Punitive Damages System

Punitive Damages ("PD"), which mean such part of damages paid to theaggrieved party above its actual loss, are the counterpart of compensatory damages.Alter its origination from Common Law countries, punitive damages have causedfar-reaching impact on Rome Law countries. PD is a special damages form in bothChina and US; its nature is the extension of the concept of punishment in criminallaw into civil law, thus preventing further commitment of similar of same civilinfringements through punishment of wrongdoer. Targeting punitive damages asthe research subject, this dissertation mainly researches on the definition, nature,history, value and function, application and enactment of PD in PRC using suchmethods as historical, comparative, legal interpretation.This dissertation consists of four parts.PartⅠ, Connotation of Punitive Damages.This part defines PD, explains and analyzes its nature. The author define PDas: "In order to educate the wrongdoer and prevent further commitment of similaror the same infringement, the aggrieved party may be entitled by court to not onlycompensatory damages, but also punitive damages exceeding its actual loss." PartⅠdiscusses the nature of PD, analyzes the criteria in the separation of private andpublic laws, concluded with the conclusion that PD shall fall within the scope ofprivate laws.PartⅡValue and Function of PDThis part analyses the basis of PD. First, it discusses its value of justice, order,freedom, equality, and efficiency. These values are interrelated to each other, andput together they constitute the value of PD. Besides, this part analyzes function ofPD, such as compensation, decreasing wrongdoing, transaction facilitating, etc.,which forms the integral value of PD.PartⅢBrief History of PDThis part briefs on the origin and history of PD, points out that some elementsof PD has already existed in ancient laws, such as Rome Laws and ancient Chineselaws. Modern PD Regime originated from Britain, and matured in US. Enormouscontroversies can be seen with respect to PD. In Rome law countries, PD has never been officially admitted as a kind of civil remedy. But such theories developed byCommon Law systems do have some influence on the academic works andprecedents of Rome Law countries to some extent. Under PRC laws,Consumer-Rights Protection Law and Interpretations on Several Problemsconcerning Laws Application in Hearing Cases involving the Sale & Purchase ofCommercial Property adopted PD. Taiwan legal regime also adopted PD in itsprovisions on civil liabilities for insider transactions.PartⅣApplication of PDThis part consists of two sub-sections. Section 1 introduces relevant provisionsof key foreign countries and Taiwan on PD under their laws; SectionⅡproposesthe establishment of PRC legal regime on PD.First, the author explores the legislation structure, suggests that PD provisionsshall be stipulated in INFRINGEMENT LAW Section of PRC Civil Code.Provisions on the application of PD in contractual disputes shall be governed byspecially enacted civil rules. Second, the author comes up with some specific draftprovisions on PD, which mainly covers prerequisites & applicable scope for theapplication of PD provisions, and rules for damages amount determination. Theauthor holds that fundamental differences exist between PD and traditionalcompensatory damages in respect of subjective requirements. Only those civilwrongdoings committed intentionally or under gross negligence maybe subject toPD. Besides, the scope of PD's application shall be strictly restricted within thoseof physical damage; extension of its application to damages on assets shall beconducted with great caution. With respect to the problem of damagesdetermination, the author suggests that two times of actual loss shall be the ceilingfor PD damages.