Aggravated, Exemplary and Restitutionary ... - Law Commission

‘moderation’ and of ‘proportionality’, which are each a vital part of the law’s
protection of the rights of wrongdoers, require this.
(iii) Exceptions to the general principle of several liability to punitive damages:
vicarious liability and partnerships
1.204 We consider that two exceptions are required to the principle that liability to
punitive damages should be ‘several’, rather than joint or joint and several. The
first is the doctrine of vicarious liability. The second is the liability of partners for
wrongs of their co-partners. We therefore recommend that:
(35) recommendation (34) (‘several liability’, rather than joint or joint
and several liability shall apply to punitive damages) is without
prejudice to:
(a) our recommendation that vicarious liability to pay punitive
damages should be retained; (Draft Bill, clause 8(2)(a))
(b) the liability of a partner for the wrongs of his co-partner.
(Draft Bill, clause 8(2)(b))
We explain the exception for vicarious liability below, 747
but it is convenient at this
point to explain the exception for the liability of partners for co-partners.
1.205 Partners are jointly and severally liable to any persons who are not themselves
partners for the wrongs committed by any partner acting in the ordinary course of
the business of the ‘firm’ or with the authority of his co-partners. 748
That liability
is expressed to include a liability for “penalties” imposed as a result of the wrongful
conduct. 749
Prima facie section 10 of the Partnership Act 1890 also makes partners
jointly and severally liable to pay punitive damages in respect of the wrong of a copartner.
We have been unable to discover any case in which partners have been
held to be so liable, or in which the point is even discussed. But we do consider
that this could properly occur. Accordingly, our proposal that any liability to
punitive damages should be several (rather than joint, or joint and several) is
subject to the qualification that it should not affect the (joint and several) liability
of ‘innocent’ partners to pay punitive damages in respect of the wrongs of a copartner.
(iv) The right to contribution under the Civil Liability (Contribution) Act 1978
1.206 The Civil Liability (Contribution) Act 1978 provides that any person who is
“liable in respect of any damage” suffered by another may recover contribution
747 See paras 5.209-5.230 below.
748 Section 10 of the Partnership Act 1890 provides:
Where by any wrongful act or omission of any partner acting in the ordinary
course of the business of the firm, or with the authority of his co-partners, loss or
injury is caused to any person not being a partner in the firm, or any penalty is
incurred, the firm is liable therefor to the same extent as the partner so acting or
omitting to act.
749 Partnership Act 1890, s 10.
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