Aggravated, Exemplary and Restitutionary ... - Law Commission

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A number of statutes that implement international liability conventions fall into this category. 608 Conflict is also almost inevitable when a statute lays down a detailed and structured remedial regime, particularly one that is administered outside the ordinary court system (for example, by industrial tribunals). One of the best examples of this sort of conflict is the wrong of unfair dismissal. 609 1.61 We should stress, however, that in our view, cases of inconsistency, of the sort we have identified above, are unlikely to be common. Many of the better known statutes under which statutory civil wrongs arise do not specify expressly what remedies are available, or may do so in only the most general terms. 610 Parliament is often content to provide that a wrong should be civilly actionable, or actionable as a tort 611 or an equitable wrong, 612 without stipulating the remedial implications of that proposition. 613 It is a reasonable inference that at least compensatory damages are available for the civil wrong so created. And we think that, in general, the availability of punitive damages would be consistent with the policy of such Acts. 1.62 We have given thought to the possibility of formulating an exhaustive statutory list of wrongs which arise under an Act for which punitive damages should be available (or, perhaps, should not be available). The list would be formulated on the basis of our view as to which wrong-defining statutory schemes are, or are not, inconsistent with the availability of punitive damages. But to deal with this, divorced from the particular facts, would be an exceedingly difficult task, and would inevitably leave gaps. We therefore think that the better solution is a general statutory provision which prevents an award of punitive damages from being made 608 See, for example, the Nuclear Installations Act 1965 (liability for nuclear occurrences), s 12(1), and the Merchant Shipping Act 1995, Ch III (liability for oil pollution), s 156. 609 See the remedial scheme established by what is now Chapter II of the Employment Rights Act 1996. It is notable that that scheme already includes elements which can loosely be described as having a ‘punitive’ (rather than primarily compensatory) purpose. But cf the remedies available for unlawful discrimination on grounds of sex, race or disability in the employment field, which we consider at paras 5.63-5.65 below. 610 For example, the Occupiers’ Liability Act 1957; the Occupiers’ Liability Act 1984; the Animals Act 1971; the Copyright, Designs and Patents Act 1988; the Defective Premises Act 1972; the Consumer Protection Act 1987. See also numerous examples of the ‘inferred’ and ‘express’ torts of breach of statutory duty. 611 Examples are: “may be made the subject of civil proceedings in like manner as any other claim in tort” (eg s 66(1) of the Sex Discrimination Act 1975) and “in an action for ... all such relief ... is available to the plaintiff as is available in respect of the infringement of any other property right” (eg s 96(2) of the Copyright, Designs and Patents Act 1988). See now the statutory wrong created by the Protection from Harassment Act 1997, which that statute expressly classifies as a tort. 612 Section 309 of the Companies Act 1985. 613 Examples of typical forms of words are “shall be liable” (for “damage” or “injury” or “loss”) or “shall be actionable”. In some other cases, such as the Occupiers’ Liability Acts 1957 and 1984, and the Defective Premises Act 1972, civil actionability, though undoubtedly intended, may be less clearly indicated. And in yet other cases, which are regarded as examples of the ‘tort of breach of statutory duty’, Parliament may have given no thought to whether a particular breach of statutory duty should be civilly actionable, and it is left to the courts to decide whether or not that should be so (though the courts themselves rationalise what they do as an attempt to discover an implied legislative intention). 114
for a wrong which arises under an Act, where the court considers that such an award would be inconsistent with the policy of the Act. We have so recommended. 614 1.63 We would like to make clear our views on the wrongs of unlawful discrimination on grounds of sex, race or disability, which arise under the Sex Discrimination Act 1975, the Race Relations Act 1976 and the Disability Discrimination Act 1995. Many consultees thought that there was a pressing need for punitive damages to be available for these wrongs. Yet unlawful discrimination provides a ‘hard case’ for the consistency test. We therefore think it important to spell out why, in our view, punitive damages should indeed be available for such discrimination and would not fall foul of the consistency test. While we shall focus on sex discrimination, the same reasoning applies to race and disability discrimination. 1.64 So far as unlawful discrimination outside the employment field is concerned, section 66(1) of the Sex Discrimination Act 1975 provides that such a complaint “may be made the subject of civil proceedings in like manner as any other claim in tort”. This appears to mean, inter alia, that the remedies which are typically available for torts are also available for this form of unlawful discrimination. Thus if punitive damages are available for torts, section 66(1) would seem to authorise an award thereof for the tort of unlawful sex discrimination, on the same basis as for other torts. Indeed, we have already seen that English courts did, at one time, award damages for unlawful discrimination under section 66 in exactly this way. 615 The reason why those decisions have since been undermined is not because an award of exemplary damages was held to be inconsistent with these provisions of the Sex Discrimination Act, but because of an independent common law rule (the cause of action test). 616 1.65 The conclusion that punitive damages should be available is more difficult to justify, but, we think, still the correct one, in relation to complaints of unlawful discrimination in the employment field. The provisions which deal with the enforcement of this category of complaint 617 differ substantially from section 66, and prima facie militate against an award of punitive damages. Section 65 establishes a detailed and exhaustive 618 remedial regime; 619 complaints are adjudicated and enforced by industrial tribunals, and therefore fall outside the ordinary court system; 620 and the only pecuniary award available is described as 614 See recommendation (19)(b) above, and draft Bill, clause 3(4) and 3(5). 615 See para 4.25 above. 616 See para 4.25 above. 617 Sex Discrimination Act 1975, ss 63-65. 618 Sex Discrimination Act 1975, s 62(1) provides that “[e]xcept as provided by this Act, no proceedings, whether civil or criminal, shall lie against any person in respect of an act by reason that the act is unlawful by virtue of a provision of this Act”. 619 Sex Discrimination Act 1975, s 65(1) provides that the industrial tribunal shall award one or more of three remedies as it “considers just and equitable”: a declaratory order (s 65(1)(a)), an order for compensation (s 65(1)(b)), and a recommendation (s 65(1)(c)). 620 Sex Discrimination Act 1975, s 63(1). 115
