The United States has a rather unique approach to punitive damages -- one that courts in other countries find alien, if not unconscionable. As the New York Times reports, foreign systems tend to disfavor punitives, and foreign courts can be reluctant to enforce American court judgments that include large punitive awards.
Most of the rest of the world views the idea of punitive damages with alarm. As the Italian court explained, private lawsuits brought by injured people should have only one goal — compensation for a loss. Allowing separate awards meant to punish the defendant, foreign courts say, is a terrible idea.
Punishments, they say, should be meted out only by the criminal justice system, with its elaborate due process protections and disinterested prosecutors. It is not fair, they add, to give plaintiffs a windfall beyond what they have lost. And the ad hoc opinions of a jury, they say, are a poor substitute for the considered judgments of government safety regulators.
Some common-law countries do allow punitive damages, though in limited circumstances and modest amounts. In the United States, by contrast, enormous punitive awards are relatively common, although they are often reduced or eliminated on appeal. Last month, for instance, the United States Supreme Court heard arguments in the Exxon Valdez case, where a jury’s initial award of $5 billion was later reduced to $2.5 billion.
Still, such awards terrify foreign courts.
“The U.S. practice of permitting a lay jury to exercise largely discretionary judgment with limited constraints in awarding punitive damages is regarded almost universally outside the U.S. with a high degree of disfavor,” said Gary Born, an American lawyer who works in London.
That the U.S. approach is "exceptional," of course, does not mean it is wrong. While the U.S. legal system has its problems, taken as a whole I find it preferable to existing alternatives (though that may well reflect a bias for the familiar).
Umm . . . disinterested prosecutors? Aren't prosecutors advocates for the State? How are they disinterested?
Dan Schmutter
Meaning, of course, any company that can stay in good favor with the right civil servants can do virtually anything with immunity; pay off a few settlements and judgments here and there, and keep on doing whatever it is you shouldn't be doing.
I'm not sure I like the American system either, but it seems like it does motivate corporations to be careful. I rather like the notion of a corporation having to ask itself, "If this is ever an issue at a trial, is my lawyer really going to be able to sell this to 12 jurors?". Given the massive legal advantage corporations have-- from being repeat players to more resources-- I think the fears of companies being 'ruined' by punitive damages are overstated. That being said, I'd love to see some empirical information on how corporate decision-making is impacted by punitive damages.
@Dan Schmutter: That depends on the extent to which the system is adversarial. At the very least, the prosecutor wouldn't normally prosecute someone unless they were themselves convinced of the defendant's guilt.
As for Jonathan's question, I'm thinking bias for the familiar in the same way that I'm very happy to live in a country with no juries. While I have arguments for disliking juries, I'm willing to accept I'm biased here.
Kind of belies the notion, often expressed by the same people who detest juries, that Americans are pro-business elitists and that Europeans have more respect for the common people.
While I would not advocate the kind of position riduled in previous comments, taking a cue from other Common Law jurisdictions seems reasonable. As stated in the post, none of them have "exemplary damages" (as they're called in the UK) anywhere near as high as in the US. As for juries, in the UK at least civil juries are limited to defamation suits and a few small categories. (I know, in the US there's a constitutional guarantee on this point, so it's a non-starter. But still.)
So I think it would be interesting to keep a list of practices in foreign jurisdictions that are more "conservative" than American legal practices. Then, whenever Justice Breyer or the like rallies for placing greater authority on foreign authorities and practices, one could reasonably ask whether such proponents also advocate for incorporating those more "conservative" practices (with which they likely disagree) as well.
Off the top of my head, a list of "conservative" practices would include:
1. Absence or distrust of punitive damages
2. Lack of an exclusionary rule
Any others?
(Note that when I say "conservative" and "liberal," I mean as a matter of policy, not constitutionally; cf. Scalia and Thomas on punitive damages.)
Are you reading a different entry than I am? Nothing in the post comes close to suggesting that Prof. Adler "begs" to look to foreign court practices. He describes the Times article and then blockquotes it. And his last two sentences, if anything, offer support for the American legal system's approach, finding it "preferable to existing alternatives."
Seriously, what the hell are you talking about?
Punis enrich lawyers and their lotto winning clients at the expense of consumers how pay higher costs for or the absence of products, services and insurance.
