Aggravated, Exemplary and Restitutionary ... - Law Commission

likely adversely to affect him or her. In a loose sense, this effect can be, and often
is, described as ‘punitive’. This is recognised by the courts, which may not award
exemplary damages 129
unless any compensatory damages which defendants must
pay will be inadequate to punish them for their conduct (the ‘if, but only if’
test). 130
As any award of damages may have such an adverse (or, loosely,
‘punitive’) effect on a defendant, the fact that an award of aggravated damages
may do so is not a reason for viewing such an award as anything other than
compensatory in nature. 131
1.17 Nevertheless, several aspects of the present law, which we consider below, do
arguably support the view that aggravated damages are ‘punitive’ in a meaningful
sense, and not compensatory. That is, they suggest that aggravated damages are
awarded in order to punish the defendant for his or her conduct, and therefore are
assessed on the basis of what is required to achieve this end, rather than on the
basis of what is necessary fully to compensate the plaintiff for his injuries. These
aspects are:
• the ‘exceptional conduct’ requirement
• the co-existence of a concept of ‘aggravated damages’ alongside a
concept of ‘damages for mental distress’
• the outright refusal to award aggravated damages for breach of contract
or the tort of negligence, even where mental distress damages are
available
• inconsistencies between the County Court and Supreme Court Rules as
to the pleading of aggravated damages
(a) The ‘exceptional conduct’ requirement
1.18 The ‘exceptional conduct’ 132
test requires the court to focus its attention primarily on
the nature of the defendant’s conduct rather than the extent of the plaintiff’s injury,
129 See Parts IV and V below.
130 See paras 4.31-4.33 and paras 5.99-5.102 below.
131 In Thompson v MPC [1997] 3 WLR 403 the Court of Appeal clearly accepted that (i)
aggravated damages are compensatory; (ii) that an award of compensatory damages (which
includes aggravated damages) will, incidentally, have some adverse (or ‘punitive’) effect on
the defendant who must pay the award; and (iii) that this incidental adverse (or ‘punitive’)
effect should be taken into account when deciding whether exemplary damages should be
awarded (the ‘if but only if’ test). Hence juries should be told that:
... if [they] are awarding aggravated damages those damages will have already
provided compensation for the injury suffered by the plaintiff as a result of the
oppressive and insulting behaviour of the police officer and, inevitably, a measure
of punishment from the defendant’s point of view.
... exemplary damages should be awarded if, but only if, they consider that the
compensation awarded by way of basic or aggravated damages is in the
circumstances an inadequate punishment for the defendants ...
([1997] 3 WLR 403, 417G-H).
132 This terminology derives from Aggravated, Exemplary and Restitutionary Damages (1993)
Consultation Paper No 132: see para 2.4 above. In Thompson v MPC [1997] 3 WLR 403
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