Aggravated, Exemplary and Restitutionary ... - Law Commission

underlying such damages, that of punishing the defendant, showing
that tort does not pay and deterring others. The same result is
achieved by the application of article 10 ... 442
1.151 The validity of these concerns about (non-)conformity with the Convention was
confirmed by the decision of the European Court of Human Rights in Tolstoy
Miloslavsky v United Kingdom, 443
which was heard before Rantzen reached the
Court of Appeal. The Court held that an award of £1.5 million in compensatory
damages, in conjunction with the lack of adequate judicial safeguards at trial and
on appeal against disproportionately large awards at the relevant time, amounted
to a violation of the defendant’s rights under Article 10. It is unclear how far the
power of ‘substitution’ of jury awards introduced by section 8 of the Courts and
Legal Services Act 1990, 444
as well as the approach in Rantzen to the exercise of
that power by the Court of Appeal, have rectified these deficiencies. If they have,
then arguably even a substantial award of exemplary damages by a jury would not,
per se, infringe Article 10, because of the potential for ‘substitution’ on an appeal.
However, the question of the legitimacy of exemplary damages awards as such -
large or small - did not arise in Tolstoy, and the European Court of Human Rights
was not called upon to consider whether they are “necessary in a democratic
society ... for the protection of the reputation of others”. 445
(2) Moderation
1.152 In Rookes v Barnard 446
Lord Devlin emphasised that exemplary awards are
governed by a principle of ‘moderation’ or ‘restraint’. 447
This was essentially an
exhortation to courts to award lower, rather than higher, awards. Commonwealth
authorities have similarly emphasised the need for caution. 448
But it would appear
that Lord Devlin was not wholly confident that the principle would sufficiently
curb excessive awards:
It may even be that the House may find it necessary to ... place some
arbitrary limit on awards of damages that are made by way of
punishment. Exhortations to be moderate may not be enough. 449
(3) Wealth of the defendant
1.153 When calculating the appropriate exemplary sum, it has been laid down that the
court or jury should take into account the defendant’s capacity to pay. 450
It would
442 [1997] QB 586, 619F-G.
443 (1995) 20 EHRR 442.
444 See further paras 4.87-4.89 below.
445 Article 10(2) of the European Convention on Human Rights.
446 [1964] AC 1129.
447 [1964] AC 1129, 1227-1228. See also para 4.66 above.
448 See, for example, Donselaar v Donselaar [1982] 1 NZLR 97, 107, per Cooke J.
449 Rookes v Barnard [1964] AC 1129, 1228.
450 Rookes v Barnard [1964] AC 1129,1228, per Lord Devlin. Lord Devlin spoke of the
“means of the parties”, but presumably the means of the plaintiff can only exceptionally (if
ever) be relevant: that is, where they affect the culpability of the defendant’s behaviour.
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