Settle, Yes - but the 'Punitives,' Well...
"How much is this case worth?" the judge asked the plaintiff's lawyer. "I'd recommend that my client settle for $50,000."
"Your Honor!" the defendant's counsel cut in, his voice at the cracking point. "This case has nothing like $50,000 in it. The medical bills are less than $1,500; the man was back to work after a month; he was earning only $500 a week; he has no scars. In fact, he has no lasting effects at all."
The judge took more than an academic interest in the debate. Most cases settle - that is, reach a conclusion short of a jury verdict or court decision. Indeed, nationally, about 95 percent of all litigation comes to a peaceful (relatively peaceful, that is) resolution. Put another way, of every 100 cases filed in court, only 5 require the full judicial treatment.
Given the chronically overcrowded dockets in most states, and the natural desire of most litigants to be done with the entire difficult, distasteful process, judges find themselves urging settlement not as a boon to the parties (although early disposition of any lawsuit benefits all the participants), but as a treatment of choice, perhaps even as a survival technique.
If the settlement rate dropped one point, that is, from 95 percent to 94 percent, the trial rate would expand to 6 percent, and the courts would thus have to conduct 20 percent more trials than they now do, because 6 is 20 percent more than 5. The increase would swamp the entire justice system.
In short, settling any case was, as far as the judge was concerned, simply an overriding necessity.
"Counsel seems to have a point," he said. "With specials [special damages: out-of-pocket, quantifiable losses] of only $2,000, how do you get to $50,000? Of course you're entitled to something for pain and suffering; but that's hardly an overpowering factor here; and you don't seem to have much else."
"Judge," said the plaintiff's lawyer, "if that was all, I'd have to agree. But we have some heavy punitives here."
"Punitives" meant "punitive damages" - money awarded not because of the injury and its fiscal and physical consequences, but rather from a desire to punish the defendant.
By definition, "punitives" serve as the noncriminal equivalent of a fine. One difference, however, is that any fine cannot exceed whatever maximum the legislature established in the statute criminalizing the particular aberrant behavior. Punitive damages, by contrast, have no limit.
Punitive damages contrast with fines in yet another way. Every penny of a fine goes either to the state's general fund or (in rare instances) to particular legislative appropriations. By comparison, the public gets no part of an award for punitive damages. Instead, after deducting the lawyer's fee, the plaintiff pockets all the rest.
Moreover, whereas judges imposing fines may be subject to some kind of legislatively imposed guidelines designed to encourage uniformity, punitive damages vary with each jury. The states themselves apply disparate standards. Some direct the jury's attention to the defendant's bad conduct as it has affected the particular plaintiff; others allow examination of the defendant's actions generally, even nationwide.
THE states vary in the degree of proof to which they hold plaintiffs. In some, mere probability suffices; elsewhere, the plaintiff must supply "clear and convincing" evidence.
A criminal defendant pays a fine once (unless he commits a second crime). A manufacturer, however, having paid punitive damages to Plaintiff A for, let's say, an improperly designed toy, may have to pay punitive damages to Plaintiffs B, C, and D, even though the conduct being punished is the same.
Worse, a defendant who pays in State X runs the risk of similar treatment in State Y. If, in our toy example, the jury in State X has imposed such a high figure that it exhausts the available insurance coverage, other possible claimants will find nothing left.
Exposure to even ordinary damages encourages defendants to exercise care. Punitive damages go farther. The idea is that fear of punishment, damages beyond the predictable, will favorably affect defendants' behavior.
Why then, the judge wondered, do we not leave pursuit of punitive damages to the government? Why should one particular plaintiff receive the windfall? Would it not make more sense and better policy to confer the proceeds of penalties for anti-social behavior on the entire public?
"How much do you think the punitives will be here?" he asked.
*Hiller B. Zobel sits on the Massachusetts Superior Court.