Punitive damages are not meant to give you back something you lost. They are meant to punish the defendant for conduct that was especially outrageous. The thinking is that the defendant needs to be punished in addition to the damages he or she pays as compensatory damages. Society as a whole also learns that this type of conduct will not be accepted through publication of punitive damage awards. Even though punitive damage awards are meant to punish the defendant and benefit society, not the plaintiff, punitive damage awards are paid to the plaintiff in a case.
Some general guidelines for how to calculate punitive damages include:
The defendant’s actions usually need to be greater than mere negligence. That is, they need to have acted with an obvious disregard for principles of care.
Punitive damages aren’t usually awarded on their own. They are generally issued as an accompaniment to “actual” damages such as compensatory damages (damages that are intended to reimburse the plaintiff for their losses).
Punitive damages must be “relatively proportionate” to the actual damages award. In most jurisdictions, punitive damages cannot exceed four times the amount of compensatory damages
When Imposed The nature of the conduct that permits juries to punish or make an example of the defendant may vary considerably. At one end of the spectrum is the view that punitive damages are awarded to punish conduct that is tantamount to criminal behaviour. Exemplary or punitive damages … are authorized to be inflicted when the wrong done partakes of a criminal character, though not punishable as an offense against the state, or consists of aggravated misconduct or a lawless act. Winn & Lovett Grocery Co. v. Archer, 126 Fla. 308, 171 So. 214 (1936) A little further along this spectrum is the view that punitive damages are appropriate where the defendant's conduct constitutes willful or intentional wrongdoing. Such damages are allowed, after an award for compensatory damages, in negligence cases when there has been some willful misconduct…. Lazenby v. Universal Underwriters Ins. Co., 383 S.W.2d 1 (Tenn. 1964) The misconduct we have in mind is intentional or malicious wrongdoing….
No firm has contributed more to the favourable development of the law of punitive damages than Mayer Brown. Mayer Brown lawyers have been involved in all of the significant punitive damages cases before the US Supreme Court since the late 1980s
Brown & Charbonneau, LLP is a top-rated Orange County, California business named by Best’s Lawyers® as one of the Top Law Firms in the US. 420 Exchange, Suite 270 Irvine, CA 92602 PHONE714- 505-3000 FAX 714-505-3070 The business litigation attorneys of Brown & Charbonneau, LLP have extensive experience in litigating claims for punitive damages. Cases where punitive damages may be awarded include fraud claims, breach of fiduciary duty, defamation and certain personal injury matters. Punitive damages may be awarded in cases where the plaintiff proves that the defendant was guilty of “oppression, fraud or malice.”
“Malice” means conduct which was intended by the defendant to cause injury to the plaintiff, or despicable conduct done with a willful and knowing disregard for the rights or safety of others.
“Oppression” means despicable conduct subjecting the plaintiff to cruel and unjust hardship in knowing disregard of the plaintiff’s rights.
“Fraud” means an intentional misrepresentation or concealment of an important fact by the defendant.
Amount of Punitive Damages
While there is no specific formula for calculating the appropriate amount of a punitive damages award, case law has established certain factors that should generally be considered. These factors include:
Whether the defendant’s conduct involved repeated acts or was a single incident
Whether the defendant’s conduct involved trickery or deceit
Whether the amount of punitive damages bears a reasonable relationship to the amount of compensatory damages awarded
The wealth of the defendant (in light of the goals to punish and deter future misconduct)