Abstract
In academic discourse it is often said that “tort must not pay”. However, the legal reality looks very different. Infringements of e.g. competition law, unfair commercial practices law, capital market law, intellectual property rights, or personal rights by mass media, or the breach of fiduciary or confidentiality duties are—for various reasons—generally highly profitable for the wrongdoer. Thus, in practice unlawful conduct regularly pays as the illegal profits remain with the wrongdoer. A general idea of disgorgement of unlawful profits does not exist yet. This general report considers the question whether or not “disgorgement of profits” is a keyword to be introduced in legal discourse and how the law may be shaped in order for illegal profits to be disgorged as efficiently as possible and thus to reduce the incentives for unlawful behaviour. According to the approach selected here, it is the private law instruments, in particular what is called “disgorgement damages”, which are the centre of attention. Can their use contribute to an increase in efficiency and what national experiences are on hand? Which legal circumstances should be necessary for their application and what are the requirements?
Ewoud Hondius: membre titulaire de l’AIDC, previous general reporter on precontractual liability (Montréal 1990: Hondius (1990)), extinctive prescription (Athens 1994: Hondius (1995)) and precedent and the law (Utrecht 2006: Hondius (2008)).
André Janssen: Former researcher at the University of Turin (Italy) where his research on disgorgement of profits was supported by a Marie Curie Intra European Fellowship within the 7th European Community Framework Programme.
Hondius E, Janssen A, Disgorgement of Profits: Gain-Based Remedies Throughout the World in: Hondius E, Janssen A (eds.), Disgorgement of Profits. Gain-Based Remedies throughout the World, Volume 8 of the Series Ius Comparatum - Global Studies in Comparative Law, pp. 471-507 (2015), © Springer International Publishing Switzerland 2015. With permission of Springer.
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Notes
- 1.
“This Court never allows a man to make profit by a wrong, but by Lord Cairns’ Act the Court has the power of assessing damages, and therefore it is fairly argued here that this is a case in which damages ought to be reckoned […].” Lord Hatherly in Jegon v Vivian (1870–1871), Law Reports Chancery Appeal Cases VI, 742 (761). With respect to this quote see also the Greek national report.
- 2.
See e.g. American Law Institute (2011) § 3, ‘Wrongful Gain’: “A person is not permitted to profit by his own wrong.”
- 3.
See e.g. Rookes v. Barnard [1964] AC 1129 (1227), per Lord Devlin: “Exemplary damages can properly be awarded whenever it is necessary to teach a wrongdoer that tort does not pay.” See also Schmolke (2007), 3: “tort must not pay”. Very clear in this respect also the report for Portugal: “The principles that one who engages in illegal behaviour should not benefit from this conduct is common to all areas of law.”
- 4.
- 5.
For the understanding of the term disgorgement damages see in more detail Sect. <InternalRef RefID="Sec4"6.4</Internal Ref> of this general report.
- 6.
All national reports which are mentioned in this contribution can be found in Hondius, Janssen (2015).
- 7.
Katy Barnett, BA/LLB (Hons), PhD (Melb), Senior Lecturer at Melbourne Law School.
- 8.
Maximilian Brunner, University of Klagenfurt; Stefan Perner, Professor of Law, University of Klagenfurt.
- 9.
Marc Kruithof, Professor of Law, University of Ghent.
- 10.
Aline de Miranda Valverde Terra, Professor of Law, University of Rio de Janiero.
- 11.
Lionel Smith, Professor of Law, McGill University (Montréal); Jeff Berryman, Professor of Law, University of Windsor (Ontario).
- 12.
Rodrigo Momberg, PhD, Brasenose College, University of Oxford.
- 13.
Xiang Gao, Professor of Law and Dean, College of Comparative Law, China University of Political Science and Law, Beijing; Chengwei Liu, Professor of Law, College of Comparative Law, China University of Political Science and Law, Beijing.
- 14.
Ana Keglevic, Assistant Professor of Law, University of Zagreb.
- 15.
Stephen Watterson, M.A., D.Phil. (Oxon), University of Cambridge.
- 16.
Michel Séjean, Professor of Law, Université de Bretagne-Sud.
- 17.
Tobias Helms, Professor of Law, University of Marburg.
- 18.
Eleni Zervogianni, PhD, University of Thessaloniki.
- 19.
Niamh Connolly, Assistant Professor of Law, Trinity College Dublin.
