punitive damages
17 May 2004Via 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.
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?