Attorney General v Blake

The case of Attorney General v Blake ([2001] 1 AC 268) is a landmark decision in English contract law, introducing the possibility of profits-based damages as a remedy for breach of contract in exceptional circumstances. The case concerned George Blake, a former spy for the British Intelligence Services, who violated his contractual obligation of confidentiality by publishing his memoirs. The House of Lords’ ruling in this case has had a profound impact on the development of restitutionary remedies and the interpretation of damages in contract law.

Facts of Attorney General v Blake

George Blake, a former member of the British Secret Intelligence Service (SIS), signed a confidentiality agreement in 1944, undertaking not to disclose any information acquired during his service. Between 1951 and 1960, Blake betrayed the UK by passing sensitive intelligence to the Soviet Union, an act for which he was convicted of espionage in 1961 and sentenced to 42 years in prison. However, Blake escaped from prison in 1966 and fled to Moscow, where he resided.

In 1989, Blake authored an autobiography detailing his time in the SIS. Substantial portions of the book contained sensitive information he had acquired during his service. The publication breached the confidentiality agreement he had signed with the Crown. Blake’s publisher agreed to pay him royalties totaling approximately £150,000.

The Government obtained an interlocutory injunction to prevent Blake from receiving further royalties and brought an action seeking to recover all profits derived from the book. Since the Government could not demonstrate direct financial loss from the publication, they pursued a claim based on restitutionary principles, arguing that Blake should not be allowed to profit from his wrongdoing.

Issues

The issues raised in Attorney General v Blake were:

  1. Can the court award damages based on the defendant’s profits in cases of breach of contract?
  2. Under what circumstances are restitutionary remedies appropriate in contract law?
  3. Does the court have the authority to issue an injunction that effectively confiscates a person’s property?

Decision of the House of Lords in Attorney General v Blake

The House of Lords ruled in favour of the Attorney General, allowing the recovery of Blake’s profits. The key elements of the decision are as follows:

Profits-Based Damages

The Lords in Attorney General versus Blake established that profits-based damages could be awarded in exceptional circumstances where conventional remedies, such as compensatory damages, were inadequate. They held that the Crown had a legitimate interest in ensuring Blake did not profit from his breach of contract, particularly given the public interest in maintaining confidentiality in matters of national security.

The court introduced a test for determining whether profits-based damages are appropriate, focusing on:

  • The nature of the contract.
  • The context and consequences of the breach.
  • Whether the claimant has a legitimate interest in preventing the defendant from profiting from the breach.

In this case, the exceptional nature of the contract—involving obligations of secrecy vital to national security—and the high degree of public interest justified the remedy. The damages awarded were based on Blake’s profits from the book, ensuring he did not benefit from his wrongdoing.

Injunctions and Property Confiscation

The Lords addressed the issue of the interlocutory injunction that had effectively confiscated Blake’s royalties. They held that courts cannot grant injunctions that amount to confiscation of property unless explicitly authorised by statute. Consequently, the terms of the injunction were modified to comply with this principle.

Dissenting Opinion

Lord Hobhouse dissented in Attorney General vs Blake on the issue of profits-based damages. He argued that the remedy stretched established principles too far. Traditionally, an account of profits is only available where the claimant has a proprietary or fiduciary interest in the defendant’s gains. Since Blake’s breach did not involve any proprietary interest, Lord Hobhouse believed awarding profits-based damages was inappropriate.

Conclusion

Attorney General v Blake is a seminal case in English contract law, introducing the possibility of profits-based damages in exceptional circumstances. The House of Lords’ decision emphasised the need for flexibility in remedies to address unique breaches of contract, particularly those involving confidentiality and public interest. While the case has been subject to criticism and subsequent refinement, its recognition of restitutionary remedies has had a lasting impact on the development of contract law.

For UK audiences, this case serves as a reminder of the evolving nature of legal remedies and the importance of balancing traditional principles with the demands of justice in complex and high-stakes disputes.

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