Aggravated, Exemplary and Restitutionary ... - Law Commission

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ecause in such cases “injury to the plaintiff’s feelings and self-esteem is an important part of the damage for which compensation is awarded”. 165 1.34 In contrast to aggravated damages, mental distress damages (although unavailable for grief, anguish, worry, upset or strain arising from personal injury to the plaintiff’s spouse or child, 166 or, apart from the tort of assault, for the mental distress of being frightened for one’s own safety) 167 are recoverable for wrongfully inflicted personal injury under the head of general damages for pain and suffering. 168 And it is now wellestablished that damages for mental distress can be recovered in an action for breach of contract in two main situations. As Bingham LJ said in Watts v Morrow: But the rule is not absolute. Where the very object of a contract is to provide pleasure, relaxation, peace of mind or freedom from molestation, damages will be awarded if the fruit of the contract is not provided or if the contrary result is procured instead ... In cases not falling within this exceptional category, damages are in my view recoverable for physical inconvenience and discomfort caused by the breach and mental suffering directly related to that inconvenience and discomfort. 169 1.35 Moreover, in Perry v Sidney Phillips & Son, 170 in an action for both negligence and breach of contract, the plaintiff was awarded damages for mental distress consequent on the physical inconvenience of living in a house with serious defects which the defendant surveyors had failed to report. 1.36 In our view Kralj v McGrath, 171 Levi v Gordon, 172 and AB v South West Water Services Ltd 173 stand as modern authorities to the effect that aggravated damages are unavailable for the tort of negligence and for breach of contract. And this is so irrespective of what the law is on the recovery of damages for mental distress. As we indicate above, 174 it is unfortunately not easy to understand the justification for 165 [1993] QB 507, 533A. 166 Hinz v Berry [1970] 2 QB 40; McLoughlin v O’Brian [1983] 1 AC 410, 418D; Whitmore v Euroways Express Coaches Ltd, The Times 4 May 1984; Kralj v McGrath [1986] 1 All ER 54, 62a-c; Bagley v North Herts Health Authority [1986] NLJ 1014; Alcock v Chief Constable of South Yorkshire Police [1992] 1 AC 310, 401, 409-410, 416; Kerby v Redbridge Health Authority [1993] 4 Med LR 178. Cf Whitmore v Euroways Express Coaches Ltd, an action against a holiday firm for negligent driving, in which the plaintiff’s wife was awarded damages for ‘ordinary shock’ (as opposed to ‘nervous shock’) suffered at seeing her husband’s injuries. 167 Behrens v Bertram Mills Circus Ltd [1957] 2 QB 1; Hicks v Chief Constable of the South Yorkshire Police [1992] 2 All ER 65, 69; Nicholls v Rushton, The Times 19 June 1992. 168 AB v South West Water Services Ltd [1993] QB 507, 527H (per Stuart-Smith LJ), 532F-G (per Sir Thomas Bingham MR). 169 [1991] 1 WLR 1421, 1445G-H. 170 [1982] 1 WLR 1297. 171 [1986] 1 All ER 54. 172 12 November 1992 (unreported, CA). 173 [1993] QB 507. 174 See para 2.26 above. 24
such a restriction, unless one takes the view that aggravated damages are in reality, and contrary to Lord Devlin’s view, a form of punitive damages. Viewed as compensatory damages, we cannot detect any good reason why aggravated damages should not be available for the tort of negligence or for breach of contract, at least where mental distress damages of some sort are available for those causes of action on the facts in question. These cases reveal all too clearly the continued confusion over the role of aggravated damages. (d) Inconsistencies between pleading rules 1.37 We shall see that both the County Court and Supreme Court Rules state that claims to “exemplary damages” must be specifically pleaded. 175 In contrast, only the County Court Rules require the same for claims to “aggravated damages”. 176 This discrepancy between the County Court and Supreme Court Rules is difficult to justify. 1.38 It is exceptional, rather than usual, for court rules expressly to require a claim to damages to be specifically pleaded. As exemplary damages are one remedy which is singled out for special treatment, it is possible to view the discrepancy as yet another manifestation of the confusion between aggravated damages and exemplary damages, and between the functions of ‘compensation’ and ‘punishment’. But this does not inevitably follow. The County Court Rule in question was drafted more recently than the Supreme Court Rules. The extension of the requirement of specific pleading to ‘aggravated damages’ may be an oversight. Or it may reflect a recent policy choice in favour of requiring specific pleading of a broader range of claims, including claims to aggravated (compensatory) damages. 177 2. REFORM 1.39 The Consultation Paper provisionally concluded 178 that aggravated damages should be assimilated within a strictly compensatory model, by means of the removal of the exceptional conduct requirement. It raised for consideration the question whether intangible personality interests can be protected by a strict compensatory model of redress. 179 Consultees’ views were also sought on the following questions: 175 See para 4.113 below. 176 CCR, O 6, r 1B. Cf RSC, O 18, r 8(3). But cf Prince Ruspoli v Associated Newspapers plc 11 December 1992 (unreported, CA) discussed in Aggravated, Exemplary and Restitutionary Damages (1993) Consultation Paper No 132, para 3.18. 177 Lord Woolf MR’s draft civil proceedings rules (Access to Justice, Draft Civil Proceedings Rules (July 1996)) require aggravated damages and exemplary damages to be specifically claimed. Rule 7.4(5) provides: “If the claimant is seeking aggravated damages or exemplary damages, he must say so expressly on the claim form”. 178 Aggravated, Exemplary and Restitutionary Damages (1993) Consultation Paper No 132, paras 6.48 and 8.18. 179 Ibid, paras 6.48 and 8.18. 25
Page 1 and 2: THE LAW COMMISSION Item 2 of the Si
Page 3 and 4: should emphasise at the outset that
Page 5 and 6: practitioners and academics) consid
Page 7 and 8: punitive damages should survive for
Page 9 and 10: and sued, he will, at worst, be mad
Page 11 and 12: ‘exceptional’ 62 conduct or mot
Page 13 and 14: defendant or his legal advisers per
Page 15 and 16: an undertaking in damages which was
Page 17 and 18: likely adversely to affect him or h
Page 19 and 20: noting the concession by the respon
Page 21 and 22: Kralj, which was an “excruciating
Page 23: two of their lordships who gave jud
