Credit: National Oceanic and Atmospheric Administration. One important argument presented in the brief is that compensatory damages and other costs paid by the company already serve to accomplish the goals of deterrence and punishment and therefore punitive damages are not necessary to ensure them. This footnote, noting that the Court does not rely on the study because it was funded by Exxon, has caused significant debate among legal scholars as to the implications on the use of studies and research conducted by or funded by parties to a case. - "RAND Institute for Civil Justice, D. Hensler & E. Moller, Trends in Punitive Damages, table 2 (Mar. 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). reasonable amount of punitive damages was twice the amount of damages awarded by the jury for mental anguish. (2006), the Ontario Court of Appeal reduced the punitive damages that were initially awarded by a jury in a lower court from $100,000 to $20,000. This is because in some instances the insurer's breach of contract is so wrongful that it breaches the implied covenant of good faith and fair dealing, a tort. 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. In Pate Estate v. Galway-Cavendish and Harvey (Townships), 2011, the Ontario Superior Court awarded punitive damages of $550,000 in a re-trial of a wrongful dismissal action and also found the municipality liable for malicious prosecution against Mr. The Court is following its idea that punitive damages should not be, in their opinion, excessive--regardless of the harm caused by the subject whose conduct was reprehensible. Our expert staff will provide you with valuable information on your best options given your unique circumstances, and in most cases, initial consultation is free. The punitive damages come on top of more than $5 million already awarded to the couple by the same jury. The judge concluded that the defendant’s drinking and driving behaviour was not extreme. It found the companies responsible for breach of implied warranty and failure to warn. (P. 499). 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". Upon re-trial, the judge found significant misconduct on behalf of the defending municipality, which persisted over a ten year period. In fact, this is the first case where punitive damages have been awarded in Shanghai. Although the impaired driver’s actions were viewed as reckless, his actions were an isolated event and not aimed at the injured woman. This paper focuses on the recent BP oil spill and its connections to Exxon v. Baker. Vol. 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. These include the economic and non-economic damages arising from the tort such as medical bills, lost income, property repairs, and pain and suffering. These usually involve cases where the plaintiff is injured or suffers losses due to the defendant’s extremely reckless or negligent behavior. The McMaster Student Union responsible for managing the pub was named as a joint defendant for their role in serving alcohol to the intoxicated driver. It is widely understood that punitive damages have two primary goals: deterrence and punishment. Punitive damages were sought in 10% of all tort trials; however, for certain case types including slander or libel, conversion, and intentional tort cases, punitive damages were requested in approximately 30% of trials. The United States Supreme Court weighed in on the constitutionality of punitive damages. 869 (1998). Private Law 1-21 (2011). One of the cases selected involved a US Pilates company where punitive damages were awarded. of Justice, Bureau of Justice Statistics, T. Cohen, Punitive Damage Awards in Large Counties, 2001, p. 8 (Mar. The Court’s decision to limit punitive damages to this one-to-one ratio with compensatory damages is designed not to deter future wrongdoers, but to provide a predictable limited amount of punitive liability for potential wrongdoers. 1.Punitive damages were awarded in 39.7 per cent of claims in our sample. 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 … Indeed, of the six medical trials Id. Footnote 14: this footnote of the Supreme Court opinion deals with the important issue of what should be the median ratio of punitive to compensatory awards, citing the following studies: The Court notes another study that found a median ratio of 1.4:1 in "financial injury" cases in the late 1980s and early 1990s. In 1996, a young McMaster University student was struck by a car while she was walking along the curb with friends after attending the campus pub. A big tobacco company that knowingly defrauded the public about the dangers of cigarette smoke. The judge rejected the malicious prosecution claim but awarded Mr. The amount of punitive damages is left to the jury's discretion. Footnote 16: in this footnote, the Supreme Court cites a recent comprehensive study of punitive damages awarded by juries in state civil trials, which found a median ratio of punitive to compensatory damages of just 0.62:1, but a mean ratio of 2.90:1 and a standard deviation of 13.81. from the makers. 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. The Court of Appeal upheld this award. 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. Juries, Judges, and Punitive Damages 269. Then, they analyze the degree of reprehensibility of that particular conduct committed by Exxon, the defendant. (P. 501). 