Aggravated, Exemplary and Restitutionary ... - Law Commission

(3) the wrongdoer’s conduct has affected a large number of people, and so
caused a large number of claims to be made in respect of it. 5
1.3 Even if the law were not open to objection on the above ground, reform would still
be required, we suggest, due to the unsatisfactory manner in which exemplary
damages are assessed. 6
Although reasoned, consistent and proportionate awards
are vital, there are few clear principles to guide courts towards this result. And,
indeed, such awards are almost impossible to achieve if, as at present, juries may
have the task of deciding the quantum of exemplary damages.
1.4 We shall also be considering the two other major types of ‘exceptional’ damages
recognised in English law: aggravated damages, which have often been confused
with exemplary damages; and restitutionary damages, which are damages which
aim to strip away some or all of the gains made by a defendant from a civil wrong.
1.5 Although we call these three types of damages (exemplary, aggravated and
restitutionary) ‘exceptional’, we do not thereby seek to minimise the importance of
this topic. Very few would seek to defend the present law. Reform, especially of
the law on exemplary damages, is widely agreed to be essential. 7
As Lord Justice
Stephenson stated in Riches v News Group Newspapers, 8
the present state of the law
“... cries aloud for Parliamentary intervention”. 9
Publication of this report
provides a unique opportunity to rationalise and clarify the aims and purposes of
the English law of damages.
2. THE CONSULTATION PROCESS
1.6 Our consultation paper on these damages, Aggravated, Exemplary and Restitutionary
Damages, 10
was published in Autumn 1993. The topic of exemplary damages, in
particular, provoked a wide range of strongly-held views from consultees.
Although it appeared that a clear majority favoured the retention of exemplary
damages, the diversity of views left us in some doubt as to where the consensus of
opinion lay as regards the future of exemplary damages. We therefore took the
unusual step of issuing a supplementary consultation paper in August 1995. That
paper outlined three models for reform and asked consultees to express their
preference. The process confirmed that a considerable majority of consultees
favoured the retention of exemplary damages. We describe the three models and
the results of the process in more detail in Part V. 11
A list of those who responded
to the two papers appears in Appendices B and C. Although the decision to have
two consultation exercises led to a long delay in formulating our final proposals, we
4 See para 1.24 below, examples (5), (7), (8), (9) and (10).
5 See para 1.24 below, example (9). See also the discussion of multiple plaintiff claims and
AB v South West Water Services Ltd [1993] QB 507 at para 4.47 below.
6 See, in particular, the discussion at paras 4.56-4.60, 4.86-4.98 and 5.81-5.98 below.
7 See para 1.14 below.
8 [1986] QB 256.
9 [1986] QB 256, 269C.
10 (1993) Consultation Paper No 132.
11 See paras 5.13-5.15 below.
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