Damages for Violations of Public Interests

According to Lord Nicholls, it ‘is axiomatic … [that with] the anomalous exception of punitive damages, damages are compensatory’. Yet English law presently features several other categories of damages that are clearly not compensatory. Think of nominal, contemptuous, vindicatory, and disgorgement damages. Accordingly, the axiom could be restated as follows: Leaving aside the anomalous exception of non-compensatory damages (NCDs), damages are compensatory. Consistently with this, as I show in my article entitled ‘Public Interest Damages’, it is commonly observed that what unites NCDs is that they are not compensatory.

However, this observation is as circular and empty as observing that all males are not non-males. It is unclear what we mean by NCDs, whether we can make any claims about NCDs collectively, whether such claims would clearly distinguish NCDs from compensatory awards, and why NCDs should be treated as an anomalous exception in the law of damages. My article seeks to resolve all those issues.

My novel claim is that awards of NCDs can collectively be analysed as awards that are justified by violations of public interests. This type of justifying reason clearly distinguishes them from compensatory damages. The very institution of all kinds of damages and the possibility of their awards is, of course, justified by reasons of public interest because damages facilitate commerce, support the institution of property, etc, and these things are considered good for society. However, my claim is not about reasons for damages awards at large. It is about reasons that justify damages awarded in the non-compensatory (as opposed to compensatory) measure.

I also argue that we should prefer this new analysis of NCDs over traditional approaches that are piecemeal and do not view NCDs as awards justified by violations of public interests. This is because unless judges reflect the distinctively public nature of reasons that justify NCDs, they are likely to make missteps in their reasoning. In particular, they are likely to award NCDs as of the claimant’s right even though these awards are in fact discretionary. This is also why NCDs should be regarded as exceptional. Unlike compensatory awards, NCDs cannot be justified solely by the claimant’s interests and therefore should not be awarded unless additional justifying reasons are identified. If this analysis is correct, we should start looking at NCDs collectively to achieve more consistent measures of non-compensatory awards that were previously seen as unrelated, to avoid double-counting when awarding NCDs, and to open a transparent debate about whether and when violations of public interests should result in damages awards.

After setting out the doctrinal scope of NCDs, this article shows that under the wrongs-based model of damages the non-compensatory awards are justified by the defendant’s wrongdoing against some public interests in addition to the defendant’s violation of the claimant’s private right. In exploring the reasons that explicitly or implicitly justify non-compensatory damages awards, I develop an analytic framework comprising correlative and non-correlative wrongdoing as two defining types of justifying reason for damages awards. These two types of reason help us to see why ‘public interest damages’, which is a term I devised to reflect the distinct reasons that justify NCDs, should be regarded as extraordinary in the law of damages.

This research has several implications. Perhaps most importantly, the analytic framework proposed in this article may allow us better to protect important public interests. Recent cases of mass violations of online privacy such as Lloyd v Google LLC expose the artificiality of our traditional analysis, and suggest that the public interest damages framework can help us to protect these emerging domains of human well-being. My point is not that we should use NCDs to protect all public interests this way, but that achieving conceptual clarity on the foundation of NCD awards is necessary to set clear limits on the judicial discretion to make such awards. After all, it may be in the public interest that we do so and that we openly discuss which vital interests merit such exceptional protection.

Václav Janeček is Research and Course Development Fellow in Law and Technology at the University of Oxford.