We’ve blogged before about the role of the civil justice system. A person, in their private capacity, may sue a wrongdoer for any “damages” sustained. Tort law is the private individual’s means of rectifying the wrongdoing of another. One aspect of damages I’d like to discuss is the concept of punitive damages. At trial, a lawyer may ask the jury to punish the defendant, by forcing the defendant to pay extra money solely as punishment because their conduct was that harmful.

In Oklahoma, Punitive damages are awarded in addition to compensatory damages for the purpose of punishing a defendant when the defendant’s conduct is particularly egregious.

Section 9.1 of Title 23, Okla. Statutes, allows for punitive damages, in addition to actual damages, “for the sake of example and by way of punishing the defendant” after considering seven factors. Those factors are:

  1. The seriousness of the hazard to the public arising from the defendant’s misconduct;
  1. The profitability of the misconduct to the defendant;
  1. The duration of the misconduct and any concealment of it;
  1. The degree of the defendant’s awareness of the hazard and of its excessiveness;
  1. The attitude and conduct of the defendant upon discovery of the misconduct or hazard;
  1. In the case of a defendant which is a corporation or other entity, the number and level of employees involved in causing or concealing the misconduct; and
  1. The financial condition of the defendant.

After considering the above, the jury is then instructed on how much punitive damages are to be awarded based upon the defendant’s level of intent: was the conduct reckless and without regard toward the plaintiff’s rights? Was it intentional and done with malice? Was the conduct life-threatening? With each level, the defendant’s conduct is considered more culpable and more deserving of punishment.

            Punitive damages are an important component of the justice system, because if all a defendant had to pay was the actual cost of damages, then a wealthy defendant could be incentivized to sometimes act in harmful ways if those acts are profitable, such as intentionally denying insurance coverage to increase profits. In such an instance, the Defendant would only have to pay what he already was obligated to pay anyway under the insurance policy. And such a system would encourage Insurance companies to deny coverage more frequently and weather the possibility of a lawsuit, knowing if they eventually get caught denying coverage in bad faith, they won’t have to pay any more than the policy. This deterrent effect is one very important reason why allowing punitive damages is good public policy.

            Another reason for allowing a jury to award punitive damages is the symbolism of retribution, and this is a more philosophical ground, but one still rooted in legal history. The legal system, as a whole, has retributive aspects, such as penal and criminal law. A large purpose of criminal law is punishment, along with other purposes, such as protection of the public and deterrence of future crimes.

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