Keith Mack
Punitive damages, also known as exemplary damages, are legal recompense that a defendant found guilty of committing a wrong or offence is ordered to pay on top of compensatory damages. They are awarded by a court of law not to compensate injured plaintiffs but to punish defendants whose conduct is considered grossly negligent or intentional. Punitive damages were first recognised under English common law in Huckle v Money (KB 1763)95 Eng Rep 768. In the United States, punitive damages were an established part of American common law by the time the Fourteenth Amendment was adopted in 1868.
| Characteristics | Values |
|---|---|
| Purpose | To punish the defendant for outrageous conduct and/or to reform or deter the defendant and others from engaging in similar conduct in the future |
| Nature | Subjective |
| Applicability | Awarded in addition to actual damages in certain circumstances, typically at the court's discretion |
| Applicability | Not awarded for breach of contract claims, except in insurance bad faith cases in the US and in Canada for "malicious, oppressive and high-handed" misconduct |
| Applicability | Awarded in tort law if the defendant's conduct was egregiously insidious |
| Application | Awarded in about 5% of verdicts |
| Caps | Typically do not exceed four times the amount of compensatory damages, although this varies by state |
| Taxation | Treated as Other Income for tax purposes, with some exceptions |
| History | Mentioned in religious law as early as the Book of Exodus, and provided for in Babylonian law nearly 4,000 years ago |
| History | Recognised under English common law in Huckle v Money (1763) |
| History | Accepted early in American tort law, but were the subject of debate and skepticism |
| History | Established part of American common law by 1868, as noted by Justice Scalia of the US Supreme Court |
Explore related products
What You'll Learn
Punitive damages are awarded in addition to actual damages
The origins of punitive damages can be traced back to ancient legal codes, including the Code of Hammurabi, the Hittite Laws, and the Hebrew Covenant Code of Mosaic Law. In the United States, punitive damages were first recognised under English common law in Huckle v Money (KB 1763) 95 Eng Rep 768. The court in this case held that punitive damages served to compensate the plaintiff for harms such as mental suffering and to punish the defendant for egregious misconduct.
While the availability of punitive damages has been a subject of debate, it is now well-settled that they are appropriate in certain circumstances. Courts have the discretion to award punitive damages, typically in about 5% of verdicts. The criteria for awarding punitive damages vary from state to state, and they are generally awarded when the defendant's actions are found to be negligent, malicious, or intentional. Punitive damages are often awarded in addition to compensatory damages, which aim to reimburse the plaintiff for their actual losses, medical treatments, and future expenses.
The amount of punitive damages awarded is also a matter of debate, with some states imposing caps on the amount. For example, Wisconsin law limits punitive damages to two times compensatory damages or $500,000, whichever is greater. In contrast, some states, such as California, have found that punitive damages serve the dual purposes of punishment and deterrence, justifying larger awards for more reprehensible misconduct.
How Americans Can Propose New Laws
You may want to see also
Explore related products
They are not available in some jurisdictions
Punitive damages are not available in some jurisdictions. For instance, in the United States, punitive damages are entirely unavailable in Nebraska, Puerto Rico, and Washington. In Australia, punitive damages are unavailable for breach of contract but are possible for tort cases. In Canada, punitive damages may be awarded in exceptional cases for "malicious, oppressive, and high-handed" misconduct.
The availability and application of punitive damages vary across different states in the US. While some states are more likely to award punitive damages, others have specific criteria that must be met for such damages to be awarded. For example, in Arkansas, the Supreme Court ruled that punitive damages require evidence of the defendant's intentional unlawful action, with knowledge of the likely harm caused.
The New South Wales Court of Appeal in Australia also held that punitive damages are unavailable for breach of contract and breach of fiduciary duty. However, the court refrained from deciding on their availability in cases of equitable wrongs analogous to torts. This variation in the application of punitive damages is not limited to different countries but also exists at the state level within the same country, as evident in the US and Australia.
Historically, punitive damages were recognized under English common law in the case of Huckle v Money (1763). This precedent was further supported by Wilkes v Wood (1763), which demonstrated the dual purpose of punitive damages: compensating the plaintiff for harms like mental suffering and wounded dignity, while also punishing the defendant for egregious misconduct.
While punitive damages were established in American common law by the Fourteenth Amendment in 1868, they were rarely claimed or awarded in the early legal system. Even when claimed, they were often dismissed before trial, and the awarded amounts were minimal compared to modern standards. The evolution of punitive damages in American law has been marked by increasing attention and controversy, with the focus now shifting towards determining the appropriate amount of punitive damages rather than their applicability.
How to Change Your Rental Agreement Terms Legally
You may want to see also
Explore related products
They are typically awarded at the court's discretion
Punitive damages are awarded at the court's discretion, and they are typically awarded when the defendant's behaviour is found to be especially harmful or outrageous. The purpose of punitive damages is to punish the defendant and deter them and others from engaging in similar conduct in the future.
