Date: Fri, 3 Nov 2006 18:28:34 +0000

From: Steve Hedley

Subject: Defamation and compensation for enrichment

There are too many side-issues developing, and the weekend is almost here. Back to basics:

To support a claim that these damages are really disgorgement of profits, you must at minimum show that the sum awarded is a measure of the profits the defendant obtained. If you cannot show this, then you will have to make a different argument, if any. The view in all the cases and textbooks I've read on exemplary damages is different: that the sum is the one that is right as a punishment, that profit is one of several factors relevant to that, and there is no reason to assume that the sum awarded will bear any resemblance to the profit made unless the jury consider that appropriate. What can be said on either side of this?

Juries in exemplary damages cases are not instructed to calculate the quantum of profit and then to award that sum; and there is no reason to suppose that that is what they do. Mere repetition that they in fact do so does not help your case. It would not matter if you were right about Devlin's intentions - Devlin didn't decide the quantum even in the case he was involved in.

Again, a mere repetition that Devlin and his fellows Lords were really engaged in calculating the quantum of profit and stripping it from the defendants does not constitute a good legal argument. Nothing in the passage you cite mentions the quantum. You supply no reason for reading it as if it did. The passage is perfectly comprehensible without that assumption. An experienced judge like Devlin would have been unlikely to run together questions of liability and of quantum in the way you suggest, or at least not without saying so. Has any court, ever, read Devlin's opinion in the way you are proposing? If not, what does that suggest to you? Is there any case support for your view at all, beyond this passage by Devlin?

Your claim that you "have heard lots of people" supporting your view does not amount to a legal argument, either. I'm sure you have heard lots of people remark that what motivates the court in these cases is that the defendant was out to make a profit - I've said so myself, and it's an unremarkable view. But what you need to establish here is a point about quantum. If this view about quantum - that it represents the profit made - is really a common one, then you can surely find it somewhere in print. Yet you cite no support. And it would be a surprising view to hold, because it would suggest that all this talk about "exemplary" or "punitive" damages is some sort of elaborate game, to cover up a profit stripping remedy. May I suggest that you try to locate some sort of support for your position, in law journals or texts. I strongly suspect that you can't. I would be delighted to be proved wrong - no, really. As for what Ken said, I'm a little surprised you thought this supported you, but he can speak for himself.

There are other points, but as you pointed you, it's the weekend.

Steve Hedley
Faculty of Law, University College Cork

-----Original Message-----
From: Allan Beever
Sent: 03 November 2006 16:27
Subject: [Fwd: Re: ODG: Defamation and compensation for enrichment]

Sorry for the length of this ... I'm just glad that it is the weekend. Have a good one everyone.

Hedley, Steve wrote:

I am puzzled that you place so much weight on Devlin's opinion

Well, I'm not exactly obsessed. I wrote one paragraph on it. And I wrote it because you challenged me to do so in your previous email by implying that the passage could not be read in the way I suggested. I was simply saying that I don't think that this is as clear as you suggest.

as you acknowledge it is so completely contrary to your own.

I never said that. If I did, why would I have, in your words, placed so much weight on it? It may help to say this. My view is that Devlin was right about one thing and wrong about another. To put this formally:

Devlin said the law should do x because of y. My claim is that Devlin was right that the law should do x, but that y is not a good explanation for why x should be done and that z is a better explanation. I don't see anything wrong with the structure of this argument. Though, of course, I accept that persons can disagree about what x, y, and z are etc.

He is explicit that the object of the award he is discussing "is to punish and deter" ([1964 AC at 1221]). If he is wrong about that, why exactly is he so trustworthy on other lesser points?

I don't think he is "trustworthy" in the sense you imply. I just think he is right about some of the other points, for reasons that I have already given in my first email. And I don't think that the other points are lesser.

