Aggravated, Exemplary and Restitutionary ... - Law Commission

1.3 Historically, a number of differently labelled remedies have performed the role of
stripping away gains made by a civil wrongdoer: for example, the award of money
had and received (especially in the so-called ‘waiver of tort’ cases), an account of
profits, and ‘restitutionary’ damages (where the damages are assessed according to
the gains made by the wrongdoer rather than the loss to the plaintiff).
1.4 It is only comparatively recently - with the recognition of, and increased interest
in, the law of restitution - that it has come to be appreciated that the law often is
concerned to strip away gains made by a wrong. No-one would pretend that
restitution in this context is as well-established and uncontroversial as
compensation. And there are cases (sometimes analysed as awarding restitution)
where one can realistically argue that the plaintiff has suffered a loss, in the
extended sense that the plaintiff has not been paid what he or she would have
charged for permitting the defendant’s conduct. 186
But to deny that the law does
award restitution for some civil wrongs, and to argue that all past decisions have in
reality been awarding compensation, would, in our view, be to distort the truth.
2. RESTITUTION FOR WRONGS: PRESENT LAW
1.5 It is convenient to divide the present law on restitution for wrongs into three parts:
restitution of enrichments gained by a tort; restitution of enrichments gained by an
equitable wrong; and restitution of enrichments gained by a breach of contract.
(1) Enrichments gained by a tort
1.6 A word first needs to be said about ‘waiver of tort’. This is a confusing concept
and it carries more than one meaning. It is normally used to refer to a sitaution in
which a plaintiff seeks a restitutionary remedy for a tort rather than compensatory
damages. So, for example, in the leading case of United Australia Ltd v Barclays
Bank Ltd 187
the plaintiff initially brought an action for money had and received by
conversion of a cheque. This was a claim for restitution of the gains made by the
tort of conversion and the plaintiff was described as ‘waiving the tort’. Yet this did
not mean that the plaintiff was excusing the tort, so that, when that claim was
abandoned prior to judgment, the plaintiff was nevertheless entitled to bring an
action claiming compensatory damages for conversion of the cheque by another
party. Viscount Simon LC said:
When the plaintiff ‘waived the tort’ and brought assumpsit, 188
he did
not thereby elect to be treated from that time forward on the basis that
no tort had been committed; indeed, if it were to be understood that
no tort had been committed, how could an action in assumpsit lie? It
lies only because the acquisition of the defendant is wrongful and there
186 That is, the damages can be viewed as compensating the plaintiff’s loss of opportunity to
bargain. See R J Sharpe and S M Waddams, “Damages for Lost Opportunity to Bargain”
(1982) 2 OJLS 290. For differing judicial views as to the usefulness of the notion of loss of
opportunity to bargain, see the interpretations of Wrotham Park Estate Co Ltd v Parkside
Homes Ltd [1974] 1 WLR 798 by Steyn LJ in Surrey CC v Bredero Homes Ltd [1993] 1 WLR
1361 and by the Court of Appeal in Jaggard v Sawyer [1995] 1 WLR 269. See para 3.36
below.
187 [1941] AC 1.
188 That is, the action for money had and received.
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