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. 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 Amicus Curiae in support of Petitioners: The main argument raised in this brief is that a punitive damages award is excessive if its amount is higher than that reasonably necessary to accomplish the goals of deterrence and retribution, as it no longer serves a valid and legitimate purpose. 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. In Alabama, punitive damages represented between 80 and 86 percent of all damages … In Roman law, multi-ple damages were always awarded for … A breathalyser test revealed a blood alcohol concentration (BAC) three times the legal limit. Brief Amicus Curiae of Sociologists, Psychologists, and Law and Economics Scholars in support of Respondents. The relevant argument presented in this brief is that neither deterrence nor retribution can justify a punitive damages award in this case, and as these are the only grounds that can justify its imposition, punitive damages cannot be justified. (P. 498). 4 869, 877 (Feb., 1998). sued Exxon Shipping Company for compensatory and punitive 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. Primary Causes for Punitive Damages While punitive damages are rare, they are awarded from time to time. Depending on how we understand the goal of the punishment objective, punitive damages will be effective or not. his place and the plaintiff was prevented from acting as manager. Punitive damages were awarded in 700 (5%) of the 14,359 trials where plaintiffs prevailed. 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. “As deplorable as the reality is, personal injuries arising from impaired driving cases are far from exceptional in our society”, and therefore, a large punitive award was not deemed appropriate in this case. 2005) (compiling data from the Nation's 75 most populous counties). This, of course, is the core reason for punitive damages, and the justification for punitive damages is very much this social science (economics) argument. 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. 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. 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. Multiple damages provided a recovery greater than the actual loss suffered. Additional Social Science Research on Punitive Damages, Judy Feuer Zimet, Bad eggs and oil slicks: a defendant's wealth is an important factor in properly assessing punitive damages, 5 Int. The main argument in this brief concerning punitive damages is that they are necessary to act as an effective deterrent to future oil spills. 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. We agree with Justice Stevens in his partial dissent that an abuse of discretion review is a better remedy for disproportionate punitive damages awards. Punitive damages were awarded in 700 (5%) of the 14,359 trials where plaintiffs prevailed. Punitive damages were sought in 10% of all tort trials; however, for certain case types including slander or libel, conversion, and intentional tort cases, punitive damages were requested in approximately 30% of trials. This brief objects to the fact that in this case the jury took into account evidence of Exxon's income and net worth in order to impose a higher punitive damages award. Exxon must be held accountable for that behavior and punitive damages are an appropriate means of ensuring that liability. The article examines some of the shortcomings of the proposed mechanisms for measuring punitive damages (including how to compensate for nonpecuniary loss) and highlights the difficulties of using punitive damages to efficiently deter behavior in a predictable and consistent way. Id. 1995) (finding an increase in median awards between the early 1980s and the early 1990s in San Francisco and Cook Counties); - "Juries, Judges, and Punitive Damages 269 (reporting median ratios of 0.62:1 in jury trials and 0.66:1 in bench trials using the Bureau of Justice Statistics data from 1992, 1996, and 2001); -" Cohen 8 (compiling data from the Nation's 75 most populous counties, and finding that in jury trials where the plaintiff prevailed, the percentage of cases involving punitive awards was 6.1% in 1992 and 5.6% in 2001); "[The] body of literature running parallel to anecdotal reports, examining the predictability of punitive awards by conducting numerous "mock juries," where different "jurors" are confronted with the same hypothetical case…". (P. 521). § 51-12-5.1. Punitive damages are intended to express condemnation and punish a defendant whose actions or inaction are particularly malicious or egregious. If you were seriously hurt through no fault of your own, you may be entitled to compensatory damages. There is little in the way of hard social science argued or cited to, but the central underpinning of economics, that actors are rational profit-maximizers, is used to make the a priori argument that punitive damages are appropriate to deter future economically rational actors from engaging in such dangerous behavior. Since Exxon failed to exercise control over a person with such a high degree of responsibility as Captain Hazelwood, someone with a known and reported alcohol problem, Exxon’s conduct leading up to the disaster was indeed reprehensible. 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. Auto. 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. 