Recommendation 12–1 The Act should provide that courts may award damages, including damages for emotional distress.

12.9 The ALRC recommends that damages, including general damages for emotional distress, be available as a remedy for serious invasions of privacy. Previous law reform inquiries made similar recommendations.[1] Several stakeholders supported this recommendation.[2]

12.10 Damages are said to be the ‘prime remedy’ in tort actions.[3] This is so even where the tort, as the ALRC recommends in the case of the new tort of serious invasion of privacy, is actionable per se in the sense that the plaintiff need not prove any ‘actual damage’ (personal or psychiatric injury, material damage or financial loss).

12.11 There are four types of damages that may be awarded in a tort action: nominal damages, compensatory damages, aggravated damages and exemplary or punitive damages.

12.12 It is likely that nominal damages will only rarely, if ever, be appropriate where the new tort is made out, because of the requirement of seriousness as an element of the tort. Nominal damages, usually of a token sum,[4] are awarded where a tort is actionable per se and where the plaintiff is unable to prove any injury, loss or damage.[5] It provides mere recognition that the wrong has occurred but where the wrong was not a serious infringement of the plaintiff’s rights.

12.13 The most important damages are compensatory damages. How compensatory damages should be assessed in cases of serious invasions of privacy is discussed below.

Damages to compensate a plaintiff

12.14 Compensation is recognised as the dominant purpose of civil actions.[6] The ALRC’s recommendation that the statutory cause of action be described as an action in tort[7] will allow a court, when determining damages for a serious invasion of privacy, to draw on principles that have been well settled and applied by the courts in analogous common law actions.

12.15 The purpose of compensatory damages in tort law is to place a plaintiff as far as possible in the position in which they would have been, had the wrong not occurred.[8] It has been argued that this purpose is not commensurate with the nature of a privacy tort as the harm caused by an invasion of privacy is irreversible.[9] However, in most civil actions, where the loss is other than purely financial, damages will not be able to restore a plaintiff to the position they would have been in had the wrong not occurred. Damages cannot undo personal or psychiatric injury. They can however compensate for the financial losses flowing from the injury and provide a measure of solace for the wrong that has occurred.[10]

12.16 Compensatory damages may include special and general damages. Special damages refer to ‘those items of loss which the plaintiff has suffered prior to the date of trial and which are capable of precise arithmetical calculation—such as hospital expenses’.[11] General damages refer to all injuries which are not capable of precise calculation.[12]

Compensation for actual damage

12.17 An award of damages compensates for actual damage to the plaintiff. Actual damage can consist of physical or psychiatric injury, property damage[13] or other economic loss. Plaintiffs must prove that the damage was caused by the tort and fell within the relevant principles of ‘remoteness of damage’.[14]

Compensation in the absence of actual damage

12.18 The recommendation that the new tort be actionable per se means that a plaintiff need not prove that he or she has suffered personal injury or another form of actual damage in order to bring the action.[15] However, this does not mean that the plaintiff is not entitled to damages for the wrong. As explained in Chapter 8, in a sense the invasion of privacy is both the wrong and the injury, and the plaintiff is entitled to be compensated because it happened.

12.19 The action for invasion of privacy essentially protects a dignitary interest. It is closely analogous to actions like assault and false imprisonment, and other forms of trespass which are actionable per se. The courts deciding actions for invasion of privacy are likely to draw on the principles of damages as developed by the courts in these torts.

12.20 Because the wrong must be serious to be actionable, it is likely that, in the absence of any actual damage, the court will award general damages in order to:

· vindicate the plaintiff;

· compensate the plaintiff for any emotional distress or injury to feelings.

Vindicatory effect of damages awards

12.21 In torts which are actionable per se, such as trespass to the person in the form of battery, assault or false imprisonment, trespass to land, and also in defamation where harm to the plaintiff’s reputation from a defamatory statement is presumed,[16] an award of general compensatory damages may vindicate a plaintiff’s interest.[17]

12.22 While vindication will have a role in compensating people for a serious invasion of privacy, by the acknowledgment that a serious wrong has been a committed, the assessment may be more analogous to other torts protecting privacy—such as trespass to land.

