A Re-Introduction of Punitive/Exemplary Damages: The Rooke’s Case

Contributor: Ibrahim Usman Wali

ODIBA v. AZEGE (1998) LPELR-2215(SC)

“Exemplary damages, in particular, also known as punitive or vindictive damages can apply only where the conduct of the defendant merits punishment, and this may be considered to be so where such conduct is wanton, as where it discloses fraud, malice, cruelty, insolence or the like, or where he acts in contumelious disregard of the plaintiff’s rights. But exemplary damages, to some extent, are distinct from aggravated damages whereby the motives and conduct of the defendant aggravating the injury to the plaintiff, would be taken into consideration in the assessment of compensatory damages.”

INTRODUCTION

Punitive or Exemplary damages used interchangeably, has been the subject of controversy since its inception. Lawyers are quick to seek Punitive damages at any given instance, without taking into consideration what it means and the conditions for its application. They pray for it almost as a rite of passage. Courts too, have struggled to either, define its scope, or determine the quantum of the awards. The principal aim for the award of damages is to compensate a Claimant for the harm they have suffered by the actions or neglect of a defendant; it is to put the Claimant in the position, in so far as money could, before the harm was suffered. In common law, asides from the compensatory role of damages, the award may include additional aggravated damage features depending on the conduct of the defendant during the commission or omission of the harmful act, or even during the pendency of the suit. This is where punitive damages come to bear.

The Supreme Court in G. K. F. INVESTMENT (NIG) LTD v. NITEL PLC (2009) LPELR-1294(SC) defined it thus:

“Exemplary, Punitive, vindictive or Aggravated damages where claimed, are usually awarded, whenever the defendant or defendants’ conduct, is sufficiently, outrageous to merit punishment as where for instance, it discloses malice, fraud, cruelty, insolence, or flagrant disregard of the law and the like.”

Put more simply, punitive damages are extra-compensatory damages, the aim of which is to punish a Defendant for his wrongful conduct, and to deter him and others from similarly acting in the future.^[1]Punitive damage made its debut in England in the 1760s. English common law judges awarded non-compensatory damages (or allowed the juries to award them), where the behaviour of a defendant appeared bad enough to warrant same, without necessarily classifying the damage under a particular heading.^[2] Its history dates back more particularly to 1763, with its earliest usage found in the case of Huckle v Money^[3], a false imprisonment case and Wilkes v Wood^[4] bordering on trespass to land. Other causes that attracted punitive damage at the time include: assault, defamation, and trespass to goods.

Punitive damage was to be qualified (in the United Kingdom) in 1964, in the popular case of Rookes v Barnard^[5], wherein Lord Delvin, speaking for the House of Lords, disapproved the award entirely, but due to constraints by precedent, categorised the award in the following categories: a) cases of oppressive, ‘arbitrary or unconstitutional action’ by servants of the government acting in that capacity; b) cases where the Defendant calculated that he would make a profit by his conduct which may exceed the compensation payable to the claimant; and c) cases in which the award of punitive damages is authorised by statute.

Lord Delvin justified the first category on the basis that, servants of the government are equally servants of the people and therefore, the use of their power must at all times be subordinate to their duty of service. Cases under this category would include those involving the police, customs, road authorities, local authorities and similar government officials. The condition here is that, at all material times, the wrongdoer must be a servant of the government acting in that precise capacity^[6]. On the second type of case, involves situations where the Defendant calculated that the profit to be gained from the harmful action/omission, would be higher than the compensation the defendant could get. There need to exist the knowledge of the act being wrong in law, coupled with the calculation that the benefit therefrom would outweigh the liability to be suffered.^[7] Some causes that fall within this category include; conversion, trespass to land, conspiracy, false imprisonment, statutory competition torts, deceit and defamation^[8]. The third types of case are simply where a statute provides for an action to attract Punitive damages.

The scope of the cases that can attract Punitive damages has since been expanded, particularly after the decision of the House of Lords in Kuddus v Chief Constable of Leicestershire^[9]. As long as there is unacceptable behaviour on the part of the Defendant, or behaviours that have elements of malice, fraud, cruelty, insolence and similar behaviour, Punitive damages may run. This is seen in the earlier quoted decision of the Nigerian Supreme Court above, where it was held that:

“Exemplary damages, in particular, also known as punitive or vindictive damages can apply only where the conduct of the defendant merits punishment, and this may be considered to be so where such conduct is wanton, as where it discloses fraud, malice, cruelty, insolence or the like, or where he acts in contumelious disregard of the plaintiff’s rights. But exemplary damages, to some extent, are distinct from aggravated damages whereby the motives and conduct of the defendant aggravating the injury to the plaintiff would be taken into consideration in the assessment of compensatory damages.”^[10]

