The United States has a rather unique approach to punitive damages -- one that courts in other countries find alien, if not unconscionable. As the New York Times reports, foreign systems tend to disfavor punitives, and foreign courts can be reluctant to enforce American court judgments that include large punitive awards.
Most of the rest of the world views the idea of punitive damages with alarm. As the Italian court explained, private lawsuits brought by injured people should have only one goal — compensation for a loss. Allowing separate awards meant to punish the defendant, foreign courts say, is a terrible idea.
Punishments, they say, should be meted out only by the criminal justice system, with its elaborate due process protections and disinterested prosecutors. It is not fair, they add, to give plaintiffs a windfall beyond what they have lost. And the ad hoc opinions of a jury, they say, are a poor substitute for the considered judgments of government safety regulators.
Some common-law countries do allow punitive damages, though in limited circumstances and modest amounts. In the United States, by contrast, enormous punitive awards are relatively common, although they are often reduced or eliminated on appeal. Last month, for instance, the United States Supreme Court heard arguments in the Exxon Valdez case, where a jury's initial award of $5 billion was later reduced to $2.5 billion.
Still, such awards terrify foreign courts.
"The U.S. practice of permitting a lay jury to exercise largely discretionary judgment with limited constraints in awarding punitive damages is regarded almost universally outside the U.S. with a high degree of disfavor," said Gary Born, an American lawyer who works in London.
That the U.S. approach is "exceptional," of course, does not mean it is wrong. While the U.S. legal system has its problems, taken as a whole I find it preferable to existing alternatives (though that may well reflect a bias for the familiar).