The GOP is big on tort reform. The brand they advocate is, of course, capping or limiting punitive damages so that they're less "onerous." Problem is, that makes punitive damages pointless entirely - they're supposed to be onerous as a punishment for onerous behavior. So, if we don't want to limit or eliminate punitive damages, what can we do to defang that "frivolous lawsuits" red herring? Simple: don't give the punitive damages to the plaintiff.
The logic is simple: remove the potentially massive incentive incentive to sue, and the only reason left for filing a dubious lawsuit is spite - and few if any lawyers are willing to take a case for spite alone.
One thing should be made clean, however, all other forms of damages must be left untouched. Medical bills, legal fees, pain and suffering, etc would all remain as they are. The only difference would be that punitive damages, which are meant as a punishment and not a reward, don't go where they used to.
The natural question to ask once it's established that giving punitive damages to the plaintiff is a bad idea is: where should the money go? That question, it turns out, does not have an unambiguously good answer that I know of. Some ideas and their possible pitfalls:
- A charity - provides jurors incentive to inflate damages to be viewed as "Robin Hoods"
- The people (tax rebate) - see above, with added personal financial incentive
- Their competitors - how to distribute the money becomes sticky, and makes it impossible to punish industry wide problems.
- The state - judges and jurors might be tempted to inflate damages to compensate for a budget shortfall, especially if it effects education.
Of those possibilities, the last honestly seems like the least problematic to me, and certainly less problematic than giving it to the plaintiff. There are a couple of ways to ameliorate the problems of giving the money to the state (national or local - depending on jurisdiction). The limits would have to be constitutional in some way, however, to prevent raiding of the trust fund, of course. The first idea for a limit is that the punitive damages have to go toward funding some kind of probationary oversight of the defendant. That is, they should pay for investigators, inspectors, lawyers, etc as needed. The purpose of the oversight would be, of course, preventing repeat behavior. I especially like this alternative because it provides disincentives for repeat behavior beyond just the financial one, which is always included in calculations as a "business expense." Another, simpler alternative would be to have the money stashed away for a year or more. That way short term budgetary concerns don't enter into the picture and legislators can plan for what to do with the money (eg temporary tax cuts, school renovations, etc).
The only real counterargument I've heard is that this makes it impossible for lawyers to work off of contingency fees. That just isn't true, I think. For cases with merit, contingency fees can be folded into the legal fees section of the award. Granted, the jury isn't likely to give them nearly as much as the punitive damages would have, but remember that this reduced financial incentive is an intentional effect designed to reduce the incentive of taking cases with insufficient merit like they were lottery tickets.
Remember, to those who argue for caps or elimination of punitive damages based on their onerousness we should say, "Prison is onerous, too, but I don't hear you suggesting that we eliminate prison sentences." That, I think, should play well in the conservative frame of mind and how enamored they are with crime and punishment.
BlackGriffen