- 20.
Talia Einhorn, Professor of Law, Ariel University Department of Economics and Business Management, Israel; Visiting Senior Research Fellow, Tel-Aviv University Faculty of Management.
- 21.
Paolo Pardolesi, Associate Professor of Law, University of Bari.
- 22.
Yoshihisa Nomi, Professor of Law, Gakushuin University Law School.
- 23.
Erik Monsen, Professor of Law, University of Bergen.
- 24.
Henrique Sousa Antunes, Professor of Law, Catholic University of Portugal, Lisbon.
- 25.
Adriana Almăsan, Associate Professor of Law, University of Bucharest; Cristina Zamsa PhD, University of Bucharest.
- 26.
Martin Hogg, Professor of Law, University of Edinburgh.
- 27.
Damjan Možina, Associate Professor of Law, University of Ljubljana.
- 28.
Jacques du Plessis, Professor of Law, University of Stellenbosch; Daniel Visser, Professor of Law, University of Cape Town.
- 29.
Carlos Gomez, Professor of Law, University Pompeu Fabra, Barcelona.
- 30.
Başak Başoğlu, Assistant Professor of Law, Istanbul Kemerburgaz University, Istanbul.
- 31.
- 32.
For more details see the reports for Austria, Croatia, Germany, Ireland, Israel, Norway, Portugal, Slovenia, South Africa, Turkey.
- 33.
See the reports for Austria and Portugal.
- 34.
See, for instance, the reports for Germany and Austria, and, in contrast, the Slovenian report.
- 35.
See e.g. the section of the German report concerned with competition law and unfair commercial practices law; see also the Chinese report. See also Sect. <InternalRef RefID="Sec4"6.4</Internal Ref> for further information.
- 36.
In the common law, restitution has two meanings: a giving back and a giving up, as Peter Birks has observed.
- 37.
See for the terminology and a possible differentiation between the aforementioned terms Edelman (2002), 65 et seq. See also the Irish and Scottish reports.
- 38.
See e.g. Dreier (2002), 42 et seq.; Kruithof (2011), 13 (37 et seq.). This “windfall profit” only arises when the skimmed-off profit goes to the plaintiff. Although this is often the case there are systems and legal instruments which allow the profit to be paid to the state (see e.g. the Chinese and German reports).
- 39.
See the Israeli report.
- 40.
See e.g. the reports for Canada, England and Wales, and Ireland.
- 41.
See e.g. the reports for Belgium, Brazil, Croatia, France, Germany, Greece, Italy, Japan, Norway, Spain, and Turkey.
- 42.
Cf Whittaker (2011), 179: “It is always difficult to discuss a topic from the point of view of a legal system where that legal system does not recognise the existence of the topic.” See also e.g. the reports for Brazil, Italy, Slovenia (“In private law, the term disgorgement of profits is unknown.”), Spain (“Hence, there is no general principle of disgorging profits under Spanish private law […].”).
- 43.
See e.g. the reports for Canada: “Canadian Law clearly allows gain-based remedies.”, England and Wales: “English law undoubtedly recognises that gain-based remedies may be awarded as a response to civil wrongdoing.”, and Ireland.
- 44.
This is very clearly noted in the Belgian report in which it is noted that disgorgement damages “tend to be camouflaged”.
- 45.
See especially in this regard the Belgian report.
- 46.
- 47.
See in more detail the reports for Israel and Scotland.
- 48.
Disgorgement for common law causes of actions such as tort and breach of contract has in general been rejected: Hospitality Group Pty Ltd v Australian Rugby Union Ltd (2001) 110 FCR 157 (FCA) 196 (Hill and Finkelstein JJ); Town & Country Property Management Services Pty Ltd v Kaltoum [2002] NSWSC 166 [85] (Campbell J); Biscayne Partners Pty Ltd v Valance Corp Pty Ltd [2003] NSWSC 874 [232]–[235] (Einstein J); Short v Crawley [2005] NSWSC 928 [24] (White J); Young (2000). One of the few positive judicial comments in favour of such a remedy is, however, that of Deane J in Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41, 124–25 (HCA). There are also academic accounts which are favourable: see e.g. Barnett (2012), Edelman (2002) (Edelman J is now a judge of the Supreme Court of Western Australia), and Harder (2010). For the situation in Australia see the Australian report.
- 49.
