• In the case of Experience Hendrix LLC v PPX Enterprises Inc [2003] 1 All ER Comm 830, the ordering of damages by courts where the claimant has not proved to have suffered financial loss was explored.

Facts of Experience Hendrix LLC v PPX Enterprises Inc [2003] 1 All ER Comm 830

  • The D, PPX Enterprises Inc, granted licences which exploited the master recordings
  • These recordings contained work from Jimi Hendrix, which was in breach of a prior agreement
  • The C, Experience Hendrix LLC, did not have the evidence to show any financial losses suffered as a consequence of the breach
  • The C sought damages for the breach of contract, they claimed a restitution of profits from the breach – citing the case of Attorney General v Blake [2000]
  • The High Court ordered an injunction to avoid further breaches but did not award damages, so the C appealed

Issues in Experience Hendrix LLC v PPX Enterprises Inc [2003] 1 All ER Comm 830

  • Was the C entitled to more than an injunction, were they entitled to an account of profits for the D’s breaches?

Held by the Court of Appeal

Appeal allowed. Instead of restitution of profits (unavailable), negotiating damages were awarded. These were restitutionary in nature and thus can be awarded where it is difficulty for the C to prove the financial loss otherwise necessary. There must be a legitimate interest in profit-making prevention of the D’s activities carried out in breach. Damages would be awarded by calculating the benefits from the breach, gained by the wrongdoer.

Lord Justice Mance

Lord Justice Mance believed this case differed from that of Blake, where restitution of profits were awarded:

  • “there are also obvious distinctions from Blake’s case. First, we are not concerned with a subject anything like as special or sensitive as national security … Second. the notoriety which accounted for the magnitude of Blake’s, royalty earning capacity derived from his prior breaches of secrecy, and that too has no present parallel” [37]

Therefore restitution of profits would not apply. However, Lord Justice Mance did believe there should be a financial award alongside the injunction ordered:

  • “The injunction that it has obtained will protect it for the future. For the past, in the absence of any proven loss, I would confine any financial remedy to an order that PPX pay a reasonable sum for its use of material in breach of the settlement agreement. That sum can properly be described as being “such sum as might reasonably have been demanded” by Jimi Hendrix’s estate “as a quid pro quo for agreeing to permit the two licences into which PPX entered in breach of the settlement agreement”” [45]

Distinguishing case

  • In Morris-Garner v One Step (Support) Ltd [2018] UKSC 20, the Supreme Court held that negotiating damages were unavailable and compensatory damages were to be based on the financial loss suffered. Negotiating damages were seen to not be restitutionary in nature – opposing the judgement held in the Experience Hendrix LLC v PPX Enterprises Inc case.