I don’t drink tea, in either the iced or 165 degree variety.
Much of what I wanted to post has already been said - punitives provide incentives to sue especially in small cases, compenstatory damages less legal fees don’t compensate - but those can be worked around.
It is interesting (to me at least) that the original purpose of punitives was to go to the injured party, and to compensate for harms that could not be including in compensatory damages. I was taught that the first punitive damages were the application of triple damages for actions such as spitting in someone’s face, where the affront to personhood could not be captured as a simple financial loss.
My bottom line is that I don’t see why punitives should not go to the person harmed. It also is addressing a headline rather than a real problem. Punitive damages are extremely rare.
It’s pravnik for the win!
I didn’t think about it this way, but once presented it’s obvious. Settling for an amount higher than compensatory damages is better for both parties than going to trial, plaintiff gets more money, defendant pays less money. The result would be a complete elimination of punitive damages, and a boon for defendants who now have tremendous bargaining leverage because they can easily offer the plaintiff a better deal than they’d get if it went to trial.
Well how would you feel if your little old grandmother spilled hers in your lap? my guess is you would find someone else to sue besides your grandmother.
Yeah. Good assessment, prav.
Thanks for the edjumacation! 
ETA: Under our current system, how is the actual amount of the punitive damages assessment arrived at? Does the judge tend to give deference to the recommendations of the plaintiff’s counsel, the defendant’s counsel, the jury?
How might this change under a system in which punitive damages are awarded to the state?
>SIGH<
I’ll do it, I guess.
It’s set by the jury, which can then be looked at by the judge, who has the power to decrase it (remittitur) or much more rarely increase it (additur). The parties then have the right to accept the judge’s alteration or go for a retrial, which, given that it is the same judge, may have a habot of ending up pretty much the same.
There is a lot of change at the moment over punitives, with multiple Supreme Court cases to determine if there is a constitutional limit on them. There isn’t one under the cruel and unusual punishment clause, but one has been found under the notion of substantive due process. The dissent to that holding was an interesting alliance between the liberal wing of the court (saying that there should not be a cap on how juries should be able to punish corporate wrongdoing) and the right (Scalia & I think Thomas) who maintain there is no such thing as substantive due process. Anyway, there is no definite limit on punitives as of yet, though Kennedy’s opinion (in Gore v. BMW or State Farm, I cannot remember which) suggests that the cap, other things being equal, will be around ten times compensatory damages.
How that would be affected by a move to punitives going to the state I don’t know. I think it is impractical for reasons stated above, especially prav’s.
I agree that this doesn’t work unless the attorneys get recompensed for winning punitive damages.
There’s no need for reimbursment to be at the same percentage, though. I don’t know if punitive damages are harder or easier to win, once you’ve won the case for compensatory damages, than successfully arguing for compensatory in the first place. My guess would be ‘easier,’ but it’s an uneducated guess.
But whoever’s managing the fund can set the rate, and find out what percentage of the take is required to get the case for punitive damages argued successfully as often as they’d like. Or the fund could even hire its own lawyers to argue for punitive damages in cases that promise a sufficiently large return.
The problem is not the attorneys, it’s the plaintiff. The plaintiff is better off settling, because he can get more than the compensation figure in a settlement, but is capped at the compensation figure at trial. Since the plaintiff is the one filing the suit, having them better off with no trial makes a trial (and punitive damages) rather unlikely.
Especially given that the defendant can make the offer contingent on the plaintiff not seeking punitives. So, Mrs. Smith, you can have $20,000 or if your attorney looks for $1,000,000 punitives, you get the $5000 the court will probably award. And by the way, if your attorney does not communicate this offer to you, he has committed an ethical violation that may well result in him being disbarred.
The OP states that having the punative damages go to the state would end up cutting the number of frivolous lawsuits. I know we hear about them on occasion, the multi-million dollar suit against a laundry for the destruction of pants for example, but are frivolous lawsuits really a serious problem?
Also, it seems to me that a lot of people in this thread are really upset at the idea of lawyers making money. Are you really so upset when a lawyer gets a percentage of a multi-million dollar suit?
Marc
What about just taking the punitive damages from the defendant and destroying them?
Putting caps on punitive damages seems to be the best option to me. That and insurers excluding them from coverage.
Several thoughts:
The idea of the state collecting punitive damages doesn’t bother me. Neither the judge nor the jury will benefit any more than any other citizen of the state from what is collected, and any individual’s share is tiny, so there would be almost no incentive to abuse the situation. In addition, state officials do not want to discourage companies from doing business in their state. I am much more concerned small municipalities that make money by setting up speed traps to fleece out-of-towners.
That said, I’d be in favor of eliminating punitive damages altogether. First, we already have a criminal court system who’s purpose it is to punish wrongdoing. I’m not sure whether they can currently be used directly against corporations although perhaps they should be given that, as I understand it, corporations are protected in terms of freedom of speech and other “individual” rights, so they ought to be subject to penalties as well.
Another problem is that we tend to think it is the corporate bigwigs who suffer from the payouts, so we don’t worry about the harm done. While the big boys no doubt get hit for a little bit of the cost, the vast majority of the expenses will come down on the consumer, expecially in a highly competitive industry like fast food. Since all the companies in the business will have the same damage risks, and when business are competitive, prices generally depend on costs, we little people will be the ones paying most of the costs of big payouts.
Finally, if a practice results in actual damages to the public of a certain amount, there is no reason to assess a penalty of many times that amount in order to stop the practice. If McDonalds has to spend ten million dollars to prevent one million dollars in actual damages to the public, it doesn’t make sense for them to do that (given that the public will be paying most of it). But they will do that in order to prevent a $50M punitive damage award. The public will be better off in the long run if the offense occurs from time to time and they just compensate those who are hurt.
I don’t get this part; this is usually the argument for punitive damages. A company engages in a practice they know will injure or disfigure a certain number of individuals, but their holdings are so large they have no incentive to discontinue the practice. Punitives shift that power balance to that they now have a disincentive to continue the harmful practice altogether, or even better, they realize the potential liability and don’t do it in the first place. Nobody gets injured or disfigured at all.
Thanks, by the way. I AmJured “Law of Unintended Consequences.”
(I rather like “prav,” come to think of it…very chummy.)
I see my statement was misleading. What I am saying is that we might be better off if they continue the practice (we don’t need to stop it). The cost to society of stopping the practice may be more than that of paying off the occasional party that is harmed.
Every time someone says this, the University of Chicago gets $1.
Ah, gotcha. No worries.