Aggravated, Exemplary and Restitutionary ... - Law Commission

(a) Restitutionary damages should be available where a defendant has
committed a tort, an equitable wrong or a statutory civil wrong, and his
conduct showed a ‘deliberate and outrageous disregard of the plaintiff’s
rights’
1.50 In Part V we recommend that punitive damages should not be available unless the
defendant has committed a tort, 265
an equitable wrong, 266
or a civil wrong that
arises under a statute, 267
and his conduct showed a ‘deliberate and outrageous
disregard of the plaintiff’s rights’. 268
We also recommend that punitive damages
should never be available for breach of contract. 269
1.51 In our view it would be unacceptable for legislation to lay down situations in which
punitive damages can be awarded, if it did not also recognise that the less extreme
remedy of restitution for a wrong (stripping away some or all of the gains acquired
as a result of the wrong) should also be available in those situations. 270
We
therefore recommend that:
(7) legislation should provide that restitutionary damages may be
awarded where:
(a) the defendant has committed:
(i) a tort or an equitable wrong, or
(ii) a civil wrong (including a tort or an equitable wrong)
which arises under an Act, and an award of
restitutionary damages would be consistent with the
policy of that Act, and
(b) his conduct showed a deliberate and outrageous disregard of
the plaintiff’s rights. (Draft Bill, clause 12(1)-12(3)).
265 See recommendation (19)(a) and paras 5.49-5.56 below.
266 Defined as breach of fiduciary duty, breach of confidence and procuring or assisting breach
of statutory duty. See recommendation (19)(a) and para 5.56 below.
267 Defined as any wrong which arises under an Act, for which a person may recover
compensation or damages, provided that the availability of punitive damages would be
consistent with the policy of the Act under which the wrong arises. See recommendation
(19)(b) and paras 5.57-5.65 below.
268 See recommendation (18) and paras 5.46-5.48 below.
269 See recommendation (19) and paras 5.71-5.73 below.
270 There is one theoretically possible difference. Where restitutionary damages are being
considered for a civil wrong which arises under a statute (which we define in clause 12(2) of
the draft Bill), the court may only award them if an award of restitutionary damages would
be consistent with the policy of the statute in question: recommendation (7)(a)(ii) above.
Where punitive damages are being considered for a civil wrong which arises under a
statute, the court may only award them if an award of punitive damages would be consistent
with the policy of the statute in question: recommendation (19)(b) below. It is theoretically
possible (but almost inconceivable in practice) that a statute could be held to be consistent
with an award of punitive damages, but not restitutionary damages (in the same
circumstances).
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