12.23 In Plenty v Dillon, Gaudron and McHugh JJ of the High Court of Australia characterised an award of general damages, for what they described as a ‘serious’ trespass to land, as fulfilling vindicatory purposes:

True it is that the entry itself caused no damage to the appellant’s land. But the purpose of an action for trespass to land is not merely to compensate the plaintiff for damage to the land. That action also serves the purpose of vindicating the plaintiff’s right to the exclusive use and occupation of his or her land. The appellant is entitled to have his right of property vindicated by a substantial award of damages … If the occupier of property has a right not to be unlawfully invaded, then … the ‘right must be supported by an effective sanction otherwise the term will be just meaningless rhetoric’.[18]

12.24 Vindication may be one of multiple aims of compensatory damages in a specific case. However, each aim does not need to be separately compensated.[19] An award of general damages can have several purposes or effects. As the High Court recognised in relation to damages for defamation in Carson v John Fairfax & Sons Limited & Slee, ‘the amount of a verdict is the product of a mixture of inextricable considerations’.[20]

12.25 A related and unresolved issue is whether a plaintiff may claim harm to reputation in a claim for invasion of privacy. To decide this matter would require a detailed analysis of the new and developing privacy rights and their interaction with defamation. Refusing to strike out such a claim, Mann J in the High Court of England and Wales described this point as ‘a serious one, capable of going to the heart of the cause of action in confidence and the newly developing wrong relating to the invasion of privacy’.[21] He acknowledged that a disclosure might well cause embarrassment and harm to reputation, but the latter would not be actionable where the information was true. He went on:

It is not clear to me why, as a matter of principle, damage to reputation of this sort should not be within the sort of thing that privacy rights should protect against.[22]

12.26 If this issue arises under the new tort, it will be a matter for the courts to decide.

Damages for emotional or mental distress

12.27 The ALRC recommends that an award of damages under the new tort may, where appropriate, include general damages for emotional distress. This accords with the purpose of a privacy action:

to promote and protect the physical, psychological and social development of individuals, and their autonomy to decide how they wish to be presented to the world.[23]

12.28 Damages for intangible losses—such as injury to feelings—may provide compensation and solace to a plaintiff.[24] The availability of damages for emotional distress is consistent with the recommendation that only serious invasions of privacy would be actionable and that, in determining seriousness, the court may consider whether the invasion was likely to be highly offensive, distressing or harmful to a person of ordinary sensibilities in the position of the plaintiff.

12.29 It is highly probable that serious invasions of privacy will commonly cause emotional distress or harm to a plaintiff’s dignitary interests.[25] As the High Court of England and Wales recognised in Mosley, ‘it is reasonable to suppose that damages for such an infringement may include distress, hurt feelings and loss of dignity’.[26]

12.30 This recommendation is consistent with the availability of damages for emotional distress in limited areas of tort law. For instance, damages in trespass cases involving assault, battery and false imprisonment commonly include a component for injury to feelings or mental distress caused by the tort, as do cases of malicious prosecution and defamation.[27]

12.31 The ability to award damages for emotional distress under the new tort will partly fill a significant gap in redress available under existing common law for the intentional infliction of emotional distress outside actions such as trespass.[28] As discussed in Chapters 3 and 13, the limitations in the common law are increased by uncertainty about whether compensation for emotional distress is available in equitable actions for breach of confidence.[29]

12.32 Several stakeholders expressed strong support for this recommendation.[30] Redfern Legal Centre argued that

it is essential that courts also be given the power to award damages for an individual’s emotional distress as a result of a serious invasion of privacy. As the ALRC recognises, serious invasions of privacy commonly cause emotional distress or harm to a person’s dignitary interests irrespective of whether there was also an economic loss. For our clients, many of who are socio-economically disadvantaged or marginalised, there may be little economic loss arising from a breach of their privacy as they are unemployed and/or have incapacitating disabilities and rely solely on government benefits for support. Nor may they experience an injury that is either physical or amounting to a psychological disorder. It is the emotional damage or loss to their dignity and the hurt and loss of trust caused by the privacy breach that is their greatest concern and one that in our view often necessitates an award of damages to compensate for this loss.[31]

