APPENDIX 1 AMERICAN LEGISLATIVE EXCHANGE COUNCIL'S PUNITIVE DAMAGES STANDARDS ACT

• Jurisdiction: United States
• Publication year: 2018

Amended: January 9, 2014

Punitive Damages Standards Act

Summary

The Punitive Damages Standards Act establishes a standard for liability for punitive damages, raises the burden of proof to clear and convincing evidence, allows a bifurcated trial on the question of whether the defendant is liable for punitive damages, limits the amount of a punitive damages award to twice the amount of the plaintiff's actual compensatory damages, limits vicarious liability for punitive damages, and precludes imposition of punitive damages when a product or service was approved by a government agency or complies with government regulations. Because the laws governing punitive damages vary among the states, a legislator planning to introduce a punitive damages bill should first obtain information about his or her state's laws.

Model Policy

Section 1.

This Act shall be known and may be cited as the Punitive Damages Standards Act.

Section 2.

For the purposes of this Act, the meaning of the terms specified shall be as follows:

(A) "Clear and convincing evidence" means evidence which leaves no serious or substantial doubt about the correctness of the conclusions drawn from the evidence. It is more than a preponderance of evidence, but less than beyond a reasonable doubt.

(B) "Compensatory damages" means damages intended to make good the loss of an injured party and no more. The term includes general and special damages and does not include nominal, exemplary or punitive damages.

(C) "Malice" means either conduct which is specifically intended by the defendant to cause tangible or intangible serious injury to the plaintiff or conduct that is carried out by the defendant both with a flagrant indifference to the rights of the plaintiff and with a subjective awareness that such conduct will result in tangible serious injury.

(D) "Nominal damages" are damages that are not designed to compensate a plaintiff and are less than $500.

(E) "Product" means any object possessing intrinsic value, capable of delivery either as an assembled whole or as a component part or parts, and produced for introduction into trade or commerce.

(F) "Punitive damages" includes exemplary or vindictive damages and means damages awarded against a party in a civil action because of aggravating circumstances in order to penalize and to provide additional deterrence against a defendant to discourage similar conduct in the future. Punitive damages do not include compensatory damages or nominal damages.

(G) "Service" means all activities engaged in for other persons for a consideration, which activities involve predominantly the performance of a service as distinguished from manufacture or sale of a product and that are regulated, approved, or licensed by a government agency. Services include, but are not limited to financial services and the provision of insurance.

Section 3.

Pleading Punitive Damages

(A) An award of punitive damages must be specifically prayed for in the complaint.

(B) The plaintiff shall not

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