Aggravated, Exemplary and Restitutionary ... - Law Commission

(1) what problems of assessment and proof, if any, might be raised by the
abolition of aggravated damages; 180
(2) whether aggravated damages should be available in respect of all wrongs or
only some; 181
and
(3) whether the proposed abolition of aggravated damages and the adoption of
a purely compensatory model would have to be carried out in conjunction
with the reform of the law of exemplary damages, to ensure that any gaps
are closed. 182
1.40 We consider that aggravated damages should be viewed as purely compensatory -
a view supported by the majority of consultees. They are assessed with reference
to what is necessary to compensate certain losses suffered by plaintiffs; they are
not assessed with reference to what is necessary to punish a defendant for his or
her conduct. To suggest otherwise would require an assumption that the law is
starkly incoherent. Punishment has been a controversial aim of the civil law of
damages, and exemplary damages, which are aimed to punish, are viewed as an
exceptional remedy, the availability of which should be tightly constrained. We
shall see in Part IV that the availability of the punitive remedy of exemplary
damages has been strictly constrained by the ‘categories test’ and the ‘cause of
action test’. We recommend in Part V that the availability of exemplary damages
should be expanded, but at the same time, subjected to significant limitations.
There can be no room within the law of damages, as it presently stands, or as we
propose it should be, for another ‘punitive’ remedy (‘aggravated damages’) which
is not subject to such limitations.
1.41 What follows from our acceptance that aggravated damages are compensatory?
We are no longer persuaded that legislative abolition of ‘aggravated damages’ (and
with it, the ‘exceptional conduct’ requirement) is desirable. This is because it may
tend to limit the availability of damages for mental distress. It is not the case that
losses which are compensated by an award of aggravated damages could always be
compensated under another, already-recognised head of damages for a particular
tort. Some losses may only be compensated once it is found that the defendant
has acted in a particularly bad manner; abolishing aggravated damages would
prevent recovery for such losses. Of course, this difficulty could be solved by
legislation, which states and expands the circumstances in which mental distress
damages should be recovered. But we do not consider that it would be sensible for
us to attempt this course of action. On the contrary, we believe that, once one has
clarified the role of aggravated damages, the availability of damages for mental
distress should be left to incremental judicial development.
1.42 What we therefore propose is legislation which will clarify the true role of so-called
aggravated damages, and at the same time, aim to sweep away the terminology of
‘aggravated damages’ which has been so misleading. Accordingly, we recommend
that:
180 Ibid, paras 6.50-6.52 and 8.18.
181 Ibid, paras 6.53 and 8.18.
182 Ibid, paras 6.54 and 8.18.
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