Leveraging the Voluntary Payment Doctrine in Litigation: Protecting Client Funds From Recoupment or Return

Legal commentators call the VPD "evil" because it allows parties to retain payments to which those parties are not entitled. In some circumstances, the doctrine can be used to protect businesses who receive overpayments to defend against claims of consumer fraud or deceptive practices.

Counsel can defend clients from claims for recoupment or repayment of funds by setting up the VPD as a defense. Typically, the defense requires that you plead and prove that the payment was voluntary and made with full knowledge of the facts--mistakes of law are not relevant. At that point, the burden can shift to the payor to prove the doctrine does not apply.

The payor can try to meet their burden by showing that the doctrine does not apply regardless of the subject matter by showing fraud, coercion, or other facts that call into question the nature of the payment. There are also specific instances (which vary from state to state) to which the voluntary payment doctrine does not apply.

Listen as this panel, whose clients have benefitted from or suffered under the VPD, explores the nuances of the doctrine, how to rely on it during legal proceedings, and the practical effects of it during negotiations. The panel will also explore state-to-state differences in the law.