The restitutionary principle of free acceptance ("FA") was first introduced by Goff and Jones in their first edition of The Law of Restitution. 1 Although this principle has been recognized in the English law of unjust enrichment,2 its existence and function remain controversial. 3 In my essay I will critically assess the operation and roles of FA in the restitution of unjust enrichment, and conclude my essay with my stand that FA has a limited role in the English law of unjust enrichment. Free acceptance – its operation and roles explained
A person can be liable to pay for services if he has "freely accepted" them. According to Goff and Jones FA arises where the defendant as a reasonable man, should have known that the claimant who rendered the services expected to be paid for them, and yet he did not take a reasonable opportunity open to him to reject the proffered services. 4 More recently, Professor Birks has with added refinement, reiterated that FA occurs where a recipient knows that a benefit is being offered to him non-gratuitously and he, having the opportunity to reject, elects to accept.
Virgo illustrated Goff and Jones and Birks' FA into a three-part test: (1) the defendant had the opportunity to reject the service or goods before it was provided; (2) the defendant knew that the claimant expected something in return for the benefit; and (3) the defendant failed to reject the service or goods. 6 When all elements are fulfilled, the defendant is said to have freely accepted the benefit. FA is regarded as having a dual function in the law of restitution. This dual function involves FA operating both to establish an enrichment and as a ground of restitution in its own right.
To be able to succeed in a claim under the English Law of unjust enrichment the claimant has to prove three requirements: – (i) a benefit must have been gained by the defendant; (ii) the benefit must have been obtained at the claimant's expense; and (iii) there is an "unjust factor" rendering it unjust for the defendant to retain the benefit. 8 Goff and Jones and Birks believed that FA is unique because it acts as a means to ascertain whether the (first) three ingredients to establish an unjust enrichment claim are satisfied, namely in establishing a benefit or enrichment ((i) and (ii)); and functioning as an unjust factor to bring a claim.
My essay will now focus on the discussion of this dual function of FA. As mentioned earlier, FA is supposed to be sufficient to establish that the defendant has been enriched. It is worth noting that the defendant can be deemed to have freely accepted a benefit regardless of whether he had or had not requested it, since it is sufficient that the defendant knowingly acquiesced in the provision of the benefit.
In situations where the defendant receives money (or benefits expressible in money), it is usually straightforward that the defendant has been incontrovertibly benefited – which no reasonable man would deny that the money benefits him10 – and no issue of FA is involved. 11 Difficulties arise, however, with benefits in kind, that is services and goods, which the defendant can "subjectively devalue"12 by stating that they have no value to him. The claimant would then have to find some way of defeating the defendant's reliance on the subjective devaluation principle.
There are two main methods of overriding subjective devaluation, namely through the principle of incontrovertible benefit and FA. Briefly, the defendant will be able to subjectively devalue using the incontrovertible benefit notion, if it can be shown that the defendant was likely to pay someone for the service or goods received and hence the claimant had saved the defendant a factually necessary expense. If this cannot be established, the burden of proof is on the claimant to succeed in his claim by evidencing that the defendant had freely accepted the benefit.
This would be established if the claimant can prove all the three conditions argued by Virgo as mentioned above have been satisfied. Whether the defendant had freely accepted the benefit is only significant where the defendant seeks to argue that the benefit received has no value to him. It follows that the function of FA is not to show that the defendant did positively value the benefit but, rather, to prevent the defendant from subjectively devaluing it after having freely accepted it.
Again to quote Birks, "a defendant who has freely accepted the benefit cannot use [the subjective devaluation] argument. The reason is that, if he has freely accepted, he has ex hypothesi chosen to receive it, and subjective devaluation is an argument whose premise is that where something has not been chosen by its recipient it cannot normally be said to have been of value to him. "15 In this sense FA is said to have a limiting or negative function which aims not to prove that the defendant did positively value the benefit but, rather, to avoid the defendant from subjectively devaluing it.
Birks argued that FA is unique in showing that there is an enrichment and that it is unjust. As what may constitute an "unjust factor", it fits in with factors negativing voluntariness, such as mistake, duress and failure of consideration. But unlike them, FA focuses on the defendant's conduct and state of mind, not the claimant's. In other words, it is deemed to be a defendant-oriented ground of restitution. According to Birks, where the defendant has freely accepted "he has only himself to blame for the resulting situation".