12.33 Dr Normann Witzleb also supported the recommendation, arguing that

the harm caused by an invasion of privacy will often also be intangible so that any provable loss is likely to be small. An award limited to compensating material loss will therefore often be insufficient to counteract the wrong. Effective redress requires that the plaintiff can also claim compensation for intangible losses, such as injury to feelings.[32]

The likely range of general damages in privacy actions

12.34 The ALRC does not suggest a monetary range for general damages in actions for serious invasion of privacy. Courts will be likely to look at damages awarded in comparable cases for other torts.

12.35 Case law in the UK suggests that the amount of general damages awarded in actions for misuse of personal information for hurt feelings and distress may be ‘modest’.[33] Associate Professor Paul Wragg comments:

What can be achieved by a monetary award in the circumstances is limited. Any award must be proportionate and avoid the appearance of arbitrariness.[34]

12.36 The amount awarded in Mosley (£60,000) represents the highest award in a privacy case in the UK to date. In Weller v Associated Newspapers Ltd, Dingemans J noted the relatively modest awards in privacy cases:

Analysis of the cases … shows that, with the exception of Mosley, very substantial awards have not been made in this area. There was an award of £2,500 (and aggravated damages of £1,000) for the publication of the photographs in Campbell v MGN; an award of £2,500 for the publication of medical information in Archer v Williams; £3,500 for each Claimant for the publication of the photographs in Douglas v Hello! (No 3); and £2,000 for the publication of private information about protected characteristics in Applause Store Productions Limited v Raphael.

In Mosley the award of damages was for £60,000, and in AAA the award of damages was for £15,000 … for publication on three separate occasions.

It should be noted in Spelman v Express Newspapers Tugendhat J recorded that the sums awarded in the early cases for misuse of private information were very low, and that those levels were not the limit of the Court’s powers.[35]

12.37 Australian courts may take some guidance from European human rights jurisprudence as to the appropriate award of non-pecuniary damages. Article 41 of the European Convention on Human Rights allows damages to be awarded to the ‘just satisfaction’ of the injured party.[36] This principle was applied in the case of Peck v UK,where the plaintiff was awarded £7,500 for non-pecuniary loss owing to the ‘distress, anxiety, embarrassment and frustration’ suffered as a consequence of CCTV footage of him attempting to commit suicide being broadcast on national television.[37]

12.38 Wragg suggests that the qualitative difference between the two types of privacy invasions in the new tort—intrusion upon seclusion and misuse of private information—may mean that the damages awarded in different cases are assessed differently.[38]

12.39 In other jurisdictions, courts have developed different approaches to assessing damages. In Jones v Tsige, Sharpe JA assessed damages based on a number of factors in that case, including whether the plaintiff suffered ‘public embarrassment or harm to her health, welfare, social, business or financial position’.[39] He suggested that damages for intrusion should be modest.[40]

Factors relevant to the assessment of damages

Recommendation 12–2 The Act should set out the following non-exhaustive list of factors that a court may consider when determining the amount of damages:

(a) whether the defendant had made an appropriate apology to the plaintiff;

(b) whether the defendant had published a correction;

(c) whether the plaintiff had already recovered compensation, or has agreed to receive compensation in relation to the conduct of the defendant;

(d) whether either party took reasonable steps to settle the dispute without litigation; and

(e) whether the defendant’s unreasonable conduct following the invasion of privacy, including during the proceedings, had subjected the plaintiff to particular or additional embarrassment, harm, distress or humiliation.

12.40 The ALRC recommends that in assessing damages in an action for serious invasion of privacy, a court may consider a number of factors as mitigating or aggravating general damages.

12.41 These factors are designed to encourage parties to resolve a matter before litigation or before litigation proceeds to a hearing. This is a non-exhaustive list. It is intended to guide a court when determining the assessment of damages. It will be for the court to decide whether particular factors are relevant.