LIMITATIONS OF THE AWARD

The object of Punitive damages is to punish and/or deter, as stated earlier, therefore the criteria for reaching the award to be granted where a case is proven to warrant Punitive damages, must be distinct from the criteria employed in compensatory damages. Several criteria have been developed over time, however, only a select few have since scaled. What is common is that the quantum of the damage, or rather the criteria to be followed, is largely at the discretion of the court. There are a minimum of eight (8) criteria, however, we will focus on the three propounded by Lord Devlin in the case of Rookes.

i) The Claimant Must Be a Victim of a Punishable Behaviour:

The first condition laid down by Lord Devlin in Rookes is that the Claimant cannot recover Punitive damages unless he is the victim of the punishable behaviour. This rule has since been the subject of controversy, as McGregor^[11] puts it – “It is difficult, however, to see that there is any real scope for the operation of such a rule, a rule indeed which had not appeared before in the cases. “It is the law that causes of action in torts cannot be assigned by act of parties, the only important situation in which the victim is not the Claimant, is where he has died and the suit is being brought on behalf of his estate.

ii) Moderation in Awards:

Another major consideration for Lord Devlin was that the award must be moderate. His Lordship expresses disdain for the outrageous damages awarded in earlier cases. It seemed to him that “to amount to a greater punishment than would be likely to be incurred if the conduct were criminal; and, moreover, a punishment imposed without the safeguard which the criminal law gives to an offender. I should not allow the respect which is traditionally paid to an assessment of damages by a jury, to prevent me from seeing that the weapon is used with restraint.”^[12]

iii) The Means of the Parties:

The third consideration in the Rookes case was the means of the parties. As expected, a small Punitive award would not ‘punish’ a rich person, while even a moderate award might agonize a poor defendant. It has therefore been the case that the financial standing of a Defendant, is a determinant in determining awards. This was expressly recognised in the early case of Benson v Frederick^[13] and later, John v MGN^[14] where it was not disputed that the Defendant’s great wealth was a relevant consideration.

Other considerations include; The conduct of the parties, the relevance of the amount awarded as compensation, the relevance of any criminal penalty, the position with joint wrongdoers, the position with multiple claimants amongst others.

CONCLUSION

The orthodox view on Punitive awards is that they serve deterrent and retributive goals. This can be seen from a standard jury instruction which reads as follows:

“In determining whether or not you should award Punitive damages, you should bear in mind that the purpose of such an award is to punish the wrongdoer, and to deter the wrongdoer from repeating such wrongful acts. In addition, such damages are also designed to serve as a warning to others, and to prevent others from committing such wrongful acts.”^[15]

The standard economic argument for the deterrence feature of punitive awards is that Punitive damages ensure that the award of compensatory damages, is supplemented by an amount sufficient to cause wrongdoers to internalize the costs of their actions. Another possible argument is that certain subjective gains, ought not to be allowed to stand in a utilitarian world.^[16]

Punitive awards are designed to punish as well as deter. Thus, the cursory argument for the retributive aspect of it, is the reflection of a community’s outrage on certain conduct. It is argued that it reflects and entrenches the basic norms of a society.

REFERENCE

Rookes v Barnard (1964) AC 1129 (n 2) 1221, ↑
Helmut Koziol, Vanessa Wilcox, Punitive Damages: Common Law and Civil Law Perspectives (2009) (Tort and Insurance law Vol. 25) SpringerWienNewYork edited: Institute for European Tort Law of the Austrian Academy of Sciences. ↑
(1763) 2 Wils KB 205, 95 ER 768 ↑
(1763) Lofft 1, 98 ER 489. ↑
[1964] AC 1129 (HL) ↑
AB v South West Water Services Ltd (1993) QB 507 (CA) ↑
Riches v News Group Newspapers Ltd (1986) QB 256 (CA) 296-70. ↑
James Goudkamp and Eleni Katsampouka, An Empirical Study of Punitive Damages, (2017 Oxford Journal of Legal Studies) pp 1-33 ↑
(2002) 2 A.C. 122. ↑
ODIBA v. AZEGE (SUPRA) ↑
Harvey McGregor, McGregor on Damages, 2014 (19^th Eds) Thomson Reuters (Professional) UK Limited ISBN 978-0-41402-847-0 ↑
Ibid 11 ↑
(1766) 3 Burr. 1845 ↑
(1997) Q.B. 586 CA ↑
Ronald w. Eades, jury Instructions on Damages in Tort Actions 98 (3d ed. 1993). ↑
Cass R. Sunstein, Daniel Kahneman and David Schkalade, Assessing Punitive Damages (with notes on cognition and valuation in law) The Yale Law Journal, Vol. 107, No. 7 (May, 1998), pp. 2071-2153 ↑