Aggravated, Exemplary and Restitutionary ... - Law Commission

manner. As shall be seen below, it is not entirely clear how the recovery of
exemplary damages can be analysed as recovery pursuant to the undertaking - at
least as that undertaking is conventionally viewed. 369
But in any case, undertakings
in damages were not mentioned in Rookes v Barnard, and it would appear that the
suggestions made in the two modern cases cannot stand in the light of AB v South
West Water Services Ltd. 370
1.112 Exemplary damages are clearly unavailable in a claim for breach of contract. The
leading authority is Addis v Gramophone Co Ltd. 371
In that case the House of Lords
refused to award any damages - including mental distress damages let alone
exemplary damages - for the harsh and humiliating manner of the plaintiff’s
wrongful dismissal.
(3) Additional factors which limit the availability of exemplary
damages
1.113 In addition to the cause of action and categories tests, the jury or judge retains an
overriding discretion to refuse to award exemplary damages. 372
Thus, even if the
plaintiff can show that the case falls within one of Lord Devlin’s three categories
and that the wrong in question satisfies the cause of action test, it is still open for
the court or jury to decide in its discretion that exemplary damages are
inappropriate. 373
The exercise of this discretion in the case law has led to the
identification of a number of factors which further limit the availability of
exemplary damages; several of these factors may, alternatively, be relevant to the
assessment of such awards. 374
1.114 These factors are:
• the ‘if, but only if’ test
• the plaintiff must be the ‘victim of the punishable behaviour’
• the defendant has already been punished by a criminal or other sanction
• the existence of multiple plaintiffs
• the plaintiff’s conduct
369 See paras 5.74-5.77 below.
370 [1993] QB 507.
371 [1909] AC 488. Addis remains good law on this point, notwithstanding that it has been
disapproved in relation to its denial of damages for injury to reputation by the House of
Lords in Mahmud v BCCI [1997] 3 WLR 95. See also Perera v Vandiyar [1953] 1 WLR 672
and Kenny v Preen [1963] 1 QB 499.
372 Indeed, according to Lord Hailsham in Broome v Cassell [1972] AC 1027, 1060B, a punitive
award, if it is ever permissible, must always be discretionary.
373 See, for example, AB v South West Water Services Ltd [1993] QB 527B-E, 528E-F, 533F, in
which the Court of Appeal identified two further grounds for striking out the plaintiffs’
claims (in addition to failure to satisfy the cause of action test and/or the categories test).
The grounds are discussed at paras 4.37-4.43 and 4.47 below.
374 See paras 4.56-4.85, and in particular, 4.81-4.83, 4.84 and 4.85, below.
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