The facts of Attorney-General v. Blake 1 are well known to spy buffs and contract enthusiasts alike. George Blake was a double agent and a traitor, imprisoned in Britain in 1961 for communicating information to the Soviet Union contrary to the Official Secrets Act 1911. He broke out of prison and now resides in Moscow. In 1990, Jonathan Cape published Blake’s autobiography No Other Choice. Proceedings were commenced against Blake and Jonathan Cape (as a third party) by the Crown to prevent £90,000 of royalties flowing to Blake in Moscow. Claims based on infringement of copyright and breach of fiduciary duty failed at trial and an appeal on the basis of breach of fiduciary duty was dismissed. The Court of Appeal, however, granted an injunction as a public law claim to restrain receipt by a criminal of profits accruing to him from his crime. Noting that Blake’s actions in writing the book and disclosing information were in breach of contractual prohibitions to do so, the Court of Appeal also indicated that, if the Crown had sought the profits on the basis of a breach of contract, it would have succeeded.2

Before the House of Lords there was an appeal and cross-appeal. The appeal by Blake was against the award of an injunction. The cross-appeal by the Crown, at the initiative of the Lords, sought an account of profits for the breach of contract. Delivering the leading speech, Lord Nicholls (Lords Goff and Browne-Wilkinson agreeing, Lord Steyn delivering a concurring speech and Lord Hobhouse dissenting) held that an account of profits could be awarded against Blake to recover the profits arising from his breach of contract. As a result, for the majority, the public law claim to an injunction did not arise. However, in the majority speeches Lords Nicholls and Steyn indicated that they would not have allowed that claim. Lord Hobhouse, agreeing on this point, also refused it. Each speech indicated that the effect of such an injunction was confiscatory in nature and that there was no common law power to confiscate property.3 The focus of all the speeches was therefore on the award of the account of profits and when such an award is appropriate for a breach of contract. However, in the course of the leading speech Lord Nicholls also considered gain-based awards for a breach of contract generally and his discussion highlighted three possible and different remedies which can now be pursued for a breach of contract.

In the leading speech Lord Nicholls thought that an account of profits against Blake was “exceptional”. The circumstances of Blake’s deliberate criminal breaches of his contract,

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