High Court Warns Lawyers To Follow The Rules When Submitting Claims For Exemplary Damages

On 13th April 2022, the England and Wales High Court handed down a decision in the case of Underwood v Bounty. The case involved a dispute over the processing of a mother’s data and that of her new-born baby by a marketing company without consent.

However, this was not the most interesting part of the case. This emerged when the judge read the specific remedies the claimant was seeking from the High Court in the civil claim. The Claimant had submitted a claim for exemplary damages. The judge appeared to take issue with this aspect of the claim and could not have been clearer in his criticism of them. He warned that a claim for this type of damage should never have been submitted against the NHS Hospital Trust. More broadly in his comments, he described such claims as ‘wholly exceptional’.

So What Are Exemplary Damages?

In essence, Claimants need to specifically apply for these damages from the High Court and they extend beyond compensating for actual loss. They are usually awarded at the discretion of the court to signify that it does not approve of the conduct of the defendant in the relevant proceedings.

A Party Can Use A Claim For Exemplary Damages As A Negotiating Tactic, Can’t They?

The High Court judge the Honourable Mr Justice Nicklin judge warned lawyers and clients contemplating submitting claims for exemplary damages are an unsuitable remedy if the purpose behind them is as a form of tactic for negotiation or when the real reason is interpreted to be seeking recompense for alleged upset which has been suffered as a result of the behaviour of the relevant Defendant in the matter.

So What Can Exemplary Damages Be Claimed For?

The judge clarified that such claims for damages will only be submitted and only when courts hand down an exemplary-damages award. He highlighted that when the Claimant submitted its Particulars of Claim it had not satisfied the High Court that the conditions were met for a successful claim for exemplary damages from the NHS Trust. He pointed to the judicial thought process when he advised affected parties to only submit claims for exemplary damages when there is a proper basis and to support such claims with admissible evidence or when admissible evidence is expected to be available at a future trial.

The exceptional circumstances alluded to by Mr. Justice Nicklin are as follows:

• those laid down in Acts of Parliament
• Ifat the behaviour of the Defendant is unacceptable to the extent that they plan to profit at a level over and above the level of monies being claimed in the matter
• the behaviour of government servants is interpreted by the judge to be seeming:

against the constitution,

capricious and

harsh.

What Actions Should Lawyers Be Taking In Light of This Judgment?

When submitting claims for exemplary damages Mr Justice Nicklin advised that respective claimants and their lawyers should be:

• ensuring that they fully consider the facts in front of them before allocating resources such as cost and time in submitting claims for exemplary damages

• adopting a cautious approach and

• taking great care not to submit such claims without evidence or

• reasonably sure that evidence will be available at a future trial to support their claims.

If they take time to do this they will not be guaranteed a successful outcome however they will mitigate the risk of a claim being dismissed out of hand by a judge owing to lack of evidence.

ASSESSING FIRMS

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THE ARTICLE WAS WRITTEN USING THE FOLLOWING SOURCES

[1] Underwood & Another v Bounty UK Limited [2022] EWHC 888 - Underwood & Anor v Bounty UK Ltd & Anor [2022] EWHC 888 (QB) (13 April 2022) (bailii.org)

[2] Data Protection Act 1998

[3] Schedule 1 Data Protection Act 1998

[4] Schedule 2 Data Protection Act 1998

[5] Section 55 Data Protection Act 1998

[6] Section 7 Data Protection Act 1998

[7] Mircom International Content Management & Consulting (MICM) Ltd -v- Telnet BVBA (C-597/19)

[8] Ittihadieh -v- 5-11 Cheyne Gardens RTM Company Ltd [2018] QB 256

[9] Copyright Directive 2001/29/EC

[10] McKennitt -v- Ash [2008] QB 73

[11] ZXC -v- Bloomberg [2022] 2 WLR 424

[12] Various Claimants -v- Wm Morrisons Supermarket plc [2018] EMLR 3113 (QB)

[13] Warren -v- DSG Retail Ltd [2021] EMLR 25

[14] Campbell -v- MGN [2004] 2 AC 457

[15] Cunningham-Hill – Civil Litigation Handbook 2008 – p104

[16] Cooke, John et al. The Common Law of Obligations – p280-282