Meagher RP, Heydon JD, Leeming MJ (2002), 61, 854. See also the Australian report.
- 50.
See e.g. American Law Institute (2011), § 4, ‘Restitution may be legal or equitable or both’.
- 51.
For more details see Sect. <InternalRef RefID="Sec11"6.7</Internal Ref> of this general report.
- 52.
- 53.
- 54.
See e.g. for the treble damages in US competition law Antitrust Modernization Commission (2007), 246 (treble damages also for “disgorgement of profits”).
- 55.
Farnsworth (1985).
- 56.
Eisenberg (2006).
- 57.
Snepp v US 444 US 507 (1980, Alaska).
- 58.
See American Law Institute (2011), § 39, ‘Profit From Opportunistic Breach’, § 51, ‘Enrichment By Misconduct; Disgorgement; Accounting’ and § 53, ‘Use Value; Proceeds; Consequential Gains’.
- 59.
However, there are some historic examples of equity affording the account of profits as a remedy for what could be characterised as common law wrongs – e.g. patent infringement, which could generate a claim for damages in common law courts, or a claim for an account of profits alongside an injunction in equity, even before the mid-19th century.
- 60.
See Murad v Al-Saraj [2005] EWCA Civ 959 (England and Wales); Warman v International Ltd v Dwyer (1995) 182 CLR 541 (Australia).
- 61.
Attorney-General v Guardian Newspapers (No. 2) [1990] 1 AC 109 (HL).
- 62.
Hickey v Roches Stores (Unreported, Irish High Court, 14 July 1976), reported at [1993] 1 Restitution Law Review 196.
- 63.
Hickey v Roches Stores (Unreported, Irish High Court, 14 July 1976), reported in [1993] 1 Restitution Law Review 196; see also Maher v Collins [1975] IR 232, 238. For more details see the Irish report.
- 64.
Hickey v Roches Stores (Unreported, Irish High Court, 14 July 1976), reported in [1993] 1 Restitution Law Review 196, 208.
- 65.
As indicated in the Irish report.
- 66.
Attorney-General v Blake [2001] 1 AC 268.
- 67.
See the English report for further details on this decision and on this question in general.
- 68.
See e.g. Surrey County Council v Bredero Homes Ltd [1993] 1 WLR 1361 (CA).
- 69.
As is described in the English report (with further references).
- 70.
For further details on this discussion see the national reports for Australia, Canada, Ireland and Scotland.
- 71.
But cf Devenish Nutrition Ltd v Sanofi-Aventis SA [2008] EWCA Civ 1086 (breach of competition law); Forsyth-Grant v Allen [2008] EWCA Civ 505 (nuisance). For critical discussion, see Rotherham (2010).
- 72.
For more details on this interesting question see the English report.
- 73.
Adras v. Harlow & Jones GmbH, Further Hearing 20/82, 42(1) PD 221-285. See in more detail the Israeli report.
- 74.
Harlow & Jones v. Adras, C.A. (Civil Appeal) 815/80 (1983) 37(1) PD 225 (10 October 1982). See in more detail the Israeli report.
- 75.
See the Israeli report.
- 76.
See e.g. the reports for Austria, Belgium, Brazil, Chile, Greece, Italy, Japan, Norway, Spain, Slovenia, and Turkey.
- 77.
Wagner (2006), 96 et seq.
- 78.
Nederlandse Jurisprudentie 1995, no. 421.
- 79.
Linssen (2001).
- 80.
See the Chinese report for the numerous legislative references concerning disgorgement damages in Chinese law.
- 81.
For more details see the Chinese report.
- 82.
As stated in the Chinese report.
- 83.
Article VI-6:101 (Aim and forms of reparation) DCFR and PEL Liab. Dam.) set forth:
(1) Reparation is to reinstate the person suffering the legally relevant damage in the position that person would have been in had the legally relevant damage not occurred.
(2-3) (...)
(4) As an alternative to reinstatement under paragraph (1), but only where this is reasonable, reparation may take the form of recovery from the person accountable for the causation of the legally relevant damage of any advantage obtained by the latter in connection with causing the damage.
- 84.
von Bar, Clive (2009), 3725, 3726.
- 85.
European Group on Tort Law (2005), article 10:101 PETL, no. 7.
- 86.
When it comes to the acceptance of bribes from third parties as a breach of confidence see in more detail the general report of Bonell and Meyer, The effects of corruption in international commercial contracts (to be published in the volume of general reports for the Vienna conference of the IALS). This particular question was generally omitted here due to the aforementioned study.
