Law
Punitive Damages
Punitive damages are monetary awards that may be granted by a court as a form of punishment for the defendant's egregious conduct. Unlike compensatory damages, which aim to compensate the plaintiff for losses, punitive damages are intended to deter the defendant and others from engaging in similar wrongful behavior in the future. These damages are typically awarded in cases involving gross negligence or intentional misconduct.
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12 Key excerpts on "Punitive Damages"
eBook - ePubMeasuring Business Interruption Losses and Other Commercial Damages
An Economic Approach
- Patrick A. Gaughan(Author)
- 2020(Publication Date)
- Wiley(Publisher)
CHAPTER 12 Economics of Punitive DamagesThe topic of Punitive Damages has evoked great debate both in the field of law and within the economics profession. Various groups, especially those representing potential defendants, have claimed that such damages are often inappropriate and “out of control.” Such groups claim that the imposition of Punitive Damages often constitutes a violation of their right to due process. This chapter addresses the economics of Punitive Damages as they relate to corporations. The chapter explores the extent to which Punitive Damages serve the goals set forth in the law, and points out the various areas in which such damages may not serve the purposes of Punitive Damages as set forth by the law. In addition, it reviews some of the approaches plaintiffs use when making presentations to juries on Punitive Damages. This chapter focuses on the problems with some of these types of presentations and explores what can be done to address them.Evolving Position of the U.S. Supreme Court on Punitive Damages
Punitive Damages have a long history in the law. The doctrine of Punitive Damages can be traced back with certainty to English common law, although others have claimed that its roots begin even further back in history.1 Punitive Damages are a penalty that is applied in addition to compensatory damages when the defendant’s conduct is judged to be particularly reprehensible.2 While they have a long history, courts have struggled to reach a consistent position on Punitive Damages; they have yet to arrive at one. However, recent Supreme Court decisions have taken major strides in that direction.Punitive Damages are designed to further the twin goals of punishment and deterrence. In 1991, the U.S. Supreme Court, in Pacific Mutual Life Insurance Co. v. Haslip, articulated these goals when it stated, “Punitive Damages are imposed for purposes of retribution and deterrence.”3 In later decisions, the Court consistently reaffirmed these purposes. For example, in Cooper Industries, Inc. v. Leatherman Tool Group, Inc., the Court stated, “Punitive Damages may properly be imposed to further a State’s legitimate interests in punishing unlawful conduct and deterring its repetition.”4
eBook - ePub- James Goudkamp, Eleni Katsampouka, James Goudkamp, Eleni Katsampouka(Authors)
- 2023(Publication Date)
- Hart Publishing(Publisher)
10 the Federal Court of Justice appreciated that the amount of Punitive Damages awarded by US courts is discretionary and usually many times higher than the actual damage suffered because Punitive Damages aim to fulfil four main purposes. Firstly, Punitive Damages are intended to punish the defendant and to assuage a desire for revenge by the claimant. Secondly, they are also awarded in order to deter the defendant as well as the general public from engaging in the behaviour concerned in the future. Thirdly, the claimant is to be rewarded for enforcing the law and for thereby strengthening the legal system in general. Fourthly, Punitive Damages are to supplement the compensation of the claimant where it is inadequate otherwise, for instance due to the lack of social security. This depiction of Punitive Damages can largely be considered to be fair and accurate.What has however been criticised about the understanding by the Federal Court of Justice is the element and degree of discretion which the US courts are said to have over the amount of Punitive Damages to be awarded. Since the Federal Court of Justice only referred to the ‘free’ discretion of the US court, it has been contended that this neglects the fact that the discretion is limited to some extent by statutes and case law in the US.11 Most notably the US Supreme Court later held in BMW of North America Inc v Gore that ‘grossly excessive’ Punitive Damages ‘transcend the constitutional limit’ of the Due Process Clause of the Fourteenth Amendment.12 Although the discretion over awarding Punitive Damages is indeed (increasingly) limited,13 these limitations still leave considerable leeway to the individual court. In any case, Punitive Damages are awarded above and beyond
- Attila Fenyves, Ernst Karner, Helmut Koziol, Elisabeth Steiner, Attila Fenyves, Ernst Karner, Helmut Koziol, Elisabeth Steiner(Authors)
- 2011(Publication Date)
- De Gruyter(Publisher)
Georgia [GC], 8.4.2004, no. 71503/01, § 202 f. 725 II. Punitive Damages A. Nature and Aims 12/2 Damages are normally concerned to compensate a victim of a wrong and are designed to place the latter, so far as possible, in the position in which they would have been, had no wrong occurred. Notwithstanding other incidental effects, the main aims of punitive or exemplary damages – the terms are synonymous – are to punish the defendant, to deter both him and others from engaging in similar outrageously wrongful conduct and to convey the disapproval of the judge or jury. Punitive Damages are awarded in excess of compensatory damages. 12/3 It is in the nature of non-pecuniary damage that it does not lend itself to precise calculation. Therefore, there is more scope to augment an award when assessing it. This does not necessarily imply that such an award is ‘punitive’. Rather, the practice of increasing non-pecuniary damages to compensate the victim of a wrong for mental distress (or injury to feelings) because of the manner in which the defendant committed the wrong or because of the defendant’s conduct subsequent to the wrong, is what English lawyers term ‘aggravated damages’, ie ‘very full compensation ’. 3 B. Punitive Damages under the ECtHR 1. Convention and Practice Direction 12/4 Although the Convention does not explicitly mention ‘punitive’ or ‘ex-emplary’ damages, whether to exclude them or otherwise, the position with respect to such damages is unambiguous. 4 In accordance with Rule 32 of the Rules of the Court, a Practice Direction on Just Satisfaction Claims was issued on 28 March 2007. Para 9 reads that ‘The purpose of the Court’s award in respect of damage is to compensate the applicant for the actual harmful consequences of a violation. It is not intended to punish the Contracting State responsible.
