Aggravated, Exemplary and Restitutionary ... - Law Commission

common law to hold, if necessary, that ‘flagrant’ infringements of copyright merit
an increased measure of compensatory damages.
1.285 Nor will the abolition of additional damages lead to any lacunae in restitutionary
remedies for these intellectual property wrongs. It is true that a court is
specifically directed to take into account “any benefit shown to have accrued to the
defendant by reason of the infringement” in deciding whether or not to award
additional damages. But this is certainly not a decisive indication that additional
damages have a restitutionary rather than a punitive aim. 843
And we are unaware
of any judicial authority, or of any support in the legislative history of section
97(2), for the view that additional damages are restitutionary in aim. 844
Even if
additional damages could include restitutionary damages, abolition would not
leave lacunae because an account of profits will remain available to victims of such
wrongs. 845
Moreover, if the defendant’s conduct has shown a ‘deliberate and
outrageous disregard of the plaintiff’s rights’, the victim may be entitled to claim
‘restitutionary damages’ under our Act. 846
1.286 We also think it important that several intellectual property lawyers have
emphasised to us how anomalous it is that the special remedy of additional
damages is only available for a limited number of intellectual property torts. Our
proposals have the merit of making punitive damages available for all such wrongs,
(although if an intellectual property tort ‘arises under an Act’, this is only so if
such an award would be consistent with the policy of the Act in question). 847
(11) Commencement of the Damages Act 1997
1.287 Insurers have expressed to us the concern that increases in the quantum of
punitive damages should not apply in respect of insurance cover which they have
already given, and therefore the hope that our Bill will not apply retrospectively. In
order to accommodate this concern, we recommend that:
(48) our draft Bill should provide that nothing in it applies to causes of
action which accrue before its commencement. (Draft Bill, clause
16(1))
1.288 This means that where a cause of action accrued before commencement, the old
law of exemplary damages, as defined by (in particular) the ‘categories test’ and
the ‘cause of action test’ will continue to apply to a claim for damages in respect of
843 See, in particular, the discussion of category 2 exemplary damages at paras 4.16-4.19
above.
844 See the discussion at paras 4.21-4.22, which indicates that judicial disagreement about the
characterisation of additional damages has been a disagreement about whether they are best
viewed as authorising awards of exemplary damages, or a higher measure of compensation
than could be obtained on ordinary principles.
845 See para 3.22 above.
846 See clause 12 of the draft Bill. ‘Restitutionary damages’ will be available for wrongs which
‘arise under an Act’ for which a person may recover compensation or damages where (i) the
defendant’s conduct showed a deliberate and outrageous disregard of the plaintiff’s rights;
and (ii) an award of restitutionary damages would be consistent with the policy of that Act.
847 See recommendations (19)(a) and (19)(b), at para 5.44 above.
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