1. What Is Restitution?
2. History of Restitution
3. How Restitution Is Determined
4. What Is the Difference Between Restitution and Compensation?

Restitution definition law refers to a monetary payment that is imposed as a penalty to restore a loss. Usually, monetary payments are included in the judgment in negligence or contracts cases. Restitution may require the stolen goods to be returned to the victim. In other cases, restitution requires the victim to receive payment for the harm they endured.

What Is Restitution?

When it comes to criminal law, restitution refers to the state programs that require an offender to donate services or repay money to the victim or society as a whole as a condition of their sentence. As a general term, restitution is the act of restoration. This term is used in various areas of the law. However, no matter the area of law, the term retains the same meaning.

Achieving fairness is the main purpose of restitution. Another purpose of restitution is to avoid the unjust enrichment of any of the parties, namely the offender.

Restitution requires that the offender give up any gains that they obtained unlawfully and return these gains to the plaintiff. Restitution is used most frequently in contracts law.

In contracts law, restitution is designed to make sure the injured party is restored to the position they enjoyed prior to the contract's formation, if possible. Parties who are seeking restitution are unable to seek lost earnings or profits caused by the breach of the contract.

The plaintiff needs to include a claim in the initial complaint in order to get restitution. If the amount cannot be determined with certainty, the plaintiff will not receive an award.

History of Restitution

The concept of restitution was first created in the courts of England in the 17th century. The courts created the concept of restitution to serve as a contractual remedy.

Eventually, the concept of restitution moved to the courts in the U.S. Since then, the concept of restitution has expended significantly beyond its roots.

Courts are now applying the idea of restitution in the following areas:

  • Admiralty or maritime law
  • Criminal law
  • Torts law

When it comes to admiralty law, restitution may be demanded when a shipping crew needs to throw goods into the sea to make sure the ship remains a float. In such a scenario, the owner of the goods that were jettisoned may gain recovery for the goods under restitution.

In the criminal arena, restitution refers to the defendant's affirmative performance that benefits the general public or the victim of the crime.

How Restitution Is Determined

Restitution is a very common feature in criminal law when it comes to the sentences of criminal defendants. If it's possible to identify the victim, the judge will order the offender to make restitution to the identified victim. For example, if the offender stole the stereo of the person, the offender may have to give the victim the stereo back or reimburse the victim for the stereo. The offender will also face punishment in the form of monetary fines and/or jail time. 

Courts attempt to fashion the criminal defendant's restitution based on the crime committed. If the defendant is convicted of the crime of solicitation of prostitution, the defendant may be ordered to volunteer at a local shelter for homeless or battered women. This is an example of restitution to the public as a whole.

Other civil damages that the defendant is forced to pay are distinct from restitutionary damages. This is because civil damages are not determined by the amount needed to restore the victim to their former status.

For example, punitive damages refer to damages that are assessed against the civil defendant to punish the conduct of the defendant. Punitive damages are not imposed to provide restitution.

When it comes to restitution, there is typically a search for the "unjust factor." In Scotland, restitution is usually made in the event that there is no legal cause for a transfer and it is unjust for the defender to keep the enriching transfer. The idea of the unjust factor has been recognized in both Australia and Canada for some time.

What Is the Difference Between Restitution and Compensation?

The difference between compensation and restitution lies in the method that is used to calculate the monetary award. Compensation, such as back pay, refers to payment to the victim for the wrong that has been inflicted. Compensation can be compared to a gift that is given to the victim or their family to help or apologize. Restitution, on the other hand, restores the victim financially.

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