By means of the doctrine of subrogation, one person is substituted for another in the exercise of that other’s rights against a third person. In particular, it is the process by which one party is substituted for another so that the first party may enforce that other’s rights against a third party. Mark Leeming (Faculty of Law, University of Sydney) has just published “Subrogation, Equity and Unjust Enrichment” as Sydney Law School Research Paper No 12/52 on SSRN. It is a version of his paper in Glister and Ridge (eds) Fault Lines in Equity (Hart Publishing, Oxford, 2012) 27-43 (collecting the papers from the symposium “Comparative Perspectives on Equity” held at the University of Sydney on 14 December 2010). This is the abstract:

Is “unjust enrichment” merely a unifying theme, or is it something more, a legal norm in its own right capable of supplying answers to particular cases? Or, if that is a false distinction, and indeed “unjust enrichment” may be either, then what approach is more likely to result in a legal system whose operation is clear, certain and coherent? This paper is directed to those questions. It notes the highly divergent approaches to a single doctrine – subrogation – in the House of Lords and the High Court of Australia, with a view to evaluating which mode of reasoning leads to clarity, transparency and coherence.

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In an earlier post, I discussed the subrogation claim in Bell Lines v Waterford Multiport Ltd [2006] IEHC 188 (28 April 2006) rvsd [2010] IESC 15 (18 March 2010). My basic point was that subrogation arises for all sorts of reasons. As Lord Diplock put it in Orakpo v Manson Investments [1978] AC 95, followed in this respect by Neuberger LJ in Cheltenham & Gloucester Plc v Appleyard [2004] EWCA Civ 291 (15 March 2004) [32], it “embraces more than a single concept”. Apart from the insurance context where it is largely a matter of contract, several reasons have been proferred to explain when subrogation arises by operation of law.

For example, (i) it can reverse unjust enrichment; (ii) it arises on “well settled established principles and in defined circumstances”; (iii) it will be applied when “reason and justice” demand that it should be; (iv) it reflects the presumed or actual intention of the parties; and (v) it is all simply a matter of discretion. It is unlikely that a single over over-arching theory will explain the whole field. Instead, subrogation is a rather protean doctrine, founded upon many different principles. As a consequence, it is likely that unjust enrichment is simply the theoretical foundation of one facet of the doctrine of subrogation rather than for the whole ambit of the doctrine,.…

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By means of the doctrine of subrogation, one person is substituted for another in the exercise of that other’s rights against a third person. In particular, it is the process by which one party is substituted for another so that the first party may enforce that other’s rights against a third party. In the classic triangular fact pattern, it arises where a creditor has rights against a debtor, the third party pays the creditor, and is then subrogated to the rights of the creditor against the debtor. In Bell Lines v Waterford Multiport Ltd [2006] IEHC 188 (28 April 2006) rvsd [2010] IESC 15 (18 March 2010), unemployment agencies in the UK paid various entitlements to UK-based employees of an Irish company in liquidation, and successfully sought to be subrogated to those employees’ preferential claims against the company in the Irish liquidation.

The litigation raises, but does not answer, some rather profound questions about the nature of subrogation. In Banque Financière de la Cité v Parc (Battersea) Ltd [1999] 1 AC 221, [1998] UKHL 7 (26 February 1998) and Bofinger v Kingsway [2009] HCA 44 (13 October 2009), the House of Lords and the High Court of Australia took different approaches to the relationship of unjust enrichment and subrogation (see my previous posts).…

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