You mean like a fine?
For a lot of plaintiffs, that would make it one hell of a lot harder to win, for the burden of proof for most criminal matters is “beyond a reasonable doubt,” whereas the burden of proof for civil matters is most often “on the balance of probabilities.”
Are you under the impression that a state adjusts the tax rate according to need? That if they suddenly received a million extra dollars they would reduce taxes accordingly? Because I assure you it doesn’t work that way anywhere in the world. Every dollar the jury awards the state has not the slightest effect on how many tax dollars they have to pay. The state has a one-time million extra dollars to deploy that year, and that’s it; indeed if they spend it on something that incurs recurrent expenditure (eg a new school, library or hospital) it make trigger a tax increase in following years.
This would be a better post if the part after the semicolon didn’t directly contradict what you said before it.
And who would go to jail? The stockholders?
Try reading it again. The implication above was that the state getting an award from the case would reduce taxes or prevent them from increasing. I’m saying that it would not reduce taxes at all (as taxes are not decided by need or by other opportunistic income sources) and may indeed result in later increases.
I don’t see how this follows. This doesn’t argue in favor of punitive damages; it argues in favor of a class action lawsuit.
I understand the down side of reducing the incentive to sue, but I think that on balance it is a good thing, not a bad. The US has more lawyers and more lawsuits than we need. Yes, if we reduced that, people who suffered minimal damage would be incentivized to settle or ignore. De minimis non curat lex, or at least it shouldn’t.
In cases of really egregious misconduct, corporations would experience just as strong a disincentive to refrain from such conduct. John Edwards wouldn’t be rich, but that’s OK by me.
The argument that punitive damages should go to the plaintiff is like arguing that traffic cops should keep the money from speeding tickets.
Regards,
Shodan
I don’t think you know what a class action lawsuit involves. You still need a named plaintiff. Sometimes the named plaintiff gets “extra” damages, but absent punitives, the incentive often won’t be there. Being the lead plaintiff can paint a huge target on your back. The extra award to lead plaintiffs is designed to prevent the “free rider” effect in class actions, but won’t incentivize someone to sue in the first place.
The suit may also not be suitable for class treatment. FRCP 23 is a pretty high standard, especially in light of CAFA.
I’m not surprised. The US has great product safety, and great quality products. Other countries without tort systems don’t. Every single time a development in tort law occured that made people gaining redress for corporate malfiesance easier, the Chicken Littles of the world ran out telling us that American industry would collapse under the burden. (See Macpherson v. Buick Motor Co., 217 N.Y. 382 (N.Y. App. 1916).) Guess what - it hasn’t. Instead it has focused on making safer, better products. Cars whose wheels don’t splinter. Coke bottles that don’t shear off in the hand. Drugs that don’t deform people.
Companies don’t do this for fun. They do it because the cost of doing otherwise exceeds the cost of doing it. Part of that is repuation, but part is the tort system. It ain’t broke, so don’t fix it.
And as for the concept that the law should not cure minor harms - you’re misapplying it. If a corporation can profit by causing small harms to significant numbers of people, it will. The only way to stop this in many cases is through the application of punitive damages.
No they wouldn’t. Only if the harm against an individual is sufficient to incentivize a suit or if the case is suitable for class treatment and a lead plaintiff can be found and incentivized. Your glib assumption that is always the case is an indication of a lack of knowledge in the field.
No it isn’t. It would be the case if the police were the only people harmed by the speeding, if the police weren’t paid money separately to stop speeding or if, absent the money going to the police, they wouldn’t catch speeders. Seeing as none of those are the case, your analogy, is, to be completely honest, a pile of pants.
Plenty of companies, including the U.S., have jail time for serious enough corporate wrongdoing.
I was asked in a compliance training session when I talked about the criminal penalties who would go to jail, and it gave me the chance to answer “it sure as hell won’t be the shareholders.”
The people jailed are the people directly (and provably) responsible for the particular actions.
As mentioned, if everyone agrees that the damages incurred aren’t worth bothering with a lawsuit, then you don’t need a lawsuit at all. Punitive damages skew that cost-benefit analysis.
Considering that the part about “always” is a figment of your imagination, I think it indicates something else.
Yes, it appears to me that it is.
I think it is a pretty good analogy.
I don’t see the relevance of saying that traffic cops aren’t the only ones harmed. Tort lawyers aren’t harmed at all, yet they get the benefit of punitive damages.
It also doesn’t matter that cops are paid separately. Plaintiffs are also paid separately - that’s the idea of compensatory damages, and pain and suffering damages. And people can and not doubt still will sue even if punitive damages go to the state, so the notion that police wouldn’t still catch speeders is also invalid.
