Punitive Damages: How Much Is Enough?
Joseph W. Cotchett and Mark C. Molumphy
This material is reproduced from Civil Litigation Reporter., Volume 20, Number 1 (Feb. 1998) copyright by the Regents of the University of California. Reproduced with permission of Continuing Education of the Bar – California, Berkeley.
Punitive damages are an established practice of American common law, traditionally assessed against defendants in civil cases to punish past misconduct and to deter future misconduct. But because they have become more frequent in recent verdicts, they have received increased attention. The major issue today is no longer whether defendants should pay punitive damages; it is well-settled that punitive damages are appropriate in certain circumstances, as both a matter of law and policy. Instead, current controversy focuses on what is the appropriate amount of punitive damages that should be awarded and how that amount should be calculated.
This article discusses the development of punitive damages, the purposes of such awards, and the factors that must be considered when determining the amount of punitive damages to be awarded. Specifically, it focuses on the percentage of a defendant’s net worth that can be assessed in awarding punitive damages and what relationship punitive damages must have to the actual damages awarded.