Aggravated, Exemplary and Restitutionary ... - Law Commission

to us to be essentially theoretical, rather than practical - viz, concerned to establish
the ‘neatness’ of a sharp divide between the civil and the criminal law.
1.38 Our conclusion is that policy considerations support our preference in principle for
the retention of exemplary damages. We have also been heavily influenced by the
fact that a substantial majority of consultees concluded that exemplary damages
should be retained. 567
Of the three options set out in our Supplementary
Consultation Paper, we therefore reject option 2 (the ‘Abolitionist Model’) as a
model for reform and recommend that:
(15) exemplary damages should be retained.
1.39 In the light of this recommendation, this is an appropriate point to consider
whether exemplary damages should be re-named. In Broome v Cassell 568
Lord
Hailsham said that he preferred the term ‘exemplary damages’ over the
alternatives because:
... [it] better expresses the policy of the law ... It is intended to teach
the defendant and others that ‘tort does not pay’ by demonstrating
what consequences the law inflicts rather than simply to make the
defendant suffer an extra penalty for what he has done ... 569
Nevertheless, in the Consultation Paper we sought views as to whether exemplary
damages should be re-named. 570
A suggested title was ‘extra damages’, but this
was unpopular with most consultees. We still consider that a change of
terminology would be clearer and more straightforward. Along with a number of
consultees, 571
we prefer the pre-Broome v Cassell terminology of ‘punitive damages’
and we do not accept Lord Hailsham’s view that this label deflects attention from
the deterrence and disapproval aims of such damages. When one uses the term
‘punishment’ in the criminal law, one does not thereby indicate that deterrence is not
an important aim. 572
Accordingly, we recommend that:
(16) our draft Bill should reflect our preference for the term ‘punitive
damages’ rather than ‘exemplary damages’. (Draft Bill, clause 1(2))
567 See para 5.15 above. We regard the law in other jurisdictions as cancelling each other out
on this question; see Part IV of Aggravated, Exemplary and Restitutionary Damages (1993)
Consultation Paper No 132. On the one hand, civil law jurisdictions have managed without
exemplary damages, at least overtly. On the other hand, in other common law jurisdictions,
in particular Australia, New Zealand, Canada and the United States, exemplary damages
have continued to flourish: especially instructive cases include Uren v John Fairfax & Sons
Pty Ltd (1966) 117 CLR 118; Lamb v Cotogno (1987) 164 CLR 1; Vorvis v Insurance
Corporation of British Columbia (1989) 58 DLR (4th) 193.
568 [1972] AC 1027.
569 [1972] AC 1027, 1073F.
570 Aggravated, Exemplary and Restitutionary Damages (1993) Consultation Paper No 132,
paras 6.23 and 8.13.
571 Cf R v Secretary of State for Transport, ex p Factortame Ltd (No 5), The Times 11 September
1997, in which the Divisional Court recently proposed that ‘exemplary damages’ is a
“misleading” phrase, and that the appropriate one is ‘penal damages’, on the basis that “[i]t
is a means of using civil proceedings to punish and deter certain classes of wrongdoer”.
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