- 87.
See the reports from Australia, England and Wales, and Ireland.
- 88.
See, for instance, the Canadian report.
- 89.
With regard to this question see, in particular, the report for England and Wales.
- 90.
An argument advanced and rejected in both Vercoe v Rutland Fund Management Ltd [2010] EWHC 424 (Ch) and Walsh v Shanahan [2013] EWCA Civ 411.
- 91.
Vercoe v Rutland Fund Management Ltd [2010] EWHC 424 (Ch), esp [334]-[345], endorsed by the Court of Appeal in Walsh v Shanahan [2013] EWCA Civ 411, esp [55]-[73].
- 92.
For further details see the national reports from Australia, Canada, England and Wales, and Ireland.
- 93.
All trusts are situations in which a person holds property, but owes an obligation to another person to hold the benefit of that property for the other. The obligation is either undertaken voluntarily (express trust) or imposed by law (constructive trust). Not all forms of the constructive trust are recognised in England, where the concept of a ‘remedial constructive trust’ has not yet been authoritatively accepted by the courts. For more details see the reports for England and Wales, and Ireland.
- 94.
Article II.-3:302 DCFR:
(1) If confidential information is given by one party in the course of negotiations, the other party is under a duty not to disclose that information or use it for that party’s own purposes whether or not a contract is subsequently concluded.
(2) In this Article, “confidential information” means information which, either from its nature or the circumstances in which it was obtained, the party receiving the information knows or could reasonably be expected to know is confidential to the other party.
(3) A party who reasonably anticipates a breach of the duty may obtain a court order prohibiting it.
(4) A party who is in breach of the duty is liable for any loss caused to the other party by the breach and may be ordered to pay over to the other party any benefit obtained by the breach.
- 95.
Article 2:302 PECL (Breach of Confidentiality):
If confidential information is given by one party in the course of negotiations, the other party is under a duty not to disclose that information or use it for its own purposes whether or not a contract is subsequently concluded. The remedy for breach of this duty may include compensation for loss suffered and restitution of the benefit received by the other party.
For further details on article 2:302 PECL see Böger (2009), 919 et seq.
- 96.
Lando and Beale (2000), Comments to article 2:302 PECL no. 2.
- 97.
For further details see the Chinese national report.
- 98.
Article 61 Chinese Company Law:
A director or the general manager may not engage in the same business as the company in which he serves as a director or the general manager either for his own account or for any other person’s account, or engage in any activity detrimental to company interests. If a director or the general manager engages in any of the above mentioned business or activity, any income so derived shall be disgorged to the company. Unless otherwise provided in the articles of association or otherwise agreed by the shareholders’ committee, a director or the general manager may not execute any contract or engage in any transaction with the company.
- 99.
See, for instance, the reports from Croatia, Germany, Norway, Slovenia or South Africa.
- 100.
As is stated in, for instance, the Croatian and South African reports.
- 101.
See, for instance, the reports from Belgium, Croatia and Germany.
- 102.
Section 61(1) of the German Commercial Code:
If a mercantile employee violates the obligations imposed upon him by section 60, the employer can claim damages, or in the alternative he can claim to take over for his own account the transactions entered upon by the employee for his private account; if the employee enters upon transactions for the account of a third party the employer may claim for himself any remuneration earned by the employee thereby or an assignment to him of the rights of action in respect thereof.
- 103.
Article 41(1) TRIPS:
Members shall ensure that enforcement procedures as specified in this Part are available under their law so as to permit effective action against any act of infringement of intellectual property rights covered by this Agreement, including expeditious remedies to prevent infringements and remedies which constitute a deterrent to further infringements. These procedures shall be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse.
- 104.
Article 45 TRIPS:
1. The judicial authorities shall have the authority to order the infringer to pay the right holder damages adequate to compensate for the injury the right holder has suffered because of an infringement of that person’s intellectual property right by an infringer who knowingly, or with reasonable grounds to know, engaged in infringing activity.
2. The judicial authorities shall also have the authority to order the infringer to pay the right holder expenses, which may include appropriate attorney’s fees. In appropriate cases, Members may authorize the judicial authorities to order recovery of profits and/or payment of pre-established damages even where the infringer did not knowingly, or with reasonable grounds to know, engage in infringing activity.
- 105.
