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Claiming Disgorgement Remedy
Involves Taking Benefits or Profits Away From a Wrongdoer
Last Updated: July 03 2026
Question: Can a lawsuit in Ontario seek disgorgement when the other party profited from wrongdoing even if my direct losses were small or hard to prove?
Answer: & Lo Greco Law can help you understand when Ontario courts may order disgorgement (a restitutionary remedy) under the “profiting from wrong” theory of unjust enrichment, including situations where there is an underlying legal wrong and ordinary damages may be inadequate, such as when the defendant’s gain was made possible by the wrongdoing even without a clear dollar-for-dollar transfer, with courts explaining the principles in Pharmascience Ltd. v. Novartis Pharmaceuticals Canada Inc., 2020 ONSC 6534. With 30+ year experienced lawyer services and LSO tribunal representation, Lo Greco Law can assess your facts, identify the strongest claim for ill-gotten gains, and explain realistic next steps for recovery in Ontario; call (416) 488-4110 to get started.
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.
Understanding Disgorgement Remedy Principles Involving Restitution For Wrongdoings Resulting In Ill Gotten Gains
There are some circumstances in which a wrongdoer receives a benefit or profit from the wrongdoing and yet the victim is without a corresponding harm or loss. Generally, under legal principles akin to no harm, no foul concepts, a legitimate lawsuit permits compensation for the loss or harm suffered by the victim; however, in some circumstances it is proper to claim disgorgement of benefits or profits received by 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 form of restitution rather than compensation whereas disgorgement is applied in law as a matter of fairness rather than as a means for making whole the losses or harms of a victim.