Aggravated, Exemplary and Restitutionary ... - Law Commission

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1.185 Some palliative could, if necessary, also be provided by the ‘safety-valve discretion’. 732 A court might, if it was aware that the plaintiff or group of plaintiffs before it represented only a small proportion of present (or perhaps also, likely) litigants, refuse to make any award in that action by exercising the last resort discretion. That a court had exercised the discretion to prevent an award going to the first individual or group of successful claimants in one case should not prevent an award being made to a subsequent (substantial) group of claimants in a later action. Indeed, such a later award would be entirely consistent with the justification for exercising the ‘safety-valve discretion’ to preclude an award in the earlier action. If this became established judicial practice, then ‘first’ plaintiffs would have a much reduced financial incentive to race to court to claim punitive damages. (5) Multiple defendants 1.186 The law may regard the liability of two or more persons as either ‘joint’ or ‘joint and several’ in a number of different circumstances. For example, two or more people may independently act in a wrongful manner, and thereby cause the same indivisible damage to another. In law they are ‘jointly and severally liable’ to compensate the plaintiff for that indivisible damage. Alternatively, two or more people may be regarded by the law as ‘joint wrongdoers’ because they have taken concerted action to a common (wrongful) end. In law they are ‘jointly liable’ to compensate the plaintiff for the injury which he or she suffers as a result of the joint wrong. Employers are vicariously liable for the torts of their employees (or ‘servants’). In law they are ‘jointly liable’ with their wrongdoing employee to compensate the plaintiff for injury which he or she suffers as a result of those torts. Similarly, partners are ‘jointly and severally’ liable by statute 733 for the wrongs of their co-partners. What should be the individual liabilities to pay punitive damages (if any) in each of the above cases, where not all of the wrongdoers acted in a punishable, or similarly punishable, manner? 1.187 For reasons which we explain below, 734 we consider that vicarious liability, as well as the liability of partners for the wrongs of their co-partners, should be treated somewhat differently from other examples of multiple defendants. Accordingly, the discussion which follows deals only with the other examples of multiple defendants. (a) The problems of the existing approach 1.188 In principle, one would expect that punitive damages should be payable, but only payable, by those who have acted in a manner which warrants punishment, and only to the extent necessary to punish them for what they have done. The existing law in England does not reflect this principled conclusion. 1.189 The English common law attempts to fit liability to punitive damages within the framework of joint and joint and several liability (hereafter simply ‘concurrent 732 See paras 5.118-5.119 above. 733 Partnerships Act 1890, s 10; see also ss 11-12. 734 See paras 5.204-5.205 and 5.213-5.224 below. 152
liability’) which applies to any compensatory damages to which joint or joint and several tortfeasors (hereafter simply ‘concurrent tortfeasors’) may be liable. 735 But this is a very poor ‘fit’. What works satisfactorily for compensatory damages produces anomalous results when applied to non-compensatory damages. 1.190 In Broome v Cassell 736 it was held that where a plaintiff brings a single proceeding against two or more concurrent tortfeasors: (1) only one sum of punitive damages can be awarded against the joint defendants; but (2) that sum must not exceed the sum which is necessary to punish the least culpable of the joint defendants. 1.191 The consequences are objectionable. The limitation represented by proposition (2) is clearly required in order to avoid the risk of over-punishment or even of punishment where none is justified. Without it a concurrent tortfeasor might be made liable to pay an award which was available because of, and/or was assessed with reference to, the greater fault of another concurrent tortfeasor. If so, the punitive award would inevitably exceed that which was proportional to his or her fault, and necessary to punish him or her for it. And if the other concurrent tortfeasors were insolvent, so that contribution would not be possible, he or she would have to bear the full burden of that inappropriate award. However, by avoiding the risk of over-punishment by proposition (2), the present approach may leave concurrent tortfeasors under-punished or even unpunished. Where two or more of such tortfeasors are jointly sued, the liability of any will at most be that of the least culpable of their number; 737 the logical corollary of this principle is that if no award is warranted by the conduct of that tortfeasor, the maximum liability of each will be nil. 738 Highly culpable tortfeasors are fortuitously benefited for no better reason than that they happen to be associated with less culpable tortfeasors. (b) The preferable, principled approach: ‘several liability’ 1.192 A number of Commonwealth courts have refused to follow the English approach. Australian and Canadian courts recognise (in effect) ‘several liability’ to punitive damages. 