It is intriguing how impoverished a concept of 'loss' is being employed here. Take a parallel case within obligations: Say the defendant negligently destroys the claimant's valuable painting; yet it is shown that the claimant was deeply attached to the painting, and would never have sold it at any price. On the narrow concept of 'loss' used here, no financial loss can be established. But of course, that would not stop the court awarding the painting's reasonable value. Or again, take personal injury damages. If the defendant injures me so as to stop me from working, I am entitled to my lost earnings. It may be that my employment prospects were uncertain; it is also very probably the case that I would never have sold to the defendant the right to injure me, at any price. But again, there is no doubt that a loss has occurred, and so the court must somehow quantify that loss in financial terms. You do not defeat a claim for compensation by saying that the claimant would never voluntarily have sold what the defendant took. Money being all the court has to give, then everything must be reduced to money, whatever the artificiality.

So equally here. The defendants exploited certain recordings, in breach of the claimant's contractual rights in the matter. Those facts demand compensation for the claimant's loss. The court awarded the reasonable value of what was taken, just as in the standard tort case. When the claimant said that there was 'no loss', presumably he meant that there was no CONSEQUENTIAL loss, or perhaps that he could not say whether he would ever have exploited the rights himself. But this cannot defeat a claim for the loss suffered, though it undoubtedly complicates the court's task.

It seems to me that the reasoning shows that there is a sliding scale of gain-based damages through from awarding a proportion of the profits made (as here) to a full account of all profits made.

The court said nothing about a sliding scale. I would therefore be interested to know what Andrew is referring to. It seems to me that 'gain' means whatever its proponents want it to mean; what Andrew thinks of as a 'sliding scale' is simply doctrinal incoherence.

As a matter of fact, the court made no enquiry into the amount of profits made (see para 14). So if Andrew claims that that the sum awarded was 'a proportion of the profits made', I reply, 'How does he know?'. In fact, the court did not say precisely how the sum was to be calculated, but it was evidently NOT simply a matter of calculating the profit made, and then calculating a certain proportion of that sum. Rather, it was a question of ascertaining what bargain would probably have been struck, had the claimant been willing to sell the rights and the defendant willing to buy (see paras 45-46).

So what the court did was to impose on the defendants an obligation to pay a reasonable price for what they took. Or to put the same thing another way - What the defendants should have done was to BUY the rights from the claimant - and so the court treats the defendants as if they had made the bargain which they ought to have made. I believe that this is known as a 'quasi-contract'. [FX: Clanking of medieval chains, creeping closer and closer.]

Careful justifications were given by Mance LJ for why, in contrast to Blake, a full account of all profits was not here appropriate (eg in contrast to Blake there was no relationship between the parties that came close to being fiduciary).

Fortunately, Mance LJ stressed that an award under Blake will be very much the exception; and he stressed that Blake concerned the security services, a unique institution (see paras 29 and 37). As some commentators mentioned at the time, the Blake opinions read as the imposition of a special law, crafted to punish one person whom the court regarded (rightly or wrongly) as uniquely bad. Whether such special laws have any place in modern society is, of course, a matter on which different views are held. My own is that common law forfeiture of the assets of convicted felons rightly fell into disuse some centuries ago. While I am in two minds whether parliament is right in its recent re-introduction of a forfeiture remedy, it is certainly not for the courts to develop one of their own.

I am also a little surprised that those who say they oppose 'discretionary remedialism' do not recognise an example of it when it stares them in the face. Naming no names, of course.

Steve Hedley

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FACULTY OF LAW, UNIVERSITY OF CAMBRIDGE

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www.stevehedley.com
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Christ's College Cambridge CB2 3BU
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