Aggravated, Exemplary and Restitutionary ... - Law Commission

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and marks such conduct out as meriting an enhanced award of damages. In the Consultation Paper we observed that: Aggravated damages ... serve to increase the damages that could otherwise be awarded; and they increase awards because of the defendant’s conduct. This looks like punishment. 133 1.19 Yet one can argue, on the other hand, that the exceptional conduct test is perfectly compatible with compensation, on the ground that exceptional conduct necessarily gives rise to increased injury to feelings. The offensiveness of the defendant’s conduct and the seriousness of the plaintiff’s injury are linked. If the loss that the plaintiff has actually suffered is exacerbated or aggravated by the conduct of the defendant, he or she should be compensated for it. To do so is simply to compensate in full measure. That this may appear to punish the defendant does not make aggravated damages punitive, rather than compensatory, in aim. 1.20 In the recent case of Appleton v Garrett 134 Dyson J adopted our analysis of the circumstances in which aggravated damages could be awarded. 135 He apparently saw no inconsistency between the proposition that such damages could be awarded where the defendant’s exceptional conduct caused injury to the plaintiff’s feelings, and the proposition that aggravated damages were compensatory, not punitive, in aim. The link between exceptional conduct and increased (compensatable) injury was also expressly recognised by the Court of Appeal in the guidance which it formulated in Thompson v MPC. 136 Aggravated damages are awardable where there are: ... aggravating features about the case which would result in the plaintiff not receiving sufficient compensation for the injury suffered if the award were restricted to a basic award. 137 (b) The co-existence of damages for mental distress and aggravated damages 1.21 The Consultation Paper 138 regarded the co-existence and conflicting availability of mental distress damages and aggravated damages as further evidence that aggravated damages are not purely compensatory. It argued that aggravated damages do not merely duplicate compensatory damages for mental distress, the Court of Appeal used the label “aggravating features” (causing injury to feelings) to refer to the circumstances in which an aggravated damages award was justified in addition to a ‘basic’ compensatory award. 133 Aggravated, Exemplary and Restitutionary Damages (1993) Consultation Paper No 132, para 3.29. 134 [1996] PIQR P1. 135 [1996] PIQR P1, P4. 136 [1997] 3 WLR 403. 137 [1997] 3 WLR 403, 417A-B (emphasis added). 138 Aggravated, Exemplary and Restitutionary Damages (1993) Consultation Paper No 132, para 3.29. 18
noting the concession by the respondents in Deane v Ealing LBC 139 that aggravated damages and damages for injury to feelings were separate issues. 1.22 We do consider that the co-existence of the two heads of claim within the law is a source of unnecessary confusion concerning the function of ‘aggravated damages’, which it is desirable to avoid. That confusion is arguably evident where aggravated damages are claimed in addition to damages for mental distress. What role is there for an award of aggravated damages in that case? Of course, the bare co-existence of the two heads of claim does not, inevitably, mean that aggravated damages are punitive rather than compensatory. Indeed, lawyers are quite accustomed to categorising compensatory damages in a range of ways, for the reason that this facilitates, because it clarifies, the task of assessment. That conclusion would only be necessary if the damages which could be claimed under the head of ‘damages for mental distress’ fully compensated the plaintiff for his or her mental distress - that is, if they took account of any increased injury that might be due to the defendant’s conduct. If so, there would be no independent compensatory role for aggravated damages. 1.23 Some courts, when faced with claims to (broadly) damages for mental distress and to aggravated damages, have treated both as compensatory and have awarded both without it being plausible to view the award of aggravated damages as ‘punitive’. For example, in Thompson v MPC, 140 having acknowledged that aggravated damages are compensatory in aim, albeit that they may have some incidental punitive effect, the Court of Appeal stated that: [aggravated] damages can be awarded where there are aggravating features about the case which would result in the plaintiff not receiving sufficient compensation for the injury suffered if the award were restricted to a basic award 141 and that the total sum of basic compensatory damages plus aggravated damages, should not exceed what [the jury] consider[s] is fair compensation for the injury which the plaintiff has suffered. 142 1.24 In Appleton v Garrett, 143 Dyson J awarded both aggravated damages and damages for mental distress, but the award of aggravated damages addressed losses which were not covered by the award of damages for mental distress. The plaintiffs were awarded damages for pain, suffering and loss of amenity caused by the trespass (non-consensual dental treatment), but also aggravated damages for the distress (anger, indignation or “heightened sense of injury or grievance”) caused by the realisation that the treatment had been unnecessary, that this had been known to 139 [1993] ICR 329, 335C. 140 [1997] 3 WLR 403. 141 [1997] 3 WLR 403, 417A (emphasis added). 142 [1997] 3 WLR 403, 417E (emphasis added). 143 [1996] PIQR P1. 19
Page 1 and 2: THE LAW COMMISSION Item 2 of the Si
Page 3 and 4: should emphasise at the outset that
Page 5 and 6: practitioners and academics) consid
Page 7 and 8: punitive damages should survive for