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.  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. The authors analyzed data describing verdicts reached in Alabama's trial courts of general jurisdiction from 1992 to 1997. 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. 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. Although the brief considers this fact a violation of the proportionality requirement, it seems clear to us that the effect of the punitive damages award will differ in each case depending on the wealth of the tortfeasor; the same award can achieve deterrence or not (and therefore be effective) depending on the particular circumstances of the defendant. The goal of the article is to develop a set of simple principles determining when punitive damages are necessary and, on the contrary, when they should not be awarded. Accordingly, punitive damages in civil actions are awarded only in exceptional cases, in order to both punish the particularly egregious action and also prevent similar future behaviour by the wrongdoer and other members of society. 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. Exxon Shipping Co. v. Baker, 554 U.S. 471 (2008), State Farm Mut. Pilot’s case was discredited during the trial. 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. Previous Post: The Risks of Distracted Driving, Next Post: Driving with a Blood Alcohol Level in the 'Warn Range' is proven to increase the Risk of Car Accidents, City may be liable for Cyclist’s Injuries despite delay in Notifying City of Claim, How Ontario’s Bill 218 impacts Covid-19 Lawsuits, Personal Information that a Plaintiff must reveal in their Lawsuit, Distracted Driving is the leading cause of Injury for Ontario motorists, What Seniors need to know when Renewing their Ontario Driver’s Licence, Passenger may be solely Liable for Car Accident Injuries when he grabbed the Steering Wheel. 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. damages were awarded because he could only sell as many cars as he could get. It is our opinion that the Court is engaging in a cherry picking of the social science data to explain and rationalize a decision reached on other grounds, and that Exxon v. Baker was actually decided by relying on the justice’s innate sense of fairness and due process for potential tortfeasors. See the section below on Additional Social Science Research for an interesting comparison to the BP Gulf oil spill. 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. Consider the following cases where large punitive damages were awarded: A hospital in Sacramento that repeatedly refused to reprimand surgeons for sexually harassing subordinate staff members. This decision was appealed, the result of which was to order a re-trial. He refused to resign and was subsequently terminated, and some information was turned over to the Ontario Provincial Police (OPP). 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. On the other hand, the punishment objective refers to society’s goal of imposing appropriate sanctions on blameworthy parties, those whose conduct is reprehensible because it reflects disregard for the well-being of others. This situation led to a prolonged eight week trial in which the insurer alleged that the family burned down their own home, although experts including the fire chief and insurer’s own investigator found no evidence of arson. 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. 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. 111, No. 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. As far as compensatory damages, the family was awarded 16.9-million dollars. Pate. 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. Therefore, when wanting to critically assess the effect of punitive damages, these two objectives must be always considered. This paper attempts to create an efficient way to measure punitive damage awards for courts to adopt that would serve as an efficient and effective deterrent for future wrongdoers. In this brief the authors also refer to the deterrent effect of compensatory damages as a reason not to award punitive damages. We cannot agree. There is no exhaustive list of the types of employer conduct that attracts punitive damages. The ideal punitive damage amount would make the expected cost of engaging in a wrongful behavior higher than the cost of taking proper precautions. However, when the defendant is a firm, the relationship is more complex. Call an experienced Injury Lawyers of Ontario (ILO) personal injury lawyer to learn about your entitlement to compensation. In Canadian law, there is a recognition that punishment should be carried out by our criminal laws and regulations. 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. For example, in the Monsanto RoundUp cases, the juries have actually awarded hundreds of millions of dollars in punitive damages. at 954. 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. Additionally, studies from Professor Theodore Eisenberg and others (some of which are cited in the Court’s own opinion) show that punitive damage awards are far more predictable than the Court suggests is the case. According to some scholars, the amount of punitive damages should be no less and no more than the harm their conduct generates. When do the courts award punitive damages in an a claim for injury compensation? The Court does not acknowledge the potential deterrent effect of large punitive awards or the deterrent effect of potentially (albeit unpredictable) large punitive awards in preventing wrongdoing. 