Attorney General v Blake [2001] 1 AC 268 (HL)

Facts

  • George Blake, a former member of the British Secret Intelligence Service, signed an undertaking not to disclose official secrets.
  • Blake became a double agent for the Soviet Union and, after escaping prison and settling in Russia, authored an autobiography.
  • The Attorney General, on behalf of the UK government, brought legal action claiming that publication of Blake’s autobiography breached his contractual undertaking.
  • The government did not seek to prohibit publication but sought to recover the profits Blake made from the book.
  • The case raised the question of whether restitutionary damages, specifically an account of profits, could be granted in response to breach of contract, departing from the usual approach of compensatory damages.

Issues

  1. Whether a restitutionary remedy, in the form of an account of profits, is available for breach of contract in exceptional circumstances.
  2. Whether the claimant’s "legitimate interest" in preventing the defendant’s profit-making activity can justify such a remedy.
  3. Whether the circumstances of the case, particularly the breach by a former intelligence officer and public policy concerns, warrant a departure from standard compensatory damages.

Decision

  • The House of Lords, led by Lord Nicholls, recognized that restitution of profits is available in exceptional cases of contract breach.
  • It was held that an account of profits is not a routine remedy and is reserved for circumstances where compensatory damages are insufficient.
  • The claimant’s legitimate interest in preventing profit from the breach was central to the court’s decision, given the public policy context and fiduciary relationship involved.
  • The court drew comparisons to fiduciary breaches, affirming that such remedies are not appropriate in typical commercial contexts.
  • The government’s interest in maintaining trust in the intelligence services and national security justified an account of profits from Blake.

Legal Principles

  • Restitutionary damages, including an account of profits, may be awarded for breach of contract only in exceptional cases.
  • The central test is whether the claimant has a legitimate interest in depriving the defendant of their profit from the breach.
  • Public policy considerations, especially concerning national security or fiduciary relationships, may justify such a remedy.
  • In ordinary commercial disputes, compensatory damages remain the norm; restitution is not available where only commercial interests are at stake.
  • Subsequent cases, such as Experience Hendrix LLC v PPX Enterprises Inc and Morris-Garner v One Step (Support) Ltd, have confirmed the exceptional nature of the Blake remedy and clarified the distinction between restitutionary and compensatory/negotiating damages.

Conclusion

The House of Lords in Attorney General v Blake established that in exceptional circumstances—chiefly where public interest or fiduciary obligations are at stake—restitutionary account of profits may be granted for breach of contract. Standard commercial disputes remain subject to compensatory damages, and the principle in Blake is reserved for cases where a legitimate interest in preventing profit from breach is demonstrated.

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