Reflections on the Introduction of Punitive Damages for Breach of Contract

Abstract

Following the recognition by the House of Lords in AG v Blake of the gain-based remedy of an account of profits in a contractual context, an increasing number of commentators have argued that the English remedial regime for breach of contract should be further reinforced by the introduction of punitive damages. This article considers whether there may be a role for punitive awards in contract law. It seeks to demonstrate that the adoption of punitive damages, without wider reform of the existing remedial regime, may lead to inconsistencies. The reason is that English contract law has generally shown reluctance to view contractual default as being reprehensible or the motive for breach as materially relevant. Legal intervention in particular defined circumstances by way of regulation may be more appropriate than punitive awards. Support for the conclusion that caution should be exercised before reform is undertaken is also drawn from recent developments in France, where the introduction of punitive damages has been proposed as part of a project to reform the Civil Code.