In the United States, punitive damages are an established practice of American common law. They are traditionally assessed against defendants in civil cases to punish past misconduct and deter future misconduct. The largest reported punitive damage award in the 1800s was $4500, which would be equivalent to $72,000 in 1998 dollars. However, even in the 20th century, awards under $100,000 were considered extraordinary and excessive by some.
The criteria for awarding punitive damages differ from state to state, with some states being more likely to award them than others. For example, California courts have found that punitive damages serve the dual purposes of punishing the defendant and deterring similar conduct in the future. Punitive damages are typically awarded in addition to compensatory damages, which are designed to compensate plaintiffs for their actual losses.
Courts are generally reluctant to award punitive damages for breach of contract claims. One exception is when an independent tort is committed in a contractual setting, in which case punitive damages can be awarded for the tort. In Australia, punitive damages are not available for breach of contract but are possible for tort cases.
Brainstorming Laws: Who Should We Ask?
You may want to see also
Explore related products
They are unavailable for breach of contract
Punitive damages are generally unavailable for breach of contract. The purpose of punitive damages is to punish the defendant and deter similar conduct in the future, rather than to compensate the plaintiff. They are awarded in addition to actual damages in certain circumstances, typically when the defendant's behaviour is found to be especially harmful or grossly negligent.
However, in the context of a breach of contract claim, punitive damages are usually not awarded. There is an exception to this rule in insurance bad faith cases in the US, where an insurer's breach of contract is considered to be a tort cause of action eligible for punitive damages. Additionally, in some jurisdictions like Canada, punitive damages may be awarded in exceptional cases of "malicious, oppressive and high-handed" misconduct.
Courts are generally reluctant to award punitive damages, and they are only given in about 5% of verdicts. When determining whether to award punitive damages, courts consider various factors, including the degree of negligence, maliciousness, or intention in the defendant's actions, as well as whether similar cases have awarded punitive damages.
The concept of punitive damages has a long history, dating back to ancient legal codes like the Code of Hammurabi and the Hebrew Covenant Code. In the English common law case of Huckle v Money (1763), punitive damages were first recognized, serving to compensate the plaintiff for harms like mental suffering and to punish the defendant for egregious misconduct. In the United States, punitive damages became an established part of common law by the adoption of the Fourteenth Amendment in 1868.
Practicing Law in Canada: US Degree Recognition
You may want to see also
Explore related products
They are awarded to punish the defendant
Punitive damages are a well-established practice in American common law. They are awarded to the plaintiff in addition to compensatory damages, with the primary purpose of punishing the defendant for their misconduct. Punitive damages are typically awarded at the court's discretion when the defendant's behaviour is deemed particularly harmful or egregious, and they are intended to deter the defendant and others from engaging in similar conduct in the future.
The availability and criteria for punitive damages vary across different states and jurisdictions. For example, punitive damages are entirely unavailable in Nebraska, Puerto Rico, and Washington. In Canada, they may be awarded in exceptional cases of "malicious, oppressive, and high-handed" misconduct.
The award of punitive damages is often considered in tort law, where the defendant has engaged in intentional tort, wanton and willful misconduct, or egregiously insidious conduct. Punitive damages are generally not awarded in the context of a breach of contract claim, with the exception of insurance bad faith cases in the US, where the insurer's breach is considered a breach of the "implied covenant of good faith and fair dealing".
The amount of punitive damages awarded is also a subject of debate, with no standard formula for calculation. While they are typically capped at four times the amount of compensatory damages, some highly publicized multi-million-dollar verdicts have led to concerns about excessive punitive damage awards.
The concept of punitive damages is not new, with punitive-type damages mentioned in religious and ancient law, including the Book of Exodus, the Code of Hammurabi, and the Hebrew Covenant Code of Mosaic Law. In the United States, punitive damages were recognised under common law in Huckle v Money (1763), where the court held that punitive awards compensated the plaintiff for harms such as mental suffering and also punished the defendant for egregious misconduct.
Congress' Power Play: Vetoed Bills and What's Next
You may want to see also
Frequently asked questions
Punitive damages, also known as exemplary damages, are legal recompense that a defendant found guilty of committing a wrong or offense is ordered to pay on top of compensatory damages. They are awarded by a court of law not to compensate injured plaintiffs but to punish defendants whose conduct is considered grossly negligent or intentional.
Punitive damages are an established practice of American common law. They are traditionally assessed against defendants in civil cases to punish past misconduct and to deter future misconduct. In Huckle v Money (KB 1763), punitive damages were first recognized under English common law.
Punitive damages are awarded in addition to actual damages in certain circumstances. Punitive damages are considered punishment and are typically awarded at the court's discretion when the defendant's behavior is found to be especially harmful. Punitive damages are usually allowed only when the defendant has displayed actual intent to cause harm.
![Torts: Cases and Questions [Connected eBook with Study Center] (Aspen Casebook)](https://m.media-amazon.com/images/I/61C6UYhPf-L._AC_UY218_.jpg)
![Tort Law: Responsibilities and Redress [Connected eBook with Study Center] (Aspen Casebook)](https://m.media-amazon.com/images/I/71YmOIIHT+L._AC_UY218_.jpg)
