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Claiming Disgorgement Remedy
Involves Taking Benefits or Profits Away From a Wrongdoer
Last Updated: August 26 2026
Question: Can a lawsuit in Ontario claim disgorgement of profits gained from wrongdoing even if the victim’s direct loss was small?
Answer: Yes. In Ontario, a victim may be able to seek disgorgement as a restitutionary remedy under the “profiting from wrong” theory of unjust enrichment when an underlying legal wrong occurred and ordinary damages are inadequate, as illustrated in Pharmascience Inc. v. Novartis Pharmaceuticals Canada Inc., 2020 ONSC 6534. Disgorgement is often linked to breaches of fiduciary duty or trust, but in exceptional cases it may also arise from other underlying wrongs, and it focuses on depriving the wrongdoer of ill-gotten gains rather than simply compensating the victim’s loss. If you need help assessing whether your claim can target profits, Wennekers.Legal™ can explain your options and the evidence you may need, with professional legal services across Ontario, call (647) 701-1162.
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Can a Lawsuit Claim Improper Profits Gained By a Wrongdoing?
When a Wrongdoer Benefits or Profits From a Wrongdoing, the Victim of the Wrongdoing May Claim Disgorgement of the Benefits or Profits From the Wrongdoer.
Note: Please contact Wennekers.Legal™ by phone at: (647) 701-1162 to discuss any specific questions that you may have.
Understanding Disgorgement Remedy Principles Involving Restitution For Wrongdoings Resulting In Ill Gotten Gains
In some circumstances a wrongdoer may receive a benefit or profit arising from the wrongdoing while little, if any, loss or harm arises to the victim of the wrongdoing. Whereas the law generally forbid a person from suing unless a loss or harm has occurred per no harm, no foul principles, a valid lawsuit may involve claims for the illegitimate benefits or profits arising from the misconduct of the wrongdoer.
The Law
Disgorgement remedy, as a stripping of ill gotten gains from a wrongdoer, was well explained within the Pharmascience Inc. v. Novartis Pharmaceuticals Canada Inc., et al, 2020 ONSC 6534, case wherein it was stated:
[19] Under the “profiting from wrong” theory of unjust enrichment, disgorgement may be available if the defendant has committed “an underlying legal wrong against a plaintiff, and the ordinary damages remedy for the underlying wrong is inadequate”. As the Court of Appeal noted, disgorgement in these cases is typically reserved for when there has been a breach of fiduciary duty or a breach of trust. However, in exceptional cases, disgorgement as a restitutionary remedy can also be granted where the “underlying legal wrong” is a crime or a breach of contract or a tort.[6] In cases premised on “profiting from wrong”, the concept of “corresponding deprivation” takes on a slightly different meaning. A plaintiff may be able to prove a corresponding loss by showing that the defendant’s gain was “made possible” by the defendant’s wrongful act towards the plaintiff rather than proving a direct or indirect transfer of wealth.[7]
Explained Principles
Imagine a situation where a person commits a criminal fraud or a civil fraud upon another person. In some circumstances, the victim may experience little harm or was able to mitigate all or most of the harm that resulted from the fraud and thus little loss, if any occurs; however, the wrongdoer may have significantly benefited or profited from the fraud. The law, applied by the courts, seeking to discourage and deter wrongful conduct, may order that the benefits or profits be disgorged from the wrongdoer and provided to the victim. In this way the remedy of disgorgement ensures that the wrongdoer fails to benefit or profit from the wrongdoing and is, presumably, discouraged and deterred from engaging in wrongful conduct.
Summary Comment
Disgorgement is a restitutionary remedy rather than a compensatory remedy, meaning that the law applies disgorgement as a matter of fairness rather than as a matter of making a victim whole for loss or harm suffered by the victim.
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