Date: Fri, 3 Nov 2006 12:12:25 +0000

From: Steve Hedley

Subject: Defamation and compensation for enrichment

Your point, as I understand it, relies on the assumption that the measure of exemplary damages bears a close resemblance to the amount of the profit made. But, as Jason has already noted, that is not the law. The amount of profit is, at most, simply one factor to be borne in mind in deciding the extent to which the defendant needs to be punished - as is clear from Rookes and other cases. The award may be less or more than the profit made, as the jury think fit.

As to Lord Devlin's opinion, this nowhere states that "damages can be used in order to strip the profit made". Devlin is explicit that the purpose is punishment (it is to show the defendant that the law "cannot be broken with impunity", as he put it). He is also clear that the quantum is to be left to the jury. None of this sits well will the idea that the remedy is "based on restitution or disgorgement than punishment" - even assuming that that distinction is accepted in the first place. It is disingenuous say that the opinion does not authorise an award of more than the profit made: the opinion is very light on any suggestions for the size of the award, and says nothing either way.

Of course, if the restitutionary remedy existed, it would be attractive to plaintiffs precisely because it *wouldn't* involve the punitive question that the current law asks, namely whether the defendant deserves such a penalty. The question is, given the (limited) existence of the flexible remedy for exemplary damages, whether the additional restitutionary remedy would be needed.

Steve Hedley
Faculty of Law, University College Cork

-----Original Message-----
From: Allan Beever
Sent: 03 November 2006 11:16
Subject: Re: ODG: Defamation and compensation for enrichment

In response to Steve's post:

It seems to me that this misses the point that we were trying to make.

As I read Lord Devlin's judgment in Rookes, his claim is that exemplary damages can be used in order to strip the profit made by those in the cases we have been discussing. Though he does imply that this is punitive and defendant focused, there is nothing to suggest that, for instance, he thinks that courts should award more than the profit the defendant received (though he does, quite rightly, insist that profit need not be restricted to financial profit). The point that has been argued by me and others is that a better explanation for these awards is based on restitution or disgorgement than punishment. This is not remote from the actual legal system. It purports to be the best explanation for what the actual legal system does. If our arguments are right, then it is too quick to say that the restitutionary remedy doesn't exist in England. Of course, it doesn't officially exist. But if courts are awarding what they call exemplary damages in a way that can't be explained well by the desire to punish but can be explained well by the desire to realise restitution or disgorgement, then it does exist in reality.

Of course, it might be a mistaken account of what the legal system does. But that is a different argument - indeed the one that others have been engaging in.

And I think it mistaken to suggest that the arguments that have been advanced rely on turning reputation into a property right. The argument is rather that there is a normative structural analogy between the conversion of property and the deliberate tarnishing of someone's reputation. The point of referring to property is to draw attention to this analogy, not to suggest that reputation is property.

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