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I've been told there is a legal principle (in UK law, specifically England) that a person cannot be allowed to benefit twice from a court's decision. I've found criminal law which addresses that, and inheritance precedents, but this is a civil case. Specifically an insurance company is trying to avoid paying benefit, relying on an argument that lawful tax avoidance was used to defer tax on certain funds, and so requiring them to pay benefits in relationship to those funds would be the equivalent of allowing the policyholder to benefit twice - first in avoiding tax, and then again by receiving insurance cover for the loss of those funds. I have been told that this inability to benefit twice is a well-established principle of english common law - but I can't find it.

Certainly there's no issue with the insurance company needing to pay the benefit twice, and if they are allowed to benefit by avoiding paying on the policy then they would be benefiting from the policyholder's careful and lawfulapproach to paying only the tax required under the law.

No doubt this is basic law 101, at least I hope so! If anyone could point me to actual law, and also real cases where this might have been applied in any similar way in a civil case, I'd be very grateful.

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The earliest mention of the principle that I can find is in Rolston v Secretary of State for Northern Ireland [1975] NI 195, where the matter of compensation for the widow of a police officer murdered in Northern Ireland arose. I am sure there are earlier cases that express the same principle in different terms, however.

It is a broad principle that applies to most areas of civil law, and I cannot find an original source for it. I imagine that it is simply "received wisdom" that has been repeated long enough to become a cornerstone of the law of restitution in England and Wales.

There is currently no statutory basis for the principle so I cannot cite any relevant Acts of Parliament either.

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  • Thanks, that is really helpful - if I'm understanding Rolston correctly, that does clarify that to "benefit twice" it has to be from the same event. In my example, the ability to defer/avoid tax and the ability to claim on the insurance do not stem from the same "event" and so do not meet the definition of "benefiting twice".
    – Thicko
    Sep 5 '20 at 22:36
  • That appears to be the common conclusion of the courts, yes. For example, if you won two claims of action against someone, the courts would be extremely reluctant to award you damages for both -- if they stemmed from the same event.
    – Matthew
    Sep 6 '20 at 13:26
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Specifically an insurance company is trying to avoid paying benefit, relying on an argument that legal tax avoidance was used to defer tax on certain funds, and so requiring them to pay benefits in relationship to those funds would be the equivalent of allowing the policyholder to benefit twice - first in avoiding tax, and then again by receiving insurance cover for the loss of those funds.

This would not be the state of the law in the U.S. or under U.S. common law. While certain kinds of double recoveries are prohibited, tax benefits are generally disregarded in this analysis of the non-tax rights of the parties.

Also, in most cases, the time value of money caused by deferring taxation, rather than avoiding it all together, is ignored for purposes of doctrines like this one.

I have been told that this inability to benefit twice is a well-established principle of english common law - but I can't find it.

In the case of an insurance contract, the central issue is going to be contract language interpretation.

There are doctrines that sometimes allow seeming double recoveries (e.g. the "collateral source rule") although those are usually offset by corresponding indemnification and subrogation rights of an insurance company.

There are also common law (mostly equitable) doctrines that prohibit double recovery and windfalls, in some circumstances (e.g. you aren't allocated to collect more in the aggregate on a money judgment entered against multiple defendants, than the total amount of the money judgment, and when damages are awarded on multiple legal theories the overlapping amounts count only once towards a total award of damages).

But this doctrine almost always applies either to cases where someone receives two alternative tax benefits for the same transaction that are meant to be either/or, or when someone receives duplicative non-tax benefits that in the aggregate receive the total legally allowed for any of them.

Generally, for purposes of these doctrines, in the absence of a carefully worded insurance contract that specifically provides otherwise, tax benefits and non-tax benefits exist in separate universes for purposes of this doctrine.

I don't have the resources to cite to specific British case precedents on point, however.

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  • Thanks, although I need this in english law, it does help in the brainstorming to add understanding from other legal systems.
    – Thicko
    Sep 5 '20 at 22:34

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