This particular characteristic hence allows disappointed risk-taker, who conferred benefit on a free acceptor, to bring a restitutionary claim against the recipient on the ground of FA. 18 Criticisms of Free Acceptance The FA notion as advocated by Goff and Jones and Birks has attracted many criticisms. On further analysis, the role of FA as establishing benefit has many limitations and is not as simplistic as it seems to be. In the recent cases of Rowe v Vale of White Horse DC19 and Chief Constable of Greater Manchester Police v Wigan Athletic AFC Limited20, reference was made explicitly to FA.
Lightman J in Rowe stated that a defendant is to be deemed to have benefited at the claimant's expense "if the defendant has freely accepted the services rendered" or "if the defendant has been incontrovertibly benefited from their receipt". 21 This was reaffirmed in the case of Wigan. Nevertheless, in both cases the judges applied the principle of incontrovertible benefit as the primary basis of the decisions and refused to engage further with FA. To date, despite the mention of FA in a number of cases, none of them deal exhaustively with the issue of FA.
Its foundation in the case law is presently insecure. 23 According to Burrows, whom I agree with his stand, "there is no reason why one should assume that a freely accepting defendant actually regards himself as being benefited by what the plaintiff has conferred. On the contrary a defendant is just as likely to accept what the plaintiff is conferring on him where he considers it neither beneficial nor detrimental as where he considers it beneficial.
"24 It seems unreasonable to hold, on the basis of the defendant's acquiescence, that the defendant benefited from what the claimant had conferred to him. A good illustration is provided by Pollock CB in Taylor v Laird, "[if the claimant] cleans another's shoes, what can the other do but put them on? "25 In short, the defendant may be indifferent to the benefit conferred by the claimant, thus FA cannot be regarded as establishing the defendant's enrichment. 26 Furthermore, Burrows submitted that FA gives no sound indication of what the defendant is or was thinking.
By asking whether the defendant would have otherwise paid for goods or services proffered by the claimant – and thus the defendant had been benefited negatively by saving an expense – is not a reliable test to establish that the defendant has been enriched. 27 My essay will now turn to the criticisms of FA as an unjust factor. Burrows, Virgo and Mead are probably the most passionate and influential academics who strongly reject FA as a basis of claim to unjust enrichment.
Firstly, Burrows raised an important question of "why would we want to protect the claimant who voluntarily undertook the risk that the defendant would not pay for the work? "28 It is argued that the claimant's risk-taking cancels out the shabbiness of the defendant's behavior in unconscientiously accepting the benefit. Consequently, there is no injustice in the law of restitution failing to require the defendant to pay for the benefit. As such FA cannot be regarded in principle as an unjust factor in risk-takers case.
In fact, the existence of FA as an unjust factor is in contradiction with the fundamental principle of the law of restitution that officious claimants should not be able to obtain restitutionary remedies. 30 Virgo commented that "even if the defendant had freely accepted the benefit, it does not follow that restitution will be awarded. Indeed, it is most unlikely that the restitutionary claim would succeed, because there is no apparent ground of restitution and, most importantly, the claimant has been acting officiously, by taking the risk that the defendant might not pay for the service.
If this comment about the law is correct, FA will be made more complex in having added problems of how to determine whether the claimant is acting officiously knowing and taking the risk that the defendant might not pay for the service. Moreover, the characteristics of FA as an unjust factor is the "odd man out"32 from the majority of the other grounds of restitution, since it is defendant-oriented and depends upon proof of faulty – the defendant had acted unconscientiously.
33 On one side of the coin it creates a ground for voluntary risk-takers to bring an action against the recipient (which as discussed above that this is unjustifiable); on the other side liability would be placed on the defendant for his or her failure to act. Looking from a wider perspective, FA is contrary to the general approach of English law which is opposed to imposing liability for omissions, save in the most exceptional and well-defined circumstances where it is possible to conclude that the defendant was under a duty to act.
In Rowe35 it was recognized for the first time (albeit obiter dicta) that the unjust factor of FA would have been established in its own rights, if the claimant Council had expected to be paid for the sewage services and the defendant had known of this. However, one may ponder if this were the case, surely the more settled failure of consideration unjust factor would have been identified, and there seems little reason to rely on the ground of FA. This is another argument against FA as a basis of restitution.
