Exemplary damages

Exemplary or punitive damages are monies awarded in remedy over and above calculated damages, as a mark of disproval of the defendant’s conduct. Notwithstanding the provisions of the relevant state/federal Civil Liability Acts, exemplary damages may be awarded for intentional torts causing personal injury, and in property damage claims.

Exemplary damages are rarely awarded in Australia, due to an emphasis on compensation and restitution, as opposed to punishment or deterrence. Where they are awarded, they amount to significantly less (in the order of hundreds of thousands dollars) than what may be awarded other jurisdictions, such as the United States (in the order of tens of millions of dollars).

Exemplary damages are only awarded where it can be established that the defendant has acted in ‘contumelious (insolent, scornful) disregard’ of the plaintiff’s rights, with the social imperative of enforcing the message that tortious conduct ‘does not pay’ (XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd (1985))

In Australia, the Court is required to display restraint when assessing the quantum of exemplary damages, to be fully aware of the danger of an excessive award, and to remember that they must be satisfied that the quantum of the compensatory damages does not contain any punitive element.