An Account of Profits or Damages? The History of Orthodoxy

Abstract

The modern orthodoxy is that compensatory and gain-based damages are 'alternative remedies' for civil wrongdoing. As such, a claimant can only have judgment for one or other, and must elect which it is to be. This article prepares the ground for a re-examination of that rule by exploring its origins in patent cases, where the election requirement was firmly established in the 1870s by the House of Lords in Neilson v Betts and De Vitre v Betts. Closer examination of early practice offers two important insights. The first is that the explanation given for the election requirement in Neilson v Betts, the 'condonement theory', was novel, and not orthodox. Pre-Neilson v Betts, courts had generally refused to allow a claimant to have both compensatory damages (as 'damages') and gain-based damages (as an 'account of profits'). Nevertheless, that practice had more contingent, practical foundations than the Neilson v Betts orthodoxy suggests. It is best viewed as a practical response, in the prevailing institutional context, to the risk of excessive remedial cumulations. The second insight is that the relationship between the remedies is fundamentally determined by two factors: the prevailing conceptions of the remedies' nature and basis, and the procedural and institutional context within which the remedies are claimed and awarded.