One of the most famous cases of punitive damages in the United States occurred in 1992. Stella Liebeck of New Mexico was seriously injured by second- and third-degree burns when a cup of coffee she had purchased at a McDonald`s Corp. (MCD) drive-thru was spilled on her lap after her grandson stopped the car she was sitting in so she could add sugar and cream. It should be noted that the application of punitive damages varies from State to State. Each State applies different criteria, and some are more willing to award punitive damages than others. In the end, Liebeck received $200,000 in damages — later reduced to $160,000 after the jury determined she was liable for 20 percent of the oil spill — and $2.7 million in punitive damages — later reduced to $480,000 to limit Liebeck`s price to three times what she had earned for damages. McDonald`s was forced to pay and responded by lowering the temperature of its coffee shops. Proponents of punitive damages argue that one of the functions of such an arbitral award is to retaliate against the victim of the defendant`s reckless or gratuitous conduct. If a person is hurt by another person`s wrongful misconduct, the plaintiff has the right to express outrage by fining the violator. Seeking reprisal allows the complainant to punish a premeditated offender in the same way that the criminal justice system punishes the complainant. While the decision reassured some in the insurance industry, the industry continued to pursue “tort reform” legislation at the federal and state levels.
President George W. Bush proposed his own reform package in 2002, which included limits on punitive damages. This proposal would limit punitive damages to the lesser of $250,000 or double the economic loss. The Supreme Court of the United States, in Pacific Mutual Life Insurance v. Haslip, 499 U.S. 1, 111 S. Ct. 1032, 113 L. Ed. 2d 1 (1991) upheld substantial punitive damages on the basis that the Alabama jury received reasonable instructions from the jury and that the Alabama Supreme Court used a seven-factor test to determine the appropriateness of the sentence. On appeal, the U.S.
Supreme Court overturned the punitive damages. First, the court identified the “degree of reprehensibility of the defendant`s conduct” as the most important indication of reasonableness in determining punitive damages under the due process clause. In the Court`s view, the damages awarded should reflect the enormity of the crime committed by the defendant and should not be manifestly disproportionate to the gravity of the offence. In Gore`s case, the sentence was exaggerated because BMW`s behaviour showed no indifference or reckless disregard for the health and safety of others. Minor repairs to the cars had no impact on their performance, safety features or appearance. The Kyoto Protocol provided for sanctions for Parties that did not meet their targets and were therefore penalized: the Implementation Division of the Compliance Committee may request a Party to prepare a compliance action plan or suspend or suspend a Party from the use of the flexibility mechanisms. In all cases, the enforcement agency shall make a public statement that the Party is not complying with the rules and shall also publish the consequences to be applied. With respect to a principal-agent relationship, courts are reluctant to award punitive damages to the principal for the agent`s reckless acts. An exception to this preference is if the customer favors or causes the agent`s recklessness. An easy way to remember the meaning of punishment is that it sounds like the word punish – both come from the Latin root punish, “to impose punishment.” Punishment does not always refer to punishment from one person to another, such as a mother disciplining a child.
It can also describe the unpleasant outcome of large-scale action, such as the punitive effect that higher taxes will have on the middle class. Nglish: Translation of Punishment for Spanish Speakers In the domestic context, courts sometimes award “punitive damages”, which consist of an amount greater than what is due as (severe) compensation. which is granted to punish and/or deter behaviour. In this context, the term “punitive” therefore describes a consequence that aims to punish and deter people. Some contracts list certain “liquidated damages” as a result of a breach. However, a court may choose to ignore this clause if the contractual penalty is indeed punitive damages. There is a 2-part test that courts typically use to determine whether a penalty clause applies: Finally, the court considered the difference between punitive damages and civil or criminal penalties that Alabama could impose for comparable misconduct. The fact that the $2 million penalty was significantly higher than Alabama`s $2,000 civil penalty for deceptive marketing practices was another reason to consider punitive damages excessive, the court found. Since the 1980s, appellate courts have been called upon to review punitive damages and assess the procedural fairness associated with awarding such damages.