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What is Tort Reform? – Part III

In past posts we have talked about “reformers” trying (in many cases, succeeding) to dramatically change our tort law by imposing conditions on the use of expert witnesses (as done in Florida by a statute that requires out of state expert witnesses to obtain a “certificate” from the Medical Board), shortening the statutes of limitation and by imposing “caps” on damages. On this occasion we will talk about another method used to fool the public into accepting tort reform: greatly limiting awards for punitive damages or eliminating them altogether.

What Are Punitive Damages

Punitive damages (or exemplary damages, as they are sometimes called) are intended to punish and “make an example” of the wrongdoer or tortfeasor. In other words, they seek to stop others from incurring in the same wrongful actions and to express society’s outrage at those wrongful acts.

Similarly, punitive damages may be awarded in cases where the court considers that compensatory damages are not an adequate remedy. For example, they may be awarded against an intoxicated driver for injuries or death he or she caused, i.e., to financially punish the drunk driver for his or her conduct. Also, punitive damages may be exceptionally awarded in contractual disputes: in insurance bad faith cases the insurance company’s refusal to pay (despite being clearly obligated to do so) is considered a tort separate from the contractual dispute which entitles the plaintiff to damages beyond the value of the insurance policy.

Punitive Damages Not Often Awarded

Despite common perception, awards for punitive damages are the exception, not the norm. Another misconception is that the typical award for punitive damages resembles the one from the late nineties where a California jury awarded 4.8 billion to 6 people that got burned when their ’79 Chevrolet Malibu caught fire (General Motors subsequently appealed the case and a judge reduced the award to 1.2 billion). In reality, statistical studies show that the median award for punitive damages is between $38,000.00 and $50,000.00.

Punitive Damages As Effective Deterrent

In the corporate World, corporate officers respond to shareholders and shareholders want profits. Otherwise, they would not have invested their money in purchasing shares in the company. Unfortunately, in America we have seen corporations place profits above public safety. In the early seventies, Ford Motor Company was under heavy competition from Volkswagen for the very profitable small-car market, prompting the company to rush the production of their new Ford Pinto despite pre-production crash tests showing that the car’s gas tank would rupture very easily when rear-ended and explode in a fire ball. Ford officials decided to continue producing the defective car despite owning the technology necessary to fix the problem patented and readily available. Why? Ford’s assembly-line machinery had already been tooled to produce the defective fuel tanks and Ford’s accountants decide it would be cheaper for Ford to fend off wrongful death lawsuits than to stop production of what had rapidly become their best selling car until the machinery had been re-tooled.

How does society deal with such callous behavior? With tort law and punitive damages. If tort law is “reformed” and damages limited or eliminated, corporations will not fix defective products or change behavior and policies that lead to injury or death. Some reformers claim that high awards for punitive damages are the result of vengeful feelings from those injured by tortfeasors and that there should be no place for revenge in civilized society…

Frankly, I do not believe that high awards for punitive damages have anything to do with revenge. Civilized society sentences criminals to long prison terms. Prison sentences are not for revenge, but for punishment and to deter others from committing similar offenses. People (including corporate officers and shareholders) tend to value their wealth very highly. Tort law seeks to have the same effect on those who negligently harm others: punishment and deterrence. In the civil system, money and not prison is the tool.

If you or a loved one have been the victims of someone else’s negligence, you should immediately contact a law firm experienced in handling these cases. The Miami Dade County Wrongful Death Law Offices of Greenberg, Stone & Urbano has throughout the years represented many clients involved in serious personal injuries and wrongful death cases. Visit our website to learn more about our firm and contact us today for a free consultation.

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