Article 6(1) ACTA:
Each Party shall ensure that enforcement procedures are available under its law so as to permit effective action against any act of infringement of intellectual property rights covered by this Agreement, including expeditious remedies to prevent infringements and remedies which constitute a deterrent to further infringements. These procedures shall be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse.
- 106.
Article 9(1) ACTA:
Each Party shall provide that, in civil judicial proceedings concerning the enforcement of intellectual property rights, its judicial authorities have the authority to order the infringer who, knowingly or with reasonable grounds to know, engaged in infringing activity to pay the right holder damages adequate to compensate for the injury the right holder has suffered as a result of the infringement. In determining the amount of damages for infringement of intellectual property rights, a Party’s judicial authorities shall have the authority to consider, inter alia, any legitimate measure of value the right holder submits, which may include lost profits, the value of the infringed goods or services measured by the market price, or the suggested retail price.
- 107.
Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights.
- 108.
For further details on this point see Janssen (2016), 362 et seq.
- 109.
For more details see the reports from Germany, Belgium, England and Wales, Greece, Scotland, Italy, Ireland, France, and Austria. Other European countries, which do not belong to the EU, also feature similar laws (see for example the Turkish and Norwegian reports).
- 110.
For further details see Janssen (2016), 382 et seq. With respect to Germany see also section 53(1)2 of the model intellectual property act.
- 111.
See the Belgian report.
- 112.
Report of the House of Representatives on the 1976 Act, HR Report No. 94-1476, 161. See also Schmolke (2007), 10, who assumes that the payment of the wrongdoer’s profits under US-American copyright law and trademark law also serves the objective of prevention.
- 113.
See, for example, the reports from Brazil, Canada and China. In contrast, there is no reference to the wrongdoer’s profits in South African intellectual property law (with the exception of copyright law). For further details see the South African report.
- 114.
See the Chinese report.
- 115.
Colbeam Palmer Ltd v Stock Affiliated Ltd (1970) 122 CLR 25.
- 116.
For further details see this Australian report.
- 117.
See the Israeli and Japanese reports.
- 118.
See the Japanese report.
- 119.
Also noted in the Croatian report.
- 120.
For further details see the reports from Austria, Croatia, Greece and Norway.
- 121.
See the reports from China and Slovenia.
- 122.
See the reports from Croatia und Greece.
- 123.
See the reports from Austria, Croatia and Slovenia.
- 124.
However, this does not apply to all legal systems. For instance, in Turkish intellectual property law the benevolent intervention in another’s affairs plays a particular role with respect to the question of disgorgement of profits even though special provisions in damages law create a link to the wrongdoer’s profits. For further details see the Turkish report.
- 125.
German Supreme Court 15 November 1994, Neue Juristische Wochenschrift 1995, 861 (Caroline von Monaco I (Fictitious Exclusive Interview)).
- 126.
German Supreme Court 8 May 1956, BGHZ 20, 345 et seq. (Paul Dahlke).
- 127.
German Supreme Court 14 February 1958, BGHZ 26, 349 et seq. (Herrenreiter).
- 128.
German Supreme Court 19 September 1961, BGHZ 35, 363 et seq. (Ginsengwurzel).
- 129.
German Supreme Court 15 November 1994, Neue Juristische Wochenschrift 1995, 861 (Caroline von Monaco I (Fictitious Exclusive Interview)), 865.
- 130.
For instance, Kötz and Wagner (2013), no. 424: “At the same time the Supreme Court openly stated (which one could only assume before), that the claim for monetary damages will not be granted for compensatory purposes, but above all has the function of deterring the wrongdoer from repeating his actions.”
- 131.
German Supreme Court 15 November 1994, Neue Juristische Wochenschrift 1995, 861 (Caroline von Monaco I (Fictitious Exclusive Interview)), 865. In Germany this decision is considered the starting point for disgorgement damages for infringements of personality rights by the press even though the German Supreme Court shys away from labelling its approach as disgorgement of profits.
- 132.
See Higher Regional Court Hamburg 30 July 2009, Gewerblicher Rechtsschutz und Urheberrecht – Rechtsprechungsreport 2009, 438 et seq. (Swedish Princess); Higher Regional Court Cologne 12 July 2016, becklink 2003842 (Jörg Kachelmann).
- 133.
See the Portuguese report for more details on this decision and on this topic in general.
- 134.
See the Japanese report.
