Aggravated, Exemplary and Restitutionary ... - Law Commission

view that such an award would be consistent with the policy of the European
Communities Act 1972. That is, the cause of action would be a tort, but it would
also be a wrong ‘arising under an Act’ (the European Communities Act 1972) and
so the court would be required, by clause 3(4)(b) of our Bill, 627
to consider
whether such an award would be consistent with the policy of that Act. 628
1.68 It is therefore the consistency test which provides the primary means for ensuring
that our Bill conforms with Community law, in relation to this category of wrong.
The 1972 Act was intended to bring national law into line with Community law in
the United Kingdom, 629
or to provide facilities for doing so. 630
In our view, it does
not unduly strain the consistency test 631
to say that it cannot be consistent with that
policy for punitive damages to be available under our Act for a wrong which arises
under the 1972 Act, if such an award would be inconsistent with Community law.
1.69 We would not seek to provide a definitive answer here to the question of whether
an award of punitive damages would, or would not, be consistent with Community
law. The arguments seem finely balanced. On the one hand, the Divisional Court
in R v Secretary of State for Transport, ex p Factortame Ltd (No 5) 632
was hostile to
the notion of punitive damages being awarded for breach of Community law. It
stressed that the United Kingdom is almost unique amongst Member States in
recognising a civil remedy of punitive damages, and that, as a result, it would
detract from attempts to achieve ‘uniformity’ in the remedies available for wrongs
across the Community, if English law awarded punitive damages. On the other
hand, Community law requires national courts not to discriminate against claims
that are founded on Community law as compared with claims founded on
domestic law. 633
It may be argued that, in the absence of clear indications to the
contrary in the 1972 Act, or in specific Community legislation, or in general
principles of Community law, punitive damages should be available (provided the
other criteria in our Bill are satisfied).
1.70 Distinct from these types of ‘Community law wrong’ are wrongs which are
expressly created by a national statute in circumstances where Community law
627 Clause 3(5) has the effect that, if a ‘tort’ is also a ‘wrong arising under an Act’, the courts
must apply the ‘consistency test’ in clause 3(4)(b) to the tort.
628 English courts could take the view that Community law wrongs are sui generis wrongs,
deriving from the 1972 Act, and not ‘torts’. But they would still be ‘wrongs arising under
an Act’ under our Bill. Similarly, we think that even if the relevant tort is, for example,
misfeasance in a public office rather than breach of statutory duty, the tort can still be
linked back for its operative force to the European Communities Act 1972. It is therefore a
‘wrong arising under an Act’ under our Bill. If this were not so, and punitive damages were
thought to be inconsistent with Community law, the courts would need to refuse punitive
damages under the ‘safety-valve’ discretion preserved in clause 3 of our Bill.
629 Section 2(1) has the effect that directly effective principles of Community law are, without
more, available to be applied and enforced in national courts; section 2(4) has the effect
that those directly effective principles take precedence over conflicting rules of national law.
630 Section 2(2) confers powers on Ministers to make subordinate legislation solely for the
purpose of implementing the United Kingdom’s Community law obligations.
631 As embodied in clause 3(4)(b) of the draft Bill.
632 The Times 11 September 1997.
633 See paras 4.52-4.55 above.
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