account for profit

When a claimant is successful in establishing liability in the course of litigation, they may be entitled to elect between an account of profits or damages for the calculation of sum payable by the defendant.

The calculation of the sum in an assessment for an account of profits differs to that used in the calculation of damages. An account looks at the profits in the hands of the defendant as a result of the wrong for which he is liable. Damages focuses on the losses sustained by the claimant.

Assessment of an account of profits is a more technical accounting exercise than that for the calculation of damages in most instances, because the defendant's expenses and operating costs are deducted (amongst other things) from the ultimate sum payable by the defendant to the claimant.

An account of profits may be ordered, at the discretion of the court, as an alternative to damages at the option of the claimant to the proceedings. Being a discretionary remedy, the courts are more inclined to order an account of profits where there has been deliberate deception or an intentional wrongdoing on the part of the defendant. An account for profits may be refused on grounds of proportionality.

See account of profits

Usage: A court ordered the Defendant to account for the profits made arising from the sale of counterfeit software.

Related Words: legal proceedings; injunction; delivery up; damages; specific performance; litigation; account of profits.