On a related note, out here in Colorado, our Dem governor and legislature are getting set to reward their lawyer contributors by substantially raising the caps on medical malpractice non-economic damages despite pleas from the doctors that they will have to leave the state when their already insane insurance becomes unaffordable or unavailable.
I don't think enormous punitive awards are "relatively common," I think they're relatively rare. And they seem to be VERY OFTEN reduced or eliminated on appeal.
Punitive damages 1) provide access to justice for harmed individuals, 2) motivate corporations to do the right thing and not just sharpen the pencil and figure the "cost of doing business."
@Terrivus: Since no one is saying the US should consider the practices of countries that aren't "civilised" in the sense that they are democratic, respect civil liberties and uphold the rule of law, are there countries that are civilised in this sense that are more conservative than the US?
In Ireland, Portugal and Poland abortion is still illegal. In Ireland (I used to live there, so I know a few things about their laws), you have to be separated for 2 years before you can get a divorce, and prenups are null and void on the grounds that they go against public policy (order, morality, etc.).
Some of my favourite passages from the Bunreacht na hEireann, i.e. the constitution of Ireland:
Preamble:
"In the Name of the Most Holy Trinity, from Whom is all authority and to Whom, as our final end, all actions both of men and States must be referred,
We, the people of Éire,
Humbly acknowledging all our obligations to our Divine Lord, Jesus Christ, Who sustained our fathers through centuries of trial,
Gratefully remembering their heroic and unremitting struggle to regain the rightful independence of our Nation,
And seeking to promote the common good, with due observance of Prudence, Justice and Charity, so that the dignity and freedom of the individual may be assured, true social order attained, the unity of our country restored, and concord established with other nations,
Do hereby adopt, enact, and give to ourselves this Constitution."
"Article 6
1. All powers of government, legislative, executive and judicial, derive, under God, from the people, whose right it is to designate the rulers of the State and, in final appeal, to decide all questions of national policy, according to the requirements of the common good."
"The Family
Article 41
1. 1° The State recognises the Family as the natural primary and fundamental unit group of Society, and as a moral institution possessing inalienable and imprescriptible rights, antecedent and superior to all positive law.
CONSTITUTION OF IRELAND – BUNREACHT NA hÉIREANN
2° The State, therefore, guarantees to protect the Family in its constitution and authority, as the necessary basis of social order and as indispensable to the welfare of the Nation and the State.
2. 1° In particular, the State recognises that by her life within the home, woman gives to the State a support without which the common good cannot be achieved.
2° The State shall, therefore, endeavour to ensure that mothers shall not be obliged by economic necessity to engage in labour to the neglect of their duties in the home.
3. 1° The State pledges itself to guard with special care the institution of Marriage, on which the Family is founded, and to protect it against attack."
"Article 44
1. The State acknowledges that the homage of public worship is due to Almighty God. It shall hold His Name in reverence, and shall respect and honour religion."
Conservative enough? Still, in most other questions, Irish laws would, in US eyes, probably look as "liberal" as those of any other Western country.
Spoken like a true lawyer. My father, the doctor, who quit practicing medicine when he could no longer afford malpractice insurance, would disagree.
I'm frankly shocked anyone suggested this on a blog like this.
People complain about the high cost of medical care in this country, well, this is the main reason it costs so damn much. At my local hospital they have to pay $100,000 a month for each doctor in malpractice insurance.
Dont see that changing much, for lawyers, making money trumps everything else.
Howzabout some qui tam like bonus for the plaintiff?
Let's bookmark this and come back in a year or so.
If the caps get raised but medical care remains available in Colorado, then we'll understand why this sort of doom-crying only arouses amused contempt amongst legislators and politicians. Conversely, if civilization does collapse in Colorado, then we can enjoy watching the Legislature wrestle through the wreckage.
Anybody wanna do a side bet on which way matters will go?
1.) Punitive damages are allowed from state juries in areas where the federal law preempts state legislatures from acting, such as in airline regulation.
2.) A defendant who is sued in multiple jurisdictions for the same act, is subject to repeated punitive sanctions.
3.) One of the whole points to having a written law is that it provides a measure of predictability. Everyone knows what is expected of them, and the consequences when they don't measure up. Even a few outlying punitive damages awards erodes this predictability.
