Aggravated, Exemplary and Restitutionary ... - Law Commission

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2. OUR CONSULTATION EXERCISES (1) Consultation Paper No 132 (a) The main arguments considered in the Consultation Paper 1.5 The following arguments, for and against exemplary damages, were considered in Consultation Paper No 132: 554 (i) Against exemplary damages • the aim of the law of civil wrongs is to provide compensation for loss; • punishment is not a legitimate function of the law of civil wrongs and should take place only within the context of the criminal law; • now that non-pecuniary harm is more freely compensatable exemplary damages are no longer necessary; • the quantum of exemplary damages is uncertain and indeterminate; • exemplary damages constitute an undeserved windfall to the plaintiff; • levels of exemplary damages are too high. (ii) In favour of exemplary damages • punishment, deterrence and the marking out of conduct for disapproval are legitimate functions of the law of civil wrongs; • exemplary damages alert plaintiffs to a method for the effective private enforcement of important rights; • criminal, regulatory and administrative sanctions are inadequate; • in some situations, compensation is inadequate or artificial, or does not effectively remedy the infringement of certain important interests. 1.6 Our provisional view was that exemplary damages should be retained, but put on a principled basis. 555 This was supported by the majority of consultees, although a wide variety of different views were expressed. (b) Some of the main arguments put forward by consultees (i) Against exemplary damages 1.7 The main arguments against exemplary damages focused on two issues: the divide between the criminal and civil law and the appropriateness of other remedies. 554 Aggravated, Exemplary and Restitutionary Damages (1993) Consultation Paper No 132, paras 5.4-5.38. 94
1.8 As regards the divide between the criminal and the civil law, it was claimed that, if an act warranted punishment, this was a matter for the criminal law or some other regulatory system. It was argued that deficiencies in the regulatory systems should be dealt with directly, by the amendment of those systems; they should not be patched up through the civil law. A further concern was that a person could be acquitted of a criminal offence, yet still be subjected to punishment by an award of exemplary damages. 1.9 The arguments focusing on the greater appropriateness of other remedies pointed to a range of other remedies which could perform at least some of the functions which exemplary damages might be expected to perform. One of these arguments was that ‘restitutionary’ damages should be available to deal with any case where a defendant acted wrongfully with a view to making a profit. A second was that ‘compensatory’ damages are adequate to take account of a plaintiff’s outraged feelings, insult and humiliation in the case of torts such as defamation, false imprisonment, malicious prosecution, assault and intimidation. A third and alternative argument was that a ‘non-monetary’ remedy, such as a published declaration, could more appropriately serve to vindicate ‘personality’ rights: there is no connection between the desire to vindicate such rights and the institution of punishment. (ii) In favour of exemplary damages 1.10 The main arguments in favour of exemplary damages responded, to a significant extent, to the same concerns, namely the divide between the civil and criminal law and the appropriateness of exemplary damages. 1.11 Many consultees were not prepared to accept that any sharp distinction exists between the goals that may legitimately be pursued by the criminal law and the civil law: punishment, deterrence and the marking out of conduct for disapproval are legitimate functions of the civil law, as well as the criminal law. 1.12 Many consultees also considered that exemplary damages perform useful and important functions. On the one hand, some pointed to its value as essentially a supplementary device: viz, as a remedy for perceived deficiencies in the criminal law, the civil law and other regulatory systems. A deficiency in the criminal law was identified in relation to police cases: in such cases it is the civil law that bears the brunt of maintaining the rule of law; retribution and punishment must therefore, of necessity, have a part to play in this area also. Likewise some consultees pointed to public concern over the failure to bring criminals to trial, or to secure convictions. A deficiency in the civil law was identified in a different set of cases, in particular those in which powerful defendants are unaffected by the normal level of damages. Another was identified in the specific area of libel law: it was observed that media libels were often deliberately perpetrated for profit or hate, and self-regulation in this area had clearly failed. On the other hand, it was also thought that exemplary damages may have a distinctive role. In particular, individuals were thereby given an effective weapon with which they themselves can 555 Aggravated, Exemplary and Restitutionary Damages (1993) Consultation Paper No 132, paras 6.8 and 8.7. 95
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THE LAW COMMISSION Item 2 of the Si
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should emphasise at the outset that
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practitioners and academics) consid
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punitive damages should survive for
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and sued, he will, at worst, be mad
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‘exceptional’ 62 conduct or mot
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defendant or his legal advisers per
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an undertaking in damages which was
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likely adversely to affect him or h
