What counts as unjust enrichment?

Question

José Manuel Alburquerque · Accepted Answer

Unjust enrichment occurs when a person increases their wealth, or avoids a cost they should have borne, at someone else's expense and without any legal reason to justify it. The person who has been impoverished can claim the return of what the other has gained at their expense. Neither the Spanish Civil Code (“Código civil”) nor the “Código Civil de Cataluña”, the Catalan Civil Code, regulates it in general terms, so its requirements have been laid down by the courts. It is a remedy of last resort, which can only be used when the law provides no other claim, such as one under a contract or one for the return of money paid by mistake. The four requirements The claimant must prove that all four are met at the same time: That the other person has been enriched, because their wealth has increased or because they have avoided a cost or a loss that was theirs to bear. That you have been impoverished by that same event, because you have lost money or property or have borne something that was not yours to bear. That there is no legal ground justifying it. In other words, there is no valid contract, law or other legal title allowing the other person to keep what they have gained. If you gave it to them as a gift, on the other hand, there is a legal ground. That there is no other legal action to put it right. This is what lawyers call subsidiarity. It is not necessary for the person who was enriched to have acted with fault or in bad faith. It is enough that the imbalance between the two parties' assets has no justification. A remedy of last resort The publication stresses that this action cannot be used to get round the requirements or time limits of other actions. First you need to see whether the law provides another route: If there is a valid contract, the claim is made under the contract. Unjust enrichment cannot be used to correct a bad bargain. If someone caused you harm, the claim is for civil liability. If you paid something you did not owe by mistake, as with a mistaken transfer, the route is recovery of payments not due (“cobro de lo indebido”). The law also has its own rules for other cases, such as building on someone else's land. Only when none of those routes exists, or they have been closed for reasons beyond the claimant's control, does unjust enrichment come into play. That is also why it cannot be used to reopen a matter that has already been decided by the courts or to get round the time limit of an action that has become time-barred. A case in point The case discussed in the publication illustrates this well. A company had contributed a plot of land that was not its own to a “junta de compensación”, which is the body that the landowners in an area form to develop it. The true owner won the lawsuit, but could not recover the land or obtain its value, because the company and that body had been dissolved. The owner also claimed, unsuccessfully, against the company's directors. Only then did the owner sue the shareholders of the dissolved company for unjust enrichment. The requirements are the same in Catalonia as in the rest of Spain. What changes is the time limit for claiming, which is a separate question.