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How are Punitive Damages Determined?

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  • Written By: Staci A. Terry
  • Edited By: Allegra J. Lingo
  • Last Modified Date: 02 November 2016
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The determination of punitive damages varies significantly from one country to another. In some countries, such as many European nations and Japan, a court typically does not award this type of monetary compensation to the plaintiff. In the United States, different state laws govern the award of punitive damages, and some state statutes place caps or limits on the amount of this type of monetary award available to a plaintiff in a civil tort case. Additionally, the U.S. Supreme Court has limited excessive awards of punitive damages, stating that they violate the due process clause of the U.S. Constitution. There is no universal cap on punitive damages in a given situation, and the amount of punitive damages is largely dependent on the laws of the jurisdiction as well as the facts surrounding the tortious behavior that gave rise to the plaintiff’s injuries.

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Unlike compensatory damages, where the intent is to compensate the plaintiff for his or her losses, courts award punitive damages in order to punish the wrongdoer and punish him or her for the behavior at issue. Another purpose of these monetary fines is to deter the wrongdoer from acting in such a manner in the future, as well as to deter members of the public from such conduct. As a result, in order to qualify for this type of monetary award, a tort must involve an intentional desire to harm the plaintiff, rather than mere negligence, such as would occur within the context of an accident.

In some cases in the United States, a jury is responsible for determining whether to award these damages to a plaintiff, using a framework set out by statute or case law. In other cases, a judge must apply the relevant law to decide the applicability of damages in a given case. Those charged with making decisions as on damages may vary depending on the jurisdiction and on the framework of a nation’s court system.

Many nations and local jurisdictions place limits on awarding damages, unless in instances of particularly egregious tort cases. Punitive damages usually are unavailable in contract cases, except in selected cases where an insurance company has breached a contact in such outrageous bad faith that a monetary damages award is appropriate. Tort reform in many regions has also placed limits on the amount of the monetary award that a plaintiff can recover under a tort claim. Likewise, case law in some states has limited punitive damages awards to tort cases.

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