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Disgorgement Damages in Norwegian Law




© Springer International Publishing Switzerland 2015
Ewoud Hondius and André Janssen (eds.)Disgorgement of ProfitsIus Comparatum – Global Studies in Comparative Law810.1007/978-3-319-18759-4_15


15. Disgorgement Damages in Norwegian Law



Erik Monsen 


(1)
University of Bergen, Bergen, Norway

 



 

Erik Monsen



Abstract

Norwegian law does not acknowledge a general rule similar to for instance the German § 812 BGB providing that a person who has been unjustly enriched at the expense of another is under a duty to make restitution to him. Nor does Norwegian law acknowledge a general rule on disgorgement damages. However, Norwegian law contains several specific rules that are providing for the disgorgement of profits obtained by a wrong. This is so, in particular, within the sphere of intellectual property rights and infringement of such rights. In this author’s view the legal material in Norwegian law now offers sufficient basis for at least discussing the acknowledgement of a general rule on disgorgement damages and the development of a separate branch of law dealing with unjustified enrichment.


Keywords
Disgorgement damagesRestitutionary damagesUnjustified enrichmentNorwegian lawEnrichment by subtraction



is a Professor of Law at the University of Bergen, Norway and also practices as a lawyer on part time basis in Advokatfirmaet Simonsen Vogt Wiig AS.

 



No Separate Branch of Law Dealing with Unjustified Enrichment


In Norwegian law there is no separate branch of law dealing with unjustified enrichment. There are, however, numerous rules giving grounds for enrichment claims. As in jurisdictions that have a “law of unjustified enrichment”, Norwegian law contains rules concerning e.g. claims based on enrichment by subtraction (“restitusjonskrav”), restitutionary damages (reasonable royalty) and disgorgement damages (“vederlagskrav” og “vinningsavståelseskrav”, respectively).1 Notwithstanding the existence of such rules, the legal doctrine has not been preoccupied with systematization of enrichment claims and development of such a separate branch of law.

The lack of a separate branch of law dealing with unjustified enrichment undoubtedly has had an effect on the development of enrichment claims, since such claims, and the connections between them, have for the most part not been analysed in depth in Norwegian law. For instance, in books on tort law there are some traces of restitution damages and disgorgement damages being dealt with, but since tort law’s main focus have been and still is personal and property damage the legal writing has only to a very limited extent analysed restitutionary damages and disgorgement damages. Furthermore, a rather specialized legal discipline called “the law of monetary claims” (“pengekravsrett”) deals with some claims concerning enrichment by subtraction, e.g. condictio indebiti and recourse. However, this legal discipline does not purport to give a systematized account of claims based on enrichment by subtraction. For instance, a cohabitant’s claim for remuneration upon breakup for contributing to the other party’s capital increase is dealt with in family law.

Some writers have been preoccupied with the so-called law of obligations. The main work within the law of obligations is Viggo Hagstrøm’s book “Obligasjonsrett”. In this book, Hagstrøm analysed enrichment as a legal ground for monetary claims. He seemed to argue in favour of the existence of a general reasonableness rule that gives grounds for enrichment claims.2 Such a rule has not been acknowledged by the Norwegian Supreme Court (“Høyesterett”), and Hagstrøm’s point of view has not been adopted by the legal doctrine as a starting point for establishing a separate branch of law dealing with unjustified enrichment.


No General Legal Basis for Disgorgement Damages


In Norwegian law there is no general rule providing that a person who is unjustly enriched at the expense of another is under a duty to make restitution to him. Surely, the Supreme Court has recognised the existence of broad principles concerning unjustified enrichment. For instance, the Supreme Court made reference to “general principles of restitution and enrichment” (“alminnelige restitusjons- og berikelsesprinsipper”) in 1984 in a case concerning a cohabitant’s claim for remuneration upon breakup for contributing to the other party’s capital increase,3 and later in a similar case in Retstidende 2000 p. 1089. In the same vein, the Supreme Court has awarded restitution damages on the basis of a general rule (“alminnelige rettsgrunnsetninger”) which it recognized on grounds of adjacent positive law.4

However, the Supreme Court has not acknowledged the existence of a general enrichment rule comprising enrichment by subtraction and restitution for wrongs, nor has it acknowledged a general rule concerning disgorgement damages. In fact, there are few case law examples concerning disgorgement damages. In effect this means that it is quite uncertain if and to what extent disgorgement damages may be awarded on the basis of non-statutory law.

In 2005, the Supreme Court decided a case concerning unlawful passing off in which the plaintiff claimed damages for loss and, alternatively, disgorgement damages, arguing that the defendant should not be allowed to make a profit from a wrong, notwithstanding any proof of the plaintiff having suffered a loss as a consequence of the wrong.5 The Supreme Court awarded only damages for loss. The Court did not find it necessary to decide whether or not there is a non-statutory legal basis for disgorgement damages in cases concerning passing off, since disgorgement damages, according to the Court, would not provide any better result for the plaintiff than the claim for damages for loss. Without acknowledging any legal basis for disgorgement damages, the Supreme Court stated that the profits from the wrong would consist of only profits that were a consequence of the customers by mistake having bought the defendant’s product instead of the plaintiff’s.

In my mind this cannot be correct, since the profits obtained by passing off surely may exceed the profits that are obtained by sales that are caused by such mistake by the customers. One may argue that the case illustrates the uncertainty in Norwegian law when it comes to disgorgement damages.

The same can be said about a Supreme Court decision which was handed down in 2007.6 In this case, the plaintiff claimed disgorgement damages for violation of a non-competition clause. The Supreme Court pointed out that the case law, in particular one of its own judgements from 1966,7 gave some support for the existence of a non-statutory legal basis for a claim for disgorgement damages in cases concerning violation of non-competition clauses. However, the Court found in favour of the defendant since he had acted only negligently. The Court did not decide whether Norwegian law contains a non-statutory legal basis for awarding disgorgement damages in cases concerning violation of non-competition clauses. It only stated that such a claim in any event would be conditional upon the defendant having acted with gross negligence or maybe even in bad faith.8

Whilst the non-existence of a general legal basis for enrichment claims is quite symptomatic of the lack of a separate branch of law dealing with unjustified enrichment, the latter surely does not exclude the existence of a general legal basis for disgorgement damages. As will be shown below, the statutory law on disgorgement damages has undergone quite considerable development lately, and this development can turn out to be important for a possible recognition of a general legal basis for disgorgement damages.


Arsenal of Instruments Focussing on Unlawful Profits


Norwegian law contains several rules, both in penal, administrative and private law that are focussing on the disgorging of profits obtained by a wrong. The Penal Code (“straffeloven”) § 35 provides that profits resulting from criminal acts may be confiscated. The confiscated profits will in general accrue to the Norwegian state. The Penal Code § 37d does however authorize judgements stating that the confiscated profits shall be used to cover a claimant’s claim for damages.

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