Punitive Damages and the Place of Punishment in Private Law
| Published date | 01 November 2021 |
| Author | James Goudkamp,Eleni Katsampouka |
| Date | 01 November 2021 |
| DOI | http://doi.org/10.1111/1468-2230.12654 |
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Modern Law Review
DOI:10.1111/1468-2230.12654
Punitive Damages and the Place of Punishment in
Private Law
James Goudkamp∗and Eleni Katsampouka†
It has long been orthodoxy that punitive damages,because they are awarded in order to punish,
are an anomalous remedy. So entrenched is this understanding that it has never been seriously
challenged. However, even apparent truismsabout thelaw shouldbe questioned and, accord-
ingly,this article oers a r ival account. It contends that the deeply ingrained view that punitive
damages are an aberration is a half-truth because several other remedial rules are also aimed,
at least in certain circumstances, at punishment.We concentrate in this regard on the doctrine
of remoteness and its attenuation where the defendant has intentionally injured the claimant,
aggravated damages, theaccount of protsremedy andgeneral damages. Overthrowing theor-
thodox understanding regarding punitive damages has important prescriptive implications. In
particular, it follows that the belief that punitive damages are an alien presence in private law
supplies no basis for conning the jurisdiction to award them.
Keywords: Tort law, Contract, Restitution
INTRODUCTION
For over half a century,the power to award punitive (or exemplary1)dam-
ages has been severely restricted.The clear policy of the law,as Lord Bingham
observed in Watkins vSecretary of State for the Home Department, ‘isnot ingen-
eral to encourage’ judges to exercise it.2A plethora of rules connes the juris-
diction, but akey limitationisthecategoriestest, whichthe HouseofLords
controversially established in Rookes vBarnard3(Rookes). Inthat case,
∗Professor of the Law of Obligations,University of Oxford, Fellow,Keble College, Oxford.
†Fellow,Chr ist’s College,Cambridge. Wedelivered presentations based on early versions of this article
to Oxford’s Obligations Discussion Group and at the workshop ‘Punishment and Private Law’that
took place at the National University of Singapore.We are grateful to participants in these events for
their commentsespecially KitBarker, Andrew Burrows, Jordan English, Yannis Goutzamanis, Jason
Neyers andCatherineSharkey. María GuadalupeMartínezAlles, Marco Cappelletti, Václav Jane ˇ
cek,
John Murphy and Sandy Steel generously providedus with wr itten remarks on the draft text.We are
also indebted to Harold Luntz, Edwin Peel, Chaim Saiman and Robert Stevens for discussing with
us the analysis that we advance.Finally,we wish gratefully to acknowledge the considerable assistance
derived fromthe anonymousreferees’ remarks.
[Correction addedon 26August2021, afterrstonlinepublication: Footnotes 69, 125, and267 have
been updated in this version]
1‘[T]he terms aresynonymous’: Kuddus vChief Constable of Leicestershire Constabulary [2001]
2[2006] UKHL 17, [2006] 2 AC 395 at [26].See also Lord Carswell’s remarks at [81] to similar
eect.
© 2021TheAuthors. The Modern Law Review published by John Wiley & Sons Ltd on behalf of Modern Law Review Limited.
(2021) 84(6) MLR 1257–1293
Thisis an open access ar ticle under the terms of the CreativeCommons Attr ibution License,which permits use,distr ibution and reproduction
in any medium, providedtheor iginal workisproperlycited.
Punitive Damages and the Place of Punishment in Private Law
Lord Devlin described punitive damages as ‘an anomaly … [in] the law of
England’4on account of their retributive agenda and that characterisation evi-
dently underpinned his decision to develop the test.His aim was to restrict their
availability to the minimum that precedent permitted on account of punitive
damages being ‘essentially dierent from ordinary damages’and because they
‘confuse the civil and criminal functions of the law’.5
The characterisation of punitive damages as aberrant on account of their
retributive agenda has been endorsed virtually without dissent ever since
Rookes was decided.6Thus, Allan Beever accurately observed that there is
an ‘almost universal sense’that punitive damages ‘are anomalous’.7Although
this mantra regarding punitive damages has elicited the occasional sceptical
comment,8little more than an eyebrow has been raised in response to it.
Certainly,no sustained assault against the orthodox position has ever been
mounted.
The absence of a properly developed rival perspective regarding punitive
damages is unhealthy.Accordingly, in this article we contend that the tradi-
tional understanding concerning punitive damages obscures an important part
of the truth. The position that punitive damages are ‘a monstrous heresy …
deforming the symmetry and body of the law’9is seriously overstated for the
simple reason that private law sometimes pursues punitive objectives via other
remedies.In other words,contrary to the shibboleth that punitive damages
have a ‘unique nature’10 by virtue of their concern with retribution, we con-
tend that punitive damages do not have a monopoly on punishment in private
law.
It would be worth revealing that the orthodox view regarding punitive
damages is out of kilter with reality even if doing so did not have any practical
consequences. However, our doingsoisdoublyjustiedgiven thattheper-
ception that punitive damages are an interloper in private law has powerfully
4ibid,1221. Lord Devlin also referred to ‘[t]he anomaly inherent in exemplary damages’:ibid,1227.
5ibid, 1221.
