In the American system of civil litigation, there are two categories of money damages that can be awarded by a judge or jury in a lawsuit – Compensatory Damages and Punitive Damages.  As was explained in a previous article, Compensatory Damages attempt to make up for the harm caused to the injured party by paying for lost wages, medical bills and other out-of-pocket expenses, and providing compensation to make up for the non-economic losses like pain and suffering, embarrassment and disfigurement, and the loss of the ability to engage in pre-accident activities.

Punitive Damages are money damages which are awarded only in cases of outrageously bad acts committed by defendants.  The purpose of the Punitive Damage award is to provide extra punishment to the defendant to deter him from committing such bad acts in the future.

When are Punitive Damages Awarded?
Punitive Damages are only appropriate in extreme cases of bad behavior.  In Pennsylvania, there must be proof of outrageous conduct because of a defendant’s evil motive or reckless indifference to the rights of others.  The Courts have concluded that Punitive Damages are proper when the defendant’s actions are outrageous in nature and are intentional or reckless.  For example, Punitive Damages have been deemed appropriate in situations such as motor vehicle accidents caused by drunk drivers (reckless conduct) or injuries caused by criminal assaults (intentional conduct).

How Much Punitive Damages Can Be Awarded?
The United States Supreme Court has limited a judge or jury’s ability to award whatever Punitive Damages they believe are appropriate.  Instead, the Supreme Court has held that Punitive Damages which are dramatically too high in proportion to the amount of Compensatory Damages cannot be permitted. 

In Pennsylvania, the law states that the following factors must be considered when determining the amount of Punitive Damages: (1) the character of the act; (2) the nature and extent of the harm: and (3) the wealth of the defendant.  The wealth of the defendant is considered in the assessment because if a wealthy person (or corporation) commits an outrageous act, it will take a larger punitive damage award to punish and deter that wealthy defendant compared to a poor defendant.  Accordingly, in cases involving the prospect of Punitive Damages, defendants can be required to disclose information concerning their wealth in the discovery process before the trial, and the judge or jury can hear evidence about their wealth during trial.

Punitive Damages can be an effective motivating force in our civil litigation system.  Since they serve the purpose of a financial penalty to punish and deter defendants who commit outrageous, intentional or reckless acts, they can “send a message” to those defendants that the legal system will not tolerate such bad behavior. 

Tim Rayne, Esquire - MacElree Harvey, Ltd. 
211 E. State Street, Kennett Square, PA 19348
(610) 840-0124; trayne@macelree.com

This entry was posted on Friday, May 16th, 2008 at 12:13 pm and is filed under Legal Damages. You can subscribe via RSS 2.0 feed to this post's comments. You can comment below, or link to this permanent URL from your own site. Your comments will appear immediately, but I reserve the right to delete innapropriate comments.