Materially identical to mistaken payment

Abstract

Mistaken payment is the ‘core case’ of unjust enrichment, and it has had a powerful effect on the development of this area of private law. For Peter Birks, unjust enrichment was simply ‘the law of all events materially identical to mistaken payment’—to be shaped through a process of abstraction from that core case. But this begs the question: how do we work out what counts as ‘materially identical’ to mistaken payment? The most obvious starting point, and that which Birks chose, is the central characteristic of money: money is valuable. Thus, ‘the law of all events materially identical to mistaken payments’ is ‘the law of all events that unjustly enrich one party at another’s expense’.

In this article, I argue that this starting point is incorrect. Rather than looking for some factual similarity between mistaken payment and other events, we should identify the role that money plays in justifying restitution. And what justifies restitution in the core case is not the ‘value’ or ‘benefit’ that money confers; rather, it is a defect in the legal transaction that links payor with payee. The payee is not liable because she has been ‘enriched’, but because she is the counterparty to a legal transaction which exhibits traits that there are institutional reasons to disavow. Just like contract and torts, the role of value is secondary: where correcting the injustice in specie is impossible or undesirable, the defendant must pay whichever sum will most nearly achieve that goal.