RESEARCH SETTING

Punitive damages are a typical and settled feature of American law. Other Common Law countries such as Australia, New Zealand, Canada and South Africa also provide for this type of damages. The remedy can be described as an additional amount of money awarded to the victim of an unlawful act on top of the compensatory damages. As opposed to the latter, punitive damages do not (primarily) compensate for a harm suffered. Instead, they pursue the punishment of the injurer and the deterrence of potential wrongdoers.

In the European Union only a handful of countries acknowledge this type of damages in their legal systems. The most prominent of these countries is England where exemplary damages – the term used in English law – are available in a few strict categories of cases.

In continental Europe punitive damages are said to be non-existent. The concept of punitive damages is considered contrary to the fundamental separation of criminal and private law. Civil Law countries in the European Union are wary of punitive damages as they are administered in civil proceedings but pursue objectives which are traditionally the focus of criminal law. Punitive damages are also held to be anathema to the principle of strict compensation and are seen as resulting in an unjust enrichment of the plaintiff.

The world we live in today is one where the practical significance of national boundaries is slowly eroding. Due to improved modes of transportation, people are able to visit other continents with relative ease. Similarly, with the rise of global commerce, businesses are expanding into other jurisdictions. Distances are no longer a hindrance to global mobility. It could be said that the world is becoming a “global village”, not only on the level of electric communication as once conceived by Marshall McLuhan3, but also in terms of tourism and trade.

This increased globalisation arguably results in an augmented number of law suits between Common Law and Civil Law parties. The effects of punitive damages are thus increasingly being felt outside the jurisdictions where they are awarded. As punitive damages are predicted to remain a significant feature of U.S. litigation, European countries cannot ignore this important institution within American law.