The Value Of A Benefit That Was Produced By Using Someone Else's Assets

• Published date: 28 December 2022
• Subject Matter: Wealth Management, Real Estate and Construction, Wealth & Asset Management, Real Estate
• Law Firm: Efraim Weinstein Law Offices
• Author: Efraim Weinstein Law Offices

Background

Sometimes a person or a corporation makes use of an asset that is not owned by them but by someone else, with this use being by virtue of the fact that they have the "power" rather than a legal right to do so. The user has the ability to take the right or use the asset without needing to obtain the owner's permission and/or consent.

In some cases, the use or performance of the action causes the owner damage for which the law allows him compensation under the laws of torts. In other cases, the mere use does not cause the owner damage. For example, temporary use of real estate does not necessarily reduce its value. Nevertheless, a legal result in which a person takes the property of another without causing him damage and without being required to make compensation for such use, goes against the principles of the legal system.

This is where the laws of unjust enrichment¹ come into the picture, allowing the owner of the property (whose right was taken from him) to file a claim for restitution under the laws of unjust enrichment, due to the taking or use of another's property. Such a claim is based on the fact that the beneficiary took the owner's property or used it for his personal benefit, without obtaining the approval of the owner of the right/property. Temporary use is considered, for this matter, as having taken the property for the duration of the use.

The Rationale for the Relief of Restitution

In essence, the restitution relief is intended to return to the plaintiff the benefit that accrued to the defendant due to the unlawful taking of the right at the plaintiff's expense. Where under the laws of torts, the plaintiff's claim is to be compensated for the damage caused to him (assuming he endured such damage), here the goal is to transfer the economic value of the benefit (the enrichment) that has accrued to the defendant as a result of the unlawful taking of the plaintiff's right.

This distinction is important in those cases where, despite the defendant's infringing actions, the plaintiff suffered no damage, or only insignificant damage, but the defendant gained a very valuable benefit. In such cases, when the defendant's profit as a result of an unlawful action at the plaintiff's expense exceeds the latter's damage, the plaintiff will prefer to sue on the grounds of restitution that exists under the laws of unjust enrichment².

This restitution is not absolute, and the court has the authority to grant an exemption from the obligation of...