Page 27 and 28: (1) legislation should provide that
Page 29 and 30: 1.3 Historically, a number of diffe
Page 31 and 32: nuisance 195 has also been recognis
Page 33 and 34: day market). At first instance, Pet
Page 35 and 36: equired to trigger an account of pr
Page 37 and 38: disgorgement to principals of bribe
Page 39 and 40: disgorge what he has saved by commi
Page 41 and 42: there is no consensus among comment
Page 43 and 44: (a) Restitutionary damages should b
Page 45 and 46: the purposes of the claim to restit
Page 47 and 48: account of profits and damages but
Page 49 and 50: area. The problem of ‘election of
Page 51 and 52: there is no such in-built limitatio
Page 53 and 54: PART IV EXEMPLARY DAMAGES: PRESENT
Page 55 and 56: that exemplary damages were not awa
Page 57 and 58: 1.96 These questions were recently
Page 59 and 60: to be irrelevant to, and even incon
Page 61 and 62: 1.107 Consistently with the apparen
Page 63 and 64: manner. As shall be seen below, it
Page 65 and 66: 1.117 Major Commonwealth jurisdicti
Page 67 and 68: In the present case there is the fu
Page 69 and 70: an aspect of the case which made ex
Page 71 and 72: 1.137 The ‘non-discrimination’
Page 73 and 74: We have ... been referred to a numb
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Thus it has been suggested that the
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underlying such damages, that of pu
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easons of fairness to defendants: i
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(6) Multiple plaintiffs 1.165 Very
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Legal Services Act 1990 and Rules o
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MR himself suggested figures to ass
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Thompson v MPC achieves its aims, t
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proceeded on the basis that the doc
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would be that to allow insurance wo
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PART V EXEMPLARY DAMAGES: REFORM 1.
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1.8 As regards the divide between t
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3. THE CASE FOR AND AGAINST EXEMPLA
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(5) The criminal approach to vicari
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particularly unsatisfactory to rely
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1.34 On the first interpretation an
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4. OUR CENTRAL REFORM PROPOSALS (1)
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when applying this principle a cour
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indefensible position which the com
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... the availability of exemplary d
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But these concepts are inadequate,
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for a wrong which arises under an A
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view that such an award would be co
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the promise. To award exemplary dam
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else should, actually constitute in
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awarded as damages (including exemp
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1.88 The first argument is that it
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(2) the relationship between (on th
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was determined, the court could mak
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(iii) A ‘last resort’ remedy (2
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A discretionary or an absolute bar
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1.117 We have therefore recommended
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discrimination between, for example
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(24) our draft Bill should lay down
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1.141 In our view, this is necessar
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the punitive damages award on the A
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to that remedy. 720 Yet this means
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(31) once punitive damages have bee
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e so where the defendant consents t
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1.183 We also think that any ‘adv
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liability’) which applies to any
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(c) Implications of the adoption of
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‘moderation’ and of ‘proporti
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conduct. 756 Although it has consis
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liable to pay a sum of money which
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1.224 The second difference is that
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award if they succeed in persuading
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approaches. 786 132, 787 Although i
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... [c]ontracts should only be held
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(ii) The problems of defining with
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the insured wrongdoer’s inability
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award to be covered by insurance, t
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punitive damages, no enactment shal
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one case, 831 and arguably done so
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common law to hold, if necessary, t
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PART VI SUMMARY OF RECOMMENDATIONS
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(19) the ‘cause of action’ test
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damages shall be permitted for that
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MICHAEL SAYERS, Secretary 11 Septem
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Nigel Ley Harvey McGregor QC Tim Ow
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APPENDIX C Persons and organisation
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Steve Hedley John Hodgson L Hoyano
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