punitive damages

Via Nathan Newman, a great proposal from Schwarzenegger in California:

SACRAMENTO – Gov. Arnold Schwarzenegger wants taxpayers to get the lion’s share of any punitive damage awards from lawsuits in California.

His proposal that the state take 75 percent of any award is tucked into the revised $103 billion budget presented to lawmakers this week. It’s drawing criticism from trial lawyers who say the money belongs to victims who win monetary damages by suing negligent carmakers, deceptive cigarette companies or fast-food restaurants that serve coffee too hot.

The Republican governor argues that the victims are compensated by separate awards for actual injury or loss. He wants the bulk of punitive awards to go into a Public Benefit Trust Fund.

The administration projects the state could get $450 million from the lawsuits each year, based on a McGeorge School of Law tally of nearly $6.4 billion in punitive awards from 1991 to 2000 in California.

This is a spectacular idea, and the criticisms of the trial lawyers are completely without base – punitive damages are separate from compensation for the plaintiff. This type of wealth redistribution could work wonders for curbing our nation’s litigious tendencies.


Comments

Nathan NewmanMay 17, 2004 at 10:37 · reply

I wouldn’t bet on it curbing litigation. Plaintiffs still keep 25% of punitive damages and I could see smart lawyers saying–

“help my client, but even more importantly, help pay the bills of the hundreds/thousands of people damaged by the defendant. Right now, members of the jury, your tax dollars are going to Medicaid, to disability payments, to a range of social services to pay for the damage to individuals who aren’t in this court room. Now, you can assess punitive damages that will fund those social services and force the defendant, not you as taxpayers, to pay for those costs to our society.”

You could see some spectacular awards with that kind of approach, don’t you think?

This is silly crowd-pleasing garbage that appeals to all of this tort reform mania without acknowledging that the victims really do get hurt by this kind of redistribution of awards that they deserve.

Why is it that whenever new proposals to curb the “out of control legal system” come up, they invariably bring up the McDonalds coffee case? If one looks back at this supposed abrogation of justice, you’ll see that the poor woman got THIRD DEGREE BURNS and a large award that was later knocked down several times upon appeal, and she’s still mocked for trying to swindle the poor McDonalds corporation.

It’s a house of cards – people are outraged at apparent greed, Arnie proposes a silly solution that opens a million other problems, and everyone is happy because those greedy fat-cat plaintiffs get their due. It’s all bullshit pleasing of the hoi polloi, Chris.

–sean

JadeGoldMay 18, 2004 at 06:17 · reply

Agree with Sean. This is political grandstanding that is designed to curb punitive damages.

The fact is punitive damages accomplish two needed functions: to punish someone or somethig that has committed truly egregious damage and to compensate a victim beyond medical expenses/loss of income.

Always follow the money; note where this proposal is coming from and who it comes from.

I am not convinced that this idea is without merit. I definitely agree that the attacks on our “out of control legal system” are usually exaggerated, including the Mcdonalds case.

But I don’t think that takes away from the possibility that changing the flow of punitive damages from the individual to the state could still be a good idea.

Strictly speaking, this legislation would not affect the compensatory award to the individual. If it does make the compensatory awardings (not punitive) to the individual vastly inadequate, then that is something that can be addressed by the jury ongoing case by case – the compensatory awardings can be increased accordingly. Right?

What sort of other problems do you think it opens up?

Current punitive damage awards certainly do “compensate a victim beyond medical expenses/loss of income”, as JadeGold states. In fact, they compensate a victim beyond what they are ever likely to earn. They compensate a victim much the way the lottery compensates a gambler.

I like the idea because it seems like it addresses the “lottery” problem of people thinking they can “get rich” off the legal system, while retaining the punitive aspects of the monitary award.

As important as it may be to “follow the money”, also look to see who opposes the idea. If the Trial Lawyers Association opposes it, chances are it’s a good idea.

cal lawyerJune 06, 2004 at 16:31 · reply

is this meant to help consumers or large corporations?

if punitive damage awrads can’t keep them in check what will?

Beth SchaadJuly 28, 2004 at 09:21 · reply

If a plaintiff is successful in an injury case, they get medical expenses, loss of income AND pain and suffering i.e. what the jury believes the pain and suffering of third degree burns amounts to. The purpose of punitive damages as defined are to punish a defendant and deter others from committing similar acts in the future.

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