Attorney General v Blake [2000]

Attorney General v Blake [2000] UKHL 45, [2001] 1 AC 268 is a landmark decision in English contract law that deals with the issue of damages for breach of contract.

The central figure in this case is George Blake, a former member of the Secret Intelligence Service, who violated his employment contract by disclosing confidential information about his espionage activities to the Soviet Union. The British government sought damages for all profits Blake earned from publishing a book detailing his covert operations.

The crucial legal principle established by the House of Lords in this case is the concept of restitutionary damages. The court ruled that in exceptional circumstances, where conventional remedies such as damages, specific performance, or injunctions are inadequate, the court has the authority to award restitutionary damages. Restitutionary damages, in this context, involve the defendant being obligated to account for all profits derived from the breach of contract.

The breach of confidentiality by Blake was considered a grave violation of his contractual obligations, leading the court to conclude that the Crown had a legitimate interest in preventing him from financially benefiting from the disclosure of sensitive state information. The nature of Blake's actions, including his double agency and the potential harm to public interest, contributed to the court characterising this case as exceptional.

Lord Nicholls, in delivering his judgment, outlined various factors that should be considered when determining the appropriateness of restitutionary damages. These factors include the subject matter of the contract, the purpose of the breached contractual provision, the circumstances surrounding the breach, and the consequences of the breach. The court must assess whether the plaintiff had a legitimate interest in preventing the defendant from profiting from the breach.

Lord Steyn emphasised the analogy between Blake's case and that of fiduciaries, suggesting that if the disclosed information were still confidential, Blake would have been treated as a fiduciary. He highlighted the flexible and case-by-case nature of the common law, emphasising its commitment to achieving practical justice.

However, a dissenting opinion by Lord Hobhouse challenged the majority's stance. He argued that the Crown had no proprietary right to the money earned by Blake and, therefore, restitutionary damages were inappropriate. According to Lord Hobhouse, compensatory damages should suffice for a breach of contract, and the Crown's claim appeared to be more punitive than compensatory.

In summary, this case is noteworthy for recognising the availability of restitutionary damages in exceptional cases where traditional remedies prove insufficient. The decision underscores the importance of protecting confidential information, particularly in matters of national security, and demonstrates the judiciary's commitment to adapting legal principles to ensure practical justice on a case-by-case basis.
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