Account of profits

Account of profits

An account of profits (sometimes referred to as an "accounting for profits" or simply an "accounting") is a type of equitable remedy most commonly used in cases of breach of fiduciary duty. [Black's Law Dictionary, 7th ed. 1999] It is an action taken against a defendant to recover the profits taken as a result of the breach of duty, in order to prevent unjust enrichment.

In conducting an account of profits, the plaintiff is treated as if they were conducting the business of the defendant, and made those profits which were attributable to the defendant's wrongful actions. This can be rather complex in practice, because the defendant's accounting records must be examined (sometimes by a forensic accountant) to determine what portion of his gross profits were derived to the wrongful act in question. [ [http://www.mondaq.com/article.asp?articleid=44776 Leigh Ellis, "Theory into Action: Calculating Damages Payments and Accounts of Profits in Patent Cases"] ]

Historically an account was not an equitable remedy, but was an action at common law, and is therefore technically an instrument of law, though it arose at a time before the distinction between law and equity was marked. [National Trust Co. v. H & R Block Canada Inc., 2003 SCC 66.]

Co-owners in concurrent estates also have the right to an accounting of profits, in order to properly apportion income from the use or leasing of the property.

ee also

*Tracing (law)
*Constructive trust

References

External links

* [http://www.thefreelibrary.com/Theory+Into+Action+-+Calculating+Damages+Payments+And+Accounts+Of...-a0155672840 Leigh Ellis, "Theory into Action: Calculating Damages Payments and Accounts of Profits in Patent Cases"] Article discussing accounts of profits in the context of patent infringement under United Kingdom law. (mirror of referenced article)


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