Research Handbooks in Law and Economics series
Edited by Jennifer H. Arlen
Chapter 19: Economic analysis of punitive damages: Theory, empirics, and doctrine
Punitive damages have been a part of the civil law landscape in the United States since the nineteenth century, but the past two decades have witnessed a firestorm of renewed interest and debate over this supra-compensatory remedy, whose goals are to punish and to deter wrongful behavior. At first glance, this intense interest may seem puzzling given how rarely punitive damages are awarded. Punitive damages are at the tip of the tip of the iceberg in the civil justice system. The number of cases going to trial is very small, on the order of 3–5percent of civil cases filed in state court (Galanter, 2004: 509 tbl.5). Of those tried cases, punitive damages are awarded in a small minority—less than 5 percent of cases in state courts (Del Rossi & Viscusi, 2010: 138 n.36; Eisenberg & Heise, 2011: 6; Hersch & Viscusi, 2004: 24 tbl.2). So, what explains the sustained interest in what is, as an empirical matter, a very extraordinary, rarely imposed remedy? First, punitive damages are awarded much more frequently in certain types of cases.
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