Aggravated, Exemplary and Restitutionary ... - Law Commission

have continued to be used in Australia, Canada and the United States, 576
describe when exemplary or punitive damages are available.
1.47 The minimum threshold is that the defendant has been subjectively reckless - to
use criminal law terminology. The notion of ‘outrage’ imports the element of
judicial discretion that we believe is inevitable, and essential, in this area. Factors
that will no doubt be relevant in deciding whether conduct is not merely reckless
but outrageous will include whether the wrong was intentionally committed, the
extent and type of the potential harm to the plaintiff, and the motives of the
defendant.
1.48 The extent to which conduct subsequent to the wrong is relevant has perplexed us
a great deal. Ultimately we are content that the need for the conduct to be
relevant to a disregard of the plaintiff’s rights is a sufficient controlling principle. It
ensures that the conduct, even if subsequent, is causally linked to the wrong and is
not wholly independent of it. The facts alleged in AB v South West Water Services
Ltd, 577
are particularly in point. 578
There the defendants admitted liability for, inter
alia, the torts of public nuisance, negligence and breach of statutory duty in
supplying contaminated water to inhabitants of Camelford in Cornwall. But the
initial commission of the wrongs would not in itself have satisfied the ‘deliberate
and outrageous disregard of the plaintiff’s rights’ test. What would have brought
the defendants within that test was the allegedly arrogant and high-handed way in
which they had ignored the complaints made by their customers and the allegedly
misleading comments they had made as to the safety of the water.
(b) The civil wrongs in respect of which an award may be made
1.49 We propose that punitive damages be available for any tort, for (most) 579
equitable
wrongs, and for civil wrongs which arise under statutes where such an award
would be consistent with the policy of the statute in question. But they should not
be available for breach of contract; nor should they be available pursuant to an
undertaking in damages. This would entail a general rejection of the rationally
of Damages (1962) pp 28-34. Also of particular assistance is Lord Denning’s judgment in
the Court of Appeal in Broome v Cassell [1971] 2 QB 354.
576 See para 4.5 above. Particularly helpful is the American Law Institute’s Restatement of the
Law of Tort (2d) (1979), section 908, which reads:
(1) Punitive damages are damages, other than compensatory or nominal damages,
awarded against a person to punish him for his outrageous conduct and to deter
him and others like him from similar conduct in the future.
(2) Punitive damages may be awarded for conduct that is outrageous, because of the
defendant’s evil motive or his reckless indifference to the rights of others. In
assessing punitive damages, the trier of fact can properly consider the character of
the defendant’s act, the nature and extent of the harm to the plaintiff that the
defendant caused or intended to cause and the wealth of the defendant.
577 [1993] QB 507.
578 Other cases raising the relevance of subsequent conduct include Asghar v Ahmed (1985) 17
HLR 25 and Lamb v Cotogno (1987) 164 CLR 1.
579 Breach of fiduciary duty; breach of confidence; and procuring or assisting in a breach of
fiduciary duty. See para 5.56 below, recommendation (19)(a) above, and draft Bill, clause
15(4).
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