What is Restitution?

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What is Restitution?

Restitution is a type of remedy available in many civil lawsuits and in some criminal cases.  This type of remedy is calculated based on the gains of the defendant, rather than the plaintiff’s losses.  Restitution basically requires a defendant to forfeit gains that they have unlawfully obtained to the plaintiff. 

In order to obtain restitution, the plaintiff must include this claim in the initial complaint.  Also, restitution will not be awarded if the amount cannot be calculated with certainty.  
The payment award is also known as “restitutionary damages”.  

Restitution is commonly awarded for two main purposes:  1) to “make the victim” whole and restore them to their financial status before the offense occurred; and 2) to prevent the unjust enrichment of the defendant (i.e., prevent them from keeping unlawful gains). 

What is an Example of Restitution?

Suppose defendant has stolen property belonging to the plaintiff.  However, suppose that the defendant has already sold the stolen property, and it can no longer be located.  In this case, the court cannot order the defendant to return the property, since it has already been sold. 

Thus, the court may order the defendant to pay restitution in order to “make the plaintiff whole”, or to restore them to their economic position before the theft occurred.  Again, the restitutionary amount will be calculated based on the gains of the defendant (i.e., how much they made from the sale of the property). 

What is the Difference Between Restitution and Compensation?

The difference between restitution and compensation lies in the manner in which the monetary award is calculated.  With restitution, the award is calculated based on how much the defendant gained from the violation.  With compensation, the amount is calculated based on how much the victim lost, financially speaking. 

In some cases, the judge will give the victim a choice between restitution and compensation.  For example, a restitution award may result in a higher payoff to the plaintiff than would compensation.  The plaintiff may then be allowed to choose the higher award amount.  This type of choice in remedies may not be available in all cases.  

What Types of Cases Result in a Restitution Award?

Restitution is commonly ordered in civil cases such as those involving:

Also, in some criminal cases, a judge may order the criminal defendant to pay the victim restitution rather than a fine.  The difference between a criminal fine and restitution is that fines are paid to the government, whereas restitution is paid directly to the victim. 

Are There any Limits on Restitution Awards?

Yes- as mentioned, restitution may not be available in all cases, especially where the amount cannot be accurately calculated. 

Also, in a breach of contract case, a restitutionary award is limited to the amount stated in the contract.  For example, suppose that A agrees in a contract to sell a car only to B for $5,000.  If instead A sells the car to a different party, A might be required to pay B restitution for a maximum of $5,000, since that is what is stated in the contract.  Thus, even if sold the car to more than $8,000, B can only collect on the contract price of $5,000. 

Some jurisdictions may place other caps on restitution amounts depending on the violation.  Thus, the actual definition for what is restitution will depend on the laws in a given area.

Do I Need a Lawyer for Legal Issues with Restitution?

If you have been the victim of a crime or civil offense, you may wish to contact a lawyer for advice.  Your lawyer can help determine whether a restitution award is available to you.  Or, if you are being ordered to pay restitution, an attorney can assist with your defense. 

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Last Modified: 05-18-2012 12:09 PM PDT

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