Aggravated, Exemplary and Restitutionary ... - Law Commission

(41) if it is sought to establish a matter relating to the question whether
punitive damages should be awarded, or to the question of their
amount, the civil, and not the criminal, standard of proof must be
satisfied. (Draft Bill, clause 10)
1.232 One reason for accepting the civil standard of proof is that that standard is, in fact,
an inherently flexible standard. 783
Clearer evidence will be required by the courts,
in order for such standard to be satisfied, where the allegations, or the
consequences of the decision for one or both of the parties, are serious. Both of
these conditions will generally be satisfied by claims to punitive damages. The
corollary is that defendants to such claims may be adequately protected even
without the criminal standard of proof and within the ‘lower’ civil standard. Cross
& Tapper on Evidence deals with the analogous case of allegations of criminal
conduct in civil actions in the following way: 784
... the person against whom criminal conduct is alleged is adequately
protected by the consideration that the antecedent improbability of his
guilt is ‘a part of the whole range of circumstances which have to be
weighed in the scale when deciding as to the balance of probabilities’.
1.233 A second reason for accepting the civil standard is that it could be impractical for a
higher burden of proof to be adopted for only one part of a civil action: all other
aspects of liability (especially, for example, the commission of the wrong which
founds a claim to compensatory damages) would be determined according to the
ordinary civil standard; whereas just one aspect (that is, ‘deliberate and outrageous
disregard of the plaintiff’s rights’) would be determined according to the criminal
standard.
(8) Insurance against punitive damages
1.234 In this section we mainly deal with the question whether a person should be
permitted to insure against any liability to punitive damages which they may incur
(personal or vicarious). In the final subsection, 785
we also deal with the rather
different question of whether statutes which currently make insurance compulsory
in certain circumstances require, or should be construed to require, insurance
against a liability to pay punitive damages (and not just compensation) for a
wrong.
(a) The options for reform
1.235 We have found the issue of whether a person should be permitted to insure against
a liability to punitive damages difficult to resolve, not least because consultees put
forward a very wide range of opinions. A survey of the approach of other common
law jurisdictions to this issue similarly reveals a considerable range of
783 See the discussion at paras 4.99-4.100 above.
784 Cross & Tapper on Evidence (8th ed, 1995) p 171.
785 See paras 5.270-5.273 below.
166