In instances where the plaintiff is asserting a claim for punitive damages against a corporate defendant, Economatrix will analyze the economic effects of such potential punitive damages. Dr. Gaughan’s views on the appropriateness of such punitive damages claims are set forth in the Economics of Punitive Damages in the chapter entitled “The Economics of Punitive Damages” which appears is in his book Measuring Business Interruption Losses and Other Commercial Damages (John Wiley & Sons 2009).
In many instances the imposition of punitive damages may have many adverse side effects which a jury would never intend. The damages may end up being borne by innocent parties such as shareholders, employees and consumers. Such damages are often facilitated by a very simplistic presentation by plaintiff’s experts who may put forward potentially deceptive measures of wealth such as net worth and market capitalization. Economatrix can explain why such measures may be very flawed and not mean what some plaintiff’s attorneys may try to portray them to indicate.
Punitive damages is a very blunt tool to use to try to punish alleged wrongdoers. Too often it has adverse side effects which hurt innocent parties. In addition, there are usually much better ways of accomplishing deterrence. These issues and others can be explained to a jury enable them to better understand the true economic ramifications of any punitive award.