Attorney General v Blake – Case Summary

Attorney General v Blake

House of Lords

Citations: [2001] 1 AC 268; [2000] 3 WLR 625; [2000] 4 All ER 385; [2000] 2 All ER (Comm) 487; [2001] IRLR 36; [2001] Emp LR 329; [2000] EMLR 949.

Facts

Blake was a former spy for the British Intelligence Services who published memoirs of his time as a spy. The Government successfully acquired an interlocutory injunction against him, preventing him from publishing his work in the UK and suspending the payment of his royalties. The book had been widely published abroad. The basis of the injunction was that by publishing official secrets, Blake was in breach of his contract with the Government. Blake appealed the grant of the injunction. He argued that the injunction was essentially a confiscation of his royalties, since Blake was unlikely to ever return to the UK to challenge it (where he would face criminal prosecution).

Meanwhile, the Attorney General claimed that the breach of contract in this case entitled them to recover some or all the profits which Blake had made from the book. This was important since the Government could not prove that they had suffered any concrete losses as a result of the publication in the UK. As such, unless the Government was entitled to the profits, they would receive no damages.

Issue(s)
  1. Are there any circumstances in which damages based on the defendant’s profits are available in contract law?
  2. Does the court have the power to grant an interim injunction which effectively confiscates a person’s property?
Decision

The House of Lords held that the Attorney General was entitled to recover Blake’s profits. They also held that the current form of the injunction was unlawful due to its confiscatory nature, and modified it accordingly.

This Case is Authority For…
Confiscatory Injunctions

The House of Lords held that the courts have no power to make interim injunction which effectively confiscate a person’s property. They noted that confiscation orders are regulated by statute, and the strict requirements of the statutory regime cannot be undermined by common law powers.

Profits-Based Damages

The findings in this case have been heavily re-contextualised by the Supreme Court in Morris-Garner v One Step (Support) Ltd [2018] UKSC 20. The circumstances in which the kinds of damages in issue in this case can be obtained have been clarified and narrowed. In addition, the Supreme Court has clarified that these kinds of damages are not actually connected to the defendant’s profits. Rather, they are just another form of damages which compensates the claimant for a loss – the loss of a hypothetical license fee releasing the defendant from the obligation. You are advised to read that case for an overview of the current law. However, knowing the old position under Blake may be helpful for writing law essay questions.

The House of Lords held that in exceptional circumstances where the ordinary ‘expectation’ measure of damages would not properly compensate the claimant, damages based on the defendant’s profits could be awarded. This would arise if the claimant had a ‘legitimate interest’ in preventing the claimant from benefiting from his breach. Factors relevant to whether there is a legitimate interest included the nature of the contract, the context and consequences of the breach and what motivated the defendant.

The House of Lords thought that cases involving confidential information could fall into the ‘exceptional’ class of cases. The high degree of public interest involved in keeping the information under wraps reinforced the claim that the Government had a legitimate interest in stopping Blake from benefiting.

Other

Lord Hobhouse dissented in relation to the damages point. He believed that it was inappropriate to use commercial law principles to decide what damages should be available in an essentially public case. Blake had not used any proprietary or commercially valuable interests of the Government. He also argued that an account of profits is ordinarily only available where the claimant had some property right or interest in those profits: such as where the defendant is a fiduciary. It stretched those principles to far to allow them to be applied in this case.