A Common Lawyer's Perspective on the European Perspective on Punitive Damages

• Author: Michael L. Wells
• Position: Marion and W. Colquitt Carter Chair in Tort and Insurance Law, University of Georgia Law School
• Pages: 557-577

Marion and W. Colquitt Carter Chair in Tort and Insurance Law, University of Georgia Law School. The author wishes to thank David Seipp and Jason Solomon for helpful comments on a draft of this article.

Page 557

While punitive damages are well-entrenched in the common law legal systems of the United States¹ and Great Britain,² they have a far smaller role in the civil law tradition of Continental Europe. Writing in these pages a year ago, Professor Helmut Koziol offered "a European Perspective" on punitive damages.³ He pointed out that punitive damages are generally disfavored in Continental legal systems,⁴ expressed his own disapproval of them,⁵ and offered an array of reasons for rejecting or restricting their use.⁶ Professor Koziol's article is typical of punitive damages scholarship in its focus on normative issues raised by the doctrine -whether, why, and under what criteria should punitive damages be awarded. The literature addressing questions of this kind is extensive and sophisticated, and I have nothing to contribute to it.⁷ Rather, this Article takes a comparative perspective, exploring the civil law-common law divide as it relates to punitive damages. Page 558

My premise, a familiar one to comparative scholars, is that we may better understand, appreciate, evaluate, and criticize our own system by standing outside it, studying another, and then looking at our own practices with fresh eyes.⁸ Some differences among the black letter rules of one legal system and those of another represent different responses to straightforward value choices, such as whether the plaintiff=s negligence should preclude recovery or merely diminish it.⁹ Others may illustrate a variety of means aimed at achieving a common goal. To some extent, the variety of definitions of "design defect" may fall into this category.¹⁰ Comparisons between the ways different legal systems deal with substantive policy choices in making legal norms can be useful because they can show that our own approach is not inevitable and invite us to question it rather than take it for granted.¹¹ One may find in another system an attractive solution to a vexing problem or an especially convincing line of argument for one rule over another.¹² Thus, some of the policy arguments advanced in favor of punitive damages have influenced the development of European Community law¹³ and even have some influence on German law.¹⁴ Page 559 Conversely, the civil-criminal distinction that weighs so heavily in European law has influenced rulings by the United States Supreme Court that curb the scope of punitive damages while not eliminating them altogether.¹⁵

Other disparities among legal systems are of a different order. They cannot be fully understood as differences as to which of two competing values ought to outrank the other. Rather, they reflect the phenomenon of "path dependence." I use that concept here to denote the ways in which the paths taken by the two legal cultures have diverged, resulting in sharp differences in certain basic features of the respective legal traditions.¹⁶ For example, "[i]t is hard to believe . . . that the heavy use of the civil jury in the United States is unrelated to differences between English and Continental administration that go back to the Middle Ages."¹⁷ In order to grasp these differences among legal systems, the comparison must go beyond legal rules to include history and culture as well. As comparative law scholar, Bernhard Grossfeld points out, "[o]ften Page 560 the thing that 'goes without saying', that remains unspoken, never questioned, has a greater impact than what we call law."¹⁸

In my view, the civil law-common law split on punitive damages falls into this category of path dependence. Thus, it is easy enough to understand how it is that Nebraska makes a value choice against punitive damages¹⁹ while Georgia accepts them.²⁰ The two jurisdictions simply weigh the pluses and minuses differently.²¹ The general acceptance of punitive damages in the common law world and their general rejection in Continental legal systems is another matter. If the availability of punitive damages turned solely on deciding how much weight to put on one value or another, one would hardly expect to see a pattern that more or less neatly tracks the civil law-common law divide. But then the question arises: why is it that societies with so much shared history and so many shared values diverge so sharply on punitive damages?

