Aggravated, Exemplary and Restitutionary ... - Law Commission

action that was neither ‘oppressive’ nor ‘arbitrary’ could give rise to an exemplary
damages award. The plaintiff’s appeal was therefore allowed and a new trial
ordered.
1.92 The availability of exemplary damages under category 1 has played a significant
role in buttressing civil liberties in claims for false imprisonment, assault and
battery, and malicious prosecution, arising from police misconduct. 318
Until the
decision in AB v South West Water Services Ltd, category 1 had also been held to be
applicable to claims arising from race and sex discrimination by public
employers. 319
(b) Category 2: wrongdoing which is calculated to make a profit
1.93 Where a tortfeasor’s conduct was calculated to make a profit which might well
exceed the compensation payable to the plaintiff, compensatory damages are likely
to be inadequate to deter the tortfeasor from committing the tort. As a result:
[e]xemplary damages can properly be awarded whenever it is
necessary to teach a wrongdoer that tort does not pay. 320
In other words, an exemplary damages award should be available to punish the
wrongdoer for such conduct, by making it unprofitable so to act.
1.94 There are two initial questions. The first is, what is a ‘profit’? In Rookes v
Barnard 321
Lord Devlin considered that this category extended beyond moneymaking
in the “strict sense” to include cases where the defendant seeks to make
any gain by committing the wrong. 322
1.95 A second initial question is, what state of mind of the defendant constitutes the
required element of ‘calculation’? It is clear that the fact that the wrongful
conduct occurred in a business context is insufficient per se to bring the matter
within category 2. 323
Rather, it must additionally be shown that the defendant
made a decision to proceed with the conduct knowing it to be wrong, or reckless
as to whether or not it was wrong, because the advantages of going ahead
outweighed the risks involved. 324
However, category 2 “is not intended to be
limited to the kind of mathematical calculations to be found on a balance sheet”. 325
318 See generally on such claims R Clayton and H Tomlinson, Civil Actions Against the Police
(2nd ed, 1992) and R Clayton and H Tomlinson, Police Actions (1997).
319 Exemplary damages are no longer available for such torts because they fail the cause of
action test. See para 4.25 below.
320 Rookes v Barnard [1964] AC 1129, 1227, per Lord Devlin. Cf Broome v Cassell [1972] AC
1027, 1130D, per Lord Diplock.
321 [1964] AC 1129.
322 [1964] AC 1129, 1227.
323 For example, if defamatory material appeared in a newspaper published for profit. See Broome v
Cassell [1972] AC 1027, 1079B-C, 1101C-D, 1121D, 1133A.
324 Broome v Cassell [1972] AC 1027, 1079C-E, 1088G-1089A, 1094C-E, 1101D-G, 1121D,
1130D-F.
325 Broome v Cassell [1972] AC 1027, 1078H-1079A, 1094C, 1101B-C, 1130D-F.
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