Punitive damages are available whenever the conduct of the defendant is such as to merit condemnation by the court. This requires high-handed, malicious, arbitrary, or highly reprehensible misconduct that departs to a marked degree from ordinary standards of decent behaviour.
Punitive damages will arise most often in intentional torts or breaches of fiduciary duty, but are also available in negligence and nuisance as well.
The following factors are relevant to the making of a punitive damage award:
- whether the conduct was planned and deliberate
- the intent and motive of the defendant
- whether the defendant persisted in the outrageous conduct over a lengthy period of time
- whether the defendant attempted to conceal or cover up its conduct
- the defendant’s awareness that what it was doing was wrong
- whether the defendant profited from its misconduct
- whether the interest violated was known to be deeply personal to the plaintiff
- the financial or other vulnerability of the plaintiff
Principles applicable to punitive damages may be summarized as follows:
- Punitive damages should be assessed in an amount reasonably proportionate to such factors as the harm caused, the degree of the misconduct, the relative vulnerability of the plaintiff, and any advantage or profit gained by the defendant.
- Regard should be had to any other fines or penalties suffered by the defendant for the misconduct in question.
- Punitive damages are generally given only where the misconduct would otherwise be unpunished or where other penalties are or are likely to be inadequate to achieve the objectives of retribution, deterrence, and denunciation.
- The purpose of punitive damages is not to compensate the plaintiff but to give a defendant his or her just desserts, to deter the defendant and others from similar misconduct in the future, and to mark the community’s collective condemnation.
- Punitive damages are awarded only where compensatory damages, which to some extent are punitive, are insufficient to accomplish these objectives.
- Punitive damages are given in an amount that is no greater than necessary to rationally accomplish their purpose.
- Moderate awards, which inevitably carry a stigma in the broader community, are generally sufficient.