Economic Analysis of Punitive Damages
Introduction: Many lawyers regard compensation as the most important goal of tort law. However, in the words of Williams, “this…does not look below the surface of things. Granted that the immediate object of the tort action is to compensate the plaintiff at the expense of the tortfeasor, why do we wish to do this?… An intelligent approach to the study of law must take account of its purpose, and must be prepared to test the law critically in the light of its purpose.”1 Keeton argues that the primary function of tort law is not to compensate the losses, but to determine when compensation is required.2 A similar argument is made by Fleming and Rogers.3 Losses of the victim are only shifted to the tortfeasor if there are reasons to do so. These reasons can be found in the goals of tort law. ... etc.