Disgorgement Remedy for Duty of Loyalty Violations

Wrongdoing should not be rewarded. – Although this is considered a core idea of Swiss law’s understanding of justice, the legal system is struggling with the principle’s satisfactory implementation when it comes to wrongfully obtained profits. One would expect the law to provide for suitable legal instruments to disgorge any gains unduly made by wrongdoers, particularly if the wrongdoer is a disloyal agent in a trust-based relationship. However, as this article will point out, the legal framework available under Swiss law to disgorge undue gains is surprisingly limited under such conditions. By exploring the policy approach chosen by US law (common law system), the question will be raised of whether Swiss law may learn from the US approach.