Justification of Use of Punitive Damages in Tort Law - Assignment Example

Justification of Use of Punitive Damages in Tort Law Introduction: Tort laws are laws that try to provide remedies to such individuals in caseof unreasonable harms experienced by them. State laws are involved in such laws and legal premises are used as the basis to determine that acts of individuals may be liable for harmful consequences or injury to others (What are Tort Laws?, n.d.). Punitive damages are referred to those damages that a defendant may be asked to pay in case his actions caused any deliberate harm or injury to any other individual. These damages are mainly considered in order to punish the defendant and not only with the purpose of awarding the injured (What are “punitive damages”?, 2011). The present study focuses on an understanding of the justification of the use of such punitive damages in tort laws. Punitive Damages: It’s Use: Generally the punitive damages are provided to plaintiffs in addition to other compensations in cases of harm or injury inflicted by any defendant to other individuals. As studies reveal that, “in the United States, punitive damages are awarded in approximately 6 percent of all cases in which plaintiffs prevail” (Polinsky & Shavell, 1999, p.764). It has been also observed that such punitive damages are provided in tort laws mainly, and United States provides the greatest importance to these kinds of damages in tort cases (Polinsky & Shavell, 1999, p.764). However there is an economic explanation to the use of punitive damages as well. The cases of torts may be explained through certain examples as well. For instance there might be a case where one individual, say A, takes some action that inflicts a cost on another individual, say B. Considering the perspective of economic efficiency, the problem is not that A imposes the costs. However it is more important to understand whether A takes the action depending on costs and benefits merely to his own self. It may be the case that the action provides A with a gain of $50 but imposes a cost of $70 on B. In that case A might accept it. On the other hand if it costs A $10 and benefits B instead by $50 A might not accept it. “The efficient policy is to take those actions and only those actions whose net benefits are larger than their net costs” (Friedman, n.d.). Studies also reveal that the punitive damages can be explained with respect to economic efficiency. While punishments are imposed in any cases, there are costs that are imposed as well for the legal system. In case of civil laws, this involves the cost of undertaking the proceedings of the cases. It is the size of the punishment that determines the total cost of imposing it. If the size of the punishment in tort cases increases, the litigation charges or costs also increase. An example may be discussed in this regard. A tort case of a typical automobile accident may be considered. In this case, there are several factors that need to be considered that include how frequently one should drive, what kind of car should be used, and other such factors. While considering these, payments for potential damages are one of the costs that need to be considered (Friedman, n.d.). Use of Punitive Damages in Tort Laws: Tort law not being constitutional law, the Supreme Court has not tried to restrict the use of punitive damages using tort laws. The injury requirement applies that the law of tort can be used only in cases where a plaintiff has been caused an injury by the defendant (Lens, n.d., pp.622-623). The injury requirement of tort law was obtained in the Court’s decision in the case of Philip Morris. In this case, the Court held that a defendant cannot be punishment with the use of punitive damages if there has been any harm to nonparties, signifying those who might possess their own claims of tort against the defendant (Lens, n.d., p.627). Thus it can be said that it is in general not possible or acceptable for punitive damages to act as anything more than a private law function. However if the damages include only nominal charges on the defendant, then such punitive damages may be allowed as part of the punishment or remedy offered by tort law (Lens, n.d., pp.635-640). Justification of the Use of Punitive Damages in Tort Law: In consideration of the justification of awarding punitive damages in tort cases, there are two social goals that can be discussed- deterrence and punishment. Deterrence refers to the use of authorizations with purpose to manipulate actions, such that the following measure of social welfare might be maximized: the benefits that the parties gain from their activities, with a reduction of the costs of safety measures, the harm inflicted, and the costs that occur as a result of the use of legal system. Punishment refers to the imposition of approvals to gratify an aspiration for payback against offenders (Polinsky & Shavell, 1999, p.765). It has been observed that the degree of damages that are most advantageous from the standpoint of the two individual goals of deterrence and of punishment in general may not be the