Aggravated, Exemplary and Restitutionary ... - Law Commission

‘employers’ of the employee in question. 775
In either case, it is the concept so
formulated which should define the extent of vicarious liability to pay punitive
damages. And if a certain person, 776
or persons generally, 777
can never be
vicariously liable for a particular wrong (apart from our Bill), our Bill should not
make such a person or persons liable to pay punitive damages for that wrong.
1.227 We therefore recommend that:
(38) our draft Bill should not define the circumstances in which one
person may be vicariously liable for the wrongs of another; instead,
it should assume the boundaries of the concept of vicarious liability
as it exists at common law, or by statute, for the particular tort,
equitable wrong or statutory wrong in question. (Draft Bill, clause
11(1) and 11(2))
(d) What should the vicariously liable person be liable to pay?
1.228 What sum of damages should a person, who is vicariously liable for the wrong of
another, be liable to pay? The nature of vicarious liability should generally entail
that the sum should be that which that other is or would be liable to pay. Thus, if
faced with an employer who (it is alleged) is vicariously liable for the wrong of his
or her employee, the court should determine what punitive damages the employer
is liable to pay by applying the tests of availability and the principles of assessment
to the conduct of the employee for whom the employer is vicariously liable. 778
1.229 There is, however, one important reason why a person who is vicariously liable to
pay punitive damages for the wrongs of another may have to pay a different sum
from that which the other is or would be liable to pay. We have recommended that
defendants should be permitted to argue that they will suffer undue hardship if
they must satisfy the award of punitive damages which the court proposes to make
against them, 779
and that, if this argument is accepted by the court, a lower award
must be made. On this basis, employee-defendants will be liable to pay a reduced
construed less technically and restrictively (see Jones v Tower Boot Co Ltd [1997] 2 All ER
406 (CA), interpreting s 32 of the Race Relations Act 1976), and the employer has a
defence if he can prove that he took such steps as were reasonably practicable to prevent the
(wrongdoing) employee from doing the wrongful act, or doing, in the course of his
employment, acts of that description.
775 In particular, the Crown Proceedings Act 1947, s 2(1)(a) (Crown); Police Act 1996, s 88(1)
(chief officer of police); Police Act 1997, s 42(1) (Director General of the National
Criminal Intelligence Service), s86(1) (Director General of the National Crime Squad).
776 The statutory provisions which extend the doctrine of vicarious liability to (eg) the Crown
or to chief officers of police (referred to above), only deal with vicarious liability for torts.
777 There is little authority for vicarious liability for equitable wrongs: see para 4.102, n 228
above.
778 In particular: (i) did the employee commit a wrong for which punitive damages may be
awarded?; (ii) did the employee’s conduct demonstrate a deliberate and outrageous
disregard of the plaintiff’s rights?; (iii) are other remedies or sanctions inadequate to punish
the employee for his conduct?; (iv) what sum of punitive damages should be awarded in
order to punish the employee for his or her conduct, taking account of the various
principles and factors which our Bill requires a court to take into account?
779 See paras 5.135-5.137 and recommendation (26) above.
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