Pros And Cons Of Punitive Damages

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Punitive damage is defined as monetary damages in excess of a compensatory award, usually granted only in intentional tort cases where defendant’s conduct involved some element deserving punishment. Punitive damages are also called exemplary damages since they are intended to punish the wrongdoer (Reed et al 796).
There is an ongoing debate over whether or not awarding punitive damages need to be limited and a national concern that this award in a lawsuit may very well violate due process clause under the Fourteenth Amendment. In a 2003 case of State Farm Mutual Automobile Insurance Company v. Campbell, where the defendant Campbell and his wife was involved in a car accident that left one party dead and a third permanently disabled. Defendant and State Farm, defendant’s insurance agency, decided to contest …show more content…

Cons of awarding punitive damages include money to be paid or punishment not severe enough. Most companies can afford to raise prices for goods and services to compensate for settlements and therefore the intent of punitive damages can be ineffective. On the other hand, a company or an individual may become bankrupt after such judgment is made against their favor. State may also impose regulations arising from the lawsuit that could cause bankruptcy to many companies within an industry. Another con is that awarding punitive damages allows for companies and individuals to get away with negligence and sets a precedent for others to do the same. For example, the defendant mentioned in the case above. This man clearly committed a crime and in my opinion should not have been awarded anything for compensation worse punitive

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