12.42 Mitigating factors will have the effect of reducing the harm of a serious invasion of privacy and will therefore reduce the amount of compensatory damages awarded to a plaintiff. Aggravating factors such as whether the plaintiff suffered particular embarrassment or humiliation due to the nature of the defendant’s conduct will increase the award of general damages. The consideration of a defendant’s conduct up to and including conduct at trial is relevant in the assessment of damages in other intentional torts, particularly for false imprisonment[41] and defamation.[42]

12.43 The Uniform Defamation Law contains similar factors for a court to consider in the award of damages. For instance, s 38 of the Defamation Act 2005 (NSW) sets out mitigating factors for a court to consider when assessing damages, including whether the defendant has made an apology to the plaintiff or has published a correction of the defamatory matter.

12.44 In actions for misuse of personal information in the UK, courts have considered the effect of mitigating or aggravating conduct or circumstances in the award of damages. While there was no separate award of aggravated damages in Mosley for instance, aggravating conduct was relevant to the assessment of the award of general damages. Eady J commented:

It must be recognised that it may be appropriate to take into account any aggravating conduct in privacy cases on the part of the defendant which increases the hurt to the claimant’s feelings or ‘rubs salt in the wound’. As Lord Reid said, in the context of defamation, in Cassell v Broome:

‘It has long been recognised that in determining what sum within that bracket should be awarded, a jury, or other tribunal, is entitled to have regard to the conduct of the defendant. He may have behaved in a highhanded, malicious, insulting or oppressive manner in committing the tort or he or his counsel may at the trial have aggravated the injury by what they there said. That would justify going to the top of the bracket and awarding as damages the largest sum that could fairly be regarded as compensation’.[43]

12.45 Several stakeholders supported this list of factors.[44] Telstra underscored their particular support for factors (a) and (d).[45] Detail about some of the factors is provided below.

(a) and (b) whether the defendant issued an apology or correction

12.46 Where a defendant has made an apology or issued a clear correction of false information about an individual, a court may consider these as mitigating factors in an award of damages. These two factors will be particularly relevant to invasions that occur through the publication of an individual’s private information.

12.47 Defamation law includes apologies or corrections as mitigating factors in the assessment of damages.[46] Apologies are not a remedy at common law for intentional torts, instead they are often a factor mitigating an award of damages.[47] The Canadian Privacy Acts also include apologies as a mitigating factor in the assessment of damages.[48]

12.48 Several stakeholders argued that this practice should be encouraged to promote the resolution of matters prior to or during litigation.[49] Guardian News and Media Limited and Guardian Australia argued that ‘the nature of invasions of privacy is that in many instances an apology, freely given, may be sufficient to resolve the matter.[50]

12.49 Research into the role of apologies on the settlement decision-making processes of litigants in America suggests that apologies influence claimants’ perceptions, judgments and decisions in ways that make settlement more likely.[51] Resolving privacy disputes prior to the commencement of costly legal proceedings will, generally speaking, be advantageous to both parties.

12.50 The Insurance Council of Australia argued that an apology or correction should not be included as a factor to mitigate damages as these remedies are inconsistent with the aim of protecting a person’s privacy.[52] The issuing of a public correction or apology for publication of false private information may compound the emotional distress, hurt or embarrassment occasioned by the initial invasion of privacy.

12.51 Some stakeholders argued that the term ‘apology’ should be qualified to ensure they are given in a genuine or sincere fashion.[53] The ALRC considers that a court will necessarily take the relevant circumstances into account when assessing the nature and effectiveness of any apology or correction made prior to the commencement of legal proceedings.

(c) whether the plaintiff has already recovered compensation, or has agreed to receive compensation in relation to the conduct of the defendant

12.52 This factor recognises that it would be unfair for a plaintiff to be compensated more than once in relation to the same invasion of privacy. Where a plaintiff has pursued alternative dispute resolution (ADR) or some other complaints mechanism prior to undertaking legal proceedings under the new privacy tort, a court should consider any compensation or other remedy obtained when assessing damages.

