Borders (UK) Ltd. & Ors v Commissioner of Police of the Metropolis & Anor

Exemplary damages remain available under the second category in Rookes v Barnard where persistent tortious conduct was calculated, in the sense of likely, to produce a profit exceeding the compensation likely to be recovered. The claimant must be a victim and the power must be exercised with restraint.

An award is not necessarily barred because the same evidence could have supported a further quantified compensatory claim. The court may consider the scale and profit of the wrongdoing when fixing a restrained exemplary award, provided that the basic damages are strictly compensatory and the additional award does not create a windfall or double recovery. Parallel criminal punishment and confiscation proceedings do not, without more, preclude a proper civil exemplary award.

A consortium of book retailers sued Ronald Jordan for conversion of books stolen from their shops and sold through his market-stall operation. Many books were recovered in raids, but the retailers alleged that substantially more had already been sold.

Master Leslie awarded compensatory damages of £279,594.89 for the recovered books and their tracing costs, and £100,000 exemplary damages. The Master treated the latter sum as a restrained estimate of profits derived from additional stolen books, which had not been recovered. Criminal confiscation proceedings under the Criminal Justice Act 1988 remained adjourned pending this appeal.

Jordan appealed from the Queen’s Bench Division, contending that the exemplary award was an impermissible substitute for unclaimed compensation and duplicated criminal punishment or confiscation.

Decision

1. The Court of Appeal unanimously dismissed the appeal. Sedley LJ gave the leading judgment; Rix and May LJJ agreed.

2. The conduct fell within Lord Devlin’s second category in Rookes v Barnard, [1964] AC 1129. Jordan had persistently and cynically dealt in stolen books, calculating that his profits would probably exceed the compensation which legal process would recover. The award was capable of teaching that tort does not pay. The retailers were genuine victims and the sum was restrained.

3. The basic damages were strictly compensatory. The Master was entitled to consider the wider scale of the wrongdoing and its profits when assessing an exemplary award. Although the £100,000 could, and should, originally have been pleaded as further compensation, its compensatory character did not prevent it falling within the second Rookes category. It did not confer a windfall: even after both awards, the retailers remained substantially out of pocket.

4. Kuddus v Chief Constable of the Leicestershire Constabulary, [2001] UKHL 29, required exemplary damages to remain additional to full compensation and to punish and deter. It did not impose a rigid rule preventing the award where the facts might also support a larger compensatory claim. The risk of double counting identified in the guidance on quantum did not arise because the primary award contained no punitive element.

5. Imprisonment and pending confiscation did not create double jeopardy or oust the civil jurisdiction. Part VI of the Criminal Justice Act 1988 preserved proper civil claims and contained safeguards against duplication. In practical terms, payment of the civil judgment would reduce the assets available for confiscation.

• Court of Appeal (Civil Division) — dismissed Jordan’s appeal in [2005] EWCA Civ 197.
• Queen’s Bench Division, Master Leslie — on 23 June 2004 awarded compensatory damages of £279,594.89 and exemplary damages of £100,000. No citation for that decision was stated.