A brief Introduction to Exemplary Damages

By  PAUL N. MUSYIMI

Introduction

This article is prompted by the not-so-easy-to-explain inclination, very frequent with advocates who rely on precedents in drafting, of praying for orders for exemplary damages in virtually every suit. Recently, I encountered exemplary damages in a suit for compensation on ground of redundancy and unfair dismissal, as one of the prayers for exemplary damages against the Defendant. The Defendant had allegedly failed to give proper notice to the Plaintiffs' trade union and the government of their eminent dismissal of redundancy. On that ground, and in a suit whose cause of action was breach of express and implied terms of an employment contract, the Plaintiff sought exemplary damages ostensibly to punish the Plaintiff and forewarn other like-minded employers against flouting the regulations on pre-redundancy criteria in Kenya.

Definition of exemplary damages

Exemplary damages are damages which are punitive in nature and generally intended to teach the defendant that tort does not pay. They are awarded in addition to compensatory damages. Thus the plaintiff receives a windfall over and above his true loss. It has been said that the distinction between aggravated and exemplary damages that aggravated damages are awarded for the conduct that shocks the plaintiff and exemplary damages are awarded for conduct that shocks the court.

Conditions for award of exemplary damages

As per Halsbury's Laws of England 4^th Edition Volume 12 Para. 1190 at page 474, exemplary damages may only be awarded in actions for torts. Exemplary damages may not be awarded in actions for breach of contracts as was held in Kenny-v-Preen [1962] 3 All ER 814, CA.

Where exemplary damages provided for by statute

At one time it was believed that exemplary damages could be awarded in any case where the defendant had behaved outrageously. However, in Rookes v Barnard [1964] AC 1129; [1964] 1 ALL ER 367, the House of Lords held that except where is specifically authorized by a statute exemplary damages should only be awarded in two categories of cases.

Against oppressive, arbitrary or unconstitutional action by government servant

One, in case of a tort occasioned by oppressive, arbitrary or unconstitutional action by servant of the government. In Cassell & Co. Ltd v Broome [1972] AC 1027; [1972] 1 All ER 801, the House of Lords applied the approach in Rookes v Barnard where Lord Reid said that this category did not extend to oppressive action by a private corporation or individual.

For tort calculated by Defendant to yield profit

The second case in which exemplary damages may be available is where the defendant has calculated by him to make a profit for himself by committing the tort even after paying compensatory damage. In Cassell & Co Ltd v. Broome (supra), the court was of the view that the damages came into this category. The defendant published a book which made defamatory statements about the plaintiff. The book was published in the face of threats by the plaintiff that he would bring a libel action against the defendants. The plaintiff was awarded 15,000 pounds compensatory damages and 25,000 exemplary damages. It was held that the plaintiff was entitled to exemplary damages because the defendant had calculated that it was worth running the risk of the book being held to be libelous because of the profits which they thought they would make from the sales of the book and the attendant publicity. But it should be noted that the mere fact that a tort is committed with the intention of making a profit is not sufficient of itself to bring the case within this category. There must be some evidence that the defendant decided that there was a profit to be made out of the wrongdoing.

Scarcity of case law on exemplary damages in Kenya

There are few direct cases in Kenyan jurisprudence dealing with exemplary damages. To be specific, only two local reported cases make mention of exemplary damages. In the case of Gitau-v-Attorney General [1990] KLR 13, the learned judge found that the actions of two police officers who wrongfully assaulted, battered and falsely imprisoned the Plaintiff were oppressive, arbitrary and unconstitutional and therefore fell in the first category of the instances where exemplary damages may be awarded. That it is, the police officer's actions were oppressive, arbitrary and unconstitutional action by the servants of the Government and therefore warranted an award of exemplary damages. The court awarded Kshs. 10,000 as exemplary damages over and above the awarded general damages of Kshs. 25,000.

In Biwott-v-Mbuguss & Another (No. 2) [2002] 1 KLR 321, a defamation/libel suit, exemplary damages had been sought as an alternative to aggravated damages. It appears the Plaintiff's counsel in the case chose to prefer/insist on aggravated damages in his submissions which were eventually awarded.

Conclusion

There is no doubt exemplary damages are strict remedy be sought only in those rare occasions when the settled conditions for its award are met. The following are the key points to remember when dealing with award or prayer for exemplary damages. Firstly, the cause of action must be a tort claim (remember exemplary damages are only applicable in tort and never in claims for breach of contract). Secondly, exemplary damages will be granted upon proof of oppressive, arbitrary and unconstitutional action by a servant of the Government but a private corporation. In addition, exemplary damages are also awarded where it is shown that the plaintiff had calculated to gain profit through the tort. Lastly, exemplary damages will be be readily awarded where they are expressly provided for by a statute. 

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Paul Ndore Musyimi is a Freelance Legal Research Consultant based in Kenya. Lawyers may contact him for legal research solutions at pmusyimi@gmail.com