eBook - PDFReforming the French Law of Obligations
Comparative Reflections on the Avant-projet de réforme du droit des obligations et de la prescription ('the Avant-projet Catala')
- John Cartwright, Stefan Vogenauer, Simon Whittaker, John Cartwright, Stefan Vogenauer, Simon Whittaker(Authors)
- 2009(Publication Date)
- Hart Publishing(Publisher)
8 Punitive Damages also serve to mark a legal system’s dis-approval of a person’s misconduct. 9 In Kuddus v Chief Constable of Leicestershire Constabulary , 10 Lord Nicholls stated that the underlying rationale of Punitive Damages ‘lies in the sense of outrage which a defen-dant’s conduct sometimes evokes, a sense not always assuaged fully by compensatory damages’. 11 He added that on occasion conscious wrongdoing by a defendant is so outrageous, his disregard of the plaintiff ’s rights so contumelious, that something more is needed to show that the law will not tolerate such behaviour. 12 Punitive Damages therefore vindicate the strength of the law. 13 The wrong-doer and others who might be tempted to engage in wrongful behaviour are taught that the law ‘cannot be broken with impunity’ and that ‘tort does not pay’. 14 Punishment, deterrence and vindicating the strength of the law are objec-tives more commonly associated with criminal law. In England, they lie at the margins of the civil law and even then are controversial. Approaching Punitive Damages in French Law 327 7 Rookes v Barnard , above n 5, 1221 (Lord Devlin). 8 A v Bottrill [2003] UKPC 44, [2003] 1 AC 449 [29] (Lord Nicholls). 9 GH Treitel, The Law of Contract (11th edn, London, Sweet & Maxwell, 2003) 935–6. 10 [2001] UKHL 29, [2002] 2 AC 122. 11 Ibid , [65]. 12 Ibid , [63]. 13 Rookes v Barnard , above n 5, 1226. 14 Ibid , 1227. draft article 1371 from this perspective, the most intriguing questions almost certainly relate to the circumstances in which Punitive Damages would be awarded under the Avant-projet . III. THE CIRCUMSTANCES GIVING RISE TO Punitive Damages Article 1371 of the Avant-projet provides that Punitive Damages may be awarded where a person commits ‘a manifestly deliberate fault’. This concept is novel in French civil law and appears to add to the established scale of civil faults.
