The first assumption of the deterrence effect is that the prospect of having to pay damages will have an effect on the behavior of similarly situated parties in the future. Further, the amount should be in proportion to the blameworthiness of the defendant’s actions; therefore, the more reprehensible the actions, the potentially larger the award. Gordon Pate was Chief Building Official for Galway-Cavendish Township until it amalgamated with Harvey Township, when he became a building inspector for the amalgamated Townships. The general rule is that punitive damages cannot be awarded for breach of contract, but if an independent tort is committed in a contractual setting, punitive damages can be awarded for the tort. This, of course, is the core reason for punitive damages, and the justification for punitive damages is very much this social science (economics) argument. The amount of punitive damages is left to the jury's discretion. The husband, wife and their daughter escaped in their pajamas, but lost all the contents of their home and their three cats. The authors begin by identifying the conduct being punished as the one of Captain Hazelwood, whose behavior was reckless. Pilot’s case was discredited during the trial. In this case, the authors of the brief consider that the existent circumstances do not allow the jury to impose a $2.5 billion award to the defendant. A one-to-one maximum potential ratio to compensatory damages, in these rare cases where punitive damages are awarded, is likely to systematically under-deter potential tortfeasors as it serves to reduce the expected cost of tortfeasor behavior. As the Court acknowledges, "some will murmur that this smacks too much of policy and too little of principle."(P. In relevant parts, the Court held that punitive damages in maritime cases should be limited to a one-to-one ratio relative to the compensatory damages awarded (reducing the award to $507.5 million). of Justice, Bureau of Justice Statistics, T. Cohen, Punitive Damage Awards in Large Counties, 2001, p. 8 (Mar. Coming back to the case at hand, the plaintiffs were awarded a decree of damages amounting to Rs. That is to say, if they serve to prevent a company from profiting from their illicit conduct, the goal of deterrence is satisfied, making any higher amount unreasonable. Adam Liptak describes the debate over the implications of footnote 17 here: From One Footnote, a Debate Over the Tangles of Law, Science and Money, The New York Times, Nov. 25, 2008. The decision to award punitive damages was considered rational in this case, given the evidence that the claimants were exploited and unfairly opposed in settling their claim after having purchased a fire insurance policy in good faith. The Court of Appeals, while upholding the jury's finding of retaliatory discharge, vacated the award of compensatory and punitive damages holding that under T.C.A. 2005) (compiling data from the Nation's 75 most populous counties). In Alabama, punitive damages represented between 80 and 86 percent of all damages … Indeed, of the six medical trials 501). The relevant legal question for our analysis of the effect of punitive damages and the Exxon v. Baker case is whether the $2.5 billion punitive damage award from the appellate court is an acceptable award where the compensatory damages totaled $507.5 million. The punitive damages award was upheld on a post-trial motion with the judge considering the three guideposts for evaluating the size of a punitive damages award set forth by the U.S. Supreme … It is important to note that Professor Eisenberg, the lead author of this study, believes "the Court went seriously astray" when using his research to support a reduced punitive damages award. 13% of cases where punitive damages were awarded had damages of $1 million or more, and the median punitive damage amount was $64,000. However, many people feel this proportion is insufficient to deter some subjects, especially wealthy firms, from committing harmful acts, and therefore they feel that higher punitive damages should be awarded to them. 1143 (1988). However, we think that punitive damages should indeed be awarded to ensure that the company as a whole gets the punishment it deserves for having engaged in reprehensible conduct, in this particular case having given the command of the vessel to an alcoholic. The young woman was a competitive athlete prior to the accident, but the physical (including a head and brain injury, soft tissue damage and multiple orthopaedic injuries) as well as psychological injuries resulting from the car accident had a devastating impact on her physical capabilities and mental health. It is widely understood that punitive damages have two primary goals: deterrence and punishment. However, calculating this expected cost requires knowing the probability of being caught, the cost of being caught (punitive + compensatory + reputational costs), and the cost of taking additional precautions. In Roman law, multi-ple damages were always awarded for … Should Life Jackets be mandatory for Ontario Boaters. ), but this likely speaks more to a limitation of tort law as a mechanism to address social and psychological harm rather than any disregard for social science in determining punitive awards. We are among the murmurers. The authors argue that