Graham Virgo: Once we have identified that it is possible to bring a proprietary claim in equity,
we then need to identify what the appropriate proprietary remedies are.
As we've seen, one of them may be the constructive trust,
another may be the lien, and a third is subrogation.
Now as you've already seen what subrogation is as a remedy,
it enables the claimant to get the benefit of a security interest from a discharge debt.
Now the really controversial issue here is: what is the justification for the subrogation remedy?
And frankly, the cases show there are various rationales that have been identified.
Some judges and some commentators say that subrogation is a remedy
that responds to unjust enrichment.
Where it's necessary to show that the defendant has been unjustly enriched
at the expense of the claimant.
Others say, that subrogation is a proprietary remedy
which responds to a proprietary claim.
So you need to establish the proprietary base, and following and tracing value
into the defendant's hands, and then we identify the proprietary remedy.
Now it is certainly the case that a number of leading authorities identify unjust enrichment,
as being the trigger for subrogation.
Actually, I think the law when you think it through is rather more complicated than that.
And this was identified by Lord Sumption in the Lowick case.
Where he said, it's necessary to identify what the underlying cause of action is,
and then determine whether subrogation is available.
Now he did say, that unjust enrichment might be one of the underlying causes of action.
But his analysis of unjust enrichment, in the Lowick case
was different from what we would normally expect of an unjust enrichment analysis.
He implied that our approach to what is an enrichment,
and whether it was at the expense of the claimant, and what the ground of restitution might be
are interpreted differently in a subrogation context.
Now if that’s right, maybe it's not appropriate to say that subrogation is awarded by reference
to the unjust enrichment course of action, as we normally identify it.
Or maybe, more subtly, we say the subrogation
is available as a personal remedy to unjust enrichment.
But as a proprietary remedy, it responds to something else.
My view is—as you will identify in this section of the book—that the proprietary analysis
really does justify the proprietary remedy of subrogation.
Now that's controversial, and the law is confusing,
and doesn't support completely what I’ve just said;
because of the reference to unjust enrichment.
But this analysis and focus on the underlying course of action
might provide some support for a differentiation between subrogation as a personal remedy
and subrogation as a proprietary remedy.