

Much of civil litigation, however, arises out of wrongs that can’t literally be undone. So the law does the best it can. It substitutes money for harm caused. Even if we cannot materialize a receipt for fixing it, and in fact, never will.

Thus, in most instances, juries determine the appropriate amount of money to compensate the plaintiff for the harm caused by the tortfeasor, breaching party, or other offender. Each body of substantive law has preferences for the best way to measure the harm so that the jury is guided to a principled award. These measurements include, for example, diminution in value and benefit of the bargain damages. Regardless of the underlying cause of action, concerns naturally arise when we need to translate harm that is not already in dollars.

The more intangible and nonpecuniary the harm, the greater the tension is. Yet, juries regularly place a dollar figure on such items as pain and suffering, lost limbs, and loss of consortium. For contracts, a plaintiff may claim the benefit of the bargain is lost profits, which means anticipated profits that would have been made if the breaching party had performed as promised. Not all such damages are recoverable because the law provides doctrines of limitation to restrain the measurement guides. Doctrines of limitation generally bound the decisionmaker to reasonably certain, foreseeable, and non-avoidable damages.

If the law limited its remedial force at this point, fewer critiques of excesses might flow, but certain harms would remain unremedied, unprevented, undeterred, and unpunished.

Accordingly, civil redress must go—when appropriate—beyond compensation. Civil litigation may in fact have nothing to do with compensation. The examples are varied but include enjoining imminent irreparable harm; setting aside a transaction that violates fiduciary duty; disgorging wrongful gains. Unjust enrichment and restitution claims saliently prove this point: they have nothing to do with compensation. That is why the remedy of restitution on an unjust enrichment claim is not called damages. The purpose of the remedy is to prevent unjust enrichment by the wrongdoer; thus, to measure it we look to the defendant’s gain not plaintiff’s loss. More on this later.

Posted by Caprice Roberts on November 21, 2015 at 11:00 AM | Permalink

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