I have been reading about a number of cases where sizable amounts have been awarded to the defendants in punitive damages. At the same time, federal and state budgets are, for the most part, in decline. If the intent of punitive damages is not to reward or compensate the defendant, but to punish the plaintiff, then why aren’t they payable to the U.S. or appropriate state’s treasury?
And why do I have the feeling that the answer is, “The Democrats would never allow this, since lawyers wouldn’t be able to take their cut of the award”?
b) Why couldn’t the award after lawyer fees be given to the appropriate government.
c) What makes you think the Democrats would oppose this. I’d think the Republicans would – first because it’s a change and second because they never want more money going to the government to spend.
What incentive would the plaintiff have to seek punitive damages if they weren’t getting any of it?
Basically, instituting this rule would eliminate any plaintiff even seeking punitive damages - as they’d:
not want to spend the time arguing for it - since they weren’t getting any
be afraid the jury would award less in compensatory damages (which they would still get)
Although punitive damages aren’t designed to solely benefit the plaintiff - I see no reason they shouldn’t go to them.
The state can often go after companies for consumer practice violations and stuff like that separately - if they want to build their treasury that way.
Give the plaintiff triple damages, and then give the remainder to the state or to an approved use intended to benefit all people damaged. Have the attorneys fees paid from the punitive damages. The plaintiff still has an incentive, and so does the attorney, but it doesn’t become a windfall for just one person.
I think people assume that stuff is more common that it really is. Not sure how complete these stats are, but if you go by this paper in 2005 - we are only talking an average of three cases per state that meet those guidelines.
That’s a particularly partisan way of looking at the issue. That doesn’t mean it’s totally untrue—trial lawyers are definitely a special interest for Democrats—but it is far from the full picture.
Fundamentally, the reason to have punitive damages is that they balance out the expected value of potentially unfair or illegal practices by economically powerful interests.
If there are no punitive damages, then it’s often in the interest of the more powerful party to deal with less than good faith. After all, the most the other party can recover from you is actual damages, and you have a much larger and more intimidating legal department.
If punitive damages to go the government, the result is still the same. The less-powerful party still has to face down that intimidating legal department, and has less to gain.
If punitive damages go to the injured party, then they have an incentive to brave the court costs, and the incentives get aligned correctly. The economically powerful interest has a lot to lose from even a single act of bad faith in the form of punitive damages, and if they decide to go for it anyway, the other party has a lot to gain from putting them back in their place.
Obviously, you can tweak how large the punitive damages should be, or you can apply a tax on them so that huge windfalls accrue partly to the government. But be careful about looking at only the recipient of the windfall to decide how that should go. Does a random person deserve millions because they got lucky and caught a huge corporation doing the wrong thing? No. But does the corporation deserve to forfeit millions for such a thing? Very possibly. Whatever system you come up with, you need to ensure that there is both a chance that they will have to, and that there’s someone who stands to gain enough from it to navigate the legal gauntlet they can wield.
Instituting a policy where punitive damages do not go to the plaintiff essentially eliminates punitive damages. Say actual damages are $100 but punitive damages will be $1000. As soon as the situation starts looking grim, the defendant approaches the plaintiff and offers to settle for $101. Since that’s a dollar more than the plaintiff could expect to get in a best-case scenario under the punitive-damages-to-the-state scenario, the plaintiff always takes it. No defendant ever has to pay punitive damages and the entire point of punitive damages is defeated.
Having punitive damages go to the plaintiff is the only way to prevent defendants from settling and avoiding punitive damages every single time.
Some punitive damages are banned by federal law. If you have group health insurance from an employer, you cannot sue your insurance company for punitive damages, no matter how egregious their behavior.
Or a group disability policy (with exceptions for government employers and some “church plans.”) That’s ERISA for you. Intended to protect workers, and ends up working a terrible injustice.
Some states limit or even prohibit punitive damages. Then you’ve the US Supreme Court making up arbitrary limits under the “due process clause.”