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If you are in a business dispute with another business, it is always good practice to resolve this as soon as possible. You should do so as amicably as you can and avoid court action. However, if you need to take commercial litigation, you may wonder about the type of claim you can make. One potential business claim following a business dispute is a claim for unjust enrichment. However, there is a time limit for this under English law. This article will explain what a claim for unjust enrichment is and how long you can wait to bring this claim.
What is a Claim for Unjust Enrichment?
A claim for unjust enrichment is a type of common law claim. It is where a claimant is at a loss through unjustly enriching the defendant in a court case. Therefore, the claim is not solely about the claimant’s loss but must be where their loss enhances the defendant.
For example, your business is the claimant, and you need to pay an invoice for a service a business provides you with, such as to your internet provider. However, by mistake, you pay the invoice to a different supplier you regularly pay, such as your landlord, to whom you pay rent. If that other supplier, your landlord, does not return the money to you, they experience an unjust enrichment at your expense.
This guide outlines how to resolve commercial disputes.
If your business has been unfairly affected by unjust enrichment, you may wish to make a claim. The law obligates the defendant to return the amount you enriched them by. There are specific elements you need to prove for this claim in a commercial dispute, including that:
- you enriched the defendant;
- the enrichment was unfair or unjust; and
- the enrichment was at your expense as the claimant.
What Do I Need to Show for a Claim for Unjust Enrichment?
In addition to bringing the claim within the limitation period, you must understand what is considered unjust or unfair. A court is particular about this and will not think the enrichment to be unjust if you and the defendant who experiences enrichment had an agreement with the details that the other party will receive enrichment in this way. Instead, a court will consider the following to constitute unjust enrichment:
- a lack of consideration for the defendant whom you enrich;
- where, like the example the article details, the payment was a genuine mistake on your behalf;
- if you enrich the other business under duress, so due to a threat or persuasion;
- where payment is due to undue influence, which may mean the other company takes advantage of you; or
- the other business did something which resulted in their enrichment by you.
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How Long Can I Wait to Bring a Claim?
If your business has been affected, you have a time limit to make a claim. This is the limitation period, which applies to many different types of court claims.
For this claim, you do not need to start at the end of any relevant contract but can begin before this. Instead, the time limit to make the unjust enrichment claim begins when there appears to be no basis or reason for the unfair enrichment you make to the defendant. The time limit from this point is in the Limitation Act 1980. It says that the time limit from this point is six years, in which you can try to bring the claim.
If the unjust enrichment was caused by a mistake, the six-year limitation period only begins once you realise the mistake.
Key Takeaways
To claim unjust enrichment, you must do so within the strict six-year limitation period. This begins when it is clear there is no basis for the enrichment rather than when any relevant contract ends. If the entrenchment is through a mistake, it starts once you realise this mistake or could have done it.
If you need help understanding how long you can wait to bring a claim for unjust enrichment, LegalVision’s experienced disputes and litigation solicitors can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.
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