Kinds of Damages

In one line

Damages may be nominal, contemptuous, ordinary, aggravated or exemplary, and only the last is meant to punish.

In the wording a student can write in an exam: nominal damages are a token sum awarded where a legal right has been infringed without loss; contemptuous damages are a derisory sum awarded where the claim, though technically good, ought not to have been brought; ordinary or compensatory damages are measured by the plaintiff's actual loss; aggravated damages are compensatory but increased because the defendant's conduct injured the plaintiff's feelings or dignity; and exemplary or punitive damages exceed the loss and are awarded to punish and deter.

The five kinds

1. Nominal damages. A small sum marking the violation of a right where no real loss followed. They are the natural award in a case of injuria sine damno, and chapter [Injuria Sine Damno] shows why the action lies at all.

2. Contemptuous damages. A derisory sum, often the smallest coin, awarded where the plaintiff has technically established his claim but the court considers the suit unworthy. The message is that the plaintiff won and should not have come. Costs are often refused as well.

3. Ordinary or compensatory damages. The general case: the sum that represents the plaintiff's loss, assessed on the principles in chapter [Judicial Remedies: Damages].

4. Aggravated damages. Still compensatory, but increased because the manner of the wrong added to the injury: insult, humiliation, malice, or a high-handed way of doing it. They compensate injured feelings rather than punish.

5. Exemplary or punitive damages. A sum beyond compensation, awarded to punish the defendant and to deter him and others. They are exceptional, and the classes in which they are given are narrow: oppressive, arbitrary or unconstitutional action by servants of the government; conduct calculated by the defendant to make a profit exceeding the compensation payable to the plaintiff; and cases where a statute authorises them.

The Indian departure: the size of the defendant enters the calculation

Facts. M.C. Mehta v. Union of India, AIR 1987 SC 1086, decided on 20 December 1986 by five judges. Oleum gas escaped from a unit of Shriram Foods and Fertiliser Industries in a densely populated part of Delhi, and the Court had to fix the measure of liability of an enterprise carrying on a hazardous industry.

Held. Besides laying down absolute liability, the Court held that the measure of compensation must be correlated to the magnitude and capacity of the enterprise, because the compensation must have a deterrent effect: the larger and more prosperous the enterprise, the greater the amount payable. It reasoned that an enterprise permitted to carry on a hazardous activity for profit must absorb the cost of accidents as an item of its overheads.