Page 9 and 10: and sued, he will, at worst, be mad
Page 11 and 12: ‘exceptional’ 62 conduct or mot
Page 13 and 14: defendant or his legal advisers per
Page 15 and 16: an undertaking in damages which was
Page 17: likely adversely to affect him or h
Page 21 and 22: Kralj, which was an “excruciating
Page 23 and 24: two of their lordships who gave jud
Page 25 and 26: such a restriction, unless one take
Page 27 and 28: (1) legislation should provide that
Page 29 and 30: 1.3 Historically, a number of diffe
Page 31 and 32: nuisance 195 has also been recognis
Page 33 and 34: day market). At first instance, Pet
Page 35 and 36: equired to trigger an account of pr
Page 37 and 38: disgorgement to principals of bribe
Page 39 and 40: disgorge what he has saved by commi
Page 41 and 42: there is no consensus among comment
Page 43 and 44: (a) Restitutionary damages should b
Page 45 and 46: the purposes of the claim to restit
Page 47 and 48: account of profits and damages but
Page 49 and 50: area. The problem of ‘election of
Page 51 and 52: there is no such in-built limitatio
Page 53 and 54: PART IV EXEMPLARY DAMAGES: PRESENT
Page 55 and 56: that exemplary damages were not awa
Page 57 and 58: 1.96 These questions were recently
Page 59 and 60: to be irrelevant to, and even incon
Page 61 and 62: 1.107 Consistently with the apparen
Page 63 and 64: manner. As shall be seen below, it
Page 65 and 66: 1.117 Major Commonwealth jurisdicti
Page 67 and 68: In the present case there is the fu
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an aspect of the case which made ex
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1.137 The ‘non-discrimination’
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We have ... been referred to a numb
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Thus it has been suggested that the
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underlying such damages, that of pu
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easons of fairness to defendants: i
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(6) Multiple plaintiffs 1.165 Very
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Legal Services Act 1990 and Rules o
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MR himself suggested figures to ass
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Thompson v MPC achieves its aims, t
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proceeded on the basis that the doc
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would be that to allow insurance wo
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PART V EXEMPLARY DAMAGES: REFORM 1.
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1.8 As regards the divide between t
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3. THE CASE FOR AND AGAINST EXEMPLA
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(5) The criminal approach to vicari
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particularly unsatisfactory to rely
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1.34 On the first interpretation an
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4. OUR CENTRAL REFORM PROPOSALS (1)
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when applying this principle a cour
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indefensible position which the com
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... the availability of exemplary d
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But these concepts are inadequate,
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for a wrong which arises under an A
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view that such an award would be co
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the promise. To award exemplary dam
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else should, actually constitute in
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awarded as damages (including exemp
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1.88 The first argument is that it
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(2) the relationship between (on th
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was determined, the court could mak
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(iii) A ‘last resort’ remedy (2
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A discretionary or an absolute bar
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1.117 We have therefore recommended
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discrimination between, for example
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(24) our draft Bill should lay down
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1.141 In our view, this is necessar
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the punitive damages award on the A
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to that remedy. 720 Yet this means
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(31) once punitive damages have bee
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e so where the defendant consents t
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1.183 We also think that any ‘adv
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liability’) which applies to any
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(c) Implications of the adoption of
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‘moderation’ and of ‘proporti
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conduct. 756 Although it has consis
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liable to pay a sum of money which
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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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