Punitive Damages: A Comparative Analysis

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In light of expanding international trade, it is increasingly likely that politicians, courts, and tribunals will wrestle with whether punitive damages are appropriate in transnational disputes, and whether countries that traditionally do not allow exemplary relief should recognize and enforce foreign awards of such damages. By exploring how different systems address these problems, we can gain a deeper understanding of the role of punitive damages in our own legal system and discover a way to better deal with punitive damages issues in the international arena. This Article undertakes a thorough comparative study of punitive damages in five common law countries. It examines the laws of Australia, Canada, England, New Zealand, and the United States to determine whether there exists a consensus on the availability of punitive damages. The Article finds that, despite the controversy over their appropriateness, punitive damages are widely available in these countries and claims for such damages have increased in recent years. However, it also finds that there is little consensus about the factors used to determine the amount of punitive damages that should be awarded. Some jurisdictions provide little or no guidance to the judge or jury who sets the award. Others provide a detailed list of factors, and one country even provides damages brackets to guide the decision maker in fixing the amount of punitive damages. The Article concludes that all of the examined countries have taken steps to rein in unreasonably large punitive damages awards. Those steps vary greatly from country to country, as do the standards for determining what constitutes an excessive award.