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Punitive damages may be everyday in US courts, but they terrify many foreign courts who regard them as offensive to notions of justice.

Punitive damages may be everyday in US courts, but they terrify many foreign courts who regard them as offensive to notions of justice. 4

In the late summer of 1985, Kurt Parrott, a 15-year-old who loved baseball and Pac-Man, was thrown from his motorcycle in Opelika, Ala. The buckle of his helmet failed, and he died when his bare head hit the pavement. Mr. Parrott’s mother sued the Italian company that made the helmet, and an Alabama court awarded her $1 million.

The company refused to pay. And last year, when lawyers for the Parrott family tried to collect in Italy, they were blocked by the Italian Supreme Court.

The court said that a peculiarity of American law — punitive damages — was so offensive to Italian notions of justice that it would not enforce the Alabama judgment.

Most of the rest of the world views the idea of punitive damages with alarm. As the Italian court explained, private lawsuits brought by injured people should have only one goal — compensation for a loss. Allowing separate awards meant to punish the defendant, foreign courts say, is a terrible idea.

Punishments, they say, should be meted out only by the criminal justice system, with its elaborate due process protections and disinterested prosecutors. It is not fair, they add, to give plaintiffs a windfall beyond what they have lost. And the ad hoc opinions of a jury, they say, are a poor substitute for the considered judgments of government safety regulators.

Some common-law countries do allow punitive damages, though in limited circumstances and modest amounts. In the United States, by contrast, enormous punitive awards are relatively common, although they are often reduced or eliminated on appeal. Last month, for instance, the United States Supreme Court heard arguments in the Exxon Valdez case, where a jury’s initial award of $5 billion was later reduced to $2.5 billion.

Still, such awards terrify foreign courts.

“The U.S. practice of permitting a lay jury to exercise largely discretionary judgment with limited constraints in awarding punitive damages is regarded almost universally outside the U.S. with a high degree of disfavor,” said Gary Born, an American lawyer who works in London.

Foreign lawyers and judges are quick to cite particularly large American awards. Julian Lew, a barrister in London, recalled a Mississippi court’s $400 million punitive award against a Canadian company in 1995 with scorn. “It did bring America into total and utter contempt around the world,” Mr. Lew said.

Yet there are signs that the gap between the United States and the rest of the world is narrowing, as American courts and legislatures start to limit punitive awards and other countries start to experiment with them.

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