June 6, 2009

Punitive Damages Awards: How Rare Are They?

Those who oppose legislative or judicial restrictions on punitive damages often argue that punitive damages are rarely awarded. (See, for example, this blog post, or this one, or this book.) I have never quite understood the logic of that argument. Even if punitive damages are rarely awarded, why should we allow them to be imposed arbitrarily in the rare instances when they are imposed? The death penalty is rarely imposed, but no one argues that it can be imposed arbitrarily. Granted, there's a qualitative difference between deprivation of life and deprivation of property, but you get the point. The debate over punitive damages reform should focus not on the rarity of punitive awards, but on whether unlimited punitive damages are an effective and/or necessary means of deterring harmful conduct.

A new law review article approaches this issue from a different angle. See The Decision to Award Punitive Damages: An Empirical Study, by Theodore Eisenberg, Michael Heise, Nicole Waters, & Martin Wells. It suggests that the rarity of punitive damages awards has been overstated. Although punitive damages are awarded in less than 5% of all trials, they are awarded in over 30 percent of the trials in which plaintiffs request punitive damages. For intentional torts, that number rises to 60 percent. Another interesting tidbit from this article is that, in personal injury cases, judges award punitive damages at a higher rate than juries, but juries award them at a higher rate in nonpersonal injury cases. The authors say this disparity may be attributable to the routing of different types of cases to judges versus juries.

Hat tip: Torts Prof Blog.