The answer, I will argue, lies in a basic cultural difference between the civil law and the common law traditions. The notion of awarding punitive damages for private wrongs is somewhat at odds with the distinction both traditions draw between private and public law. Nonetheless, there are strong policy arguments for such damages. The cultural explanation for the civil law-common law divide is that lawyers, judges, and legislators trained in the civil law learn that law is a body of rules and are thereby better equipped to maintain the formal distinction between the two domains in the face of policy arguments for exceptions. By contrast, students of the common law study discrete cases and the facts, reasons, and distinctions courts rely on to resolve them. The history of the common law is one of endless innovation and assimilation of new ideas. General principles are always giving way, and students learn that rule-based arguments routinely lose in the battle between form and substance. The acceptance of punitive damages is an illustration of that general theme. Page 561

If I am right that something more than straightforward "pluses and minuses of punitive damages" value choices are at stake here, then path dependence may be the key to the divergence between civil law and common law systems. We must study the history of how law developed in the two legal traditions, or as William Ewald puts it, "the effort by jurists, over time, to deepen their understanding of law and what it requires."²² Luckily, generations of accomplished comparativists and legal historians have done the basic research bearing on the issues I wish to address. I will draw heavily on their work and borrow their insights for my purposes. Part I discusses the civil law tradition, Part II turns to the common law, and Part III argues that certain historical contingencies do much to explain why common law systems are less resistant than civil law systems to anomalous doctrines like punitive damages.

I Why The Civil Law Tradition Rejects Punitive Damages

Professor Koziol's argument against punitive damages begins with the basic principle that "punishment is outside of the private law."²³ This is so because "penalties express public disapproval of certain behaviour."²⁴ Yet "punitive damages are then awarded to an individual who has neither suffered damage to that amount nor has a claim for unjust enrichment."²⁵ The basic problem with punitive damages is that "in the area of private law a rule always concerns the relationship between two or more legal subjects."²⁶ Awarding such damages "is against the structural principle that, under the private law, legal consequences need mutual justification."²⁷ Professor Koziol concludes that "[e]ven if there are very strong arguments for imposing a sanction on the defendant, these arguments alone cannot justify awarding the plaintiff an advantage when he has suffered no corresponding damages and has no unjust enrichment claim against the defendant."²⁸ Page 562

This line of reasoning illustrates three characteristic features of the "folklore" of the civil law tradition.²⁹ The first is "the importance of clear cut concepts."³⁰ The general premise--that "punishment is outside of the private law"³¹--leads quickly to the conclusion that the plaintiff in a tort case may not obtain non- compensatory damages. "Judges, according to the folklore, are merely the operators of a machine designed by scientists and built by legislators."³² The "machine" they operate in deciding private law issues is the civil code, which "marks a new beginning"³³ and is conceived of as "the whole law."³⁴ Once the civil code is adopted, "[w]hat is wanted is the correct interpretation of the code provision, not its forerunners."³⁵ The result is that, since the installation of the French Civil Code after the Revolution and the German Civil Code later in the nineteenth century, civilians have tended to stress the importance of very general legal norms, which are located in the relevant code.³⁶

The second characteristic of the civilian tradition is the heavy reliance on principles of "relationship" (i.e., that "in the area of private law a rule always concerns the relationship between two or more legal subjects") and "structure" (i.e., "the structural principle that, under the private law, legal consequences need mutual Page 563 justification.")³⁷ One of the points of enacting a code was to rationalize the law by bringing coherence to the mass of pre-code rules, principles, and customs.³⁸ When creating a unified code, civilian scholars identified the relationships between these disparate sources of law and imposed an order upon them that was previously lacking.³⁹ Civilians learn that in working their way from general principles to rulings in particular cases, lawyers and judges should pay close attention to the structure of the law and the relationships the code identifies as important.⁴⁰

The third feature of the "folklore" is that civilians favor formal reasoning over pragmatic problem solving. Since one reasons from clear-cut concepts to resolve the case at hand, "[t]he law is made at least to appear to grow inevitably out of a series of...