Thread: Punitive damages

Until 19th century, punitive damages frequently operated to compensate for intangible injuries like pain and suffering or emotional distress. Punitive damages have deep roots in American and English common law, but their nature has changed here over time.
These days, driven by the structure of the American civil justice system, entrepreneurial plaintiffs’ lawyers and the populism they embrace, punitive damages are used to send messages to large corporations, to fill gaps in regulation and to reward successful plaintiffs with multiples of what they have lost.
Punitive damages are so embedded in the American legal system that the rationale for them is rarely explored. One of the best explanations came from a German Supreme Court decision, which said the concept had four main purposes:

· To punish the offender for uncivilized conduct
· To deter the offender and others
· To reward the plaintiff for enforcing the law
· To supplement inadequate compensatory damages
Distinctive features of the American legal system — civil juries, class actions, contingency fees and the requirement that each side bear its own lawyers’ fees — all play a role in amplifying punitive damages.
American courts and legislatures are experimenting with ways to limit punitive damages, often in response to lobbying and litigation from business groups that say huge punitive awards are arbitrary, unfair and hurt the American economy.
Five states — Louisiana, Massachusetts, Nebraska, New Hampshire and Washington — ban or severely limit punitive damages. Others restrict the amounts awarded. Some states, responding to the criticism that the awards are a windfall for the plaintiffs, require that a part be turned over to the states.
The United States Supreme Court has in the last decade or so started to impose its own limits. It ruled that a $2 million punitive award in an Alabama consumer fraud case involving a $4,000 compensatory award was excessive, given that the harm was merely economic, far exceeded the maximum punishment the state could have imposed and was disproportionate to the compensatory award.
At the same time, courts in a few countries around the world are expanding the availability of punitive damages.

It affords U.S. plaintiffs a level of protection of which they ought not necessarily to be deprived just because the defendant’s assets are here.

“It is simply a different policy choice,” says Dick Weekley, CEO of TLR.

i agree. if punitive damages aren't available in lawsuits big companies get off too easy. what's $4,000 to them? if our legal system were strong enough to make someone think twice about doing wrong it would help. just another example of the criminals wielding the real power in court.