Subrogation: Persistent Misunderstandings

This chapter shows how cases on ‘reviving subrogation’ over the last decade constitute a major judicial advance in explaining and clarifying the law of subrogation. It argues that the courts have taken too literally the metaphorical language which has often been used to describe a subrogated claimant's entitlement. It explains that in many cases where a creditor's extinguished personal rights have been ‘transferred’ via subrogation, the courts could have produced the same outcome more rationally and more simply by allowing the claimant his own direct right of action in unjust enrichment. The...

This chapter shows how cases on ‘reviving subrogation’ over the last decade constitute a major judicial advance in explaining and clarifying the law of subrogation. It argues that the courts have taken too literally the metaphorical language which has often been used to describe a subrogated claimant's entitlement. It explains that in many cases where a creditor's extinguished personal rights have been ‘transferred’ via subrogation, the courts could have produced the same outcome more rationally and more simply by allowing the claimant his own direct right of action in unjust enrichment. The chapter considers the ‘transfer’ of extinguished proprietary rights via subrogation, and argues that the underlying basis for this remedy is unjust enrichment rather than a fictional presumption that the parties intended the ‘transfer’ to take place.