12.53 There are several legal or regulatory avenues that a plaintiff may be able to pursue as an alternative to taking action under the new privacy tort. These may result in the payment of compensation or an award of damages. For example, the Office of the Australian Information Commissioner (OAIC) has the power to make determinations that an APP entity must provide compensation to an individual where it is found that APP entity breached an Australian Privacy Principle.[54] In Chapter 16, the ALRC supports the OAIC’s proposal to broaden the complaints mechanism. In Queensland, the Information Privacy Act empowers the Privacy Commissioner to refer complaints to the Queensland Civil and Administrative Tribunal (QCAT).[55]

12.54 Were a plaintiff to pursue either of these avenues prior to commencing legal proceedings under the new privacy tort, a court should take into account any compensation already awarded, agreed upon, or received, when assessing damages.

12.55 However, the ALRC does not recommend a bar on legal proceedings under the new privacy tort where a plaintiff has already pursued the matter through another mechanism.

(d) whether either party took reasonable steps to settle a dispute

12.56 This factor is intended to encourage the parties, in appropriate circumstances, to attempt to resolve their dispute without litigation, if it would be reasonable to expect them to do so.[56] This factor may be read as a mitigating or an aggravating factor in the assessment of an award of damages, depending on whether a party took ‘reasonable steps’ to settle a dispute prior to legal proceedings.

12.57 In determining the ‘reasonableness’ of either party’s conduct, a court may consider whether either party had made attempts at ADR; whether a complaint had first been made to the Office of the Australian Information Commissioner, the Australian Communications and Media Authority (the ACMA) or another body, and the outcome of any determination.

12.58 Whether a defendant has made an offer of amends—and whether that offer has been accepted—may be considered by a court when assessing whether either party has taken reasonable steps to settle a dispute prior to legal proceedings.

12.59 When determining reasonableness, a court may consider whether the nature of the invasion of privacy—particularly where it is ongoing—as well as the relationship between the parties, is conducive to pre-litigation resolution.

12.60 Given the highly personal nature of some invasions of privacy, there may be many circumstances where pre-trial negotiations are inappropriate. Advocates for persons experiencing domestic violence were concerned by the inclusion of this factor in the list of mitigating and aggravating factors.[57] The Office of the Victorian Privacy Commissioner argued that ADR can sometimes lead to inequitable outcomes for some plaintiffs, particularly in situations where there is a perceived power imbalance between two parties to a proceeding; a lack of trust between the parties; or where the plaintiff may be too emotionally distressed to approach the plaintiff.[58]

12.61 The ALRC agrees that the circumstances of some invasions of privacy will be inappropriate for pre-trial ADR. The ALRC also agrees that failure by a plaintiff to engage with a defendant who shows a willingness to settle a dispute prior to legal proceedings should only be used against a plaintiff in an award of damages, where it would be reasonable to do so in the circumstances.

12.62 The ALRC has not proposed that ADR be compulsory before pursuing an action for serious invasion of privacy, but instead considers that including this factor will encourage parties to engage in ADR where appropriate.

Contributory negligence should not be considered in assessing damages

12.63 The ALRC recommends that contributory negligence not be included as a factor to be considered by a court to reduce an award of damages. Under state apportionment legislation, a court may reduce an award of damages in certain claims to the extent that the plaintiff was at fault,[59] but only where the defence of contributory negligence would have been a complete defence at common law. Contributory negligence is not a defence at common law to intentional torts and the apportionment legislation therefore does not apply to such claims.[60] As discussed in Chapter 11, contributory negligence is not recommended as a defence to the new tort.

12.64 Including contributory negligence as a factor in the assessment of damages would be inconsistent with the fault element of the proposed statutory cause of action which limits liability to intentional or reckless conduct. However, as Eady J pointed out in Mosley,

there is no doctrine of contributory negligence. On the other hand, the extent to which his own conduct has contributed to the nature and scale of the distress might be a relevant factor on causation. Has he, for example, put himself in a predicament by his own choice which contributed to his distress and loss of dignity?[61]

Other factors

12.65 The ALRC has not recommended that the defendant’s state of mind at the time of the invasion of the privacy should be considered. However, it will be a matter for the court whether this should be considered in a particular case. In some circumstances, a high level of malice may be more appropriately considered as grounds for an award of exemplary damages, because exemplary damages focus on the defendant’s motives.[62]

12.66 Several stakeholders proposed additional factors in mitigation or aggravation of damages. The ABC proposed that ‘whether the defendant reasonably believed that the actions comprising the invasion were carried out in the public interest’ should be considered.[63] However, the ALRC considers the public interest balancing test is already a sufficient protection of legitimate and reasonable claims for public interest disclosure of an individual’s private information.

