Aggravated, Exemplary and Restitutionary ... - Law Commission

(24) our draft Bill should lay down (in some instances by amending, and
in other instances by restating previous law) the main elements of
the remedy of punitive damages; but subject to this, the law relating
to punitive damages should continue to apply and be open to future
common law or statutory development. (Draft Bill, clause 1(1))
(1) The pleading of punitive damages
1.133 We consider the existing approach to the pleading of exemplary (or, as we prefer
to call them, punitive) damages 710
to be the appropriate one. A claim to punitive
damages should be specifically pleaded, together with the facts on which the party
pleading them relies. Neither the court of its own motion, nor any other person or
body, should be entitled to raise the issue if the plaintiff does not do so. And a
plaintiff’s failure specifically to plead punitive damages should prevent such an
award from being made. The reason is that suggested in Broome v Cassell by Lord
Hailsham:
... a defendant against whom a claim of this kind is made ought not to
be taken by surprise. 711
1.134 We therefore recommend that, as at present:
(25) punitive damages should not be awarded unless they have been
specifically pleaded by the plaintiff, together with the facts on which
the party pleading them relies. (Draft Bill, clause 3(2))
(2) The relevance of the means of the defendant
(a) How should the defendant’s wealth be relevant?
1.135 Inevitably the wealth of a particular defendant must significantly affect the extent
of the punitive and deterrent impact of a punitive award. Nevertheless, we do not
support inquiry into the financial position of the defendant in every case in which
punitive damages are awarded, and as a precondition of such awards. 712
An inquiry
of this sort could involve questions of great complexity (for example, in the case of
corporate defendants) and discovery may involve substantial expense. Moreover,
there is a risk of abuse by plaintiffs of rights to discovery, in order to oppress and
to pressurise defendants.
1.136 We believe that the focus of the assessment of what is required in order to punish
and deter the defendant’s ‘outrageous’ conduct should, initially, be on the nature
of that conduct, but that a defendant should have the opportunity to show that, in
his or in her particular financial circumstances, an apparently and otherwise fair
710 RSC, O 18, r 8(3); CCR, O 6, r 1B. See paras 4.113-4.114 above.
711 [1972] AC 1027, 1083F, per Lord Hailsham. Lord Hailsham proposed, in the same
passage, to refer the pleading issue to the “Rule Committee”; the resulting reference
appears to have been the source of the present rule.
712 In Aggravated, Exemplary and Restitutionary Damages (1993) Consultation Paper No 132,
para 6.47, we provisionally supported the view that, as at present, no detailed inquiry into
the defendant’s finances should be undertaken. There was a mixed response to this from
consultees.
139