punitive damages ordinarily should be awarded if, and only if, an injurer has a significant chance of escaping liability for the harm he caused. Our analysis focuses on what the Court did, and did not, include in their justification for reducing the punitive damages. Mr. Punitive damages, also known as “exemplary damages,” are a monetary amount awarded to a plaintiff in a civil lawsuit for the purpose of punishing the defendant, or to deter him from engaging in the same conduct in the future. The Supreme Court found that the Jury’s response to the facts presented in the initial trial was rational in their conclusion that Pilot should not get away with paying only the amount of the claim that was originally due (plus costs), after having dragged out the claim for so long. Pate was acquitted of all charges, after having endured much negative local media attention. Had Exxon properly performed its duties, the spill would have been avoided. Schedule a free consultation today. They were awarded an additional £100,000 in punitive damages. In Ontario, the Courts have awarded punitive damages in several cases, including: Wal-Mart was ordered to pay punitive damages because of a manager’s bullying and harassment. Exxon must be held accountable for that behavior and punitive damages are an appropriate means of ensuring that liability. If they are intended to punish the firm as an entity (with independence of the conduct of blameworthy individuals within the firm), they fully accomplish their objective. The Jury also concluded that the insurer knew all along that arson was not the cause of the fire and were counting on the fact that the devastated family would be unable to challenge the wrongful dismissal of their claim. Ins. It is interesting to note that both the petitioner and the respondent in this case agree that the paying of damages is necessary to (and does) deter negative behavior. Vol. Although punitive damages are generally only awarded in cases of unusually offensive conduct, the courts may decide on punitive damages if they are deemed necessary to ‘send a message’ to the ‘at fault’ person. Footnote 15: in this footnote, the Supreme Court cites studies that support its claim that available data do not substantiate a marked increase in the percentage of cases with punitive awards over the past several decades: It is unclear to us how a low percentage of cases including a punitive damages award suggests that in all cases it is unnecessary to have a high-ratio of punitive to compensatory damages to deter potential tortfeasors. While we do not dispute the legitimacy of the social science methodology in reaching these numbers, we again question how the Court can reasonably conclude from this that high-ratio punitive damages cases are in all cases excessive and unnecessary to deter potential tortfeasors. Punitive damages are award in addition to any compensatory or other damages, increasing the plaintiff’s total award. Such modeling assumes that the probability of being caught, the cost of taking additional precautions, and the cost of wrongdoing can be known in advance. In this respect, punitive damages differ from the usual damages that are awarded to an injured person to compensate them for losses arising from their injury. 1.85 crores spread out amongst 7 Defendant parties. This case presents questions on how the Supreme Court used and did not use social science evidence in reaching their opinion and raises questions on the effect of ratio-limited punitive damages on potential tortfeasors. Auto. In State Farm Mut. Mr. Whiten suffered severe frostbite on his feet, for which he was hospitalized. Compensatory damages commonly awarded in civil cases and negligence suits include compensation for financial losses (pecuniary losses) such as loss of income and rehabilitation expenses and compensation for a reduction in the quality of life and pain and suffering (non-pecuniary losses). The authors analyzed data describing verdicts reached in Alabama's trial courts of general jurisdiction from 1992 to 1997. OPP were reluctant to lay charges but were allegedly pressured to do so by the Township. Pate was pressured to resign to avoid criminal charges, but he was never provided details on the alleged discrepancies. This $1 Million punitive damage award restored the amount initially awarded by the Provincial Court in a trial by jury, but which the Ontario Court of Appeal reduced to $100,000. The $20,000 in punitive damages were payable solely by the Griggs, and $250,000 in general damages were to be shared by the co-defendants. Unlike the conventional compensation in personal injury claims, these are a distinct type of damages applicable only to a few specific circumstances. If this condition is met, punitive damages are needed as a deterrent tool to ensure the injurer will be held accountable and the same harm will not happen again. For example, lawsuits against medical care providers for malpractice have punitive damage caps in some states. In fact, this is the first case where punitive damages have been awarded in Shanghai. [2] These awards are non-compensatory by nature and represent an exception to the general common law rule that damages are awarded to compensate the injured as opposed to punish the wrongdoer. It was held that denial of the claim was deliberate