The Effects of Seeking Punitive Damages on the Processing of Tort Claims
Posted: 14 Nov 2004
Punitive damages are controversial aspects of tort litigation and have been the subject of numerous theoretical, empirical, and experimental studies. Critics have argued that the uncertainty and unpredictability that punitive damage claims inject into a case may increase the rate and amount of settlements and carry systemic consequences for the general processing of tort claims. This paper represents the first empirical examination of this hypothesis.
With one of the most comprehensive data sets of tort litigation we analyze cases that are likely to have caps on punitive damage awards and cases that are likely to be uncapped. We examine the effect of the decision to seek punitive damages on several major decision points in the tort litigation process in a series of logit regression models. With extensive control variables we find that seeking punitive damages has no statistically significant effect on most phases of the tort litigation process.
JEL Classification: K13, K41
Suggested Citation: Suggested Citation