eBook - ePub- Mark K. Moller(Author)
- 2007(Publication Date)
- Cato Institute(Publisher)
III. The Supreme Court and Punitive Damages: A Play in Six Parts (So Far …)
States vary tremendously in their rules about Punitive Damages. As just stated, a handful have no punitives at all. Quite a few other states allow Punitive Damages for intentional torts and gross negligence, but with a global monetary cap.7 Other states have partial limitations on punitives, some of which may be unconstitutional.8 Finally, many states have no limitation on punitives at all.Yet, in all states Punitive Damages were mostly symbolic until the 1980s. Up to 1976, the highest Punitive Damages award in the entire country was $250,000, a sobering observation in light of recent multibillion-dollar punitive awards.Starting in the late 1980s, though, some punitive awards in amounts, heretofore unheard of, were handed down. Defendants naturally protested that their constitutional rights were abridged by these new, non-compensatory awards. After all, these awards were for amounts that did not correspond to any harm they had wrongfully caused; they could be repeated many times for the same wrongdoing, if different persons sued them; they resulted from the compelled production of “self-incriminating” evidence through discovery; they could be granted if the fact finder believed them warranted “by a preponderance of the evidence,” not “beyond a reasonable doubt”; and there seemed to be no limit on the amount that could be assessed. Imagine a criminal law in which violations are punishable by a fine, the amount of which will be determined by the ruler, at his discretion, with no presumption of innocence and after a forced confession. Such a law might lead us to dump tea in the nearest harbor. Analogously, modern Punitive Damages developments were shocking and seemed contrary to the basic nature of private ordering.No small wonder that constitutional appeals to our nation’s highest court followed. Obviously, every time one of these challenges happened, by definition the complaining party was usually a pretty bad guy—not an “attractive client,” as lawyers say …
eBook - PDFMeasuring Damages in the Law of Obligations
The Search for Harmonised Principles
- Sirko Harder(Author)
- 2010(Publication Date)
- Hart Publishing(Publisher)
14 The Present Law of Exemplary Damages I Terminology In actions for torts and, in some jurisdictions, other civil wrongs, the claimant is sometimes awarded a sum of money exceeding both the claimant’s loss and the defendant’s gain resulting from the wrong. The purpose of such an award has traditionally been described as the punishment of the defendant for committing the wrong, in order to set an example. 1 Various names have been used to re fl ect this purpose, including exemplary, penal, punitive, retributory or vindictive damages. 2 The term ‘ Punitive Damages’ is recommended by the Law Commission for England and Wales 3 and has prevailed in all other common law jurisdictions. However, courts and commentators in England and Wales predominantly still use the term ‘ exemplary damages’, preferred by the House of Lords in the leading cases Rookes v Barnard 4 and Cassell & Co Ltd v Broome . 5 Adopting that parlance, this Part will consistently use the term ‘ exemplary damages’ even when referring to the law in other jurisdictions. Before entering the study, a note on aggravated damages is due. 6 They had not been clearly separated from exemplary damages until Lord Devlin in Rookes v Barnard distinguished between exemplary damages, which aim to punish the defendant, and aggravated damages, which re fl ect the aggravation of the injury to the claimant’s feelings of dignity and pride by the manner in which the defendant 1 Below ch 15, I. For economic accounts of exemplary damages see below ch 15, II. 2 See Whitfeld v De Lauret & Co Ltd (1920) 29 CLR 71 (HCA) 81 (Isaacs J). 3 Law Commission, ‘ Aggravated, Exemplary and Restitutionary Damages’ (Law Com No 247, 1997) [5.39], Appendix A, Draft Damages Bill s 1(2). 4 [1964] AC 1129 (HL). 5 [1972] AC 1027 (HL), where Lord Hailsham LC (at 1073) expressly rejected the adjectives ‘ vindictive’, ‘ aggravated’ and ‘ retributory’ as being inaccurate.
eBook - ePubThe Currency of Justice
Fines and Damages in Consumer Societies
- Pat O'Malley(Author)
- 2009(Publication Date)
- Routledge-Cavendish(Publisher)
First, Devline argued that exemplary damages may be awarded where there has been ‘oppressive, arbitrary or unconstitutional action by the servants of the government’. Second, they can be awarded where ‘the defendant’s conduct has been calculated by him to make a profit for himself which may exceed the compensation payable to the plaintiff’ (Rookes v. Barnard ([1964] AC 1129 (HL) 1226)). However, this attempt at clarification contributed to another point of blurring or convergence. Clearly enough, punitive monetary damages and fines levied against corporations are very little different – except with respect to procedural issues (Mann 1993). This is even more so where conviction in a criminal prosecution under American antitrust laws serves as prima facie evidence of responsibility in an ensuing private action, and conditions relating to damages are provided by criminal law. Thus, under the Clayton Antitrust Act (1914 section 4), ‘any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue … and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney’s fee’. 9 Here, the punitive nature of the money damages is both explicit and mandatory, and its rationale has been elaborated in the courts as being a deterrence against violations of antitrust laws that might otherwise go undetected or unprosecuted because of the limited resources of the Department of Justice (Schleuter and Redden 1995:516). Not only are these damages punitive but also their governmental rationale is to promote privately initiated actions as a form of prosecution facilitating the potential award of massive damages (Elzinga and Breit 1976:66)
eBook - PDF- Brian L. Cutler(Author)
- 2007(Publication Date)
- SAGE Publications, Inc(Publisher)
