Getting money back from unlicensed contractors?

Today I was doing some research on the importance of getting a licensed contractor. I found an interesting ruling by the Arizona Supreme Court.  In common sense and usual cases,  the victims of an unlicensed contractor is able to recover 100% of the cost he/she paid to the unlicensed contractor.

however, the Arizona Supreme court in this case changes the ruling that the unlicensed contractor only have to pay the differences between the amount of the work that the victim received and the amount of work the victim is trying to recover, even the contractor is unlicensed.

So what does it means?

For unlicensed Contractors

This is positive news to unlicensed contractors because they are being treated like other licensed contractor who follow the rules, pay the fees, get themselves educated. Even when someone finds out that they are not licensed and not happy with their work, what they have to do is to pay back the money that they have received, but not the works that they have delivered.

So as an unlicensed contractor, I do not have incentive to get an license. I also do not need to worry about as long as I am providing the works.

For licensed Contractors

This is not good news because as mentioned above, there isn’t enough bad consequences to be an unlicensed contractors, it means higher competitions in their life, and these competition can easily out bid them because they have less operational cost, and no one can take anything from them, EXCEPT PAYING THE DIFFERENCE of the work they provided and the amount of money that they have received.

For Consumers

Bad news. Now they are more stressed to hire a contractor because if they are unfortunately enough to hire an unlicensed contractor, they won’t be able to recover all of their money even though the works are bad, damages are made. In addition, the probabilities of running into  a contractor will increase and the only lost would be Consumers.

In the above case, the consumer is semi-lucky that the unlicensed contractor is not broke and be able to pay back some money. But in many other cases, the unlicensed contractors are uninsured. All their money are gone and left with a mess.

I am only a layman in law but in many cases I don’t understand the verdicts. I understand that judgments are supposed to be logical but there are something fundamentally wrong with it. The reason that we require contractors to be licensed is because we want to protect the consumer. However, the judge is doing something against that principle and un-protecting the consumer.

Am I on a wrong path?