Rarely awarded, punitive damages punish the most egregious behavior and force business executives to put safety first or suffer the consequences.
As in the case of Vioxx, where a Texas jury found Merck guilty of knowingly pushing a deadly drug, jurors award punitive damages only when the behavior was so reckless that corporate executives apparently need an incentive not to commit the same offense twice.
Limits on punitive damages are routine in anti-consumer proposals to rewrite state tort law—whether for product liability, medical malpractice, or any other area of law. Evidence shows that these damages are rarely awarded in tort cases and are proportionate to the injuries in the case. Limits on them are an unnecessary intrusion into a protected area best handled at the state level, where the courts already severely limit verdict amounts if they are excessive.
What are Punitive Damages?
They are damages awarded to punish wrongful behavior by a defendant. Often, damages are awarded in cases where there is evidence that the defendant intentionally caused the injury, such as fraud, a physician who sexually assaults a patient, or a corporation that knowingly polluted a town’s groundwater.
They serve to punish lawbreakers who a jury decides acted unethically, rather than just heedlessly, and to prevent others from acting in a similar manner.
Manufacturers and other people who are afraid of the damages are also likely to act carefully to improve the safety of their products by better design and clear warnings about possible hazards.
Punitive Damages are Rare
The most recent U.S. Department of Justice’s analysis of verdicts in the 75 largest counties found the damages were awarded to only 6% of plaintiff winners in 2001. Thus, 94% of plaintiff winners received no damages. The median punitive award was a mere $50,000.
In cases involving medical malpractice, they were awarded to only 1%-4% of plaintiff winners, with the median award being $250,000.
A 2005 U.S. Department of Justice report said, “punitive damages are reserved solely for tort claims in which the defendant’s policy was grossly negligent or intentional. They tend to be infrequently awarded in tort trials.”
They Are Awarded Appropriately
Professor Theodore Eisenberg of Cornell Law School writes in his study, The Predictability of Punitive Damages: “It is easier to predict when punitive damages will not be awarded than when they will be. Unless the case involves an intentional tort or a business-related tort (such as employment claims), they will almost never be awarded.”
Republished with permission of the Association of Trial Lawyers of America