181 D AMAGE A WARDS Damage awards function as a remedy for wrongdoing in civil lawsuits; they constitute money awarded to an injured party as compensation for injuries or other losses (“compensatory” damages). They can also serve as punishment for the wrongdoer (“punitive” dam-ages). These awards are made mostly by juries and occasionally by judges who previously determined that a wrongdoer was liable for damages. Determining damages—especially for intangible injuries such as pain and suffering—can be difficult, and juries have been criticized for issuing awards that seem extrava-gant and unpredictable. Although some of the criti-cisms are unfounded (e.g., jurors are not especially sympathetic toward plaintiffs), jurors occasionally do experience difficulty in applying jury instructions and following procedures that blindfold them to the conse-quences of their verdicts. Reforms intended to address these issues should be based on empirical analysis, and psychologists are well-positioned to provide the rele-vant data. Various Kinds of Damage Awards Damage awards are of two general types, compen-satory and punitive, and they serve different functions. Compensatory awards are intended to return an injured person or entity (e.g., a business, agency, or corporation) to pre-injury levels of functioning—that is, to restore that party to the position it was in prior to the injury or harm. For example, a person injured in an automobile accident may receive a compensatory damage award to cover any medical costs, lost wages, and pain and suffering related to the injuries sustained in the accident. As another example, a business may receive a compensatory damage award to cover any revenues lost to competitors involved in price-fixing, trademark infringement, or sharing of trade secrets. Compensatory damage awards are themselves of two sorts: economic and noneconomic. Economic damages are intended to cover the financial or eco-nomic costs incurred by the injured party.
eBook - PDFAdministrative Law in a Changing State
Essays in Honour of Mark Aronson
- Linda Pearson, Carol Harlow Harlow KC, Michael Taggart, Linda Pearson, Carol Harlow Harlow KC, Michael Taggart, Linda Pearson, Carol Harlow, Michael Taggart(Authors)
- 2008(Publication Date)
- Hart Publishing(Publisher)
To sum up, Punitive Damages may be available but only in exceptional cases. The conduct sanctioned must be contumelious, deliberate and outrageous, high-handed, insolent and vindictive or a deliberate and outrageous disregard of the plaintiff’s rights. Recklessness or wilful blind-ness closely approaching intentional wrongdoing is also covered. C Causes of Action That wrongful motive by itself is insufficient for tortious liability is a truism. Yet faced with the sort of conduct we have been discussing, courts will strive to find a remedy. The classic case is Roncarelli v Duplessis , 31 where the Quebec Premier, who doubled as Attorney-General, ‘advised’ the Quebec liquor licensing commission to revoke the plaintiff’s licence in perpetuity, with the sole object of preventing him from standing surety for Jehovah’s Witnesses charged with disseminating offensive literature. Rand J held the defendant liable for ‘a gross abuse of legal power’ in terms of 30 Law Commission, Aggravated, Exemplary and Restitutionary Damages , Law Com No 247, 1997 and the previous consultation paper, Law Com No 132, 1993 noted by P Jaffey, ‘The Law Commission Report on Aggravated, Exemplary and Restitutionary Damages’ (1998) 61 Modern Law Review 860. See generally M Tilbury, ‘ Reconstructing Damages’ (2003) Melbourne University Law Review 27. The Report has not so far been implemented. Much attention has been lavished on the distinction between aggravated damages (compen-satory) and exemplary or Punitive Damages. As this distinction is not relevant to my argument, the copious discussion will not be repeated here. 31 (1959) 16 DLR (3d) 689 (‘ Roncarelli ’). A Punitive Role for Tort Law? 253 Article 1053 of the Quebec Civil Code, which bases extra-contractual liability on fault. The judgment of Rand J, which has become the standard test of liability in cases of malicious wrongdoing by public officials, lends itself to two slightly different interpretations.
eBook - PDFContract Damages
Domestic and International Perspectives
- Djakhongir Saidov, Ralph Cunnington, Djakhongir Saidov, Ralph Cunnington(Authors)
- 2008(Publication Date)
- Hart Publishing(Publisher)
In principle, the position of English law is that the choice to award Punitive Damages and the amount of the award is at the discretion of the judge or jury. The plaintiff has no right to Punitive Damages. 73 If this view were accurate, then punitive awards would be a category four order, for which there simply is no law (public or private) that explains the awards. In light of the extensive discussions of the principles governing Punitive Damages in damages textbooks, however, the reality appears to be that punitive awards are only partly discretionary. There is a considerable body of law dealing with both the availability and amount of Punitive Damages. 74 This is therefore remedial law, directed at courts. B Nominal Damages An award of nominal damages appears to be a second clear example of an order that creates a new substantive right. As a general rule, plaintiffs have a right to nominal damages when their ordinary rights have been infringed (eg a breach of contract) but the infringement caused no loss. Unlike the case of Punitive Damages, therefore, the plaintiff’s remedial right to the order is clear. But orders are similar to punitive awards in that the order itself does not appear to compel the defendant to do what he should have 56 Stephen A Smith 71 There do not appear to be any categories of damages awards that are available only for claims based on breach of contract. 72 Notably Canada ( Whiten v Pilot Insurance Co [2002] 1 SCR 595) and the United States ( Freeman & Mills Inc v Belcher Oil Co 900 P2d 669 (1995)). 73 Cassell v Broome & Co Ltd [1972] AC 1027 (HL) 1060; A B v South West Water Services Ltd [1993] QB 507 (CA) 527, 528, 533. 74 See, eg McGregor, above n 2. done already: the plaintiff’s right is to an order that the defendant do something different—pay nominal damages.
