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(E) EXEMPLARY DAMAGES

Where the defendant has committed a tort,[1] such as assault, false imprisonment and even negligence,[2] but not a breach of contract[3] or breach of fiduciary duty,[4] the court may award the claimant exemplary damages[5] in addition to any damages which are awarded to compensate the claimant for any loss suffered. Exemplary damages will only be awarded in very special circumstances, but for present purposes the most important of these is where the defendant committed the tort calculating that he or she would make a profit which might well exceed any compensation which was payable to the claimant.[6] [7] Whilst exemplary damages cannot be regarded as a completely restitutionary remedy, since the measure of such damages is not necessarily confined to the profit which the defendant made from the commission of the tort, they have been characterized as ‘a blunt instrument to prevent unjust enrichment by unlawful acts’.1 2 Despite this, the unsatisfactory nature of exemplary damages as a weapon in the restitutionary armoury is reflected in the rationale behind the award of such damages, which is not simply to deprive the defendant of any benefit made from the wrongdoing but is primarily to punish the defendant for such cynical wrongdoing and to deter the defendant from engaging in such unacceptable conduct in future.[8] [9] Consequently, such damages are an inaccurate way of ensuring that the defendant does not profit from the wrong.

  • [1] The previous limitation, of awarding exemplary damages only for torts which had previously recognizedthat such damages were available, has been removed: Kuddus v Chief Constable of Leicestershire [2001] UKHL29, [2002] 2 AC 122.
  • [2] A v Bottrill [2002] UKPC 44, [2003] 1 AC 449.
  • [3] H Beale (ed), Chitty on Contracts (31st edn, London: Sweet and Maxwell, 2012), para 26-043.
  • [4] Vyse v Foster (1872) 8 Ch App 309, 333 (James LJ). See also Harris v Digital Pulse Pty Ltd (2003) 56NSWLR 298.
  • [5] For analysis of the law relating to the award of exemplary damages and recommendations as to reformsee Aggravated, Exemplary and Restitutionary Damages (Law Com No 247, 1997), 53-184.
  • [6] See Rookes v Barnard [1964] AC 1129, 1226 (Lord Devlin).
  • [7] Broome v Cassell and Co Ltd [1972] AC 1027, 1130 (Lord Diplock).
  • [8] Rookes v Barnard [1964] AC 1129, 1221 (Lord Devlin).
  • [9] See A Beever, ‘The Structure of Aggravated and Exemplary Damages’ (2003) 23 OJLS 87 who advocatesthe abolition of exemplary damages since punishment is not an appropriate function of private law. This wouldbe desirable.
 
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