Private Law Theory

ABSTRACT
In Imageview Management Ltd v Jack (EWCA 2009) forfeiture was ordered of an agent’s entire remuneration because of non-disclosure of a conflict of interest. This was done even though there was no finding of dishonesty in the agent, and even though the services conformed to what was requested and there was no suggestion that their value had been affected by the breach of duty. This case has since been followed. It is strongly arguable that the reasoning in these cases is inconsistent with both common law and equitable principle, since, where there has been no failure of performance, and any collateral profit has (rightly) already been stripped, forfeiture of remuneration is justified neither by the law of contract nor the principles of equity. In particular, the existence of an independent equitable jurisdiction to forfeit remuneration is plainly based on a misunderstanding of the 19th century case law, and rubs against the principle that equity does not act penally. There has been a simple failure to let basic contract principles do the necessary work (including amongst those the concept of ‘failure of consideration’). Some other cases have found a way to distinguish Imageview, but the result is only undue complexity. A principled reconsideration of the law is needed.

Watts, Peter G, Forfeiture of Agents’ Remuneration (December 2, 2018). A pre-publication version of chapter 10 in P Devonshire and R Havelock (eds), Impact of Equity and Restitution in Commerce (Hart Publishing, 2019).