Category: Foreign Courts

Last year we reported on a movement towards permitting punitive damages in South Korea.  That movement appears to be gaining steam, with KBS World Radio reporting that a committee within the South Korean national assembly has approved a bill that would authorize punitive damages against corporations in product liability cases.  The proposal would limit punitive damages to no more than three times the amount of compensatory damages.

European courts are generally not fans of American-style punitive damages, as we have noted.  But the World Intellectual Property Review has an interesting article about a recent decision from the Court of Justice of the European Union: “EU law doesn’t prevent punitive damages in IP suits, says CJEU.”  According to the article, the Polish Supreme Court took the view that punitive damages are not allowed for copyright infringement cases in the EU, but it asked the CJEU for a definite ruling on the issue.  The CJEU took up the issue and held that EU member states are permitted to award punitive damages in copyright infringement cases if they so choose.

The New York Times is reporting on a movement in South Korea to permit punitive damages in civil cases, as a response to scandals involving product safety.  According to the article, a former president of the Seoul Bar Association rounded up a thousand signatures from lawyers on a letter stating that punitive damages are needed to balance a legal system that is geared too much towards protecting businesses.  The article does not mention whether the supporters have identified any data showing that products are safer in countries that permit punitive damages. 

The StarPhoenix of Saskatoon reports that an appellate court in Saskatchewan has reduced an “unprecedented” $5 million damages award in an insurance bad faith case.

The plaintiff claimed that two insurance companies unreasonably denied his claims for workers’ compensation benefits. The trial court (Justice Murray Acton of the Saskatoon Court of Queen’s Bench) awarded him $450,000 for emotional distress and $4.5 million in punitive damages.  At the time, Justice Acton said he hoped the large award would gain the attention of the insurance industry.

Instead, the award attracted the attention of the Court of Appeal, which issued a 94-page opinion that dramatically reduced the “extravagant” damages.  The three-judge panel reduced the emotional distress damages to $45,000 and reduced the punitive damages to $675,000.

The opinion is an illustration of the stark contrast between Canadian courts and American courts when it comes to damages.  We are long past the time in this country when anyone would call a $5 million damages award in a bad faith case “unprecedented” or “record-setting.”

Will American-style damages awards gain a foothold in Canada?  Perhaps, if this story is any indication.  But for now at least, the Saskatchewan Court of Appeal is holding the line.

CBC News reports that a judge in Montreal has ordered three tobacco companies to pay $15 billion in a class action brought by one million Canadian smokers.  The plaintiffs alleged that the defendants failed to warn about the dangers of smoking and engaged in unscrupulous marketing.  The defendants are Imperial Tobacco, Rothmans Benson & Hedges, and JTI-MacDonald.

Canadian courts are not known for dishing out large punitive damages awards.  A few years ago we reported on a case before the Supreme Court of Canada involving a $500,000 punitive damages award, which was reportedly the largest amount ever awarded in an employment case in Canada.  So this $15 billion award is somewhat of a shock.

Not surprisingly, the tobacco defendants say they intend to appeal.  But the story also says that the judge will permit the plaintiffs to enforce the judgment up to $1 billion while the appeal is pending.  So even if the defendants win on appeal, they’ll be left with the prospect of trying to claw back $1 billion from a million individual smokers throughout Canada. 

China Post reports on proposed legislation to authorize punitive damages as a remedy under Taiwan’s civil code.  The article says that the proposal is supported by 19 lawmakers, but opposed by the Deputy Minister of Justice, who argues that punitive damages should be authorized only for violation of specific laws. 

This is the second law review article we’ve seen discussing the Fountaine Pajot decision by France’s Cour de Cassation (the supreme court for civil matters).  In that case, the court surprised many observers by holding that punitive damages are not, per se, contrary to French public policy.

This article, Changing Tides: the Introduction of Punitive Damages into the French Legal System,   appears in the Winter 2013 edition of the Georgia Journal of International & Comparative Law, which was just uploaded to Westlaw.  The author contends that the Fountaine Pajot case is one of several indications that European opposition to punitive damages is eroding.  I can’t find a copy online, so you’ll need to access Westlaw or head to a library to read the whole thing.

Related posts:

New law review article on enforcement of U.S. punitive damages awards in France

The French dip deeper into punitive damages jurisprudence

French Supreme Court rules that American punitive damages awards are enforceable, as long as they don’t exceed compensatory damages

Law Review Article Focuses on a French Court’s Refusal to Enforce a California Punitive Damages Award

An editorial in Business Standard reports on a case in which the Supreme Court of India has affirmed a punitive damages award of “Rs 100 crone” in a contamination case against the operator of a copper smelting plant. That works out to $18.4 million, according to an on-line currency converter.

The editorial says India’s Supreme Court has traditionally been hostile to punitive damages.  The author, who is apparently a student at Stanford law school, worries that the decision does not clearly explain the basis for the punitive damages award, possibly opening the door to expansion of punitive damages claims in future environmental litigation in India. 

OHS News reports that a judge in Saskatchewan has awarded punitive damages totaling $4.5 million against two insurers (Zurich Life Insurance and AIG) for wrongfully withholding workers’ compensation benefits.  According to OHS News, the award in this case represents “the largest ever punitive damages penalty in Canada.”  In California, an award like that would not have made the top 10 list last year (though it would have come in at #10 in 2011).

Mondaq reports that Italy’s Supreme Court, the Court of Cassazione, has reaffirmed that it will not enforce U.S. judgments containing punitive damages.

Back in 2007, in Parrott v. Soc. Fimez., the Court of Cassazione ruled that an Alabama judgment containing punitive damages was unenforceable in Italy, because punitive damages are incompatible with Italy’s public policy. 

This case, Ruffinatti v. Oyola-Rosado, involved a Massachusetts judgment.  According to the Mondaq story, the judgment on its face did not include punitive damages.  But the Italian Supreme Court apparently concluded that the $8 million compensatory damages was so large, and so disconnected from the plaintiff’s actual injuries, that it must be punitive in nature.  Accordingly, the court refused to enforce the judgment under the reasoning set forth in Parrott.

Related post:

Law Review Article: “Recognition and Enforcement of U.S. Punitive Damages Awards in Continental Europe: The Italian Supreme Court’s Veto”