12.67 The Australian Bankers’ Association (ABA) proposed that if the defendant acted ‘honestly and reasonably’, they ‘ought fairly to be excused’.[64] This is similar to a provision in the Australian Consumer Law (ACL) which provides a defence where a person ‘acted honestly and reasonably and, having regard to all the circumstances of the case, ought fairly to be excused, the Court may relieve the person either wholly or partly from liability to any penalty or damages on such terms as the Court thinks fit’.[65] However, the fault element of the new tort makes such relief from liability to pay damages less appropriate than in the case of the ACL which imposes strict liability.

No separate award of aggravated damages

Recommendation 12–3 The Act should provide that the court may not award a separate sum as aggravated damages.

12.68 The ALRC recommends that the Act should not empower a court to make a separate award for aggravated damages.[66]

12.69 At common law, aggravated damages are a form of general damages, ‘given by way of compensation for injury to the plaintiff, which may be intangible, resulting from the circumstances and manner of the wrongdoing’.[67]

12.70 Aggravated damages comprise an additional sum to take account of the special humiliation suffered by the plaintiff due to the nature of the defendant’s conduct in the commission of a wrong.[68] Aggravated damages are awarded where the defendant’s conduct was so outrageous that an increased award is necessary to appropriately compensate injury to a plaintiff’s ‘proper feelings of dignity and pride’.[69]

12.71 Rather than recommending that aggravated damages may be awarded, the ALRC recommends that a court may consider whether a defendant’s unreasonable conduct following the invasion of privacy, or prior to or during legal proceedings, subjected the plaintiff to special or additional embarrassment, harm, distress or humiliation when assessing damages.[70]

12.72 The ALRC considers that listing such conduct as a factor to be considered when assessing damages will provide sufficient opportunity for the court to take into account circumstances where a defendant has caused additional and unreasonable distress or humiliation to a plaintiff prior to commencing legal proceedings.[71] Moreover, the ALRC recommends that exemplary damages may be awarded where a court believes it is appropriate in all the circumstances.

12.73 The ALRC recommends that aggravated damages not be awarded as a separate sum to avoid the risk of overlap between an ordinary award of general damages for injury to the plaintiff’s feelings and an award of aggravated damages.[72]

12.74 There is also a risk of overlap between the award for aggravated damages and that for exemplary damages, considered later in this chapter, which are intended to punish or deter the defendant because of the nature of his or her conduct. As Taylor J said in Uren v John Fairfax & Sons Pty Ltd, ‘in many cases, the same set of circumstances might well justify either an award of exemplary or aggravated damages’.[73] Both risks are avoided if aggravated damages cannot be awarded.

12.75 The ALRC’s approach is consistent with that of the New South Wales Law Reform Commission (NSWLRC) on this issue. The NSWLRC explained that aggravating circumstances would already form some part of an assessment for general damages, stating:

To the extent to which the conduct of the defendant has increased the damage to the plaintiff, the plaintiff’s loss is simply the greater—a fact that will, obviously, be reflected in the size of the award.[74]

Exemplary damages

Recommendation 12–4 The Act should provide that a court may award exemplary damages in exceptional circumstances.

12.76 The ALRC recommends that a court be given the discretion to award exemplary damages in exceptional circumstances, where a defendant’s conduct was outrageous and in contumelious disregard of a plaintiff’s rights.[75] An award for exemplary damages is considered separately from other heads of damages.[76] Exemplary damages are intended to punish a defendant and deter similar conduct in the future.

