I just read an article about a $5 billion class-action lawsuit filed against a number of game companies by relatives of Columbine massacre victims, and I’m thinking, geez, this has got to stop!
Now, if I remember my high school civics class correctly, there are three types of awards granted by civil lawsuits:
Actual damages. You hit my car, it costs $300 to repair.
Compensatory damages. Without a car I missed work for a week, you owe me $500 (plus $1200 pain & suffering.)
Punitive damages. To “punish” you for hitting my car, you owe me another $500,000.
Seems like #3 is the big draw for people filing lawsuits left and right against big corporations and rich people. There’s that recent settlement against…umm, GM I think?..to the tune of $4.3 BILLION for victims horribly burned in a car accident. Terrible thing, but I simply can’t see how they’re injuries were deserving of a multi-BILLION dollar award!
So here’s my suggestion: ELIMIATE punitive damages! Or, at the very least, make it so the punitive awards get donated to a charity of the plaintiff’s choice, or given straight to the government. Pay anyone BUT the plaintiffs (who of course still receive actual & compensatory damages.) Seems like this will eliminate, or at least seriously cut down on, the people filing huge lawsuits against corporations and rich people simply hoping to “win the lottery.”
While I agree that the lawsuit in the link is idiotic, and those that brought it should be smacked into oblivion, eliminating punitive damages would be a bad, bad thing.
Your example, however, is pretty far outside the realm of possibility. There is no punishment for accidents.
Don’t you think you should examine what punitive damages are for and to what extent they achieve the purpose before tossing them out? Why stop at punitive damages, lets just get rid of civil lawsuits altogether.
The award of punitive damages is very very rare in Anglo-Australian jurisdictions (you sometimes see it in defamation cases).
Having advocated in the BBQ Pit that contigency fees are partly responsible for lawsuit mania in the US, and then getting attacked by US attorneys who made compelling arguments on the basis of their experiences that this is not so, I *cautiously *remark that punitive damages awards in the US remind me of playing at lottery - you sue and hope for the big discretionary prize awarded by the jury. You should only be awarded your actual loss.
Ned - perhaps you could explain why you think punitive damages are as fundamental to justice as civil actions, rather than gratuitously and unhelpfully lobbing in a hand grenade.
A better solution would require that if someone brings a lawsuit against another entity, and they lose, they should have to pay a significant fraction (or maybe all) of the other entities court costs.
It’ll make people think twice before they scream “I’ll sue!” Well, some people, anyway.
And keep in mind that in a lot of cases, the punitive damages that are actually awarded are lower than those that are sought.
I don’t know if companies actually use this formula(and my apologies if I’ve screwed it up). But if they did, you could see why punitive damages would be a good thing. The threat of the punitive damage is to provide incentive for the company to bite the bullet and do the recall, rather than risk lives and save money.
That doesn’t happen in the US?!? [eyebrows hit ceiling]
You lose in Australia, England or HK, and you pay the winner’s costs - not all of them, but about 50%-705, assessed with reference to a scale, and are called “taxed costs”.
You lose on a point so hopeless that you could never have won, you can be forced to pay “indemnity costs” - ie. virtually all of the winner’s legal costs, except that which is patently unreasonable.
I don’t practice in personal injuries, but yes there are (fairly morbid) books on assessment of damages for the loss of lives of adults and children, both in the US and elsewhere.
But do you think it would fair for the company to only pay for the dollar value of the life their actions took? Even if taking it was a calculated risk on that companies part.
That was pretty much my reaction. At best - I think - you can file a countersuit, claiming defamation and such. But as far as I know, there’s no automatic “Loser pays costs” thing in effect.
Someone please correct me if I’m wrong. It’ll help me sleep a little better every night. Just a little.
Seems like that would indeed have a chilling effect. But that is probably not a good thing.
Say you’ve been wronged by a company that’s got a lot of dough, enough to have some of the best lawyers in the country on their side. You would be less likely to sue(get justice), and far less likely to get a lawyer to represent you, if you had to pay that companies court costs . Which, given the fees that top notch lawyers charge, could be exorbitent.
