Lloyd's Maritime and Commercial Law Quarterly
“WROTHAM PARK DAMAGES” AND ACCOUNTS OF PROFITS: COMPENSATION OR RESTITUTION?
Craig Rotherham *
It has long been debated whether relief calculated on the basis of what would have been a reasonable fee for the relaxation of a right breached by the defendant is compensatory or whether such relief would be better understood as targeting a defendant’s unjust gain. While the latter view appeared to be gaining the ascendancy, the former understanding is enjoying a renaissance. Illustrative of this trend is the recent Court of Appeal decision in
WWF v.
WWF, where it was concluded that not only reasonable fee awards but also accounts of profits are properly regarded as compensatory. This article takes issue with this view, arguing that Chadwick LJ’s interpretation of the seminal decisions of
Wrotham Park and A-G v.
Blake is untenable. The article then examines some recent academic analyses depicting reasonable fee awards as compensatory. It concludes that the notions of loss of or damage to rights that underlie such accounts are unconvincing. Because relief for a claimant’s loss is generally easier to justify than relief linked to the defendant’s gain, it is not surprising that judges and jurists are attracted to compensatory analyses in this context. However, a close examination of these recent judicial and academic efforts to offer a loss-based account of the relief in question ultimately demonstrates that reasonable fee awards and accounts of profits can only be sensibly understood as gain-based.
A. INTRODUCTION
At times claimants whose rights have been breached are awarded relief calculated on the basis of what would have been a reasonable fee to pay for the relaxation of the right in question. There has long been a lively debate as to whether this form of relief is best characterized as compensatory or whether it should instead be viewed as requiring the defendant to give up an unjust enrichment—relief that tends to be described as “restitution for wrongs”.1
For those who favour the latter view, such relief is closely aligned to the awards provided in equity of profits realized as a result of a wrong, long understood to be
* Professor of Law, University of Nottingham. I would like to thank Ralph Cunnington for his thoughtful comments on an earlier draft of this article.
1. It may be objected that the term applies awkwardly to a situation where the defendant is not required to account for a benefit gained directly from the claimant and some prefer to use the term “disgorgement” to describe this form of relief.
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