4.) Using the collective force of the state to punish an individual for conduct that the state itself does not proscribe is an aberration of the state's responsibility to administer justice.
5.) Punitive damages may be available, for the same conduct, against one class of defendants and not another, e.g. the government.
6.) Punitive damages should not be regarded as a remedy for the state's failure to exercise its oversight or regulatory authority.
I'm surprised no one else has held this line in particular to ridicule. Certainly government safety regulators may offer judgements superior to juries some of the time. But why would government regulators be immune to making "ad hoc" judgements in all cases?
What about the recent California lawsuit against the EPA? Which government regulators in that case gave "considered judgements"? How about the FDA's decision to approve Vioxx? Was that a "considered jugement"? Would we expect the same FDA that approved Vioxx to then turn around and arbitrate disputes between Vioxx victims and Merck? Would we need a new government agency to handle these product liability disputes?
Color me skeptical....
Not enforcing a judgment for public policy reasons is generally an extremely high bar to overcome. Apparently Italy (and Germany to a certain extent) have chosen to set the bar quite a bit lower.
Moreover, companies wishing to do business in the US are well aware of the risks. Should they chose not to accept the risk, they should not do business rather than being able to hide behind the courts in their country. (no comment on medmal/PI problems..I agree there is a HUGE problem there).
If a man commits a crime against me and is convicted, I don't get to have him serve his punishment by being my personal slave for the duration of the sentence.
IANAL, and my one year of Jr. High Latin, some 35 years ago did not cause qui tam to stick in my head, but hopefully Wikipedia is correct on this. I suppose some qui tam might be appropriate.
But then you get into the issue of the underlying civil action was supposed to make the injured party whole, not richer then before they were injured.
JB,
Again, IANAL but wouldn't the State actually have to have suffered a personal injury to bring a case in civil court? And how could a "corporate" entity like the State suffer a personal injury?
Because this is the United States of America, not the Association of Socialist Squishes.
One of the most difficult parts of the transition from blind believer in the garbage stuffed in der brain from childhood to libertarianism is the shocking recognition that government does nothing, absolutely nothing, good for the commoners. It merely squelches real good by transferring resources from one group to another, e.g., my money to section 8 vouchers for lowlife losers or 100 Billion Dollar bank bailouts for highlife losers.
How about clean drinking water, flood control, and sewage treatment?
Yet most large corporations still look at the LA justice system with, shall we say, a healthy mistrust.
I pay a water/sewage bill every month. Don't you? Or are you saying it is a tax rather than a fee for service?
Does no jurisdiction deal with this problem in any way? This feature strikes me as having the most potential for injustice.
How about a rule that any punitive damages must be reduced by the amount of punitive damages already paid by the same defendant for the same wrong? Otherwise you get over-deterrence.
Say Jury A awarded $100 million in punitives for selling defective products. Jury B awards $150 Million. That means jury B thinks that the defendant needs to be deterred and made an example of to the tune of $150 Million. But defendant has ALREADY been made an example of to the tune of $100 Million in case A. So really you only need an extra $50 Million in deterrence.
(And if Jury B's award is lower, then the defendant has already been deterred to the same extent and more!)
Or maybe Jury B should be told of any prior punitive award by Jury A.
Any thoughts?
As to the whole issue of medical malpractice ruining doctors, just look at what insurance rates have done in states that have put in malpractice caps. They haven't gone down, they've gone up. The problem isn't the medical malpractice specialties.
Finally, Martinned says;
First off, I'm not sure this is true, especially if the criminal fines increase their own budget. But, even assuming it were true, is this a feature or a bug? If the prosecutor never believes a company has done something wrong, doesn't that leave consumers unprotected by both the civil justice and the criminal justice systems?
Last thought, what about problems of jurisdiction? If company headquarters in NY makes a decision about a product that only endangers consumers in hot dry climates (just as an example) how are Nevada and Arizona to defend their claims. Company execs won't travel there, and I can guarantee NY won't extradite the CEO of a big company who has tons of business in NY.
"Neither the article nor commentators here note the connection to contingency representation, not usually available outside the US. Contingency makes representation available in a range of cases which would otherwise be impractical."
