Loser Takes All: Multiple Claimants & Probabilistic Restitution
10 U.C. Irvine L. Rev. 907 (2020)
31 Pages Posted: 8 Aug 2019 Last revised: 12 Jul 2021
Date Written: March 1, 2020
Consider these two seemingly unrelated recent scandals: The publicized fall from grace of cyclist Lance Armstrong, and the truly ruinous Madoff pyramid scheme. These cases (as well as a plethora of more mundane scenarios discussed throughout this article) share a common feature, hitherto scantly discussed by courts and legal scholars: causal ambiguity in restitution claims involving multiple claimants. In such cases, a wrongdoer was enriched at the expense of others – sometimes a great many others – and it is therefore difficult to determine exactly which possible victim is indeed the source of the wrongdoer’s enrichment. In such cases, it can be near impossible to preponderantly prove the identity of the claimant at whose expense the wrongdoer was enriched. This article is the first to identify this problem as a reoccurring pattern in restitutionary claims.
By making this novel contribution, the article fills an important gap in the literature and identifies a new paradigm within the law of restitution, that of causal ambiguity in multiple-claimant cases. This vacuum in the literature on restitutionary claims is especially striking, considering the vast scholarship on a closely related topic, namely causal ambiguity in multiple-defendant tort cases.
The article argues and demonstrates that the existing rules of the law of restitution do not provide appropriate solutions in multiple-claimant cases. Under existing law, many deserving claimants – sometimes all of them – can be left with no remedy, thereby denied of their rights and not compensated for harms they suffered at the hands of a wrongdoer. Drawing on the more developed literature on causal ambiguity in tort law, we propose a solution for this injustice by presenting, for the first time, a new concept of probabilistic restitution. The article shows that the proposed regime can lead to just and efficient outcomes, serving the goals of both interpersonal justice and deterrence.
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