Aggravated, Exemplary and Restitutionary ... - Law Commission

punish you, in reality we are not concerned about whether it will be efficacious, or
not, because your conduct was not that bad”.
(d) The reasons for rejecting option 3: a public policy bar in all cases
1.257 Option 3 would, in its practical impact, be most closely consistent with what may
be the existing judicial approach to insurance against criminal punishment. 806
The
policy which might be thought to justify option 3 was well expressed by Denning J
in Askey v Golden Wine Co Ltd:
It is, I think, a principle of our law that the punishment inflicted by a
criminal court is personal to the offender, and that the civil courts will
not entertain an action by the offender to recover an indemnity against
the consequences of that punishment. In every criminal court the
punishment is fixed having regard to the personal responsibility of the
offender in respect of the offence, to the necessity for deterring him
and others from doing the same thing against, to reform him ... All
these objections would be nullified if the offender could recover the
amount of the fine and costs from another by process of the civil
courts. 807
1.258 We anticipate that any conduct satisfying the test of a ‘deliberate and outrageous
disregard of the defendant’s rights’ would be conduct which is sufficiently serious
to merit a bar within the criminal law, if such conduct were to constitute a criminal
offence. Nevertheless, despite this analogy, and the force of the arguments which
underlie it, we believe that a more powerful set of counter-arguments (namely, the
five reasons set out above for favouring option 1) 808
entail that a different approach
can and must be adopted in relation to punitive damages awarded in civil actions,
than is applied to crimes.
(e) Some alternative proposals suggested by consultees
1.259 Several consultees made some interesting proposals for dealing with insurance
against punitive damages in ways which differed from options 1-3. We think it
useful and necessary to describe them, and to give some reasons why we ultimately
reject them.
(i) Insurance is permitted only to the extent that there is a shortfall caused by a
wrongdoer’s inability to meet his or her liability
1.260 One suggestion 809
was (in effect) that any insurance cover for punitive damages
should be limited to such sums as are necessary to meet a shortfall arising due to
806 See para 4.108 above. The approach to contracts of indemnity is also applicable to other
forms of indemnity (eg by way of a tort action for damages) in respect of fines paid by way
of punishment, and even against the adverse financial implications of conviction (eg loss of
business profits).
807 [1948] 2 All ER 35, 38C-E. Askey did not deal with a contract of indemnity, but with the
attempt by a wrongdoer to obtain an indemnity by means of an action in tort (conspiracy)
against others - viz, the suppliers who had knowingly sold Askey the products which gave
rise to his subsequent criminal liability.
808 See paras 5.237-5.248 above.
809 Made by the Police Federation.
172