Punitive Damages: A Comparative Analysis

Abstract

In light of expanding international trade, it is increasingly likely that politicians, courts and tribunals will wrestle with whether punitive damages are appropriate in transnational disputes, and whether countries that traditionally do no allow exemplary relief should recognize and enforce foreign awards of such damages. Furthermore, by seeing how different systems address these problems, we can gain a deeper understanding of the role of punitive damages in our own legal system and be better able to deal with punitive damages issues in the international arena. This Article undertakes a thorough comparative study of punitive damages in common law countries. It examines the laws of England, Canada, Australia, New Zealand and the United States to determine whether there exists a consensus on the availability of punitive damages. The Article finds that, despite the controversy over the appropriateness of punitive damages, they are widely available in these countries and claims for such damages have increased in recent years. It also finds, however, that there is little consensus on the factors that are used to determine the amount of punitive damages that should be awarded. Some jurisdictions provide little or no guidance to the judge or jury who sets the award. Others provide a detailed list of factors, and one country even provides damages brackets to guide the decision maker in fixing the amount of punitive damages. The Article concludes that all countries have taken steps to rein in unreasonably large punitive damages awards. Those steps vary greatly from country to country, as do the standards for determining what constitutes an excessive award.