Aggravated, Exemplary and Restitutionary ... - Law Commission

PART V
EXEMPLARY DAMAGES: REFORM
1. THE NEED FOR REFORM
1.1 The decision in Rookes v Barnard 545
was a compromise, being the furthest the
House of Lords felt it could go within the confines of precedent in ridding the law
of exemplary damages, which it regarded as anomalous. 546
The first two of Lord
Devlin’s three categories are essentially historically-based and represent situations
where exemplary damages had been awarded prior to Rookes v Barnard and where
reclassification of the damages as compensatory aggravated damages was not
thought possible. It is debatable whether Lord Devlin would have felt constrained
from abolishing exemplary damages following the Practice Statement of 1966. 547
It is
equally debatable whether his Lordship would have felt the need to formulate his
second category had the notion of restitutionary damages been current in 1964. 548
1.2 The interpretation given to Rookes v Barnard 549
by the Court of Appeal in AB v South
West Water Services Ltd, 550
limiting exemplary damages to wrongs in respect of which
they had been held to be available before the decision in Rookes v Barnard, 551
has
meant that the availability of exemplary damages is now yet further dictated by what
are arguably the accidents of precedent, rather than sound principle.
1.3 Although it is not inconceivable that the House of Lords could reformulate the law
in a way that is more satisfactory, it is surely correct that the present state of the
law “cries aloud ... for Parliamentary intervention”. 552
The overwhelming majority
of our consultees agreed that the current law is in an unsatisfactory state. One
consultee spoke for many in stating that the “result of AB v South West Water
Services Limited is intolerable in terms of justice, logic and certainty.” 553
1.4 We regard some reform of the present law to be essential in order to restore rationality.
We have the opportunity to recommend reform, unconstrained, as the courts have
been, by precedent. The very difficult question is what form the reform should take.
In particular, should exemplary damages be abolished altogether?
545 [1964] AC 1129.
546 “These authorities convince me ... that your Lordships could not, without a complete
disregard of precedent, and indeed of statute, now arrive at a determination that refused
altogether to recognise the exemplary principle ...”: Rookes v Barnard [1964] AC 1129,
1225-1226, per Lord Devlin.
547 Practice Statement (Judicial Precedent) [1966] 1 WLR 1234.
548 But see the discussion of whether category 2 is susceptible to restitutionary analysis at paras
4.16-4.20 above.
549 [1964] AC 1129.
550 [1993] QB 507. See paras 4.4 and 4.24-4.28 above.
551 [1964] AC 1129.
552 Riches v News Group Newspapers Ltd [1986] QB 256, 269C, per Stephenson LJ.
553 Professor Rogers.
93