Restitution

The law of restitution is the law of gains-based recovery. It is to be contrasted with the law of compensation, which is the law of loss-based recovery. When a court orders restitution it orders the defendant to give up his/her gains to the claimant. When a court orders compensation it orders the defendant to pay the claimant for his or her loss.The word 'restitution' was used in the earlier common law to denote the return or restoration of a specific thing or condition. In modern legal usage, its meaning has frequently been extended to include not only the restoration or giving back of something to its rightful owner and returning to the status quo but also compensation, reimbursement, indemnification, or reparation for benefits derived from, or for loss or injury caused to, another. In summary, therefore, the word 'restitution' means the relinquishment of a benefit or the return of money or other property obtained through an improper means to the person from whom the property was taken. The law of restitution is the law of gains-based recovery. It is to be contrasted with the law of compensation, which is the law of loss-based recovery. When a court orders restitution it orders the defendant to give up his/her gains to the claimant. When a court orders compensation it orders the defendant to pay the claimant for his or her loss. American Jurisprudence 2d edition notes: Restitution may be either a legal remedy or an equitable remedy, 'depend upon the basis for the plaintiff's claim and the nature of the underlying remedies sought'. Generally, restitution is an equitable remedy when the money or property wrongfully in the possession of defendant is traceable (i.e., can be tied to 'particular funds or property'). In such a case, restitution comes in the form of a constructive trust or equitable lien. Where the particular property at issue cannot be particularly identified, restitution is a legal remedy. This occurs, for example, when the plaintiff 'seeks a judgment imposing personal liability to pay a sum of money'. Unjust enrichment and quantum meruit are sometimes identified as types of a disgorgement legal remedies.