The court may impose them to prevent undercompensation of plaintiffs and to allow redress for undetectable torts and taking some strain away from the criminal justice system.
In Harris v Digital Pulse Pty Ltd,[6] the defendant employees knowingly breached contractual and fiduciary duties to their employer by diverting business to themselves and misusing its confidential information.
Mason P dissented and opined that there was no principled reason to award punitive damages in respect of common law torts but not analogous equitable wrongs.
[7] The Supreme Court of Canada set out 11 principles to guide judges and juries for awarding punitive damages in the leading case Whiten v Pilot Insurance Co 2002 SCC 18.
[11][12] Examples of statutory authorisation of punitive damages (the third Rookes category) include section 34 of the Crime and Courts Act 2013, which allows claimants to seek, and courts to grant, exemplary damages against news media publishers when they show a "a deliberate or reckless disregard of an outrageous nature for the claimant's rights".
If one should select the former mode of redress, he may, no doubt, recover exemplary damages, or what is sometimes styled vindictive damages; but if he should choose to seek redress in the form of an action for breach of contract, he lets in all the consequences of that form of action: Thorpe v Thorpe (1832) 3B.&Ad.
Such a substantial statutory amount considered by the legislative organ is based on several extremely serious food quality incidents in the past two years, such as the notorious Sanlu tainted milk powder case.
Application of the punitive damage rule is further expanded with the enactment of the PRC Law on Tort Liability effective as of July 1, 2010.
[24] Punitive damages are entirely unavailable under any circumstances in a few jurisdictions, including Nebraska, Puerto Rico, and Washington.
[25] Although state laws vary, punitive damages are usually allowed only when the defendant has displayed actual intent to cause harm (such as purposefully rear-ending someone else's car), rather than in cases of mere negligence, or causes an injury through action taken in reckless disregard for the lives and safety of others.
In response to judges and juries which award high punitive damages verdicts, the Supreme Court of the United States has made several decisions which limit awards of punitive damages through the due process of law clauses of the Fifth and Fourteenth Amendments to the United States Constitution.
In this case, the Supreme Court affirmed that disproportionate punitive damages were allowed for especially egregious conduct.
At trial, this led the jury to find McDonald's knew their product was dangerous and injuring their customers, and that the company had done nothing to correct the problem.
The jury also awarded Liebeck $2.7 million in punitive damages, which was at the time two days of McDonald's coffee sales revenue.
Nevertheless, many legal scholars and documentary film makers like Hot Coffee argued that corporate lobbyists seized the opportunity to create public misinformation and distrust of the legal system by leaving out important facts in their television advertisements, such as, that the verdict was roughly equivalent to two days of coffee sales for McDonald's, that Liebeck received permanent injury to her genitals and groin requiring surgery, and that McDonald's had already received numerous complaints about the temperature of the coffee.
v. Campbell (2003), the Supreme Court held that punitive damages might only be based on the acts of the defendants which harmed the plaintiffs.
More reprehensible misconduct justifies a larger punitive damage award, just as a repeat offender in criminal law may be punished with a tougher sentence.