Disgorgement

A remedy requiring a wrongdoer to surrender profits or proceeds derived from illegal or inequitable conduct, without reference to the actual harm suffered by the plaintiff. Disgorgement is common in securities fraud, IP infringement, antitrust, and fiduciary duty cases, and is sometimes available even when traditional compensatory damages are difficult to prove. For litigation funders, disgorgement-based claims can be attractive because the recovery theory focuses on the defendant's gain — which may be large and well-documented — rather than requiring complex proof of the plaintiff's specific losses. Courts vary significantly on the availability and scope of disgorgement, making jurisdictional analysis a key underwriting consideration.

Funders are drawn to disgorgement theories because the defendant's own financial records — not a contested projection — often set the recovery ceiling, and that documentation can exist even where the plaintiff's own damages are difficult to prove. Because courts differ significantly on when disgorgement is available and how broadly it can be measured, funders treat the governing jurisdiction's disgorgement precedent as a threshold underwriting filter before relying on this theory to size an investment.