Reforming Exemplary Damages: Expansion or Abolition?
When I was appointed to the Law Commission, the topic that I was most dreading taking over from Jack Beatson was that on exemplary damages. Not because I do not find the area interesting. On the contrary, I have long been intrigued by it. But rather because my own published views have taken a markedly different line from that provisionally recommended by the Law Commission in its Consultation Paper Aggravated, Exemplary and Restitutionary Damages.1 For example in the first edition of Remedies for Torts and Breach of Contract, I wrote the following at the end of Chapter Five on Non-Compensatory Damages: '[T]he ideal solution is to reform the law by abolishing exemplary damages altogether. As the House of Lords will probably continue to consider that the authorities are too firmly entrenched for it to overturn them, it is up to the law reform bodies and the legislature to achieve this.' In the second edition I added the following passage: 'Unfortunately the Law Commission in its recent consultation paper has provisionally recommended that, while there should indeed be reform, exemplary damages should be retained while being put on a principled basis thereby extending their ambit. Oddly the precise basis of principle is left open. The main possibilities canvassed are where the defendant's conduct has been malicious or outrageous, especially if the parties were in a relationship of inequality at the time of the wrong; and/or that the plaintiff's "rights of personality" have been infringed. No extension of exemplary damages to breach of contract is proposed. Views of consultees are sought on various more specific issues, such as the burden of proof, vicarious liability, joint defendants, and whether part of the exemplary damages should be made payable to the state or another public fund. It remains to be seen whether the response to the paper will convince the Law Commission that the more principled approach is to abolish exemplary____________________