It follows that the preferred view, despite the ruling in Rowe, is that there is no role for FA as a ground of restitution in its own right. Even Birks himself has subsequently conceded that FA played a much smaller role as an unjust factor than he initially envisaged and wholly abandoned FA as an unjust factor in his subsequent publications. Many of the cases which he once argued were explicable by reference to FA are better explained as cases where there was a total failure of consideration, without incorporating any element of fault.
With regards to the previous point, Burrows and Birks rightly explained that the unjust factor of failure of consideration must logically apply both to money and non-money claims. If English law continues to adhere to the view that failure of consideration can only apply to money claims, the scope for free acceptance as an unjust factor might be greater because incomplete or anticipatory contract cases would then be left without explanation. 37 If, on the other hand, the view is accepted that failure of consideration can apply to non-money claims, then the role for free acceptance as an unjust factor is, at best, a small one.
Moreover, Mead criticized that Birks' formulation of FA fails to explain what steps the recipient must go to in order that he will not come under an obligation to pay. In particular, what is meant by "opportunity to reject"? If we accept that there must be a "reasonable" opportunity to reject, then we are left with great uncertainties as to what is reasonable. This uncertainty might work to the detriment of the recipient in that he will never know in advance what steps he must take to avoid liability.
It is obvious from the illustration of FA through the window-cleaner and street-performers examples,39 and just as in the case of the person who cleans windscreens of cars stationary at traffic lights, that the cleaner is rendering a service and expects some recompense for doing what he does. "On whom in all the circumstances should the risk fall? "40 Should the defendant be placed under an obligation to pay for services proffered had he not rejected it where there is a chance to do so, or should the claimant be placed under the obligation to ask the defendant if his services are wanted?
It seems to me that the latter is a more reasonable and less hassle choice for all parties, including the court. If the claimant was offering a service, he should simply made it clear and sought permission to offer the service, as suggested by Mead. 41 This is because a real choice to reject or to accept that proffered service could only have been given by the defendant making clear what he wanted and explaining the full background.
Indeed in the absence of making it clear that the claimant expected to be paid, the defendant would plainly have concluded that the claimant was neither offering a service nor expecting to be paid. Using Birks words to counter argue his own principle: "it is not enough that the plaintiff had a non gratuitous intent. The defendant must also have known of that intent. Otherwise nothing calls the defendant to ask himself whether he should take steps to reject the benefit; for, people do accept as gifts some benefits which they would certainly reject if they thought they were expected to pay. "42
Birks particularly rejected this formality requirement pinpointed by Mead, arguing that "restitution is not about agreeing to obligation; it is about obligations imposed because an enrichment has been received which ought to be given up. "43 In my opinion, however, had the claimant made it clear to the defendant in the first place, I can say with confidence that the complex issues as to whether the defendant is enriched and whether FA could be an unjust factor on its own would at least be more fair, straightforward and easier to resolve; although this will in effect deprive FA of any usefulness in the English law of unjust enrichment.
Conclusion From my discussion, one can see that despite its recent recognition in cases, FA – whether as an approach to establish enrichment or as an unjust factor in its own right – has never played a significant part in the English law of unjust enrichment. I agree with Burrows fully that the contentious application of FA to cases to justify restitution should, if not be abolished, only be as a last resort; where possible, other less controversial justifications, like failure of consideration and a bargained-for principle of benefit (which is based on request), should be adopted.
44 It is worth noting that this suggestion is subsequently accepted by Birks. 45 It is clear from the criticisms discussed above that FA, quoting Birks, "proved to be the result of muddled thinking. "
Books Birks, P, Restitution – The Future (Federation Press, Sydney 1992) Birks, P, Unjust Enrichment (2nd edn OUP, Oxford 2005) Burrows, A S, Essays on the Law of Restitution (Clarendon Press, Oxford 1991) Burrows, A S, Understanding the Law of Obligations: Essays on Contract, Tort and Restitution (Hart Publishing, Oxford 1998) Burrows, A, E McKendrick, J Edelman, Cases and Materials on the Law of Restitution (2nd edn OUP, Oxford 2005) Goff, R, and G Jones, The Law of Restitution (Sweet & Maxwell, London 1966)