While it has recently been established that an account of profits may be awarded for torts or breaches of contract in ‘exceptional cases’, it remains unclear when this requirement will be satisfied. This article explores the issue in the light of the principal justification offered by courts and commentators for stripping defendants of profits: the deterrence of wrongdoing. It concludes that deterrence provides less support for accounts of profits than is often assumed. In particular, this rationale does not justify stripping defendants of consequential profits for every ‘cynical’ wrong, as is commonly suggested. Weight must equally be given to the importance of the relevant interest, the gravity of the breach and the vulnerability of the interest in question. In addition, it must be asked how effective an account of profits would be at deterring future transgressions in a particular context and what costs would come from its use. This analysis explains how some ‘exceptional cases’ can indeed be identified as justifying profit-stripping relief in the interests of optimal deterrence. Nonetheless, these objectives will seldom justify extending the account of profits beyond the contexts in which it has traditionally been employed.
Craig Rotherham, ‘Deterrence as a Justification for Awarding Accounts of Profits‘. Oxford Journal of Legal Studies, Vol. 32, No. 3 (2012), pp. 537–562, doi:10.1093/ojls/gqs007.