The reason why it matters that the award was made by a jury is precisely that the judge doesn't have to concern his/herself with the quantum. The question in the case was, how the matter should have been left to the jury. It is therefore very unlikely that Devlin would have been asking himself precisely what figure should be awarded or how it should be arrived at. Personally I can see nothing about quantum in the passage cited, which seems to me to concern the availability of any award, and its purpose if available.

Yes. But if you take Devlin to be saying that the D's profit should be stripped (which, of course, you don't, fine) then, while he was not speaking about the exact amount, he was talking about how it should be arrived at. That is, on this reading of the case, Devlin said that there should be exemplary damages so that the defendant's profit is stripped, but the amount is for the jury to decide. The amount of the profit - amongst many other things - would be a matter of fact and for the jury to decide.

Of course, none of this follows on your reading of Lord Devlin's intentions. But as I now recall, I have heard lots of people describe the case in a similar way to me. Though I hope not to use it in a way he would think inappropriate, at the beginning of this discussion, Ken said:

English law wouldn't award restitutionary damages, but punitive damages could well be available and - as has often been remarked - their effect (perhaps even their purpose) may be to strip the wrongdoer of his ill-gotten gain.

Though Ken does not express his own view here, I take this to be an accurate statement of the position. That is, though it is clearly debatable, it is not unreasonable to suggest that the purpose of the award, properly understood, is profit stripping. You don't agree that this claim is correct. Fine. But your argument, ie the one found in your first email that corrective justice theory here clearly does not connect to the case law or, as you actually put it, that "such discussions are usually rather remote from any actual legal system" - requires showing that the view is unreasonable as an interpretation of the case law. Corrective justice is remote from Devlin's judgment only on your reading of it.

I am also bemused at your advice to read the passage while imagining that "you believe that Lord Devlin thought that the only way to justify disgorgement of the profit was punishment". Since the correctness of that assumption is precisely what we are disagreeing about,

No WE are not. This is what the debate between the others was about. The debate we are having stems from your claim that the arguments advanced by those who support restitutionary awards as based on corrective justice in these kind of cases does not latch onto the law of England.

If the actual justification is what we are now to argue about rather than that claim, then it is necessary to give up the insistence that the arguments advanced by me and others can be dismissed because they don't connect with the case law. You would have to address the merits of the arguments. And you may well be able to prove on those grounds that the arguments advanced fail. But that would not be to show that corrective justice theory is remote from the case law. On the contrary, the argument would be the same as between any other two positions regarding any other point of law.

you are effectively suggesting that Devlin is to be taken as supporting your view unless he expressly contradicts it.

Why? Even if that was what we were disagreeing about, how would it follow that I am implying that Devlin supports my view unless he is contradicting it? What I am doing is interpreting what I think Devlin meant. The truth about the issue you mention does not affect what Lord Devlin meant.

To which I would reply: do you have any stronger authority than that?

My view about the best way to conceptualise profit stripping (ie the issue that the others and me were arguing about), stands or falls on the strength of the relevant reasons. Authority has and can have nothing to do with it. My view about Lord Devlin's intentions in the passage cited stands or falls on the textual and other relevant evidence to support it. Again, authority has nothing to do with it. I might look to other cases to help me determine what Devlin meant, but that isn't to look at the cases as authorities, just as pieces of evidence.

And in that vein, I forgot to mention the most important thing about Lord Devlin's judgment in Rookes. Isn't it odd that Devlin would be so hostile to exemplary damages for most of the judgment but then be so gung ho for them when the D calculated to make a profit? I think that this would be very odd, and my interpretation of Devlin's intentions is designed to avoid or, at least soften, this conclusion. What is so special about the D trying to profit? It is surely near impossible to think that that someone of the intelligence of Lord Devlin thought that it is appropriate to punish someone when and only when he tried to make a profit. It is THIS feature of Devlin's judgment that, in my view, most importantly does not connect with punishment and requires, or at least strongly suggests, that we must read the judgment differently. My reading is one suggestion of how we might do so.

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