with the intention to force the family to take an unfair and undervalued settlement. The Court’s opinion is concerned with the disparity in punitive damage awards relative to compensatory damages awarded and argues that "fairness and consistency" require a predictable ratio of punitive damages to compensatory damages. Footnote 17: in this footnote, the Supreme Court cites: All of the research cited in footnote 17 was funded, at least in part, by Exxon. The Court argues, in part D of the majority opinion, that because a survey of punitive damage awards shows a trend of restraint relative to the compensatory damages awarded, therefore high ratio punitive damages are more than what is required to deter wrongdoers. In a Dec 2009 trial, Mr. In this brief the authors also refer to the deterrent effect of compensatory damages as a reason not to award punitive damages. On Punitive Damages Research Cited in the Court's Opinion. In the landmark Supreme Court decision, Justice Souter, speaking for a five justice majority, held that a one-to-one ratio for punitive damages to compensatory damages is a reasonable upper limit in maritime cases to comport with due process and limit the uncertainty of allegedly variable and unpredictable punitive damage awards. It should be recognized that, while punitive damages are only awarded in a small percentage of jury trials where punitive damages were both sought and a plaintiff's ver-dict rendered, the highest median punitive damages award for all negligent tort cases in 2005—$2.8 million—was in medical malpractice cases. Therefore the misconduct of the company cannot be placed on a low degree in the scale of reprehensibility, despite the brief authors' claim that "it was not morally repugnant". The main argument in this brief concerning punitive damages is that they are necessary to act as an effective deterrent to future oil spills. Mr. Grigg had been drinking at the campus pub, but this was apparently the third bar he had attended that evening. damages were awarded because he could only sell as many cars as he could get. Brief of Product Liability Advisory Council, Inc., as Amicus Curiae in support of Petitioners: The main idea of this brief, presented by a manufacturers association, is that the $2.5 billion punitive damages award against Exxon is excessive and unnecessary because it was imposed in violation of the common-law principles limiting punitive awards to a sum reasonably necessary to serve the legitimate purposes of punishment and deterrence. They argue that compensatory damages only fail to deter when there is an evident fear or danger that the defendant will not be held accountable for its conduct. When are punitive damages awarded? Upon re-trial, the judge found significant misconduct on behalf of the defending municipality, which persisted over a ten year period. Punitive damages are entirely unavailable under any circumstances in a few jurisdictions, including Louisiana, Nebraska, Puerto Rico, and Washington. The amount of punitive damages awarded for an injury—whenever they’re awarded at all—is based on the total compensatory damages involved in the case, with a limit of up to four times the amount in most scenarios. (General damages of $300,000 and aggravated damages of $500,000 were also awarded to Mr. Hill)  A Crown Attorney, Mr. Hill sued the Church of Scientology after a church representative announced at a press conference in front of a Toronto courthouse, that Mr. Hill had misled a judge and breached a court order sealing church documents. Id. The judge rejected the malicious prosecution claim but awarded Mr. For the year recorded, punitive damages were awarded in just 5% of the trials where plaintiffs prevailed. When it is an individual, that relationship is straightforward; if after assessing the individual’s conduct, appropriate punitive damages are imposed, the objective is achieved. Nonetheless, to the extent that they are mostly aimed at penalizing culpable individuals within firms (penalizing the firm is just the way to penalize the individuals), their effectiveness is significantly attenuated, and they can even penalize those whose conduct is not blameworthy, especially shareholders. The Court reduced the punitive damage award from $2.5 billion to $507.5 million (the same amount the plaintiffs were awarded in compensatory damages) because a "one-to-one ratio to compensatory damages is a fair upper limit of punitive damage awards for such maritime cases". He refused to resign and was subsequently terminated, and some information was turned over to the Ontario Provincial Police (OPP). A breathalyser test revealed a blood alcohol concentration (BAC) three times the legal limit. Punitive damages were awarded in 700 (5%) of the 14,359 trials where plaintiffs prevailed. These allegations were determined to be unsubstantiated and untrue. The amount of punitive damages was based on the similarity of this case to McNeil v. Brewers Retail Inc. where punitive damages of $500,000 were awarded. The brief goes on to argue that, by awarding compensatory damages alone, the court would be under-assessing the total costs of harm, and therefore not adequately deterring future wrongdoers. When the actions of a liable person are significantly and unusually deplorable so as to warrant punitive damages, it