13% of cases where punitive damages were awarded had damages of $1 million or more, and the median punitive damage amount was $64,000. In some states, like California, this still happens. On Punitive Damages Research Cited in the Court's Opinion. As the Court acknowledges, "some will murmur that this smacks too much of policy and too little of principle."(P. At trial, the jury returned a verdict for Plaintiff and awarded him $200,000.00 compensatory and $375,000.00 punitive damages. 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. Ins. In some cases, it is also possible to collect punitive damages. 1.85 crores spread out amongst 7 Defendant parties. Pate was pressured to resign to avoid criminal charges, but he was never provided details on the alleged discrepancies. Furthermore, this brief argues that the jury should not take into account the defendant's wealth when determining a punitive damage award. This study concluded that "no statistically significant variation exists in the inflation-adjusted punitive award level over the three time periods" T. Eisenberg et al., Juries, Judges, and Punitive Damages: Empirical Analyses Using the Civil Justice Survey of State Courts 1992, 1996, and 2001 Data, 3 J. of Empirical Legal Studies 263, 278 (2006) (hereinafter Juries, Judges, and Punitive Damages) (analyzing Bureau of Justice Statistics data from 1992, 1996, and 2001). Co. v. Campbell, 538 U.S. 408 (2003) (addressing outlier punitive damage awards and due process), BMW of N. Punitive damages are entirely unavailable under any circumstances in a few jurisdictions, including Louisiana, Nebraska, Puerto Rico, and Washington. While punitive damages are well-established in terms of the trademark law, in practice it is only recently that such damages are being awarded. In a four day criminal trial in 2002, Mr. Illustrative Ontario cases where punitive damages were awarded. Prior to being fired, Mr. Pate was fired by his employer who alleged that they discovered discrepancies with building permit fees. These findings were the basis of the $550,000 punitive damages award. Schedule a free consultation today. The Court reaches this conclusion despite failing to analyze the deterrent effect of punitive damage awards on future behavior and rather simply analyzes the punitive award amounts relative to compensatory awards in past cases as all the evidence the Court needs to limit punitive damages to a one-to-one ratio. Pate was acquitted of all charges, after having endured much negative local media attention. The municipality’s actions, which were deemed intentional and foreseeable against the plaintiff, had a devastating effect on Mr. Pate’s life including his marriage and employability. 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. 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. 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. 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). 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. This legal question is both normative (is it fair to tortfeasors to be exposed to this type of liability) and empirical (does a certain ratio of punitive damages deter future potential tortfeasors). It was held that denial of the claim was deliberate with the intention to force the family to take an unfair and undervalued settlement. 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. Punitive damages are often awarded at higher rates in EPL cases than in other civil cases. Coming back to the case at hand, the plaintiffs were awarded a decree of damages amounting to Rs. In a defamation of character case, Hill v. The Church of Scientology, 1992, the jury awarded punitive damages of $800,000, an amount which was upheld on Appeal. In State Farm Mut. Punitive damages are awarded only in exceptional cases where conduct giving rise to damage is such that it offends the court’s sense of decency. (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. Punitive damages are rarely awarded in cases in New Jersey, as they require that the defendant’s actions were outstandingly bad. Thus, the key question is what amount of money injurers should be made to pay in order to achieve appropriate deterrence. 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. Whether or not punitive damages are appropriate for your case, if you were seriously injured by someone’s negligent actions, you are entitled to compensatory damages for any financial losses you are experiencing as well as for loss of enjoyment in life. 2.The average punitive damages award was £18,181. 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. 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. 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. 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. 3. 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. This paper criticizes the punitive-compensatory damage ratio from Exxon v. Baker and argues that such a punitive damages scheme under-deters potential tortfeasors. Mr. Grigg, the driver of the vehicle, was intoxicated and allegedly speeding when he recklessly turned a corner and struck Ms. Mcintyre. 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