Torts

Lesson 60: Punitive Damages

Punitive damages, also known as exemplary damages, are damages awarded in a civil suit in addition to compensatory damages. They are intended to punish the defendant for particularly egregious conduct and to serve as a deterrent to others.

Understanding Punitive Damages

Unlike compensatory damages, which are intended to compensate the plaintiff for the harm suffered, punitive damages aim to punish the defendant. They are awarded when the defendant's conduct is found to be especially harmful.

Note: Punitive damages are rare and typically require a demonstration of willful or malicious misconduct.

Conditions for Awarding Punitive Damages

The defendant's actions must be more than just negligent; they often need to be intentional or particularly reckless.
There must be clear and convincing evidence of the harmful conduct.

Calculation of Punitive Damages

There is no set formula for calculating punitive damages, but courts often consider factors such as:

The severity of the defendant's misconduct.
The harm caused to the plaintiff.
The defendant's financial status.

Example Calculation

The jury awarded $500,000 in compensatory damages and decided on punitive damages of $1,000,000 due to the defendant's egregious conduct.

Legal Criteria for Punitive Damages

The legal criteria for awarding punitive damages vary by jurisdiction. However, there are general standards that apply:

Reprehensibility: The more reprehensible the conduct, the more likely punitive damages will be awarded.
Ratio: The ratio of punitive damages to compensatory damages is considered. The U.S. Supreme Court has suggested that single-digit multipliers are more likely to comply with due process.
Comparable Penalties: Courts may compare punitive damages to civil or criminal penalties for similar conduct.

Diagram: Factors Influencing Punitive Damages

graph TB A["Defendant's Misconduct"] --> B["Reprehensibility"] A --> C["Ratio to Compensatory Damages"] A --> D["Comparable Penalties"] B --> E["High"] B --> F["Medium"] B --> G["Low"] E --> H["Likely High Punitive Damages"] F --> I["Moderate Punitive Damages"] G --> J["Low or No Punitive Damages"]

Case Law on Punitive Damages

One of the landmark cases in the context of punitive damages is BMW of North America, Inc. v. Gore. In this case, the U.S. Supreme Court outlined the constitutional limits on punitive damages.