The Predictability of Punitive Damages

Abstract

Using one year of jury trial outcomes from 45 of the nation's most populous counties, this article shows a strong and statistically significant correlation between compensatory and punitive damages. These findings are replicated in twenty-five years of punitive damages awards from Cook County, Illinois and California. In addition, we find no evidence that punitive damages awards are more likely when individuals sue businesses than when individuals sue individuals. With respect to award frequency, juries rarely award punitive damages, and appear to be especially reluctant to do so in the areas of law that have captured the most attention, products liability and medical malpractice. Punitive damages are most frequently awarded in business/ contract cases and intentional tort cases. The frequency-of-award findings are consistent with all major studies of punitive damages.

JEL Classification: K41