Punitive damages may be recovered in some wrongful death cases. Punitive damages are widely misunderstood, largely due to the McDonalds coffee case. Many people are under the false impression that punitive damages are a road to riches.
Punitive damages are difficult to prove. You are not allowed to even ask for them until after you show a judge that you have good reason to. Then you have to prove it at a very high level of proof called “clear and convincing” proof. And even if you win and the jury awards punitive damages, the insurance company will often appeal the punitive damages, and the U.S. Supreme Court has gotten more and more hostile to high punitive damages awards, so if the award is quite high, it will often be reduced on appeal.
As if that weren’t bad enough, in Oregon the State takes 70% of any punitive damages award. Your lawyer will then take 20% as a fee (less than the normal fee of 33% to 40%), leaving the beneficiaries with only 10%. That 10% is then taxable, so the final amount in the pocket of the beneficiary may be as little as 5% and will never be more than 10%.
Despite all of this, it is still usually a good strategy to plead punitive damages when they are appropriate, for a few reasons:
- Even though the beneficiary receives very little of the money, the insurance company still has to pay out that money, so the threat of a high punitive damages verdict can be useful in negotiations.
- If you can get a judge to allow the pleading of punitive damages, you are allowed to ask all sorts of questions of the defendant that you would not otherwise be allowed to ask. For example, you can ask about the defendant’s finances. Why shouldn’t a jury know if the company you are suing has hundreds of millions in earnings? There are many honest and truthful facts that the rules of evidence do not allow a jury to hear. Successfully pleading punitive damages allows a jury to hear more facts, and more truth generally helps our side and hurts insurance companies.
- Punitive damages can also focus the jury more intently on the bad behavior of the defendant, which can also be helpful.
All of this can be quite confusing. The law says exactly what can be recovered, but then many of the terms turn out to be undefined. “Economic” and “non-economic” damages must be differentiated because of the $500,000 cap. Punitive damages are difficult to get, often appealed, and heavily taxed. But pursuing them can still be a good idea at times. We hope that this chapter has been some help to you in understanding this complicated area.