eBook - PDF- Katy Barnett, Sirko Harder(Authors)
- 2018(Publication Date)
- Cambridge University Press(Publisher)
However, ss 236 and 237 refer to ‘loss or damage’, making it likely that French J’s conclusion in Musca v Astle Corporation Pty Ltd still holds. Exemplary damages are likely to be unavailable because the purpose of the sections governing the award of damages is solely compensatory. [14:51] Division 1 of Part 5-2 of the ACL allows the regulator to seek pecuniary penalties, which are paid to the state in relation to specified contraventions of the legislation. Pecuniary penalties are like fines, and explicitly punish the contravening party for breach of specified civil penalty provisions. The ACL also allows for other quasi-punitive orders upon the application of the regulator, such as adverse publishing orders pursuant to s 247 and orders disqualifying persons from managing corporations pursuant to s 248. C Normative objections to exemplary damages generally [14:52] Scholars such as Ernest Weinrib have argued that, as a matter of principle, questions of desert should not enter into private law. 165 Punishment is said to be an inappropriate purpose for private law to pursue. 166 Weinrib argues that punishment is incompatible with his concept of normative corrective justice, because it focuses only on the blameworthiness of the defend- ant. 167 It is also said that punishment should not be part of private law because it vindicates not only the relationship between the parties, but also the broader regime of rights. The proper party to enforce the broader regime of rights is the state, via the mechanism of the criminal law. 168 It has also been argued that a retributive rationale requires the extra procedural and evidentiary constraints which are associated with the criminal law protections for the accused. 169 [14:53] Several scholars have attempted to refute these arguments.
eBook - PDF- Katy Barnett, Sirko Harder(Authors)
- 2014(Publication Date)
- Cambridge University Press(Publisher)
C Normative objections to exemplary damages generally Scholars such as Weinrib have argued that, as a matter of principle, questions of desert should not enter into private law. 160 Punishment is said to be an inappropriate or illegitimate purpose for private law to pursue. 161 Weinrib argues that punishment is a 155 [2002] NSWSC 33, (2002) 166 FLR 421 [117]–[128]. 156 A Duggan, ‘Exemplary Damages in Equity: A Law and Economics Perspective’ (2006) 26 OJLS 303, 315. 157 Musca v Astle Corp Pty Ltd (1988) 80 ALR 251, 262; Snyman v Cooper (1989) 24 FCR 433, 458. 158 (1988) 80 ALR 251, 262–69. 159 Competition and Consumer Act 2010 (Cth), ss 87ZB(2)(b) and 87E(1). 160 E Weinrib, The Idea of Private Law (OUP 2012) 74. 161 E Weinrib, ‘Punishment and Disgorgement as Contract Remedies’ (2003) 78 Chi-Kent L Rev 55, 86–87; A Beever, ‘The Structure of Aggravated and Exemplary Damages’ (2003) 23 OJLS 87; S Todd, ‘ A New Zealand Perspective on Exemplary Damages’ (2004) 33 CLWR 255. 324 PART 4 REMEDIES AS VINDICATION one-sided consideration which is incompatible with his concept of normative correc- tive justice, because it focuses on the blameworthiness of the conduct of the defend- ant. 162 It is also said that punishment should not be part of private law because it seeks to vindicate not only the specific relationship between the parties, but also the broader regime of rights. The proper party to enforce the broader regime of rights is the state, via the mechanism of the criminal law. 163 It has also been argued that a retributive rationale requires the extra procedural and evidentiary constraints which are associ- ated with the criminal law protections for the accused. 164 A number of scholars have attempted to refute these arguments. Stevens points out that retribution is used in a narrower sense in this area than in the criminal law, as it focuses on the infringement and vindication of a private right.
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