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THE LAW COMMISSION Item 2 of the Si
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should emphasise at the outset that
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practitioners and academics) consid
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punitive damages should survive for
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and sued, he will, at worst, be mad
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‘exceptional’ 62 conduct or mot
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defendant or his legal advisers per
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an undertaking in damages which was
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likely adversely to affect him or h
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noting the concession by the respon
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Kralj, which was an “excruciating
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two of their lordships who gave jud
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such a restriction, unless one take
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(1) legislation should provide that
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1.3 Historically, a number of diffe
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nuisance 195 has also been recognis
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day market). At first instance, Pet
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equired to trigger an account of pr
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disgorgement to principals of bribe
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disgorge what he has saved by commi
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there is no consensus among comment
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(a) Restitutionary damages should b
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the purposes of the claim to restit
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account of profits and damages but
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area. The problem of ‘election of
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there is no such in-built limitatio
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PART IV EXEMPLARY DAMAGES: PRESENT
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that exemplary damages were not awa
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1.96 These questions were recently
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to be irrelevant to, and even incon
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1.107 Consistently with the apparen
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Page 65 and 66: 1.117 Major Commonwealth jurisdicti
Page 67 and 68: In the present case there is the fu
Page 69 and 70: an aspect of the case which made ex
Page 71 and 72: 1.137 The ‘non-discrimination’
Page 73 and 74: We have ... been referred to a numb
Page 75 and 76: Thus it has been suggested that the
Page 77 and 78: underlying such damages, that of pu
Page 79 and 80: easons of fairness to defendants: i
Page 81 and 82: (6) Multiple plaintiffs 1.165 Very
Page 83 and 84: Legal Services Act 1990 and Rules o
Page 85 and 86: MR himself suggested figures to ass
Page 87 and 88: Thompson v MPC achieves its aims, t
Page 89 and 90: proceeded on the basis that the doc
Page 91 and 92: would be that to allow insurance wo
Page 93 and 94: PART V EXEMPLARY DAMAGES: REFORM 1.
Page 95 and 96: 1.8 As regards the divide between t
Page 97 and 98: 3. THE CASE FOR AND AGAINST EXEMPLA
Page 99 and 100: (5) The criminal approach to vicari
Page 101 and 102: particularly unsatisfactory to rely
Page 103 and 104: 1.34 On the first interpretation an
Page 105 and 106: 4. OUR CENTRAL REFORM PROPOSALS (1)
Page 107 and 108: when applying this principle a cour
Page 109 and 110: indefensible position which the com
Page 111 and 112: ... the availability of exemplary d
Page 113: But these concepts are inadequate,
Page 117 and 118: view that such an award would be co
Page 119 and 120: the promise. To award exemplary dam
Page 121 and 122: else should, actually constitute in
Page 123 and 124: awarded as damages (including exemp
Page 125 and 126: 1.88 The first argument is that it
Page 127 and 128: (2) the relationship between (on th
Page 129 and 130: was determined, the court could mak
Page 131 and 132: (iii) A ‘last resort’ remedy (2
Page 133 and 134: A discretionary or an absolute bar
Page 135 and 136: 1.117 We have therefore recommended
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Page 139 and 140: (24) our draft Bill should lay down
Page 141 and 142: 1.141 In our view, this is necessar
Page 143 and 144: the punitive damages award on the A
Page 145 and 146: to that remedy. 720 Yet this means
Page 147 and 148: (31) once punitive damages have bee
Page 149 and 150: e so where the defendant consents t
Page 151 and 152: 1.183 We also think that any ‘adv
Page 153 and 154: liability’) which applies to any
Page 155 and 156: (c) Implications of the adoption of
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Page 159 and 160: conduct. 756 Although it has consis
Page 161 and 162: liable to pay a sum of money which
Page 163 and 164: 1.224 The second difference is that
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award if they succeed in persuading
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approaches. 786 132, 787 Although i
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... [c]ontracts should only be held
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(ii) The problems of defining with
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the insured wrongdoer’s inability
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award to be covered by insurance, t
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punitive damages, no enactment shal
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one case, 831 and arguably done so
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common law to hold, if necessary, t
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PART VI SUMMARY OF RECOMMENDATIONS
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(19) the ‘cause of action’ test
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damages shall be permitted for that
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MICHAEL SAYERS, Secretary 11 Septem
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Nigel Ley Harvey McGregor QC Tim Ow
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APPENDIX C Persons and organisation
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Steve Hedley John Hodgson L Hoyano
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