Aggravated, Exemplary and Restitutionary ... - Law Commission

1.137 The ‘non-discrimination’ or ‘comparability’ requirement was recently considered
in relation to the remedy of exemplary damages by the Divisional Court in R v
Secretary of State for Transport, ex parte Factortame Ltd (No 5). 410
In Brasserie du
Pecheur SA v Germany 411
the European Court of Justice stated that an award of
exemplary damages “cannot be ruled out” in a claim founded on Community law,
“if such damages could be awarded pursuant to a similar claim or action founded
on domestic law”. In that case the ECJ was dealing with the principle of ‘state
liability’ for breach of Community law recognised in Francovich and Bonifaci v
Italy. 412
In ex parte Factortame Ltd (No 5) the Divisional Court had to apply the
ECJ’s ruling to this category of claim.
1.138 The Divisional Court indicated that the state liability claim was best understood as
an action for breach of statutory duty. 413
It was apparently accepted that, under
domestic law, exemplary damages could never be awarded for such a claim. 414
But
did Community law require exemplary damages to be available? The applicants’
argument was that exemplary damages could be awarded for the tort of
misfeasance in a public office; 415
that this is a “similar claim or action founded on
domestic law”; that to refuse to award them for state liability claims would infringe
the principle of ‘non-discrimination’; and that, as a result, exemplary damages had
to be available as a matter of Community law. The Divisional Court rejected these
arguments. Community law did not require exemplary damages to be available for
the simple reason that the tort of misfeasance in a public office was not a ‘similar
claim or action’. 416
1.139 Arguments that Community law (the Equal Treatment Directive) requires
exemplary damages to be available for unlawful discrimination on grounds of sex
have been similarly unsuccessful. It is now reasonably clear that exemplary
damages are not available, as a matter of domestic law, for unlawful discrimination
on grounds of sex, contrary to the Sex Discrimination Act 1975, because such
410 R v Secretary of State for Transport, ex p Factortame Ltd (No 5), The Times 11 September
1997.
411 C-46 & 48/93 Brasserie du Pecheur SA v Germany; R v Secretary of State for Transport, ex p
Factortame Ltd [1996] QB 404 (ECJ).
412 C-6 & 9/90 Francovich & Bonifaci v Italy [1991] ECR I 5357.
413 R v Secretary of State for Transport, ex p Factortame Ltd (No 5), The Times 11 September 1997.
414 See para 4.25 above.
415 This would almost certainly fall within category 1: see paras 4.3 and 4.6-4.7 above.
Moreover, the Divisional Court appeared to decide that the cause of action test was
satisfied, in the case of the tort of misfeasance in a public office, because the tort was known
to the law pre-1964. That is obviously a necessary condition, but it should not be sufficient
to satisfy the cause of action test, as conventionally viewed: see paras 4.4 and 4.25 above.
The court should have gone on to ask whether there were authorities which had awarded
exemplary damages for that tort pre-1964.
416 The Divisional Court was extremely reluctant to conclude that Community law required
punitive damages to be available for breaches of Community law. It observed that the
United Kingdom was almost unique amongst Member States in recognising a civil remedy
of punitive damages. If English law made that remedy available for breaches of Community
law, the pursuit of “uniformity” in the remedies available for such breaches across the
Community would be undermined.
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