Aggravated, Exemplary and Restitutionary ... - Law Commission

1.117 We have therefore recommended that, when deciding whether to award punitive
damages, the court must have regard to any other sanctions which have been
imposed in relation to the conduct concerned. 691
One would expect the court to
decide whether the defendant has been sufficiently punished by those sanctions; if
he or she has, then no award is appropriate.
(v) A ‘safety-valve discretion’
1.118 Both the ‘if, but only if’ test and the test of ‘deliberate and outrageous disregard of
the plaintiff’s rights’ offer the courts significant flexibility in deciding whether to
award punitive damages. In particular, when considering whether there has been
an ‘outrageous disregard’ of the plaintiff’s rights, the judge should take account of
any factor which bears on the culpability, and so punishment-worthiness, of the
defendant’s conduct - whether as a mitigating 692
or aggravating 693
factor. Even if
such a disregard exists, however, it would be open to a court (under the ‘if, but
only if’ test) to refuse to make any punitive award, or a low award, on the ground
that compensation and/or restitution and/or any other remedy which the court is
minded to grant are adequate or broadly adequate.
1.119 Nothing in our proposed legislative framework compels a court to award punitive
damages, even if those two threshold tests are satisfied. Nevertheless, where a
defendant has acted in ‘deliberate and outrageous disregard of the plaintiff’s rights’
and the remedies which the court is minded to grant will not be adequate to
punish and deter, and the provisions concerning criminal conviction and the
relevance of other sanctions do not apply to bar an award, there should be a
presumption that a punitive damages award is appropriate. For to find these
hurdles to be surmounted entails a conclusion that the defendant’s conduct is
sufficiently culpable to merit punishment, that other civil remedies which the court
is minded to award will not be sufficient to achieve that end, and that no other
sanction has been imposed which makes a punitive damages award unnecessary or
otherwise inappropriate. Accordingly, whilst nothing requires a court to make an
award in this situation, some exceptional circumstance would have to exist before a
court could, we believe, legitimately refuse to make a punitive damages award in
these circumstances. This ultimate discretion, which our proposals preserve,
should properly be conceived as a residual, ‘safety valve’ discretion.
(vi) The principles of ‘moderation’ and ‘proportionality’
1.120 We consider that assessments of punitive damages must be constrained by two
overriding principles: the principles of ‘moderation’ and ‘proportionality’.
1.121 The principle of ‘moderation’ reflects the approach adopted by the Court of
Appeal in John v MGN Ltd 694
where it held that an award of exemplary damages
691 See para 5.44, recommendation (21)(b), above.
692 For example, that the defendant acted under some form of mistake, or was provoked by the
plaintiff.
693 For example, that the defendant knowingly acted wrongfully in the expectation that he or
she would obtain a profit thereby.
694 [1997] QB 586. See para 4.66 above.
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