Aggravated, Exemplary and Restitutionary ... - Law Commission

award if they succeed in persuading the court that they have insufficient means to
satisfy the proposed liability. In our view, vicariously liable defendants should also
be permitted to advance the argument that they (the employers) have insufficient
means, but not the different argument that what they must pay should be reduced
on account of their employees’ insufficient means. 780
On this limited basis it is
quite conceivable that employers could be liable to pay sums of punitive damages
in excess of those which their employees are or would be liable to pay: primarily
because an employee is much more likely than his or her employer to succeed with
an argument that the proposed award is too high for him or her to pay.
1.230 We therefore recommend that:
(39) subject only to recommendation (40), the sum of punitive damages
which a person is vicariously liable to pay for the wrong of another
should be that which that other would be liable to pay, and should
be determined on that basis. (Draft Bill, clause 11(2))
(40) where the court is assessing the sum of punitive damages which an
employer is vicariously liable to pay for the wrongs of its employee:
(a) the award payable by the employer may be reduced (in
accordance with recommendations (26)-(28)) if the court
considers that the employer’s means are such that it would
cause it undue hardship to be required to pay such sum as
would otherwise be appropriate, (Draft Bill, clause 11(3)) and
(b) the award payable by the employer must not be reduced on
the ground that the employee’s means are such that it would
cause the employee undue hardship if he or she was to be
required to pay such sum as would (disregarding the means
of the employee) otherwise be appropriate. (Draft Bill, clause
11(3))
(7) Standard of Proof
1.231 We are content, in agreement with the majority of consultees, to continue to apply
the civil standard of proof to claims to punitive damages. 781
That this is the
existing legal position was recently confirmed by the Court of Appeal in John v
MGN Ltd. 782
We therefore reject any view that the criminal standard of proof is
appropriate, in order to replicate the evidential safeguards that are offered by the
criminal law, and in recognition of the quasi-criminal nature of the activity which
may give rise to a punitive damages award. We also reject an intermediate
standard, such as ‘clear and convincing evidence’, which has been adopted in some
American states. Accordingly, we recommend that:
780 This is the approach taken in Thompson v MPC [1997] 3 WLR 403. See above, paras 4.70-
71.
781 This issue was discussed, without any provisional view being reached, in Aggravated,
Exemplary and Restitutionary Damages (1993) Consultation Paper No 132, paras 3.111-
3.112 and 6.37.
782 John v MGN Ltd [1997] QB 586. See paras 4.99-4.100 above.
165