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 A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties (person or group of persons). Typically, a fiduciary prudently takes care of money or other assets for another person. One party, for exampl ...
duty. It is an action taken against a
defendant In court proceedings, a defendant is a person or object who is the party either accused of committing a crime in criminal prosecution or against whom some type of civil relief is being sought in a civil case. Terminology varies from one jurisdi ...
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. As a result, mathematical exactness is not called for and reasonable approximation is acceptable. 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. Co-owners in
concurrent estate In property law, a concurrent estate or co-tenancy is any of various ways in which property is owned by more than one person at a time. If more than one person owns the same property, they are commonly referred to as co-owners. Legal terminolo ...
s also have the right to an accounting of profits, in order to properly apportion income from the use or leasing of the property. The remedy is also available against strangers to a trust who "dishonestly assist" an express trustee in a breach of the trustee's fiduciary duty. Case law has shown roughly two approaches to assessing the extent of an account of profits:. # To account not of the entire business but of the particular benefits which flowed to him in breach of his duty; # To account for the entire business and its profits, due allowance being made for the time, energy, skill and financial contribution of the fiduciary (the approach in '' Boardman v Phipps'').

See also

* Tracing (law) *
Constructive trust A constructive trust is an equitable remedy imposed by a court to benefit a party that has been wrongfully deprived of its rights due to either a person obtaining or holding a legal property right which they should not possess due to unjust enri ...


Further reading

HS222 How to calculate your taxable profits (2019)

(in German)
Account of profits ALRC
Judicial remedies Equity (law) {{law-term-stub