In most instances in the United States, punitive damages (extra monetary awards meant to punish the payer) are capped at three times the actual damages. Many people are offended by this idea because if a person is wealthy enough, the cap on punitive damages arguably prevents the damages from fulfilling their punitive function. For example, imagine that person A causes person B an injury worth $100,000. The punitive damages for such an injury would be capped at $300,000 and this would be a significant sum to most people. Yet if person A has a net worth of millions or billions of dollars he might not be fazed by a $400,000 fine. Depending on what the nature of the injury and the guilty party’s intent or negligence, such an award could be inappropriately small.
Even so, there are disadvantages to having no cap on punitive damages. One of those disadvantages is having personal injury lawyers deliberately hunt for rich defendants. Most people would agree that such a situation would be unfair. It could also “widen the field” re: the debate on damages that must take place during negotiations. The plaintiff and the defendant would be negotiating over vastly different sums, which would make trials longer and settlements less likely. For reasons like these, the courts have capped punitive damages at three times the actual damages or even less in some cases.
To put this into perspective, debate over the proper form punishments should take is not a new issue. Past societies sometimes followed the rule of talion or “eye for an eye”. This philosophy is still alive today; for example, the death penalty is applied to murderers. Even so, it is not economically or socially efficient to apply talion in every case. People do not always have an equivalent thing which they can suffer being taken from them and even when they do, putting out everyone’s eyes can have negative long-term results. As such, economic damages (and/or jail time) are used in almost every case and those damages tend to be capped.
There is one other form of punishment used besides economic damages, jail time and rare applications of talion: community service. Community service has as a unique advantage as a punishment in that it is equally costly to everyone. Whether a person is rich or poor, their time is worth relatively the same to them as anyone else’s. While this is also true of being put in jail, people in jail cost the public money and people who are doing community service are saving the public money. Some states have been creative in applying community service but they could go further. Economic damages have a vastly different impact upon people with different levels of wealth. It is not truly enough to say that some people are harmed by economic damages and a minority are not; the reality is that everyone is harmed differently by them and the message this sends is that the rich are better than the poor. A fairer system would be if punitive damages did not exist at all and if all punitive punishments had to be completed through community service. Such a policy might even cross the line from punishment into penance, the latter state being an ideal reaction on behalf of any guilty party. It would also slightly reduce hard feelings and resentment over lost court cases since any good person would resent needing to fulfill community service less than they would having to pay a burdensome fine. Finally, instead of costing the community things, tort lawsuits might begin to benefit the community through the steady stream of community service workers it would produce.
Alexander Fāng 