12.77 The ALRC considers that the award of exemplary damages should only be made in exceptional circumstances or, for example, where the court considers that the other damages or remedy awarded would not provide a sufficient deterrent against similar conduct in the future. The deterrent function of exemplary damages is arguably more valuable than the punitive function. The aim of awarding exemplary damages to deter similar conduct by others in the future has been recognised by Australian courts.[77]

12.78 When assessing whether the exceptional circumstances of the case call for an award of exemplary damages, the court will also consider whether the other damages already awarded against the defendant are sufficient to fulfil the retributive, punitive or deterrent purposes of exemplary damages.[78]

12.79 The ALRC considers that a court should be able to award exemplary damages under the new privacy tort, given that it is confined to invasions of privacy that are both serious and intentional or reckless.[79] The ALRC intends that any award of exemplary damages should be included in the cap on damages for non-economic loss, as outlined in Recommendation 12–5 later in this chapter.

12.80 Exemplary damages are available in Australia at common law for a wide range of intentional torts.[80] They are not available in defamation claims.[81] They are also not available for breach of equitable obligations such as breach of confidence,[82] or in actions for breach of a contractual duty of confidence,[83] and are limited in personal injury actions.[84]

12.81 Exemplary damages are available in privacy actions in other jurisdictions. In the UK, the Leveson Inquiry recommended that courts be able to award exemplary or punitive damages for actions in breach of confidence, defamation and the tort of misuse of personal information.[85]

12.82 Similarly, the Joint Committee of the House of Lords and House of Commons on Privacy and Injunctions recommended in 2012 that courts be empowered to award exemplary damages in privacy cases, arguing that compensatory damages were too low to act as an effective deterrent.[86] This recommendation led to the enactment of the Crime and Courts Act 2013 (UK), which provides for the award of exemplary damages against a defendant who is a news organisation in misuse of information cases.[87] Under this provision, a court may only award exemplary damages where the defendant’s conduct has shown a deliberate or reckless disregard of an outrageous nature for the claimant’s rights;[88] or the conduct is such that the court should punish the defendant for it;[89] and other remedies would not be adequate to punish that conduct.[90] Canadian privacy statutes also provide that courts may award punitive damages.[91]

12.83 PIAC supported the recommendation to allow the award of exemplary damages, arguing that

there are a number of circumstances where an invasion of privacy may be of such a malicious or high-handed manner that it warrants an award of exemplary damages. PIAC also supports the award of exemplary damages where other damages awarded would be an insufficient deterrent.[92]

12.84 Posting on the internet of so-called ‘revenge pornography’—intimate photographs or video of an ex-partner or ex-spouse without their consent—may be an example of an outrageous invasion of privacy that may justify an award of exemplary damages.

12.85 An award of exemplary damages may also be appropriate where a gain-based remedy is unavailable, such as in circumstances where a defendant had attempted to procure some financial gain from the intentional invasion of privacy but did not in fact make a profit.[93]

12.86 Women’s legal services generally welcomed the availability of an award of exemplary damages,[94] with Women’s Legal Services NSW arguing that

using exemplary damages in the context of violence against women would send a powerful message that violence against women is unacceptable in our society.[95]

12.87 There is some concern that exemplary damages provide a windfall to plaintiffs.[96] Courts, however, are conscious of this concern and the High Court has ruled that awards of exemplary damages should be moderate.[97]

12.88 Several stakeholders opposed the availability of an award of exemplary damages.[98] The OAIC submitted that remedies for a privacy action should be directed at compensating a plaintiff, while exemplary damages are targeted at punishing a defendant.[99]

12.89 There is some concern that if exemplary damages were available, this may stifle important and legitimate activities like investigative journalism, and as such may restrict freedom of expression.[100] Guardian News argued that the legal costs associated with defending analogous civil actions, such as defamation suits, act as a sufficient deterrent for media organisations to avoid publishing defamatory matter.[101] They argue that this principle would apply to actions brought under the new privacy tort.

12.90 While the ALRC acknowledges the concern that potential defendants would have about the availability of exemplary damages, it considers that the courts should be able to award them in exceptional circumstances.

