Aggravated, Exemplary and Restitutionary ... - Law Commission

(ii) The problems of defining with certainty the range of conduct falling within the
public policy bar on insurance
1.252 Any concept which is used to define the category of particularly serious conduct
which not only warrants a punitive damages award, but also justifies the further
step of a public policy bar on insurance, should be capable of precise definition:
legal and commercial certainty so require. We do not consider that a concept such
as ‘particularly outrageous conduct’ satisfies this requirement.
1.253 A possible response is to adopt instead a concept which draws a parallel with
conduct meriting prosecution within the criminal law. One example is ‘conduct
constituting a criminal offence’. However, although this offers greater conceptual
clarity, we consider it to be objectionable in principle.
1.254 Our objections are three-fold. The first is that the judgment concerning the
criminality of the defendant’s conduct would have to be made within a civil court;
it cannot be assumed that such court would have the experience in dealing with
such matters. The second, and more important, is that to utilise any such concept
would involve denying a defendant the procedural and evidential safeguards found
within a criminal trial; it is also open to accusations that any adverse or favourable
finding could prejudice any subsequent criminal prosecution that may be brought.
The third is that ‘conduct constituting a criminal offence’ will not in fact capture,
and capture only, the most outrageous examples of conduct meriting a punitive
damages award. The notion of a ‘crime’ does not include only intentional or even
advertent interferences with important interests; 803
it also embraces certain forms
of grossly 804
or ordinary negligent conduct, 805
and, in the case of crimes of ‘strict
liability’, conduct that does not display even this degree of fault. The result is that
there is still a need for some additional concept which delineates the most serious
forms of crime.
(iii) The range of culpable conduct
1.255 We would also question a key assumption underlying option 2. This is that there is
an extensive range of conduct which merits a punitive damages award, ranging
from the highly to the barely culpable; the corollary, it is argued, is that conduct at
the ‘lower’ end of this spectrum should be capable of being insured against, whilst
conduct at the ‘higher’ end of this spectrum should not.
1.256 The critical point is that even though there is such a range of conduct, a basic
minimum threshold of bad conduct must have been reached before an award of
punitive damages can properly be made by a court. The aim of an award is the
same wherever on the spectrum a particular defendant’s conduct falls: the conduct
is thought to be sufficiently bad to require punishment. If this is so, it is
incoherent for the law then to be seen to say: “even though we thought fit to
803 But many more serious crimes do require such a higher degree of fault or culpability.
804 See eg the Road Traffic Act 1988, s 1 and s 2 (causing death by dangerous driving;
dangerous driving - for the meaning of dangerous, see s 2A).
805 See eg the Road Traffic Act 1988, s 3 and s 3A (careless or inconsiderate driving; causing
death by careless or inconsiderate driving).
171