Punitive damages, or exemplary damages as they are sometimes referred to, are noneconomic damages for things such as pain and suffering. Punitive damages generally fall under anything related to the case that doesn’t have a fixed bill.
Juries normally decide on the amount of punitive damages that are paid out to the injured party. If a judge feels the punitive damage amount is excessive the judge can reduce the amount.
Punitive damages are not meant to reward the victim (the injured party), rather they are fines for disregarding human safety. This could be against a business selling a defective or dangerous product, against a medical professional who didn’t practice up to the standard of care they are required to, or against a driver who was too busy texting to pay attention to the road.
History has proven that financial punishment is the best way to prevent future wrongful behavior and to encourage change to any current wrongful behavior. Punitive damages only punish the party who has participated in wrongful behavior; they do not affect the general public or the economy in any way.
Yes, punitive damages are taken from businesses at times, but only when that business has knowingly participated in wreckless outrageous behavior endangering the general public. Yes, their costs as a business can go up, but only to correct any defective device or product they are selling. Costs to consumers do not go up, generally, unless the fix has added an extra cost to the product.
There are limitations on punitive damages that help protect the cost of doing business so prices do not have to go up.
In addition consumer costs rising, it is also a common belief that medical malpractice lawsuits cause an increase in health care and health insurance costs. This is not true.
In Pennsylvania, there are only about 1500 - 1600
medical malpractice lawsuits per year. Most of them are lost, despite medical negligence in hospitals being the 3rd highest cause of death in the United States.