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noting the concession by the respon
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Kralj, which was an “excruciating
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two of their lordships who gave jud
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such a restriction, unless one take
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(1) legislation should provide that
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1.3 Historically, a number of diffe
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nuisance 195 has also been recognis
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day market). At first instance, Pet
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equired to trigger an account of pr
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disgorgement to principals of bribe
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disgorge what he has saved by commi
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there is no consensus among comment
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Page 45 and 46: the purposes of the claim to restit
Page 47 and 48: account of profits and damages but
Page 49 and 50: area. The problem of ‘election of
Page 51 and 52: there is no such in-built limitatio
Page 53 and 54: PART IV EXEMPLARY DAMAGES: PRESENT
Page 55 and 56: that exemplary damages were not awa
Page 57 and 58: 1.96 These questions were recently
Page 59 and 60: to be irrelevant to, and even incon
Page 61 and 62: 1.107 Consistently with the apparen
Page 63 and 64: manner. As shall be seen below, it
Page 65 and 66: 1.117 Major Commonwealth jurisdicti
Page 67 and 68: In the present case there is the fu
Page 69 and 70: an aspect of the case which made ex
Page 71 and 72: 1.137 The ‘non-discrimination’
Page 73 and 74: We have ... been referred to a numb
Page 75 and 76: Thus it has been suggested that the
Page 77 and 78: underlying such damages, that of pu
Page 79 and 80: easons of fairness to defendants: i
Page 81 and 82: (6) Multiple plaintiffs 1.165 Very
Page 83 and 84: Legal Services Act 1990 and Rules o
Page 85 and 86: MR himself suggested figures to ass
Page 87 and 88: Thompson v MPC achieves its aims, t
Page 89 and 90: proceeded on the basis that the doc
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Page 93: PART V EXEMPLARY DAMAGES: REFORM 1.
Page 97 and 98: 3. THE CASE FOR AND AGAINST EXEMPLA
Page 99 and 100: (5) The criminal approach to vicari
Page 101 and 102: particularly unsatisfactory to rely
Page 103 and 104: 1.34 On the first interpretation an
Page 105 and 106: 4. OUR CENTRAL REFORM PROPOSALS (1)
Page 107 and 108: when applying this principle a cour
Page 109 and 110: indefensible position which the com
Page 111 and 112: ... the availability of exemplary d
Page 113 and 114: But these concepts are inadequate,
Page 115 and 116: for a wrong which arises under an A
Page 117 and 118: view that such an award would be co
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Page 121 and 122: else should, actually constitute in
Page 123 and 124: awarded as damages (including exemp
Page 125 and 126: 1.88 The first argument is that it
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Page 131 and 132: (iii) A ‘last resort’ remedy (2
Page 133 and 134: A discretionary or an absolute bar
Page 135 and 136: 1.117 We have therefore recommended
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Page 139 and 140: (24) our draft Bill should lay down
Page 141 and 142: 1.141 In our view, this is necessar
Page 143 and 144: the punitive damages award on the A
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to that remedy. 720 Yet this means
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(31) once punitive damages have bee
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e so where the defendant consents t
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1.183 We also think that any ‘adv
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liability’) which applies to any
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(c) Implications of the adoption of
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‘moderation’ and of ‘proporti
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conduct. 756 Although it has consis
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liable to pay a sum of money which
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1.224 The second difference is that
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award if they succeed in persuading
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approaches. 786 132, 787 Although i
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... [c]ontracts should only be held
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(ii) The problems of defining with
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the insured wrongdoer’s inability
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award to be covered by insurance, t
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punitive damages, no enactment shal
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one case, 831 and arguably done so
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common law to hold, if necessary, t
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PART VI SUMMARY OF RECOMMENDATIONS
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(19) the ‘cause of action’ test
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damages shall be permitted for that
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MICHAEL SAYERS, Secretary 11 Septem
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Nigel Ley Harvey McGregor QC Tim Ow
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APPENDIX C Persons and organisation
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Steve Hedley John Hodgson L Hoyano
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197
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