The pants fit pretty well, as far as I can tell.
The point of the analogy remains .Tort lawyers have a vested interest in collecting as much money as they can. Therefore the possibility exists that they are pushing to sue when they shouldn’t, or collect when they weren’t harmed.
Paying punitive damages to the state removes that incentive. Companies are still punished just as much for wrongdoing (where appropriate) since criminal laws still apply, and punitive damages can still be awarded.
And then the rest of us are less l,likely to wind up with lawnmowers with labels warning us not to trim trees with it, or (especially) not have to pay for medical tests for common conditions, ridiculous malpractice insurance rates for OB/GYNs, and so forth.
Regards,
Shodan
Wasn’t there a case in the 50’s or 60’s that showed some car company was producing a defective product that resulted in people dying? The company cynically calculated that settling the court cases where people would sue, even if that cost them a few million dollars, was cheaper than fixing the problem?
So, the company traded people’s lives so they would not have to re-tool a manufacturing line.
Without substantial punitive damages it was cheaper to payoff the families of those who died.
Sighs.
You seem to have ignored the comments on not everything being suitable for a class action, even if there are large numbers of people involved. Could that be because you don’t have the first clue about what goes in to having a class certified? Having been on both sides of the equation multiple times (though I will say more often in opposing class cert) I’m going to tell you it isn’t as open and shut as you seem to think.
And again, we are talking specifically about low levels of harm to multiple people. Judge Posner wrote an opinion about bedbugs in hotels. It’s unlikely anyone is going to sue on their own. Even as part of a class, there is no real incentive to be the lead. So, absent punitives, the rational economic decision for the hotel chain is not to spray for bedbugs, especially if the other low cost chains aren’t.
No it isn’t. Let’s look back at what you said, conveniently posted for all to see…
Do you deny saying that? You’ll look pretty foolish if you do. You said “would experience” not “would usually experience” or “woudl experience most of the time.”
“Would experience” means “would always experience.”
Bottom line is there are cases of really egregious misconduct when they wouldn’t experience just as strong a disincentive. In fact, if you reduce the incentive for a private individual to sue, even by a tiny amount, then assuming rationality the disincentive is always lower. But I didn’t go that far. Just pointed out if you think the disincentive will always be as strong, then you don’t understand the law. Color me unsurprised.
Well of course you think it’s a good analogy. It’s your baby and you are proud of it. Unfortunately, you are blinded by the birthing experience of it and don’t realize it actually looks like Winston Churchill crossed with a monkey’s ass.
Traffic cops aren’t specifically harmed by speeders, and so don’t receive the money. Tort victims are, by definition, specifically harmed by the tort, and so receive the money. (That they choose to use part of their money to compensate their attorney is not relevant to the discussion, but nice attempt at a dig at the nasty plaintiffs bar that oppresses you, until you need it that is).
I’ve already explained to you how compensatory damages often don’t compensate, and often don’t provide sufficient incentive to sue. Your discussion of how plaintiffs get paid is confusing to say the least, and that’s the polite way I can describe it. Traffic cops are paid separately to the act of speeding. They exist (partially) because of speeding, but only in the sense that judges exist, partially, because torts are committed. The act of a person going 65 mph in a 45 zone doesn’t impact whether the traffic cop should be paid or not. Absent the tort, the tort victim does not receive compensation. It’s a situation that cannot be said to be similar.
Oh - I just saw this on reading through again…
You really don’t understand the system. Tort lawyers collecting when they weren’t harmed? Unless a person is representing him or herself in a tort suit, then the lawyer isn’t the person harmed at all…
Paying punitive damages to the state will do certain things. It reduces the incentive of an individual to sue. It reduces the incentive of quality lawyers to represent low income plaintiffs by changing the contingent equation. It reduces the likelihood juries will award punitives.
All of this shifts the balance towards the corporation and away from protection of the consumer. Yet, like everyone else, you dress it up in language that it is the lawyers you are going after. You look a lot less sympathetic when the reality of tort reform becomes clear - that those who are hurt by it are the parents of oxygen deprived children who have to provide 24/7 nursing care for the child’s life out of an award capped at $2 million; or the person with 95% body burns because an auto company made the calculation that retooling was more expensive than the expected number of wrongful death or injury suits; or even the consumers sold cars that’re wrongly advertised as higher horse power than they actually possess, and the company can’t be bothered to change it.