Cap on damages

Recommendation 12–5 The Act should provide for a cap on damages. The cap should apply to the sum of both damages for non-economic loss and any exemplary damages. This cap should not exceed the cap on damages for non-economic loss in defamation.

12.91 The ALRC recommends a cap on damages for all damages other than for economic loss. Any award for exemplary damages should be included in the amount of damages subject to this cap. The total amount of general damages for non-economic loss and exemplary damages awarded should be capped at the same amount as the cap on damages for non-economic loss in defamation awards.[102]

12.92 This recommendation provides equal protection to privacy and reputational interests and may avoid the risk of plaintiffs cherry-picking between causes of action based on the availability of higher awards of damages.[103]

12.93 Several stakeholders agreed with this recommendation.[104] PIAC opposed the imposition of a cap on damages for non-economic loss, fearing that ‘if the ceiling is set too low, it will be inadequate to redress unlawful conduct’. However, if a cap were to be introduced, they supported an alignment with defamation law.[105] Similarly, Barker argued that, while he was unconvinced by the need for a cap on damages, any cap should be set at the same level as defamation:

since such caps now apply in personal injury and defamation claims in Australia, it would be anomalous and unfair from a distributive point of view if similar caps did not apply. A cap similar to that applied in defamation cases for non-economic loss would seem appropriate.[106]

12.94 Associate Professor David Rolph has argued that a cap on damages for a statutory cause of action should not be lower than that for defamation.[107] He argued that a lower cap on damages for non-economic loss in privacy actions would be ‘undesirable, failing to reflect the relative importance Australia should now prescribe to privacy’.[108]

12.95 The ABC supported a cap on damages for non-economic loss, arguing however that the cap should be lower than that in defamation law.[109] The ALRC considers that, while the cap on damages for non-economic loss in defamation is arguably too high, it is nevertheless desirable that the caps be the same for both actions.

12.96 The Redfern Legal Centre supported the proposal, arguing that other statutory privacy schemes provide ‘inadequate compensation’.[110] For instance, under the Health Records and Information Privacy Act 2002 (NSW), the NSW Civil and Administrative Tribunal (NCAT) can award a maximum of $40,000 where the respondent is a body corporate and $10,000 where the case involves any other party.[111] According to Redfern Legal Centre, the maximum amount ‘is rarely (if ever) awarded, meaning that a victim is insufficiently compensated for serious breaches of their privacy under this regime’.[112]

12.97 Some stakeholders argued against capping damages.[113] The OAIC submitted that setting a cap ‘may have the effect of focusing attention on that upper limit and implying that serious privacy invasions should result in a payout of that magnitude’.[114]

12.98 The Office of the Victorian Privacy Commissioner argued that not imposing a cap on damages would ‘reflect the growing importance placed on privacy rights in Australia’.[115]

12.99 The ALRC is of the view that an appropriate cap will not undervalue privacy interests, in the same way that a cap on damages for non-economic loss in defamation has not eroded the protection of reputational interests in Australia.

12.100 Moreover, the ALRC does not consider that a cap—combined with the threshold requirement that actions be sufficiently ‘serious’—poses a risk that courts will automatically award the upper limit in every case. Courts are equipped to assess appropriate awards of damages based on the context in which each case arises. For example, in Jones v Tsige, Sharpe JA stated that

in determining damages, there are a number of factors to consider. Favouring a higher award is the fact that Tsige’s actions were deliberate and repeated and arose from a complex web of domestic arrangements likely to provoke strong feelings and animosity. Jones was understandably very upset by the intrusion into her private financial affairs. On the other hand, Jones suffered no public embarrassment or harm to her health, welfare, social, business or financial position and Tsige has apologized for her conduct and made genuine attempts to make amends. On balance, I would place this case at the mid-point of the range I have identified and award damages in the amount of $10,000. Tsige’s intrusion upon Jones’ seclusion, this case does not, in my view, exhibit any exceptional quality calling for an award of aggravated or punitive damages.[116]

12.101 While the ALRC recommends that a cap be included, it has not recommended a threshold for damages. It will be for the court to decide the appropriate awards in an individual case, taking into account awards for analogous torts.