remains the responsibility of judge or jury to decide the appropriate amount of damages. his place and the plaintiff was prevented from acting as manager. In a highly publicized lawsuit over Monsanto's globally used Roundup weedkiller, a jury initially awarded Dewayne Johnson $39.25 million in compensatory damages and $289 million in punitive damages. Further, the Supreme Court also cited another study which concluded that "the median punitive damage award in civil jury trials decreased between 1992 and 2001" Dept. The connection between the imposition of punitive damages awards and the accomplishment of the punishment objective varies depending on the nature of the defendant. The Court of Appeal upheld this award. Regarding retribution, the authors of the brief do not believe punitive damages can be justified as a way to punish the company. The brief also argues that punitive damages will alleviate the social and psychological harm of those injured by the oil spill and placed in uncertainty regarding whether they would be compensated. (P. 499). Punitive damages are awarded in a small number of cases, but if they are awarded, they relate to personal injury cases. Pate did not obtain municipal employment after the trial and passed away in 2011. Am., Inc. v. Gore, 517 U.S. 559 (1996) (holding that a punitive damage award ratio to compensatory damages of 500 to 1 is grossly excessive and violative of due process), Theodore Eisenberg, Michael Heise, and Martin T. Wells (2010) Variability in Punitive Damages: Empirically Assessing, Multimedia Interview with Professor Theodore Eisenberg on Punitive Damages in the, On Exxon's Funding of Studies Critical of Punitive Damages in, From One Footnote, a Debate Over the Tangles of Law, Science and Money, Brief of Product Liability Advisory Council, Inc., as, "On the Effects of Punitive Damages Generally", Brief of the American Petroleum Institute, the American Chemistry Council, the American Tort Reform Association, the National Association of Manufacturers and the Western States Petroleum Association as. Juries, Judges, and Punitive Damages 269. As we can see, when establishing a punitive to compensatory awards ratio, the Court appears to selectively rely on social science evidence that accords with their beliefs. 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As we said before, this argument cannot be supported by us because punitive damages have a punitive or retributive effect that is absent in compensatory damages, which do not take into account profit and the less than perfect chance that potential actors will be caught. A. Mitchell Polinsky and Steven Shavell,  Punitive Damages: An Economic Analysis (111 Harvard L. Rev. The $20,000 in punitive damages were payable solely by the Griggs, and $250,000 in general damages were to be shared by the co-defendants. And, according to the data, the median award in EPL cases (punitive and compensatory) is several times higher than the quantum of median awards of other civil cases. The Court concluded “the insurer’s conduct towards the [Whitens] was exceptionally reprehensible.” The family was forced to accumulate $320,000 in legal costs they did not have. The punitive damages come on top of more than $5 million already awarded to the couple by the same jury. The Court neglects to evidence demonstrable proof that certain ratios of punitive damages are effective deterrents and argues, somewhat perversely, that the prospective wrongdoer should know how much exposure to liability the actor will face if the actor chooses to violate the law. (P. 501). The Supreme Court found no good reason to challenge the original Jury decision that something more was needed (in the form of a substantial punitive award) to show the insurance company that dealing in bad faith with the loss claim was not a profitable or wise course of action. In January 1994, the Whiten family home in Haliburton County, Ontario, burned down during the night in minus 18 Celsius temperatures. at 954. Thus, the key question is what amount of money injurers should be made to pay in order to achieve appropriate deterrence. Co. v. Campbell, 538 U.S. 408 (2003), the Court struck down a punitive damages award of $145 million where the compensatory damage award was only $1 million. Therefore, the Supreme Court, when it acknowledges that discretion to award punitive damages has not mass-produced runaway awards, is essentially acknowledging that the violation of due process they set out to correct by limiting punitive damages to a one-to-one ratio in practice rarely occurs. In addition to the social science research on punitive damages addressed in the opinion's footnotes, several amicus briefs address punitive damages research and merit closer analysis. Georgia Punitive Damages Law The place to begin when researching punitive damages in Georgia personal injury and wrongful death cases is the plain language of the pertinent statute, O.C.G.A. The jury originally awarded $1.5 million in punitive damages against the hospital, but at a later retrial on punitive damages, the jury awarded a slightly reduced sum of $1.45 million. 3.The success rate of punitive damages claims was much higher in ‘Category 2’ cases (54.7 per cent) than in ‘Category 1’ cases (18.3 per cent). 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