As to the old story about OB/GYN insurance, why not put the blame where it belongs - on the insurance companies. Juries LOVE doctors. Insurance companies whine about frivilous suits, but then don’t oppose them in court. Man up, grow a pair, and fight them. That’s how to put ambulance chasers out of business. While the costs would be higher in the short run, in the long run making it clear that an insurance company would not be an easy mark and would not settle on specious claims would be a winner.
So why doesn’t the insurance company do it? Because they can pass the cost onto the doctor of not doing it, who can pass the cost onto the patient. Because of a stupid fucked up health care system, there is no incentive for the insurance companies to act responsibly. But it is easier for people on your side of the fence to blame lawyers rather than actually trying to fix what is wrong with things.
No, that just means that the damages and costs award to an individual are less than the cost of the action. Given the high cost of litigation, that means that even significant damages are often not pursued.
A whack of people? Class action. Deliberate nastiness? Punatives. A whack of people plus deliberate nastiness? Class action with punatives awarded in addition to compensatory.
Where the USA differs from some other jurisdictions (e.g. Canada), is that in the USA the courts tend to be more inclined to award punatives in a non-class action, with their minds turned to all the other people out there who are being similarly harmed by the defendant despite those people not being part of the action. The McDonald’s coffee spill is a good example of this. The result of the high punatives is that the company is pressed to change its ways, while the complications and additional expense of a class action are avoided. I think this is a cost effective way of bringing companies in line.
If you did not use the courts to bring companies in line, I expect that there would be more legislation, to keep the companies in line through regulation.
The nice thing about the judicial system is that it is usually more responsive to individuals’ needs than the legislative system. As a business, would you rather make your own decisions, or have the gub’mnt regulate the hell out of you? As Joe Q. Little Guy, would you rather be able to take a matter to court with the hope that an award beyond compensation will be high enough to change the company’s practices, or wait on the politicians (who are influenced by lobbyists) to regulate the company more? Punatives are simply a tool used by the judicial system that helps it be responsive.
That’s a good example. Something like the coffee spill situation is an example of a corporation deliberately placing large numbers of people at risk. In the first instance, it is unlikely to be amenable to a class action, because the differences between the class members will be very high (did the person buy it to drink immediately or later, was there contributory negligence - as was found in the case, did they add cream or not, how severe were the burns etc). But more importantly, there is the gambling aspect of the corporate behavior which leads to the punitives - McD’s was lucky there weren’t many other such burns, but it felt it could take that risk. As long as it kept gettign away with it, it had no incentive to change. Had the award been limited to compensatory damages (and let’s remember McDonald’s could have walked away for $20k) then its calculation would have been to continue serving a potentially fatal product.
Missed the edit window…
Now - it is likely/possible that this woman would have sued even with the punitives going to the government. But who would have represented her. McDonald’s was asked for $20,000. A lawyer will do some work for the $6,000 or so he gets out of that. But once McDonald’s says no, and the attorney knows he is capped at 30% of the compensatories - so 30% of $160K which is $48,000 - you are going to massively impact the amount and quality of work. Let’s say the attorney estimated a 70% chance of success on that case, so his expected payout is now $33,600. That’s around 75-80 hours of my time, and I am not that senior. You can bet your bottom dollar McD’s attorneys are making damn sure the plaintiff’s lawyer is tied up for significantly longer than that.
The effect of what Shodan is suggesting is to further tip the balance in favor of the corporate defendant. What a surprise.
The Supreme Court changed the calculus in the late 90’s.
To some extent, we are in giving the proceeds from speeding tickets to the guys that write the speeding tickets. And that is the way it is SUPPOSED to work. We are giving private citizens an incentive to police this sort of activity AT THE SAME TIME we are providing an deterrent for people to engage in this sort of activity.
Perhaps the incentive doesn’t need to be that high but right now we are making the deterrent effect too low. Are we more concerned with some greedy schmuck getting more money than he has any right to when he drags some miscreant corporation into court or are we more concerned about some corporation screwing the public?
I can make a pretty good argument that a relatively progressive tax system eliminates the first problem perhhaps the answer is for states to impose a special progressive tax on punitive damages.
How do other countries do it? Surely there are other first world countries that have punitive damages. Where does the money go for them, and what are the consequences of whatever approach they have?
Secondly, one of the problems that I see associated with the way punitive damages are done here is that it contributes to a certain contempt and loss of respect in the legal system. People are generally OK with a plaintiff receiving compensatory and actual damages even when they are extremely high, it’s the punitive damages that sets them off, and frankly, it’s not an unreasonable reaction. There is something fundamentally unfair about someone getting a huge “bonus settlement” for damages they have already been compensated for.
I understand all the reasons for why it’s handled the way it is, but still at a gut level it violates every notion of fairness we have learned since kindergarten.