WHAT ARE PUNITIVE DAMAGES AND WHY SHOULD ANYONE HAVE TO PAY THEM?
Our civil justice system holds individuals and corporations accountable for their conduct. In most cases, if a party accidentally injures another person or damages property, they pay compensation to the injured person for the losses he or she sustained. “If you break it, you fix it.” However, in some cases, the damaging conduct is more than just an accident. In those cases, an individual or corporation may be required to pay “punitive damages.”
Punitive damages are intended to PUNISH the other party’s wrongful behavior, not just to compensate the victim. The purpose is to deter further wrong behavior of the defendant. It may also set an example to discourage others them from engaging in similar behavior.
Some people and news outlets argue that punitive damages have gotten out of hand. But in fact, our lawyers have observed that punitive damages are rarely allowed by the courts. In Minnesota, for example, a lawyer cannot even ask for punitive damages in the initial case (complaint). Instead, it is only later in the case that a judge decides if the jury can even consider punitive damages.
PUNITIVE DAMAGES REQUIREMENTS IN MN
First, the judge must be convinced that the evidence is sufficient to permit the jury to conclude that it is “highly probable” that the defendant acted with deliberate disregard for the rights or safety of others. If the judge is not convinced that such evidence is there, then the jury is not even asked to consider punitive damages. In fact, there are few cases where a judge even allows a jury to consider punitive damages. Basically, the defendant’s conduct has to be very intentional and very serious before punitive damages will even be considered.
Punitive damages have a place in our civil justice system. Jurors can only consider punitive when the behavior was so reckless or harmful that the defendant clearly needs a strong incentive not to commit the same offense again. Without these penalties, for example, a corporation might find it more cost-effective to continue their misconduct. They would just have to pay limited compensation to those they have harmed without thinking of the ramifications. Punitive damage make safety a more important issue.
THE IMPORTANCE OF PUNITIVE DAMAGES
Consider the punitive damages awarded recently in a Vioxx drug case in Texas. Merck executives KNEW the drug was deadly but sold it anyway. They made $12 billion in sales – while the drug killed as many as 55,000 people from heart attacks and strokes. The jury awarded $229 million in punitive damages because that was how much money Merck estimated it would make by delaying a change in Vioxx’s warning label.
Unfortunately, Texas state law puts an arbitrary cap on punitive damages, so in the Vioxx case the punitives were automatically reduced to $1.6 million. That is a drop in the bucket for Merck and not likely to change their future behavior.
In Minnesota, punitive damages are often allowed in drunk driving cases. Drunk driving is completely inexcusable, and the harm caused by a drunk driver can be very serious. Therefore, MN has a strong incentive to punish the drunk driver financially as well as criminally. If you have been injured by a person or business that engaged in egregious conduct and you have a question about punitive damages, call our office and speak with a personal injury lawyer for a free consultation.