Law Economics Perspective, Punitive Damages,

Punitive damages is derived from England, and be further developed in America. Up until now, the scheme is only adopted by Common Law System, however, denied by Civil Law System.The employment of the punitive damages, serves the ends for equity and justice, and may compensate for the losses that compensatory damages could not offset. However, the awarding of such damages is a very complicated issue, and will bring us into a territory full of controversy. The main reason for this is that, the punitive damages lies between the tort law and criminal law, it entails great ambiguities regarding the justifications, scope and amount when we awarding such damages. And the deterrent effects of the awarding of such damages are also uncertain. Even in the United States, where the scheme is relatively highly developed, there is no consensus on such issues. During the studies on Punitive Damages, the Economic Analysis of Law gradually took the lead. By utilizing the economic analytical approaches, such as Positive Economic Analysis, Cost-benefit Analysis and Marginal Analysis, Economic Analysis of Law enormously advanced the studies, and even touched the essence of the punishment and compensation. It bears great importance either in theoretical aspects or practical aspects.Our scholars have not done too much studies on this scheme yet, and their focus are remain on the introduction of such scheme from abroad and whether and to what extent should we transplant this scheme into our legal regime. Currently, we have adopted this scheme in our consumer protection act. Whereas, it not running smoothly, primarily due to the lack of theoretical accumulation on this scheme. Since we contemplate to incorporate this scheme into more civil acts, it will expose us to very high and unpredictable risks, given the fact that there is no ready experience from Continental Law System can be relied on.Therefore, we have to further explore the risky nature of the scheme, by absorbing the fruitful academic achievements of Economic Analysis of Law, in hoping that our legislative and practical activities will benefit from the study. This article is composed of seven chapters. The first chapter is a general review of the history of the scheme and its latest developments. The Second chapter addresses the justifications and purposes of the scheme. By using the economic approaches, it respectively analyzes on the two purposes ofthe scheme——desert and deterrence, and further explores the internalcoherence of the two opposite purposes and questions the traditional conceptions and distinctions on the punishment and compensation. The third chapter studies the scope within which the scheme shall be utilized, based on the theoretical rules explored in the chapter two. The fourth chapter focuses on the calculation of the punitive damages. The point is that, optimal punitive damages are based on multiplier principle and aims to achieve optimal deterrence. In its latter part, it looses the multiplier principle in accordance with the practical situation, and further explores some alternatives for the multiplier principle, in reconciliation with the traditional legislative and judicial conventions. The fifth chapter discusses additional issues to this scheme, one is what type of the legal liability the punitive damages should be recognized as, and the other is how to distribute the punitive damages in an appropriate manner. The sixth chapter aims to apply the rules established in this article to our legislative practices, it comments on current statutes and make an outlook for future legislations. The seventh chapter offers a general review and conclusion on this article.