Broome v Cassell & Co Ltd (Cassell & Co Ltd v Broome)

Exemplary damages remain available only within the restricted categories recognised in Rookes v Barnard [1964] AC 1129. For profit-motivated wrongdoing, the defendant must knowingly or recklessly commit a tort because the expected material advantage is judged worth the risk of compensation.

Even within a permitted category, exemplary damages are discretionary. The tribunal must first assess full compensation, including aggravated damages. It may award a larger total only where that compensation is inadequate to punish and deter. The compensatory sum forms part of the punishment and must not be counted twice. A lower court must follow binding decisions of a superior court, even when it considers them wrong or difficult to apply.

The respondent, a retired Royal Navy captain, brought two consolidated libel actions against the author and publisher of a book about the destruction of Convoy PQ17. The jury found the allegations false and defamatory. It awarded £1,000 for the proof copies, £14,000 compensatory damages for the hardback edition and a further £25,000 exemplary damages.

The publisher appealed only against the exemplary award. The Court of Appeal dismissed the appeal, but also declared that Rookes v Barnard [1964] AC 1129 had been decided per incuriam, was unworkable and should not be followed by trial judges.

The principal issues before the House were whether the evidence brought the publication within the profit-based category of exemplary damages, whether the jury had been adequately directed, whether a joint exemplary award was permissible, whether the award was excessive, and whether Rookes v Barnard remained binding.

1. Appeal dismissed by a majority of four to three. The Lord Chancellor, Lord Reid, Lord Morris of Borth-y-Gest and Lord Kilbrandon held that the exemplary award should stand. Viscount Dilhorne, Lord Wilberforce and Lord Diplock would have allowed the appeal because of misdirection and, in differing formulations, excessiveness.

2. Per the Lord Chancellor, Lord Reid, Lord Morris and Lord Kilbrandon, there was ample evidence that the publisher knew, or deliberately disregarded the probability, that the material was false and defamatory, yet published because the anticipated advantage was worth the risk of an action. The second category in Rookes v Barnard [1964] AC 1129 requires no arithmetical calculation. Ordinary publication for profit is insufficient. The defendant must knowingly or recklessly commit the tort because its expected material advantage outweighs the perceived risk.

3. Per the majority, the jury's direction was barely but sufficiently adequate. Compensation, including any aggravated element, must be assessed first. A further sum may be awarded only if that compensation is inadequate to punish, mark disapproval and deter repetition. The ultimate total substitutes for the lower compensatory figure; separately calculated compensatory and punitive sums must not simply be added together.

4. Per the Lord Chancellor and Lord Reid, where several defendants are sued jointly for one tort, only one exemplary sum may be awarded. It must not exceed the amount appropriate to punish the least culpable defendant. The majority considered that the jury had sufficiently understood this requirement.

5. Per the majority, the award could be disturbed only if no reasonable jury, properly directed, could have made it. Although each majority member regarded £25,000 as high, the deliberate gravity of the libel and the limited appellate power over a jury's assessment prevented interference.

6. Per the Lord Chancellor, Lord Reid and Lord Diplock, Rookes v Barnard remained binding and was neither per incuriam nor unworkable. Its categories are statements of principle, not statutory definitions. It restricted rather than extended the torts for which exemplary damages were recoverable.

7. Per all members of the House on the hierarchical point, the Court of Appeal had no authority to direct lower courts to disregard a considered decision of the House of Lords. An inferior court must loyally apply binding superior authority. Dissatisfaction may be expressed, but alteration belongs to the superior court exercising its power to depart from precedent.

1. House of Lords: By a majority of four to three, dismissed the publisher's appeal and left intact the judgment for £40,000, including £25,000 exemplary damages.
2. Court of Appeal: Dismissed the appeals of the author and publisher. It nevertheless held that Rookes v Barnard [1964] AC 1129 should not be followed, a conclusion rejected by the House.
3. High Court: Following a 17-day trial before Lawton J and a jury, judgment was entered against both defendants for £40,000. That comprised £1,000 for the proof copies, £14,000 compensatory damages for the hardback edition and £25,000 exemplary damages.