Aggravated, Exemplary and Restitutionary ... - Law Commission

or she has suffered as a result of being restrained from doing what he or she could
otherwise have done. The claim to ‘damages’ is really a claim to payment of an
agreed sum, the measure of which is the defendant’s loss; the ‘damages’ are not
available for the breach of any duty in the undertaking, contractual or otherwise.
By definition an ‘indemnity’ will only extend to losses suffered by the indemnified; 642
the use of an undertaking for the purposes of punishment is, on this reasoning,
contrary to principle. 643
1.76 A different view is evident from two authorities to which we have already
referred. 644
This is that an undertaking in damages is validly viewed as a means of
responding to reprehensible behaviour arising in connection with the obtaining or
execution of interlocutory injunctions or related orders - such as Anton Piller
orders and Mareva injunctions. 645
1.77 In our view the better analysis of the role of an undertaking is the first. This does
not mean that we do not consider that the aims which are advanced by the second
conception, particularly the protection of what Zuckerman has called ‘procedural
rights’, 646
are not legitimate aims. 647
It simply means that a liability (if any) to
exemplary or punitive damages in these situations 648
is better analysed as arising
from a civil wrong - especially a tort. The forms of reprehensible conduct which
were alleged to found claims to exemplary damages in the two modern cases in
which such claims were made and contemplated (but not upheld on the facts)
certainly appear to be analogous to torts. And if analysed carefully, they may, or
642 The ‘usual form’ of an undertaking in damages is worded in terms which indicate that its
sole purpose is to operate by way of an indemnity. This has also been noted by S Gee in
Mareva Injunctions and Anton Piller Relief (3rd ed, 1995) p 132.
643 It is theoretically possible that a court could require a plaintiff seeking interlocutory relief to
undertake to pay what amount to ‘punitive damages’, should it subsequently appear that he
or she has acted in a reprehensible manner, either in the course of obtaining the
interlocutory relief, or in the course of its execution. In this case the ‘agreed sum’ would be
an ‘agreed punitive sum’. We note, however, that courts refuse to enforce ‘penalty clauses’
payable by one party to a contract on breach.
644 See Digital Corporation v Darkcrest Ltd [1984] Ch 512; Columbia Pictures Inc v Robinson
[1987] 1 Ch 87, discussed at para 4.27 above.
645 Thus it appears that in Digital Corporation v Darkcrest Ltd [1984] Ch 512, exemplary
damages had earlier been sought pursuant to an undertaking in damages on the ground
that the Anton Piller order had been sought and obtained for an ulterior or improper object.
The claims to damages immediately before Falconer J were based on one or more torts
(including abuse of process), but Falconer J indicated that the plaintiffs were claiming no
more than what they could have obtained pursuant to the undertaking. In Columbia
Pictures Inc v Robinson [1987] 1 Ch 87, Scott J considered that exemplary damages could be
claimed for the excessive and oppressive manner in which the Anton Piller order was
executed - in particular by removing property, the removal of which was not authorised by
the order.
646 See para 5.76, n 95, above.
647 We note the recommendation of the Lord Chancellor’s Department in Anton Piller Orders, A
Consultation Paper (1992), that a summary remedy should be made available to the courts,
which includes the power to award a punitive sum if a plaintiff has behaved in a
reprehensible manner in the course of obtaining or executing an Anton Piller order: para
3.13.
648 The same reasoning applies to compensation.
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