Reason Foundation

Reason Foundation

Punitive Damages and Environmental Law

Rethinking the Issues

Alexander Volokh
September 1, 1996

Executive Summary

The current debate over punitive damages, both in environmental cases and in general, is misguided. That debate paints a false dichotomy between environmental protection and corporate profits. There is a problem with punitive damages, though contrary to what tort reformers may argue, the problem is not large punitive damages awards per se. The problem is not that punitive damages are assessed in “crisis” proportions—no one knows what “crisis” proportions are. Rather, the problem is that punitive damages are often assessed in inappropriate situations or in unjustifiable amounts.

Formulations like “Punitive damages are too high” or “Punitive damages are too low” suffer from the same problem as statements like “Too many people are convicted of murder.” Such statements, based on aggregate results, lose sight of the purpose of the law, which is to establish a fair process for achieving a fair result in individual lawsuits. In the legal system, a fine that is $100 too high and one that is $100 too low do not cancel each other out. A solution to the punitive damages problem must explain what a “correct result” is and how to achieve it in individual cases. This paper will argue that:

Alexander Volokh is Associate Professor of Law

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