To be right and lose your case and have to pay the opponents court costs seems really, really wrong to me.
You can’t: it’s unconstitutional (First Amendment right to seek redress of grievances).
And it’s a bad idea. Punitive damages are what keep manufacturers from releasing badly broken products because the actual damages (as defined in the law) flowing from the defects will not exceed the marginal profit to be gained from not fixing the defect. Without punitive damages, we’d have even more exploding Ford Pintos, more Dalkon Shields, more faulty Firestone tires. It’s the threat of paying potentially uncapped damages that keeps this sort of anticonsumer conduct under some sense of control.
“Loser pays” makes the courts inaccessible for those lacking money by increasing the risk of suing. Suppose your toaster oven explodes. As a result, you lose your job and incur several hundred thousand dollars in medical expenses. (You work for Burger King, so you don’t have medical insurance.) With “loser pays”, the toaster oven manufacturer is more inclined not to settle the case because they can probably “win” (that is, fail to lose) the suit on a technicality. After all, you can’t afford a good attorney – you’re $85,000 in the hole and you don’t have a job. All they have to do to win the case is bury you in paper, wait for you to fail to meet some deadline, and then move to dismiss. Boom, you lose, now pay!
The main advocates for “loser pays” and for punitive damage caps are (a) manufacturers and (b) insurance carriers. The first group wants to be able to cut more corners without worrying about getting sued when they do. The second doesn’t want the (unbounded) risk that punitive damages represent to their clients.
In that sort of instance, the judge and/or jury (whichever is being used in the case) should have the choice. After all, the judge decides whether to accept certain testimony, whether to find someone in contempt of court, whether to accept or overrule an objection, etc.
In instances of blatant “wrongness” on the part of the suer (is that even a word, spelled without a “w”?), the judge would say, “Not only am I throwing this out of court, but you have to pay his court fees, too”. It wouldn’t be the sort of thing that affects ALL court cases.
I think that judges should step to the plate and actually throw out a lot of cases that are without merit.
Well, part of me wants that. Then I realize that there are judges with conflicts of interest, and judges that are, well, lacking in good judgement.
What we really need are better juries! And to that end, I filled out my juror affidavit and sent it in. I anxiously await the summons to go and due my duty!
1. Last time I checked, Alaska does have a “loser pays” system, adopted ten or fifteen years ago. I have not seen any data on the effect that new system has had on lawsuits, but Alaska is relatively small potatoes as far as American jurisdictions go.
2. There are pros and cons to both the American pay-your-own-lawyer system and the English/Australian/etc. loser-pays system. Loser-pays discourages borderline frivolous suits (truly frivolous suits are already subject to stiff sanctions in the U.S.), but it also discourages suits that have a questionable basis in law but nevertheless should be heard. How long would it have taken the NAACP to file Brown v. Board of Education when Plessy v. Ferguson already said separate-but-equal was constitutional and they would have had to pay big bucks to the school board’s lawyers if they lost?
3. It is almost certainly not unconstitutional (at least not under the federal constitution–YMMV under state constitutions) to eliminate punitive damages. A number of states already severly limit the amount of punitive damages that may be collected, and the Supreme Court (BMW v. Somebody or Other) has made it clear that seriously excessive punitives violate the Due Process clause.
4. Punitive damages seem to have become somewhat more common in the last ten to twenty years, but they’re still rather uncommon. Big punitive damage awards against tobacco companies and such make headlines, but they are invariably reduced dramatically by either the trial judge or on appeal. The criteria for punitive damages are also quite stiff in most states. For instance, it was a rather big surprise when the Texas Supreme Court actually upheld, for the first time in years, an award of punitive damages in a case it accepted for review last year. It sucks to be slapped with punitives, but I haven’t seen any good data on what impact they really have on individual companies or the economy at large. My guess is it’s fairly close to negligible.
