English Law Exemplary Damages
Punitive damages outside the U.S. jurisdictions are generally refereed to in the common law systems as exemplary damages and they have a relative minor role to play in legal cases compared to the U.S. situation. The English position that damages should compensate rather than be awarded as a deterrence or punishment is reflected in case law. In Rookes v Barnard (1964) Lord Devlin proposed two very limited and exclusive categories in which exemplary damages could be awarded:
The first category related to “oppressive, arbitrary or unconstitutional action by the servants of the government” and the second category where “the defendant’s conduct has been calculated by him to make a profit for himself which may well exceed the compensation payable to the plaintiff.” Following Lord Devlin’s landmark judgment a bar of action was imposed on exemplary damage cases and this bar implemented by the case of AB v South West Water Services (1993) CA 1993 which involved an action for public nuisance and negligence.
However, in the later case of Kuddus v Chief Constable of Leicester (2001) the strict limits of the categories of Lord Devlin were weakened. The court also heavily criticised Lord Devlin’s formulation because whatever the position forty years ago, it respectfully inclined to doubt the soundness of the distinction between government officials and companies and individuals. In other words, the rise of a modern, globalised economy and massive individual wealth meant that large companies, organisations or even individuals could also be regarded as “oppressive and arbitrary” and therefore should be potentially subject to exemplary damages claims.
Nevertheless, it must be emphasised that generally exemplary damages in English law are rare in tort cases (see Kuddus v Chief Constable of Leicestershire Constabulary [2001] UKHL 29) and almost certainly irrecoverable in contract cases (Addis v Gramophone, Abbar v Saudi Economic & Development Co (SEDCO) Real Estate Ltd [2013] EWHC 1414 (Ch) at para 232.