Appendix P-4

AXA vs Jensen, Birmingham County Court, 10/11/2008

(Lawtel 18/2/2009)

Mrs Jensen sold her caravan but the buyer did not pay for it. So
she claimed it had been stolen while she was on holiday. Her
insurer, Axa, paid her out, and then began to smell a rat.
Enquiries revealed what had happened; she was arrested by
the police and given a caution.

Axa then sued her for return of the indemnity paid (some
8,000) and for exemplary damages, an unknown creature in
our insurance law being designed, not unlike punitive damages,
as a form of deterrent. Mr Recorder Cochrane awarded 4,000
on top of the 8,000, which he ordered her to repay. Why? In
law, exemplary damages are appropriate in three classes of
case. The first is when they are allowed under statute and the
second when given to deter oppressive governmental action.
Neither

of

those

applies

here.

The

third

is where

the

defendants conduct has been calculated to make a profit for

him or herself, which may exceed the compensation payable to

the claimant. That seems to be the class into which Recorder
Cochrane put Mrs Jensens behaviour. But we believe, with
respect, that view is wrong; Mrs Jensens conduct was
calculated to make her exactly the amount of money, which
would be repayable to Axa in compensation the 8,000
indemnity.