- 135.
See the Belgian report, which however notes that the consideration of the profits when calculating the non-pecuniary loss is the exception and not the rule.
- 136.
See in more detail the Greek report.
- 137.
See Art 4 para 10 of the only Art of Law 2328/1995 on infringements by Radio and TV. See also para 2 of the only Art of Law 1178/1981, as amended by para 1 of the only Art of Law 2243/1994 referring to minimum compensation of the non-pecuniary loss of the victim in case of libel by the press. See also the Greek report.
- 138.
As also indicated in the Greek report.
- 139.
Ley Orgánica 1/1982, de 5 de mayo, de protección civil del honor, la intimidad personal y familiar y la propia imagen.
- 140.
For more details see the Spanish report.
- 141.
See, for example, the comments in the South African report.
- 142.
See in particular the German and Greek reports.
- 143.
See the Turkish report for more details about the legal situation in Turkey.
- 144.
Now expressly in Swiss Supreme Court 7 December 2006, Juristenzeitung 2007, 1159 (1160) (disgorgement of profits for personality rights infringements).
- 145.
See e.g. Swiss Supreme Court 7 December 2006, Juristenzeitung 2007, 1159 (1159 et seq.) (disgorgement of profits for personality rights infringements).
- 146.
[1964] AC 1129, esp 1220-1233 (per Lord Devlin). See also Cassell & Co v Broome [1972] AC 1027.
- 147.
[1964] AC 1129, 1226-1227 (per Lord Devlin).
- 148.
See also the report from England and Wales.
- 149.
As is especially clear from the Australian report.
- 150.
Section 20 Chinese Anti-Unfair Competition Law provides that “where an operator, in contravention of the provisions of this Law, causes damage to another operator, i.e., the injured party, the infringer shall bear the responsibility for compensating for the damages. Where the losses suffered by the injured operator are difficult to calculate, the amount of damages shall be the profit gained by the infringer during the period of infringement through the infringing act. The infringer shall also bear all reasonable costs paid by the injured operator in investigating the acts of unfair competition committed by the operator suspected of infringing the injured operator’s lawful rights and interests”.
- 151.
For further details and criticism of this approach see the Chinese report.
- 152.
For further details see the Austrian report.
- 153.
Austrian Supreme Court 13 July 1953 3 Ob 417/53, although the judgment is about an infringement governed by section 9 Act Against Unfair Competition the court could not argue with paragraph 4 (and the express claim to disgorge the violator’s profits therein contained) because the said paragraph was not enacted until 1999 (see Trade Mark Amendment Act BGBl I 111/1999); Austrian Supreme Court 8 May 1962, 4 Ob 319/62. For more details see the Austrian report.
- 154.
For more details see the Japanese report.
- 155.
For more details and references to further court decisions see the German report. In Austria there appears generally (at least in these areas) not to be any doubt of the application of disgorgement damages.
- 156.
Section 10 Unfair Competition Act:
(1) Whoever, while acting with intent, uses an illegal commercial practice pursuant to Section 3 or Section 7, thereby making a profit to the detriment of numerous purchasers, can be sued for surrender of such profit to the Federal budget by those entitled, pursuant to Section 8 subsection (3), numbers 2 to 4, to assert a cessation and desistance claim.
(2) Such payments as were made by the debtor, because of the contravention, to third parties or the state shall be deducted from the profit. So far as the debtor made such payments only at a time subsequent to satisfaction of the claim pursuant to subsection (1), the competent agency of the Federation shall reimburse the debtor the profit thus paid in the sum of the recorded payments.
(3) Where there is more than one creditor claiming the profit, sections 428 to 430 of the Civil Code shall apply mutatis mutandis.
(4) Creditors shall notify the competent agency of the Federation of the assertion of claims pursuant to subsection (1). Creditors can request reimbursement from the competent agency of the Federation for such expenses as were necessary for assertion of the claim, so far as they cannot obtain satisfaction from the debtor. The reimbursement claim shall be limited to the sum of the profit paid into the Federal budget.
(5) The competent agency within the meaning of subsections (2) and (4) shall be the Federal Office of Justice.
- 157.
German law provides a corresponding provision for antitrust law, section 34a Act against Restraints of Competition.
- 158.
BT-Drucks. 15/1487, 23 and BT-Drucks. 15/3640, 36.
- 159.
For more details see the German report or Sieme (2009).
