Claim for subrogation—a restitutionary remedy
Produced in partnership with Harris Bor of 20 Essex Street
Claim for subrogation—a restitutionary remedy

The following Dispute Resolution guidance note Produced in partnership with Harris Bor of 20 Essex Street provides comprehensive and up to date legal information covering:

  • Claim for subrogation—a restitutionary remedy
  • What is subrogation?
  • When might subrogation arise?
  • Elements of subrogation
  • Subrogation as a restitutionary remedy
  • Subrogation in the insurance context
  • Subrogation in the lending context
  • Defences to a claim for subrogation
  • Subrogation context—further guidance

What is subrogation?

Subrogation is an equitable mechanism aimed at preventing unjust enrichment by permitting one party to ‘step into the shoes’ of another and to bring an action in that other’s name.

For further guidance on unjust enrichment generally, see Practice Notes:

  1. Restitution for unjust enrichment—elements of the claim

  2. Defences to restitutionary claims

When might subrogation arise?

Two common situations where subrogation arises are:

  1. where one party has indemnified another against a loss, for which a third party is liable (ie, party A has indemnified party B against a loss caused to B by party C. Party A can 'step into the shoes' of party B and bring an action against party C); and

  2. where one party discharges an obligation owed to another, the discharging party is entitled to step into the shoes of the party that was owed (ie, party X has paid a debt which party Y owes to party Z, party X can 'step into the shoes' of party Z and bring an action against party Y)

More specifically, the remedy is commonly available, together with a restitutionary remedy, where:

  1. insurers cover losses caused by another

  2. a guarantor/surety pays the loan to another

  3. a director uses a company’s money to pay off a personal debt, and

  4. where a bank lends money for a party to pay