What the comment misses is that in many of these cases, "looser pays" could be a viable alternative - but that would mess with other parts of the American system.
Another factor is the availability of payments by the "welfare state" in many European countries:
If you take the typical mass tort, one problem is that is very difficult to figure out the degree of damages caused that will only show themselves in the future. Punitive damages can be used to cover such cases. The European solution is to provide for social security payments and more or less free health care.
A further reason punitive damages are disliked in the rest of the world is the impression (correct or not) that American juries are more ready to impose big punitive damages on foreign corporations. This combines with class actions (more or less unique to the U.S., too), extremely broad bases for general jurisdiction (doing business) covering actions abroad and a discrimatory application of the "forum non conveniens doctrin" to fend of foreign plaintiffs, as well as general disrespect for the sometimes applicable foreign law shown by juries.
P.S. Damages for pain and suffering are known to most continental systems.
If the Dems manage to raised the cap on non-economic medical malpractice damages in my formerly Red state of Colorado, I will wager that both medical malpractice insurance rates will rise and doctors will leave the state out of economic necessity.
There is no real doubt about these two results. This is happening all across the country right now.
I just hope my sister and her husband are not among the physicians forced to move or discontinue practice after I convinced them they were moving to paradise after they finished up med school.
Depending on the country, the neutrality to the prosecutors can be a very important part of their job description (the French juge d'instruction being an extreme case). In most countries I am familiar with, they are less likely to prosecute innocent people than those in the U.S.
One reason: in most European countries, they (and their superiors) are career officials with a lot of job security. Usually the get promoted not on the basis of how many people they send to prison (I'd guess that European prisons tend to be more expensive than their US counterparts), but on how well (/fast) they handle their dockets.
Your calculation glosses over something that's crucial: stealing is an actual crime. If someone breaks into my house and makes off with my goods, and there's plausible evidence of who did it, the criminal justice system normally asserts itself, and the possible penalty there is way more than just $X.
I'm not sure that doctors leaving the state is the threshold. If malpractice rates rise physcians may not leave the state en masse, but may limit their medicaid participation, or stop doing obstetrics in rural areas, avoid high risk procedures like bariatric surgery, etc. In other words, even if doctors stay, they may try to manage their risk by limiting the services that they provide.
And as I understand the Colorado bill, malpractice rates for a given level of coverage will be capped (potentially limiting the pool of insureds) for a given level of coverage, but removing the caps on impairment and disfigurement will force doctors to increase their limits, making their malpractice overhead increase regardless.
The problem is that malpractice insurance rates rise regardless of the caps. So if we've got a "solution" that puts some cost on people (those who are injured and can't recover an appropriate amount) and doesn't solve the problem it purports to, should we do away with the solution?
It is much more accurate to say that the increased cost in malpractice insurance will increase costs across the board for doctors, which will cause a decrease in the number of doctors practicing and an increase in the cost of medical services provided...Causing an increase in insurance rates for everyone who purchases insurance inside the state.
Health care will be available, the question is At What Cost?
Once again, look at what happened to the cost of medical malpractice insurance when malpractice caps were in place. Cost of medical malpractice insurance still increased. I understand your link between increased malpractice insurance costs and increased cost and decreased availability of medical care. It's the first link in that chain that you haven't established. Find me a state in which malpractice caps were established and the malpractice rates decreased (or even remained flat) and your argument will get somewhere. Until then, its assume the effect and all the rest of the effects logically follow. I'm sure you're right about all the rest of the effects, I'm just not going to assume that your first effect is correct...especially when the evidence points to it not being correct.
Here is some salary data I found on the net (probably inaccurate or old, oh well):
1. Anesthesiologists $184,340
2. Surgeons $184,150
3. Obstetricians &Gynecologists $178,040
4. Orthodontists $176,900
5. Oral &Maxillofacial Surgeons $164,760
6. Internists - General $160,860
7. Prosthodontists $158,940
8. Psychiatrists $149,990
9. Family &General Practitioners $149,850
10. Chief Executives $144,600
So nine of the top ten highest paying jobs in America are physicians and somehow these physicians are not going to be able to pay their malpractice insurance and will quit practicing medicine? Or is the argument that they will leave the state if we don't cap damages?
