Exceptional Measures of Damages: A Search for Principles
My role at the SPTL seminar on exceptional measures of damages was that of Reporter. This intimidating job requires one to comment fairly and perceptively on the papers circulated in advance and to give a faithful account of the discussion on the day. On the face of it, the paper which follows performs neither of these tasks. The fact is, however, that in writing it I was greatly assisted and stimulated both by the papers prepared for the seminar and by the discussion which they generated. Yet a third task allotted to the Reporter is that of providing a framework within which the papers and the discussion can be brought into fruitful union. It is primarily this task which I have attempted to perform in this essay.
I will first tackle some terminological issues before examining in turn four different measures of damages recognized in the English law of obligations. Finally, I will have a few words to say about contractual penalties. My main argument will be that different measures of damages can be usefully viewed in terms of their aptness for expressing different degrees of disapproval of conduct and for sending out deterrent signals of differing strengths to those who might engage in such conduct.
The meaning of the term 'damages' is a matter of controversy. Some would say that an award of damages is a common law remedy, and that the proper name for monetary remedies in equity is 'compensation'. Others would say that the only proper measure of damages is compensation for losses, and that it is wrong to speak of 'restitutionary damages', for instance. (On this view, the word 'compensatory' in the phrase 'compensatory damages' is tautologous). Nevertheless, in this essay I will adopt a wide usage by referring to monetary remedies1 generally as 'damages' and by qualifying that word with adjectives which indicate the measure of the remedy (for example, compensation or restitution) and the source of the obligation for____________________