739 Separate awards of punitive damages, for different amounts, may be 735 See paras 5.77-4.80 above. 736 [1972] AC 1027. 737 Cf the effects of contribution. If contribution is possible, because there are one or more other concurrent tortfeasors who are solvent and similarly culpable, this will only further reduce the likely liability of each of those tortfeasors. 738 This point was recognised by Viscount Dilhorne in Broome v Cassell[1972] AC 1027, 1105F: The result of this conclusion appears to be that if three defendants are sued for writing, printing and publishing a libel, if the publisher and author are held liable to pay exemplary damages and the printer is not, the plaintiff will not be awarded exemplary damages and the publisher and author will avoid liability for such damages. 739 See, on Australia, M Tilbury, Civil Remedies (1990) vol 1, [5014], citing XL Petroleum (NSW) Pty Ltd v Caltex Oil (Aust) Pty Ltd (1985) 155 CLR 448. See, on Canada, eg S M Waddams, The Law of Damages (2nd ed, 1991) para 11.410 referring to, inter alia, 153
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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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(a) Restitutionary damages should b
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the purposes of the claim to restit
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account of profits and damages but
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area. The problem of ‘election of
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there is no such in-built limitatio
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PART IV EXEMPLARY DAMAGES: PRESENT
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that exemplary damages were not awa
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1.96 These questions were recently
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to be irrelevant to, and even incon
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1.107 Consistently with the apparen
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manner. As shall be seen below, it
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1.117 Major Commonwealth jurisdicti
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In the present case there is the fu
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an aspect of the case which made ex
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1.137 The ‘non-discrimination’
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We have ... been referred to a numb
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Thus it has been suggested that the
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underlying such damages, that of pu
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easons of fairness to defendants: i
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(6) Multiple plaintiffs 1.165 Very
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Legal Services Act 1990 and Rules o
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MR himself suggested figures to ass
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Thompson v MPC achieves its aims, t
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proceeded on the basis that the doc
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would be that to allow insurance wo
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PART V EXEMPLARY DAMAGES: REFORM 1.
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1.8 As regards the divide between t
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3. THE CASE FOR AND AGAINST EXEMPLA
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(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
Page 119 and 120: the promise. To award exemplary dam
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
Page 127 and 128: (2) the relationship between (on th
Page 129 and 130: was determined, the court could mak
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
Page 145 and 146: to that remedy. 720 Yet this means
Page 147 and 148: (31) once punitive damages have bee
Page 149 and 150: e so where the defendant consents t
Page 151: 1.183 We also think that any ‘adv
Page 155 and 156: (c) Implications of the adoption of
Page 157 and 158: ‘moderation’ and of ‘proporti
Page 159 and 160: conduct. 756 Although it has consis
Page 161 and 162: liable to pay a sum of money which
Page 163 and 164: 1.224 The second difference is that
Page 165 and 166: award if they succeed in persuading
Page 167 and 168: approaches. 786 132, 787 Although i
Page 169 and 170: ... [c]ontracts should only be held
Page 171 and 172: (ii) The problems of defining with
Page 173 and 174: the insured wrongdoer’s inability
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Page 177 and 178: punitive damages, no enactment shal
Page 179 and 180: one case, 831 and arguably done so
Page 181 and 182: common law to hold, if necessary, t
Page 183 and 184: PART VI SUMMARY OF RECOMMENDATIONS
Page 185 and 186: (19) the ‘cause of action’ test
Page 187 and 188: damages shall be permitted for that
Page 189 and 190: MICHAEL SAYERS, Secretary 11 Septem
Page 191 and 192: Nigel Ley Harvey McGregor QC Tim Ow
Page 193 and 194: APPENDIX C Persons and organisation
Page 195 and 196: Steve Hedley John Hodgson L Hoyano
Page 197: 197
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