By seeking to limit punitive damages and raise the evidentiary standard for such awards, so-called "reformers" would strip individuals of the power to make reckless or malicious defendants change their misconduct.
Punitive damages are awarded in less than 5 percent of civil jury verdicts, according to a 1990 American Bar Foundation study of 25,000 jury verdicts in 11 states over a four-year period. Between 1965 and 1990, there were only 355 such awards in products liability cases, according to a study by law professor Michael Rustad of Suffolk University in Boston. And more than half of those awards were reduced or overturned on appeal. The rarity of punitive damages helps to explain why such awards often have news value. Moreover, the U.S. Supreme Court has mandated that courts carefully scrutinize such awards.
Contrary to allegations about the overuse and excessiveness of punitive damage awards, data collected in the most recent National Center for State Courts (NCSC) study reveals that they are awarded in only 6 percent of tort cases in which the defendant was found liable. Further, the NCSC study indicates that the median award of punitive damages is $50,000.
A 1995 U.S. Department of Justice study analyzing civil jury cases over a 12-month period in the nation's 75 most populous counties found that juries awarded punitive damages in just 6 percent of all successful suits, and that approximately half of these punitive damage awards were for $50,000 or less.
The number of punitive damage awards between 1990 and 1994 in San Francisco and Cook County (Illinois) decreased 59 percent from the 1985-89 period, according to data from a 1995 study by the Rand Institute for Civil Justice. In the 1990-94 period, punitive damages were awarded in only 2 percent of all cases in San Francisco and in 1 percent of all Cook County cases.
In nearly 80 percent of the products liability cases in which punitive damages were awarded, the manufacturer made a subsequent safety change, professor Rustad found. Beyond that, just the threat of punitive damages causes safety to be taken into account, thereby resulting in a safer America.
Limiting punitive damages to an arbitrary level would undercut their deterrent value since reckless or malicious defendants might find it cheaper and more cost effective to continue their bad behavior and to risk paying punitive damages.
Americans would be much worse off if they were not able to hold wrongdoers accountable. The makers of asbestos certainly did not voluntarily assume responsibility for the harm they caused. The A.H. Robins Company did not offer to compensate the thousands of women injured by the Dalkon Shield. It is only the civil justice system and punitive damages that have placed accountability where it belongs -- at the door of the wrongdoer.
Given the facts, why do the proponents of legal revisions seek to protect the reckless and malicious from bearing responsibility for their acts? In addition, why do they base policy recommendations on misrepresented anecdotes? The threat of punitive damages deters egregious misconduct.
Used with permission from The Association of Trial Lawyers of America. All rights reserved.