The truth of the matter seems to be that we don't have enough doctors to begin with (this is reflected by their high pay). We should import every foreign doctor we can (they seem happy to come). Perhaps encouraging more people to go to medical school would also pay off.
Medical malpractice insurers could simply refuse to insure the small amount of doctors that are responsible for most malpractice, then malpractice claims would go down in number.
Frivilous lawsuits deserve santions.
Of course, if trial lawyers gave as much to Republicans as say, Realtors, tort reform probably would not have happened at all.
And do the giant punitive damages cases even turn up in medical malpractice? I thought they were more common in product liability cases where the defendants are large corporations. The amount of money it takes to send a message to a physician, even a rich one, is very different from the amount it takes to get Big Pharma to notice you're there.
And how are the regulators supposed to handle the drug cases, anyway? They can do all the clinical trials they want, but you won't find the rarer side effects until the drug is being used in the population at large. It's a matter of numbers.
Those numbers are bogus. Go to gasworks (the correct one, the wrong one will get you some stupid porn site, the right one is an employment service for anesthesiologists).
$360,000.00 or more starting, right out of school, with six weeks vacation is much more typical. Five to six million a year only gets you to the top 40%.
Trauma ortho surgeons? Just out of residency they are making two to three million a year. I depose them regularly. Under oath, that is where the numbers work out.
Same surgeon in England? Working lots of overtime. Just had a recruiter tell me they could get such a surgeon 100,000 euros a year. They would take as many as I could find.
GPs? Probably that chart is a bit high. I've hired some for a clinic at much less, and there wasn't that much of a problem getting them.
I'll never know why people think the laws of supply and demand doesn't apply when it comes to doctors. Ditto for insurance. If the barriers to entry in the insurance field dropped, there'd be cheaper malpractice insurance out there.
But that was all part of Ted Kennedy and ilk's plan. Give insurance co's lots of protection so they can gouge the consumers for fat profit margins; give the doctors beloved AMA the abililty to thwart opening of new medschools and artificially restrict residency programs so doctors make more money; give hospitals generous subsidies if only they submit to the dictate of the State. Then, add a few non-optional insurance programs...and enslave the docs to the system...and force hospitals to give free care to any smelly lowlife who shows up.
Ah, those stupid capitalist pigs. They will indeed sell you the rope you use to hang them. Give it to them good, Teddy, they deserve it.
Off the top of my head, a list of "conservative" practices would include:
1. Absence or distrust of punitive damages
When I see comments like this, I am reminded of how little most conservatives who bash on the judiciary really know about it (just as they don't know that much about the media that they bash on).
You might want to look at just who on the Supreme Court has been pushing for due process limits on punitive damages for the last 10 years or so. Hint: it's not Scalia or Thomas.
That's a nonresponse. My post was directed at someone up the thread who assumed he had really "gotten" Breyer and the liberals for their support of "internationalizing" some issues but not others. In fact, the liberals support limits on punitive damages and some of the conservatives don't, and had the poster known that, he wouldn't have popped off in that way.
In any event, what the split on punitive damages on the Court really shows is that social issues like abortion and gay rights, rather than economic issues, are the motivating factors behind both liberal and conservative positions on substantive due process.
I have to say I share stanneus' concern, but see these developments as stemming from popularly desires to counterbalance some of the risk-shifting that statist corporations (back by wealthy investors) have successfully engaged in.
After all the health and environmental regulatory systems developed because of the havoc wrought when corporations were able to persuade judges to move from stricter views of tort toward a "balancing" that favored industry, and the regulatory schemes themselves in part have been supported by industry as barriers of entry to competitors.
Of course the trial bar itself can be seen as a group that extracts rents both from industry and from plaintiffs, but they I believe they are largely accepted as a balance to induistry (which has a similar group of rent-seekers in the relatively insulated management class inside public companies).
Since I concede the value of punitive damages as, you know, *punishment,* I don't really care whether the punitive damages get paid to the government (in which case you might call it a "fine," something for which there is a bit of a precedent) or to a deserving private charity. It seemed rhetorically useful to compare it to criminal punishments, which generally aren't applied to enrich the victim.
Now how did it get started anyway? Paying punitive damages to plaintiffs, that is.
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