If you were subject to a breach of contract, had a piece of property stolen from you, or have been the victim of another crime, you may have a legal right to restitution. So, what is restitution? Learn more about restitution, how it works, and if it applies to you.
What Is Restitution?
Restitution is a remedy that occurs in both civil and criminal cases. Courts may order a defendant to either return something they took or, if they committed a crime, compensate the victim of that crime. In either case, the goal is to compensate the injured party for losses suffered as a result of someone else’s wrongful actions.
Civil Cases
In civil cases, restitution occurs when the defendant has been unjustly enriched due to a wrongful act or breach of contract. In other words, the defendant has benefitted at the expense of someone else (plaintiff). In these cases, a judge does not focus on a plaintiff’s losses but rather the defendant’s wrongdoing. The defendant will usually be ordered to pay the plaintiff an amount equal to the benefits or profits the defendant unlawfully earned.
For example, let’s say Diane agrees to let her friend Jack use her boat during his weekend at the lake. Jack decides to unlawfully sell Diane’s boat and makes a profit. If Diane sues Jack and asks for restitution, the court can order Jack to forfeit the profit he made and give it to Diane. In this case, the purpose of restitution is to restore Diane to where she was before her boat was sold and to prevent Jack from keeping the money he made and being unjustly enriched.
Criminal Cases
What is restitution in a criminal case, compared to civil cases? Generally, it’s a court order for a person who committed a crime (defendant) to financially compensate the victim of that crime. Each state has its own laws regarding restitution for victims.
In every criminal trial, regardless of whether the victim asks for it, the court is required to consider whether the defendant must make restitution to the victim of the crime. Courts will use guidance under the Mandatory Restitution Act of 1996 to determine the amount of restitution a victim should receive.
What Is Restitution Required to Cover?
For public policy reasons, courts order restitution as a way to make a victim whole. While money will not replace the suffering a victim may have gone through as a result of a crime, it may help cover financial losses someone has suffered as a result of the defendant’s crime.
Depending on the state, restitution may cover:
- Lost wages
- Counseling
- Property damage
- Medical expenses
- Funeral costs
- Any other cost related to the crime
Restitution does not cover:
- Pain and suffering
- Taxes
- Interest
- Penalties or fines
Who Is Eligible for Restitution?
What is restitution and how does it work for those that are able to receive it? Eligible groups include the following:
Victims
Restitution is paid to the person who suffered the harm or loss as a result of the defendant’s actions. In civil cases like a breach of contract, a court may order restitution to an individual, business, or corporation. In criminal cases, restitution may be paid to the victim, or in some states like North Carolina, the victim’s estate.
Qualifiers Under Federal Law
The Crime Victims’ Rights Act entitles any person considered a victim to restitution.
Third Parties
Certain parties other than the victim may receive restitution. These are usually an individual, organization, corporation, or association that helped a victim, like a victim’s advocate organization.
How Is Restitution Calculated?
The court will take the victim’s losses into consideration when determining an amount for restitution. Often, victims may prove their losses by providing medical bills, information documenting lost wages, receipts for replacement property, or any other document stating the financial amount the injured party lost.
The court must also consider a defendant’s ability to pay when it’s time to calculate the restitution amount. A court will look at the defendant’s assets including real and personal property, the defendant’s ability to earn a living, and other financial responsibilities the defendant may have.
How Are Restitution Payments Made?
Payments may be made in one lump sum or, most often, in installments. Keep in mind that receiving restitution payments may take years. If a defendant is sentenced to prison, the payments may be processed as part of a criminal sentence. However, it is unlikely that defendants are able to pay while incarcerated thus many restitution payments begin after a defendant is released from jail or prison.
Defendants on parole or probation may also be subject to making payments and failure to do so could result in a parole violation. Defendants may even be subject to civil remedies including wage garnishment and ‘liens.’
Companies can also be required to pay restitution as part of a settlement agreement. For example, pharmaceutical companies have been court-ordered to pay restitution to those affected by the opioid crisis. However, even victims in these large corporate cases can find it difficult to recover restitution.
Need a Lawyer to Help Get Restitution?
If you still have questions about what is restitution, you may benefit from speaking with a lawyer. Get started today and find help from a criminal defense attorney.