same. Particularly, the level that is paramount for deterrence can be expected to surpass that which is greatest for punishment if the possibility of being found legally responsible is low and the extent of punitive damages essential for deterrence consequently is high. On the other hand, the level that is paramount for punishment would be higher if the probability of being found accountable is high, since then most advantageous damages for intentions of deterrence are more or less equal to destruction, but the liability of the act of the defendant in all probability demands for damages added to the compensations in order to give out the objective of the punishment (Polinsky & Shavell, 1999, p.774). A frequently stated justification for punitive damages is that these damages reflect a type of punishment for the defendant and often replace or add to criminal authorizations that are forced by the government. The obligation of punitive damages enables the civil system to penalize the conduct of defendant by giving damages that are essential to be provided to the plaintiff in addition to normal compensatory charges. It has also been given by such scholars that there are many similar characteristics among the punitive damages and criminal penalties. Both punitive damages and criminal sanctions bear a noteworthy disgrace for a failed defendant (Kumar, n.d., pp.46-47). A second argument or justification for the use of punitive damages in tort laws is that such damages discourage potential unlawful activities in the future. There are two focuses of this argument. This includes “looking at both the deterrent effect on the named defendant, but also looking at the deterrent effect on other similarly-situated non-parties” (Kumar, n.d., p.48). It is hoped that a large punitive damages judgment would discourage the defendant from repeating the similar actions that led to the trials and also will be an indication to others that “such conduct comes with significant costs; thus deterring parties unrelated to the trial, as well” (Kumar, n.d., p.48). An ultimate justification of the use of punitive damages has been found that these awards perform as a type of regulatory action of a state. Supporters of this theory argue that the capacity of the state to follow civil and criminal violations is inadequate, and consequently the support of private parties is essential to supervise wrongdoings. In this regard punitive damages produce an encouragement for this confidential action. This speculation of private assistance for regulatory actions of the state has been systematized by several states in the course of the execution of split recovery statutes. The fundamental principle of these statutes is to obtain a proportion of a punitive damages award of the plaintiff and hand it out to the state. “This splitting of punitive damages awards allows states to raise capital as they would in a regulatory action, while allowing a private plaintiff to handle the litigation for a sizeable fee—the remaining fraction of the punitive damages award” (Kumar, n.d., p.48). Conclusion: From the above study, it may be concluded that tort laws and punitive damages have their own functions in the legal system particularly considering the civil law cases. However while tort laws have the ability to provide remedies to civil issues, the punitive damages add extra compensations to the normal compensatory damages that on one hand proves to be awards for the plaintiffs and on the other hand proves to be punishment for the defendants. Hence, although there may be several benefits and justifications of the use of punitive damages, the use of such damages in tort laws needs to be restricted depending on the injuries or the harms that a defendant might have caused to a plaintiff, otherwise which such damages might prove to misuse their power and punish even when such punishments are not needed. References 1) Friedman, D. (n.d.), An Economic Explanation of Punitive Damages, davidfriedman, available at: http://www.daviddfriedman.com/Academic/Punitive/Punitive.html (accessed on November 2, 2012) 2) Kumar, S. (n.d.), An Analysis of the Civil, Criminal and Regulatory, Justifications for Punitive Damages, Journal of Consumer and Commercial Law, available at: http://www.jtexconsumerlaw.com/V13N2/V13N2_Punitive.pdf (accessed on November 3, 2012) 3) Lens, J.W. (n.d.), Punishing for the Injury: Tort Law’s Influence in Defining the Constitutional Limitations on Punitive Damage Awards, Hofstra Law Review, Vol.39, No.595, pp.595-644, available at: http://lawarchive.hofstra.edu/pdf/academics/journals/lawreview/lrv_issues_v39n03_cc-3-lens-final.pdf (accessed on November 2, 2012) 4) Polinsky, A.M. & S. Shavell (1999), Punitive Damages, encyclo, available at: http://encyclo.findlaw.com/3700book.pdf (accessed on November 1, 2012) 5) What are “punitive damages”? (2011), rotlaw, available at: http://www.rotlaw.com/legal-library/what-are-punitive-damages/ (accessed on November 1, 2012) 6) What are Tort Laws? (n.d.), CECP, available at: http://cecp.air.org/interact/authoronline/february99/2.htm (accessed on November 1, 2012) Read More