Tort Reform: Difference between revisions
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Punitive damages are not designed to compensate a person for losses caused by the other side, but to punish socially reckless or intentional behavior considered wrong by society. Punitive damages are much harder to get because of the requirement for reckless or intentional harm, rather than merely careless behavior, but can be much higher against companies deemed to do wrong.
Since they are designed to punish, a jury may look at many things and set the punishment at something they think will hurt the company. That's where $250 million verdicts come
Those awards seldom stay that high. A $250 million verdict against insurance companies for denying claims may be reduced to $25 million by the judge at trial and to $2 million on appeal. The Supreme Court has ruled that excessive punitive damages are an unconstitutional violation of due process, and criteria for assessing punitive damages include the reprehensibility of the defendant's conduct, the other civil or criminal penalties they would face for similar conduct, and a comparison of the punitive damages awarded to the actual damages (with anything greater than nine times the actual damages requiring a particularly strong showing).
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