In reading or hearing stories about court juries delivering big dollar verdicts in civil lawsuits, we often get a distorted, negative view of punitive damages. Are there any restrictions to what a jury can award? And where do you draw the line between simply reimbursing an accident victim for their medical expenses and punishing the defendant who caused the accident?
To help us better understand the sometimes controversial legal world of punitive damages is our local law expert and attorney Mark Alexander of Stewart, Melvin & Frost. Mark is an experienced litigator specializing in personal injury law and will talk about the purpose and the circumstances that allow these types of punitive damages judgments.
Question: Let’s start with the basics: From a legal perspective, just what are “punitive damages”?
Mark: In civil lawsuits, there are two types of damages that juries can award: Compensatory damages and punitive damages. Compensatory damages attempt to make the person whole again. For example, an accident victim suing the person who caused the wreck may seek compensatory damages for their medical expenses. The intent is that the victim is reimbursed and returned to the life they lived before their accident.
Punitive damages are different because it goes one step farther to punish the defendant. For example, if the driver who caused an accident was driving drunk, then punitive damages could be awarded to punish the driver for their actions. Punitive damages are designed to be a deterrent. Its intent is to prevent someone else from causing similar harm to another person. And hopefully make life safer for all of us.
Question: Under what circumstances does the law allow punitive damages to be awarded in a lawsuit?
Mark: The awarding of punitive damages undergoes strict scrutiny by the courts. It also involves a separate, second phase of a civil jury trial.
At the close of a civil trial, a judge will instruct jurors that they may consider punitive damages. However, there must be “clear and convincing evidence” that the defendant has acted with a specific intent to cause harm, or with a “conscious indifference” for the consequences of their actions.
For example, if a car crash happens because the defendant was carelessly talking on their phone, it is unlikely that punitive damages could be awarded unless this person has a clear record of committing this same bad behavior in the past – and has failed to heed warnings. Otherwise, punitive damages would not apply.
However, it becomes a different story if the driver was intoxicated. That’s where the line is crossed. When someone drinks too much and gets behind the wheel of a car, they are acting “consciously indifferent” to the dangers or consequences of their action. Punitive damages may be appropriate to deter people from engaging in this behavior and to promote safety.
Another example is when a car or drug manufacturer puts out a product that they know is unsafe or dangerous, and they knowingly place “profit over safety.” If someone gets hurt, punitive damages may be appropriate to deter them from engaging in this behavior and to promote safety.
Question: We often hear in the news about excessive jury awards for punitive damages. Are there any limits to the amounts of these punitive judgments?
Mark: The legal guidelines for punitive damages vary from state to state. In Georgia, there is a $250,000 ceiling on punitive damages except in cases of driving under the influence; product liability; and incidences of clear intention to harm someone.
You might wonder why product liability is one of the exceptions. One of the reasons is that a manufacturer’s faulty product – for example the recent General Motors case involving the faulty ignition switch – has the potential to harm many more victims. So the ceiling on punitive damages is lifted to provide a greater deterrent so that others are not endangered.
Question: The famous McDonald’s hot coffee incident and other court cases involving large jury payouts receive a lot of negative publicity as being excessive and a misuse of the courts. But how common are these types of cases involving millions of dollars in punitive damages?
Mark: The subject of punitive damages is a hot topic and a flash point for the tort reform debate in the United States. The publicity from a handful of sensationalized cases has led to a fairly common perception that punitive damage awards tend to be frequent and excessive. However, contrary to popular opinion, awards of punitive damages are very rare and involve much less money.
Statistical studies have revealed that punitive damages are only awarded in two percent of civil cases that go to trial, and that the awards average between $38,000 and $50,000. Locally, I can also confirm that there have been very few cases where Hall County juries have awarded punitive damages.