- 160.
Section 33(3) Act against Restraints of Competition:
Whoever intentionally or negligently commits an infringement pursuant to paragraph 1 shall be liable for the damages arising therefrom. If a good or service is purchased at an excessive price, the fact that the good or service has been resold shall not exclude the occurrence of a damage. The assessment of the size of the damage pursuant to section 287 of the Code of Civil Procedure [Zivilprozessordnung] may take into account, in particular, the proportion of the profit which the undertaking has derived from the infringement. From the occurrence of the damage, the undertaking shall pay interest on its obligations to pay money pursuant to sentence 1. Sections 288 and 289 sentence 1 of the Civil Code shall apply mutatis mutandis.
- 161.
For more details see Janssen (2016), 552 et seq.
- 162.
Green Paper – Damages actions for breach of the EC antitrust rules, 19 December 2005, COM(2005) 672 final, 7.
- 163.
- 164.
“Beneath the cloak of restitution lies the dagger that compels the conscious wrongdoer to ‘disgorge’ his gains.” (Warren v. Century Bankcorp., Inc., 741 P.2d 846, 852 (Okla. 1987)).
- 165.
See for instance the reports from Belgium, Chile, Croatia, Greece, Ireland and South Africa. Several national reports do however see a great relevance of unjust enrichment for the question of disgorgement of profits (see the reports from Brazil, Israel and Portugal).
- 166.
For details on the proprietary remedies see also the reports from Turkey, Norway, Belgium, Japan, South Africa and Israel.
- 167.
See the reports from Greece, Ireland and Scotland.
- 168.
Pro-Sys Consultants Ltd. v Microsoft Canada CIE 2013 SCC 57 at [93].
- 169.
For example, the Italian report is very clear in this respect.
- 170.
See also e.g. the report for Brazil, Italy, Slovenia, Spain.
- 171.
Hickey v Roches Stores (Unreported, Irish High Court, 14 July 1976), reported in [1993] 1 Restitution Law Review 196. See also the Irish report.
- 172.
For more details see the Brazilian and South African reports.
- 173.
See, e.g. the German report.
- 174.
For more details see the report for England and Wales.
- 175.
For more details see the Chinese report.
- 176.
For more details see the Chinese report.
- 177.
See, for example, the reports from Turkey, Greece, Italy, Croatia and China, as well as the reports from Spain and South Africa.
- 178.
As is noted in many national reports (for instance in the Italian and Greek reports).
- 179.
This report cannot tackle the question of whether disgorgement damages are also justifiable when the wrongdoer has “merely” infringed the market’s code of conduct. For more details on this question see Janssen (2016), 557 et seq.
- 180.
For more details see part 1 of this report.
- 181.
As is also the view in the Chinese report. The German experiences with section 10 of the Unfair Competition Act, which provides that the unlawful profits are to be paid to the state, show that such an approach has almost no practical effect.
- 182.
See in particular the reports from China, Croatia, Australia and Israel.
- 183.
See the reports from Croatia (“There are no legally binding rules on its calculation, nor there is a court practice on this issue.”) and Israel (“Israeli law has not developed a systematic approach to the calculation of profits.”).
- 184.
See also the Chinese report. For more details see Janssen (2016), 396 et seq.
- 185.
- 186.
German Surpreme Court 2 November 2011, Gewerblicher Rechtsschutz und Urheberrecht 2001, 329 et seq. (Gemeinkostenanteil – overhead share).
- 187.
Lehmann (2004), 1686.
- 188.
German Supreme Court 2 November 2011, Gewerblicher Rechtsschutz und Urheberrecht 2001, 329 et seq. (331) Gemeinkostenanteil (overhead share).
- 189.
See Grabinski (2009), 262.
- 190.
See Swiss Supreme Court 7 December 2006, Juristenzeitung 2007, 1159 (1159 et seq.) (disgorgement of profits for personality rights infringements).
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Hondius, E., Janssen, A. (2017). Disgorgement of Profits: Gain-Based Remedies Throughout the World. In: Schauer, M., Verschraegen, B. (eds) General Reports of the XIXth Congress of the International Academy of Comparative Law Rapports Généraux du XIXème Congrès de l'Académie Internationale de Droit Comparé. Ius Comparatum - Global Studies in Comparative Law(), vol 24. Springer, Dordrecht. https://doi.org/10.1007/978-94-024-1066-2_6
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