Punitive Damages System

Punitive damage system is one in which damages beyond actual loss are awarded to the injured party to prevent and punish wrong acts. This article discusses punitive damage system in four parts.Part one mainly expounds basic theories of punitive damage system which is defined as one of damage systems purported to prevent and punish wrong acts. Punitive damages are often requested by a plaintiff in a lawsuit against the defendant for his misconduct, and are awarded with an amount beyond the plaintiff s actual loss. The first inkling of this system appeared in ancient laws. Contemporary punitive damage system had come into being originally for more than 200 years in Britain. Then it was broadly adopted in and applied to tort law and contract law in America. Contrast to these, in common law countries, along with its increasing influence the theoretical attitude towards this system changed from complete denial to limited admission. Both in the mainland and in Taiwan of China, provisions of punitive damages are laid down expressly. There are some relations and differences between punitive damages and compensatory damages. Discrepancies also exist between punitive damages and mental damages within such aspects as functions, application scopes, whether being able to be requested independently or not, relations to the occurrence of injury, so on and so forth. This is the same case between punitive damages and fine as well as forfeit. Response from the author to the opinions of critics of punitive damage system is also presented in this paper.Part two largely analyses the values and the functions of punitive damage system. The fundamental objective of its value is justice. With the fundamental objective of actual justice of this system, such values interrelate, interact, coordinate as efficiency, order, freedom, equality and protection of the under privileged which together consist of the contents of punitive damage system value. Notwithstanding, punishment, deterrence and encouragement are three main functions of this system.Part three chiefly explains such problems related to punitive damage system as the component elements, the scope and calculation of punitive damages. Unlawful conduct, wrong, causality and injury are four components of punitive damages which compared with compensatory damages, lay more emphasis on the factors of wrong and unlawful conduct, emphatically applied to conduct with outrageously subjective wrong. Punitive damages can be applied to the fields of tort law and contract law, particularly to the former. As for the latter, the application should be limited. The determination of the amount of punitive damages should be complied with the principle of proper punishment and deterrence in consideration of such factors as the possibility of being to blame for the defendant' s act, the conditions of his property, whether or not having been punished according to criminal law or administrative law, etc. When it comes to calculate the exact amount of punitive damages, calculate actual loss of the injured first, then take such elements stated above as the possibility of being to blame and the conditions of his property into account to set forth the proportion of this damages to actual loss. Finally, set the upper limits in different legal fields.Part four mainly deals with the thinking on legislative construction of punitive damage system in China. There exists the feasibility and necessity for China to establish this system. Punitive damages are provided expressly in Protection Act of Consumer' s Interests and Rights of PRC and Highest Court Interpretations of Applying Laws Concerning the Hearing of Cases Related to Commercial House Contract Disputes. Provisions for punitive damages should be laid down in the legislation of our incoming civil law code. Meanwhile, this is true in the legal fields concerning intellectual property, anti-unfair competition, securities, environment protection and rights of personality.