Aggravated, Exemplary and Restitutionary ... - Law Commission

• the defendant’s good faith
We now consider each in more detail.
(a) The ‘if, but only if’ test
1.115 Exemplary damages are available to a court if, but only if, the sum which it seeks
to award as compensation is inadequate to punish the defendant for his outrageous
conduct, to deter him and others from engaging in similar conduct, and to mark
the court’s disapproval of such conduct. Thus in Rookes v Barnard 375
Lord Devlin
stated that, when assessing damages in a case in which exemplary damages are
available, the jury should be directed that:
... if, but only if, the sum which they have in mind to award as
compensation (which may, of course, be a sum aggravated by the way
in which the defendant has behaved to the plaintiff) is inadequate to
punish him for his outrageous conduct, to mark their disapproval of
such conduct and to deter him from repeating it, then it can award
some larger sum. 376
The importance of this principle was further emphasised by the House of Lords in
Broome v Cassell. 377
1.116 The ‘if, but only if’ test therefore entails that exemplary damages are a remedy of
‘last resort’ and that they are, in one sense, a ‘topping-up’ award. 378
It recognises
that even awards of compensatory damages may have an incidental punitive effect,
and that the need for an award of exemplary damages is correspondingly reduced
where this is so. Thus the test makes the availability of exemplary damages
conditional on compensatory awards being inadequate to achieve the ends of
punishment, deterrence and disapproval. Such awards represent the balance
between, on the one hand, any compensatory sum, and, on the other hand, the
sum that the court considers to be appropriate to achieve those ends.
375 [1964] AC 1129.
376 [1964] AC 1129, 1228.
377 [1972] AC 1027, 1060A-D, 1082A-B, 1089B-F, 1104D, 1116C, 1121G-1122A, 1126C-D.
See, in particular, Lord Diplock (at 1126D):
... it is only if what the defendant deserves to pay as punishment exceeds what the
plaintiff deserves to receive as compensation, that the plaintiff can also be
awarded the amount in excess.
378 Nevertheless, exemplary damages and compensatory damages can be (and generally are)
itemised. This is apparent from John v MGN Ltd [1997] QB 586, 619C-D in which it was
said that:
... it is only where the conditions for making an exemplary award are satisfied,
and only when the sum awarded to the plaintiff as compensatory damages is not
itself sufficient to punish the defendant, show that tort does not pay and deter
others from acting similarly, that an award of exemplary damages should be added
to the award of compensatory damages (emphasis added)
See also Thompson v MPC [1997] 3 WLR 403, in which the Court of Appeal recommended
that awards of ‘basic’ compensatory damages and ‘aggravated’ compensatory damages
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