6Indeed, the proposition that punitive damages are anomalous was in vogue well before Rookes
was decided: see, for example, W.W.BucklandandA.D.McNair, Roman Law and Common Law
(Cambridge: CUP,1936)267.
7A. Beever,‘TheStr ucture ofAggravated andExemplaryDamages’ (2003) 23OJLS 87, 109n 91.
To like eect, see S. Rowan, ‘Reections on the Introduction of Punitive Damages for Breach
of Contract’ (2010)30OJLS 495, 507.
‘[i]t cannot lightly be taken for granted, even as a matter of theory,that the pur pose of the law
of tort is compensation … or that there is something inappropriate or illogical or anomalous
(a question-begging word) in including a punitive element in civil damages’.And in One Step
(Support) Ltd vMorris-Garner [2018] UKSC20, [2019]AC649at[25], LordReedremarked
that ‘[i]n tort … damages may in some circumstances be awarded forpunitive pur poses’ (emphasis
added). Consider alsoN.J. McBride, ‘Punitive Damages’ inP. Birks (ed), Wrongs and Remedies
in the Twenty-First Century (Oxford:ClarendonPress, 1996) 194-195(rejecting theproposition
that punitive damages are anomalous on the basis that it is ‘a conclusion masquerading as an
argument’); P. Cane,The Anatomy of Tort Law (Oxford:HartPublishing, 1997) 116-119(arguing
that various other species of damages are also concerned with retribution).
9Fay vParker 53 NH 342, 382 (1872) per Foster J.
10Beever,n7above,98.
1258 © 2021TheAuthors. The Modern Law Review published by John Wiley & Sons Ltd on behalf of Modern Law ReviewLimited.
(2021) 84(6) MLR 1257–1293
James Goudkamp and Eleni Katsampouka
inuenced the scope of the jurisdiction to award them.11 As the Law Commis-
sion observed,‘[t]he modern boundariesof the remedy of exemplary damages
[have been] fashioned by the courts on the assumption that they are an
“anomalous” civil remedy…’.12 Indeed, judges havebeensotransxedbythe
understanding that punitive damages are an outlier in private law that they have
taken the highly irregular step of placing the rules regarding them into stasis.
Thus, in Broome vCassell & Co Ltd (Broome) Lord Reid contended that because
punitive damages are an ‘undesirable anomaly’they ‘should not be permitted
in any class of case [where their award is] not covered by authority’.13 In other
words,Lord Reid’s view was that the circumstances in which punitive damages
are available should be ossied.This approach contrasts starkly with the usual
judicial methodology, whichinvolves developing the common law incremen-
tally by analogy with established authority.14 This sclerosis, subject tocertain
exceptions that are discussed below,15 continues tothepresentday. Thus, in the
recent decision in Axa Insurance UK Plc vFinancial Claims Solutions Ltd Flaux
LJ remarked that because punitive damages ‘are anomalous … [i]t would … be
inappropriate to extend the circumstances in which they can be awarded …’.16
Beyond rejecting the conventional view that punitive damages are anoma-
lous we also argue that judges not infrequently circumvent the restrictions on
the jurisdiction to award punitive damages by imposing punishment via other
remedies and that this practice can be seriously problematic.For one thing, it
can result in covert punishment because judges,when they impose punishment
via another remedy, are not always candid about the fact that they are acting
punitively.One diculty with punishment being discreetly imposed behind the
screen of another doctrine is that it may be hard or impossible to investigate
its appropr iateness. Meting out punishmentviaotherremediescanalsocause
problems where the mechanism alighted upon is a decidedly inferior way of
imposing punishment. As we will see,certain of the alternative instruments of
punishment that judges use do not calibrate the amount of punishment im-
posed by reference to the defendant’s culpability but according to some other
criterion, such as the claimant’s loss or the defendant’s gain.This gives rise to
the spectre of disproportionate punishment.
We begin this article by oering a conspectus of the power to award punitive
damages with a focus on the myriad and cumulative limitations to which it is
subject. Identifying the fetters on the jurisdiction oers insight regarding the
extent to which it is constrained and the magnetic inuence of the traditional
11The or thodox view regarding punitivedamageshas hadotherimplications. Forexample, aca-
demics in thrall to it have sought to recast punitive damages as another type of award with a
view toremovingaperceived anomalyfromprivate law: see, for example, E. Weinrib,The Idea of
Private Law (Oxford:OUP,2012)135n25(arguingthatpunitive damages sometimesmasquer-
ade asrestitutionary damages)andR. Stevens, To r t san dR i g h t s(Oxford: OUP,2007)87(seeking
to recharacterise punitive damages as ‘substitutive damages’).
12Law Commission, Aggravated, Exemplary and Restitutionary Damages Law Com No 247 (1997) 1.
13n 8 above,1086. Lord Reid also characterised punitive damages as ‘highly anomalous’:ibid.
14For a recent and emphatic endorsement of the traditional mode of legal reasoning, see Robinson
vChief Constable of West Yorkshire Police [2018] UKSC, [2018] AC736 at[21]-[30].
15See the text to nn 63-64 below.
[139].
© 2021TheAuthors. The Modern Law Review published by John Wiley & Sons Ltd on behalf of Modern Law Review Limited.
(2021) 84(6) MLR 1257–12931259
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