05 - Punitive Damages in the United States

Punitive damages, are a peculiarity of the American legal system. Again and again, one reads of extraordinarily high sums, which are primarily judged against larger corporations. A well-known case, that went through the press a few years ago, was about a woman, who received a paper cup of hot coffee, at the car counter of a fast-food restaurant, and then clamped it between her legs. The paper cup couldn't withstand the pressure, so the woman scalded herself with the hot coffee. The woman then sued the company, and was awarded $ 2.7 million in the first instance. A consequence was, that the company then printed a warning on the paper cups, that the coffee is hot.

At first glance, this judgment sounds difficult to understand for a European. However, if you look at the background, the situation is a little different. In fact, there had been similar incidents in the past. In addition, it emerged in the course of the proceedings that the company required employees to keep the coffee at a temperature of at least 90 ° C at all times in order to meet the standardized taste. After the company appealed the ruling, another hearing began and the damages were reduced to a few $ 100,000. In fact, legal political goals are pursued with punitive damages.

One aim is about punishment:

On the one hand, the crude behaviour of the offender should be punished with the means of civil justice and, on the other hand, possible additional acts of revenge by the victim should be avoided.

Since such regulations are not contained in the legislation, the judgment should also serve as a deterrent: In addition to the perpetrator, the judgment should also preventively deter the general public or, better yet, potential perpetrators from future socially harmful behaviour.

Since such a procedure is also associated with a high personal risk, the aspect of reward plays a role: the injured party should be rewarded for the enforcement of the law based on his commitment - to strengthen the legal system in general;

Finally, it is also about that the victim receives full compensation: the victim is to receive a supplement to what is perceived to be inadequate repair of the damage, whereby a lack of social security can have an impact, among other things.

The punitive damages can be many times higher than the actual damage, as the following example from 2020 shows: A peach farmer from Missouri is said to receive a total of $ 265 million from Bayer and BASF. An American jury sentenced the two companies in the legal dispute over the weed killer Dicamba. The total is divided into $ 15 million in damages and an additional $ 250 million in punitive damages.