Rookes v Barnard (1964)

Damages in tort compensate. Exemplary damages punish — and punishment, as Lord Devlin said, "ought logically to belong to the criminal" law. This case is where the House of Lords confronted that anomaly and, instead of abolishing exemplary damages, confined them to a closed list.

That list is the most quotable thing in the law of damages, and examiners ask for it by name. Learn the two common law categories plus the statutory third, and the three considerations that govern any award.

The case also gave its name to the modern tort of intimidation, which is why it appears twice in this subject — once for damages and once for the economic torts.

Lord Devlin began by explaining why abolition was not open to him. The authorities and the statutes "convince me of two things. First, that your Lordships could not without a complete disregard of precedent, and indeed of statute, now arrive at a determination that refused altogether to recognise the exemplary principle. Secondly, that there are certain categories of cases in which an award of exemplary damages can serve a useful purpose in vindicating the strength of the law."

He then set the limits, candidly acknowledging that he was imposing "limits not hitherto expressed on such awards" against "powerful, though not compelling, authority for allowing them a wider range."

Category 1 — oppressive, arbitrary or unconstitutional action by servants of the government

The reason for confining it to government is the heart of the case, and it is worth reproducing:

"I should not extend this category ... to oppressive action by private corporations or individuals. Where one man is more powerful than another, it is inevitable that he will try to use his power to gain his ends ... If he uses his power illegally, he must of course pay for his illegality in the ordinary way; but he is not to be punished simply because he is the more powerful. In the case of the government it is different, for the servants of the government are also the servants of the people and the use of their power must always be subordinate to their duty of service."

He added that a big man bullying a small man may be "a source of humiliation that makes the case one for aggravated damages, but it is not in my opinion punishable by damages" — the distinction between aggravated and exemplary damages, which is itself a favourite question.

Category 2 — conduct calculated to make a profit exceeding the compensation payable

"Where a Defendant with a cynical disregard for a Plaintiff's rights has calculated that the money to be made out of his wrongdoing will probably exceed the damages at risk, it is necessary for the law to show that it cannot be broken with impunity."

It is not confined to money-making in the strict sense: it extends to a defendant "seeking to gain at the expense of the Plaintiff some object — perhaps some property which he covets — which either he could not obtain at all or not obtain except at a price greater than he wants to put down."

The sentence to remember: "Exemplary damages can properly be awarded whenever it is necessary to teach a wrongdoer that tort does not pay."

Category 3 — where a statute expressly authorises them

"To these two categories which are established as part of the common law there must of course be added any category in which exemplary damages are expressly authorised by statute."

Lord Devlin added three limits that apply even within the categories:

1. The plaintiff must be the victim of the punishable behaviour. "The anomaly inherent in exemplary damages would become an absurdity if a Plaintiff totally unaffected by some oppressive conduct which the jury wished to punish obtained a windfall in consequence."
2. Restraint. "The power to award exemplary damages constitutes a weapon that, while it can be used in defence of liberty, as in the Wilkes cases, can also be used against liberty." Some jury awards amounted 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."
3. The means of the parties are relevant — "irrelevant in the assessment of compensation, [but] material in the assessment of exemplary damages. Everything which aggravates or mitigates the Defendant's conduct is relevant."

Exemplary damages may be awarded only in three situations: oppressive, arbitrary or unconstitutional action by servants of the government; conduct calculated to yield a profit exceeding the compensation payable; and where a statute expressly provides for them. Even then the claimant must be the victim of the conduct, the power must be used with restraint, and the parties' means are relevant.

• England: Cassell & Co Ltd v Broome [1972] AC 1027, a seven-judge House, affirmed the categories despite strong criticism from the Court of Appeal. Later, Kuddus v Chief Constable of Leicestershire [2001] removed the separate "cause of action" restriction that had grown up around the rule.
• Elsewhere in the common law world the categories were rejected. The Privy Council in Australian Consolidated Press v Uren declined to impose them on Australia, and Canada and New Zealand likewise kept the wider rule. This is a rare and useful example of one common law system deliberately diverging from another.
• India has never adopted Lord Devlin's closed list. Indian courts award exemplary damages more freely — notably in constitutional compensation for violation of fundamental rights, and in cases of oppressive state action, where the reasoning behind Category 1 resonates strongly.

• Direct question: When may exemplary damages be awarded? Give the three categories in Lord Devlin's own words, then the three considerations. State expressly that the list is closed in English law and not followed in India, Australia, Canada or New Zealand.
• Distinguish aggravated from exemplary damages. Aggravated damages compensate for injured feelings and are still compensatory; exemplary damages punish. This case is the authority for keeping them apart — see the "big man bullying a small man" passage.
• Problem question pattern: a police officer or public official acts oppressively — Category 1. A publisher calculates that a libel will sell more copies than the damages will cost — Category 2. A private employer behaves badly but without calculation — neither; aggravated damages at most.
• Cross-reference: use this in Constitutional Law on compensation for violation of fundamental rights, where Indian courts reach a similar result by a different route.