5. The OP’s #1 and #2 are both compensatory damages. Compensatories include everything from economic damages such as hospital bills and lost wages to pain and suffering damages. The idea of compensatories is to make the victim “whole” again, i.e., to put her in the position she would have been in had the accident never occurred. Punitives are intended to affirmatively punish the defendant for particularly egregious behavior.
6. “Accidents” may indeed be compensable under the tort system. I think what the person who suggested otherwise above meant was that (generally speaking) there has to be “fault” (usually “negligence”) before an injury becomes compensable. An accident can be the result of negligence even if it’s not intentional.
I would think that punitive damages are by definition not redress of grievances, but rather a punishment in addition to the redress of the grievances.
My idea FWIW, is to have all punitive damages be paid to the government, rather than to the plaintiff. This will eliminate the incentive to go after the big payoff, but still retain the option of punishing egregious wrongdoers.
Been on a post-clerkship vacation, spooje. Only one more month to go until I get back to being a lawyer.
And actually, I think plaintiffs do sometimes sue for punitives in traffic accident cases, especially when the defendant was drunk. They’re rarely, rarely awarded in such cases, but it doesn’t cost anything extra to ask for punitives. Who knows, you might hit the jackpot. Besides, you have to ask for damages in your complaint if you’re ever going to get them, and that’s usually long before all the evidence is available that would support or disprove a punitive damages claim.
Izzy, that idea about paying punitives to the government was more or less floated during the big tort-reform movement of ten years ago. At the time, the idea was to create a punitive-damages fund that would be used to compensate victims and such. Some proposals would have required all punitives to go into this fund, while others would have taken only a percentage from the plaintiff’s punitive recovery. I don’t think any of the proposals were adopted by the state legislatures, but it’s possible that one slipped past me when I was looking at tort reform issues a couple years ago.
Personally, I think stricter application of the normal punitive damges criteria is all that we really need. In Texas, where the criteria are quite strictly enforced by the Supreme Court and some of the intermediate appellate courts, big punitive damages are fairly uncommon.
I would just add though, that there is no inherent reason for the punitive damages to be paid to the plaintiff - after all they are punitive and have no connection to the damage suffered by the plaintiff. I think the rationale is to reward the plaintiff for having brought the lawsuit that caused the penalty, and to deter evildoers by giving an incentive to take initiative to punish them. Unfortunately, this is in essence the same thing as encouraging lawsuits, and to the extent that one believes that there is already too much litigation, they don’t hold.
Your comments about Texas must be understood in context of the George Bush tort reform laws that were passed there. My understanding is that the trial lawyers spent millions of dollars to defeat Bush precisely because they did not want Texas-style tort reform passed on a national level. Perhaps you might comment on the specifics of this.
First, I would point out that in many situations, punitive damages are a useful thing:
An example: Let’s suppose you make a perfectly valid claim on an insurance policy for $1000. If the insurance company wrongfully denies the claim and you take them to court, you won’t recover much more than $1000 unless you can get punitive damages. Thus, without the prospect of punitive damages, insurance companies have every incentive to manufacture reasons to deny certain kinds of claims.
Second, I agree that there’s no need for punitive damage awards to go entirely to the plaintiff, and I would not be uncomfortable with a large “tax” on punitive damage awards. At the same time, I note that parties would structure settlements to avoid such a tax.
Third, I believe that “loser pays” is a bad idea. As pointed out by other posters, this would give a tremendous advantage to the “big guy.” If you think that meritorious claims always prevail, you are just naive. And if meritorious claims failed even only 10% of the time, there would be a tremendous disincentive to bring good claims, since many people will not take a 10% chance of financial ruin.
Fourth, I agree that the US has lots of lawyers and lawsuits, but I’m not sure that this is a bad thing. Earlier in the previous century, it was much more common to see shockingly indadequate safety precautions taken by companies. Is there a connection? Who knows, but personally, I’d rather have too many warning labels than not enough lifeboats.
