Why is there a cap on punitive damages?
Asked by: Rupert Carroll PhD | Last update: January 23, 2026Score: 4.8/5 (40 votes)
In response to judges and juries which award high punitive damages verdicts, the Supreme Court of the United States has made several decisions which limit awards of punitive damages through the due process of law clauses of the Fifth and Fourteenth Amendments to the United States Constitution.
Why are punitive damages capped?
Damages are capped because it limits the costs of participating in the legal system. This means costs will be lower and more predictable primarily for those running a business, and at some level limits the money spent by taxpayers on the courts.
What is the limitation of punitive damages?
In recent years, several courts across the country have acted to put limits on the size of punitive awards. For example, in California, several courts have not allowed punitive damages to exceed 10 percent of the defendant's net worth.
What is the largest punitive damage ever awarded?
The court also observed that the $145 billion punitive damages award was a record- breaking amount that was too great to be permitted: This trial produced the largest punitive damage verdict in American legal history.
Are caps on damages a good idea?
A “cap” on damages is law that puts an arbitrary “one-size-fits-all” limit on the amount an injured person can receive in compensation irrespective of what a judge or jury decides compensation should be. Therefore, caps not only hurt victims, they undermine our jury system.
Caps on Damages and Lawsuits: What it Really Means
How much punitive damages should I ask for?
It is hoped that making the perpetrator pay a sum stretching beyond compensatory damages will deter both the defendant and others from committing similar misdeeds in the future. A typical cap on punitive damages is four times the amount of compensatory damages.
What are the three types of caps on damages?
There are three types of damages in personal injury claims: non-economic damages, economic damages, and punitive damages. Special and general damages are alternative terms used to describe economic and non-economic losses.
How to get a million dollar settlement?
Million-dollar personal injury settlements are rare and usually awarded only in cases involving severe injuries and significant damages. Factors common to high-value settlements include the financial, physical, and emotional impacts as well as the at-fault party's ability to pay.
Can punitive damages be bankrupted?
Unlike most judgments against a defendant, punitive damages awards are not dischargeable in bankruptcy so long as the relevant cause of action was based upon willful and malicious actions. This rule is important for creditors, as debtors may try to hide behind bankruptcy to avoid large judgments against them.
What is the biggest lawsuit ever won by a single person?
Tobacco Awards
However, there have been two awards to individuals that top the list of personal injury amounts. In 2002, a California jury awarded Betsy Bullock $28 billion who began smoking at 17 and developed lung cancer which spread to her liver at the age of 64.
Can a judge reduce punitive damages?
Judges may reduce punitive damage awards when it looks like juries have not followed instructions.
Is emotional distress punitive damage?
If the emotional distress was caused by reckless or intentional actions, such as harassment or extreme negligence, courts may award punitive damages in addition to compensatory damages. Punitive damages are meant to punish the defendant and deter similar conduct in the future.
What states do not allow punitive damages?
Therefore, punitive damages awards will be overturned by courts in most states if a jury has not also awarded compensatory damages. Punitive damages are not available in every state. Michigan, Nebraska, Washington, and Puerto Rico do not allow for punitive damage awards.
What is the constitutional limit on punitive damages?
It thus found the maximum permissible punitive damages award to be $350,000. The Court of Appeal affirmed. The California Supreme Court reversed the lower courts.
What is the largest personal injury settlement ever?
The largest personal injury settlement in U.S. history was the landmark 1998 Tobacco Master Settlement Agreement (MSA), where major tobacco companies agreed to pay $206 billion over 25 years to 46 states to compensate for medical costs related to smoking-related illnesses.
Why are punitive damages rarely awarded?
Punitive damages are rare, both in Florida and in other US states, because of the stringent criteria required to justify their imposition.
Can punitive damages be excessive?
The U.S. Supreme Court has, however, held that a punitive award is arbitrary – and violates due process – where it is “grossly excessive” in relation to a state's legitimate interests in punishment and deterrence. (BMW of North America, Inc. v. Gore, supra, 517 US at 568; State Farm Mutual Auto Ins.Co.
Can punitive damages be money?
Even though the award for punitive damages is against the party who caused the injury, the money for punitive damages is paid to the injured party. Therefore, an accident victim could receive money for their damages and money awarded to punish the defendant's conduct.
What is the rule for punitive damages?
Overview. Punitive damages are awarded in addition to actual damages in certain circumstances. Punitive damages are considered punishment and are typically awarded at the court's discretion when the defendant's behavior is found to be especially harmful.
Why do lawyers often try to negotiate a settlement?
By negotiating for higher settlements, you can show your clients that they deserve justice. You can provide compassionate legal care by working to hold liable parties responsible.
Is it illegal to have a million dollars in cash?
The bank won't call the police. They will notify the IRS. It is legal for you to have $1 million in cash. It is legal for you to open an account with $1 million in cash.
What injuries pay the most?
The highest-paying car accident injuries often involve severe conditions like spinal cord injuries, traumatic brain injuries, and multiple fractures. These injuries require extensive medical treatment, leading to substantial medical bills and significant pain and suffering damages.
Do punitive damages have a cap?
California does not impose a dollar limit on the punitive damages you can recover. However, the United States Supreme Court prohibited excessive punitive damage awards in 2003 in the case State Farm v. Campbell.
What is the most common type of cap?
Worldwide, Streptococcus pneumoniae is a type of bacteria that is most often responsible for CAP in adults. Some other common bacteria that cause CAP are: Haemophilus influenzae. Mycoplasma pneumoniae.
What is the cap on pain and suffering damages?
In the 1978 Andrews Trilogy of cases, the Supreme Court set a cap of $100,000 for non-pecuniary injuries following catastrophic or serious bodily injuries. This amount is adjusted for inflation each year. In 2023, the serious impairment cap for pain and suffering damages is approximately $400,000.