Aggravated, Exemplary and Restitutionary ... - Law Commission

disgorgement to principals of bribes made to their fiduciaries. 234
It is noteworthy
that the account of profits may be awarded even if (as shown in the secret profit
cases) the fiduciary was not acting dishonestly or in bad faith.
1.30 Similarly, it is well-established that an account of profits can be awarded for breach
of confidence. In Peter Pan Manufacturing Corpn v Corsets Silhouette Ltd 235
an
account of profits was ordered where the defendants had manufactured and sold
brassieres knowingly using confidential information obtained from the plaintiffs.
And in the leading case of Attorney-General v Guardian Newspapers Ltd (No 2) 236
the Sunday Times was held liable to an account of profits, for breach of
confidence to the Crown, in publishing extracts of Peter Wright’s book,
“Spycatcher”, at an early stage before the information had reached the public
domain. Lord Goff said the following:
The statement that a man shall not be allowed to profit from his own
wrong is in very general terms, and does not of itself provide any sure
guidance to the solution of a problem in any particular case. That
there are groups of cases in which a man is not allowed to profit from
his own wrong, is certainly true. An important section of the law of
restitution is concerned with cases in which a defendant is required to
make restitution in respect of benefits acquired through his own
wrongful act - notably cases of waiver of tort; of benefits acquired by
certain criminal acts; of benefits acquired in breach of a fiduciary
relationship; and, of course, of benefits acquired in breach of
confidence. The plaintiff’s claim to restitution is usually enforced by
an account of profits made by the defendant through his wrong at the
plaintiff’s expense. This remedy of an account is alternative to the
remedy of damages, which in cases of breach of confidence is now
available, despite the equitable nature of the wrong, through a
beneficent interpretation of the Chancery Amendment Act 1858 (Lord
Cairns’ Act), and which by reason of the difficulties attending the
taking of an account is often regarded as a more satisfactory remedy, at
least in cases where the confidential information is of a commercial
nature, and quantifiable damage may therefore have been suffered. 237
1.31 In the context of breach of confidence, it may be that the courts will award
damages (whether restitutionary or compensatory), rather than an account of
profits, if the breach of confidence was committed without dishonesty. This is one
explanation for Seager v Copydex Ltd 238
in which the defendants had manufactured
a carpet grip, honestly and unconsciously making use of confidential information
given to them by the plaintiff. The Court of Appeal ordered damages to be
assessed (apparently on a restitutionary basis). Lord Denning MR said,
234 Eg Reading v AG [1951] AC 507.
235 [1964] 1 WLR 96.
236 [1990] 1 AC 109.
237 [1990] 1 AC 109, 286B-E.
238 [1967] 1 WLR 923. See also Seager v Copydex Ltd (No 2) [1969] 1 WLR 809. The other
explanation is that the court awarded damages, rather than an account of profits because, as
a matter of factual causation, the contribution of the confidential information to the profits
made was relatively minor.
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