Aggravated, Exemplary and Restitutionary ... - Law Commission

compensatory analysis of the Wrotham Park case favoured, by the Court of Appeal
in Jaggard v Sawyer. 252
1.37 The conclusion to be reached, therefore, is that, in contrast to many torts and
equitable wrongs, there is no tradition of awarding restitution for breach of
contract - with the probable exception of a breach of a restrictive covenant. It
should further be noted that, in contrast to torts, exemplary damages cannot be
awarded in England for breach of contract. 253
Of course, this is not to deny that
restitution (or exemplary damages) may be awarded for a tort or equitable wrong
that constitutes a concurrent cause of action alongside the breach of contract.
Breach of fiduciary duty is a particularly important example. 254
3. RESTITUTION FOR WRONGS: REFORM
1.38 Our basic position, which we elaborate below, is that development of the law on
restitution for wrongs is most appropriately left to the courts. The changes which
we propose to effect by statute are limited to those which are necessitated by our
proposals for an expanded, if constrained, remedy of exemplary damages. 255
(1) Our basic position: development of the law is best left to the courts
(a) Restitution of enrichments gained by a tort
1.39 While to some it is odd to think of restitution, as opposed to compensation, being
awarded as a remedy for a tort, careful examination of the law shows, as we have
seen, that the courts have long been willing to award restitution for torts, especially
for proprietary torts. This does not mean to say that the precise scope of torts for
which restitution will be awarded is settled.
1.40 The justification for restitution for a tort - as for other civil wrongs - is at root to be
found in the notion that ‘no man shall profit from his own wrong’. And while
some might object to restitution on the ground that it gives the plaintiff a windfall,
it is most important to emphasise that the effect of denying restitution is to leave
the defendant with a wrongfully obtained windfall.
1.41 In the Consultation Paper we asked if the development of restitutionary damages
should be left to the courts or effected by statutory provision. 256
The view of over
two-thirds of consultees was that this area should be left to be developed by the
courts. 257
This was particularly because it is an area which, until the relatively
recent interest in the law of restitution, had been little explored or understood, and
252 [1995] 1 WLR 269.
253 See para 4.28 below.
254 See, eg, Reid-Newfoundland Co v Anglo-American Telegraph Co Ltd [1912] AC 555; Lake v
Bayliss [1974] 1 WLR 1073; Hospital Products Ltd v United States Surgical Corpn (1984) 156
CLR 41.
255 See generally Part V below.
256 Aggravated, Exemplary and Restitutionary Damages (1993) Consultation Paper No 132,
para 7.10.
257 69% of those responding on this question favoured leaving development of restitutionary
damages to the courts.
40