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Business Law. Punitive Damages in Florida Term Paper

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Updated: Aug 21st, 2021


The word law can be used to describe a body of rules of conduct inherent in human nature and essential to building human society. In every civilized society, those are laws that dictate the society’s ability to function. These rules and principles are enforced by a political authority or a logical system. Business law is a descriptive simplification of these laws’ involving the business and commercial components of society and allows business to function (Mallor et al., 1996)

Business law falls under civic law, which, as opposed to criminal law, seeks to deal with disputes between individuals and organizations. Business law deals with issues of public as well as private law. It regulates agreement between portion parties hiring practice and the manufacture & sales of consumer goods. In criminal matters, the states prosecute the defendant before a magistrate or a judge in court. In criminal liability, the basic assumption is that there is both a mental element and a physical element to the offense.

The burden of proof for criminal offenses is beyond a reasonable doubt. The penalties for criminal offenses are fines and imprisonment, as well as other non-custodial punishments. In civil liability, it gives the person rights to obtain redress from another person, e.g., the ability to sue for damages for personal injury. The actual person should have suffered the actual injury. The actual person should have suffered the actual injury or loss.

The probability burden of proof is “the balance of probability,” which is much lower than for criminal matters. If there has been a relevant criminal conviction in particular matters, then the burden of proof in any related civil action is revered, so the dependent has to prove he is not liable, e.g., the conviction of a company for breach of health and safety registration followed by the injured employee suing the company for damages for personal injury. In this case, the losing party will pay the winners’ costs. (Mallor et al. 1996)

There are several branches of law such as international law, constitutional laws, criminal law, and Civil law, etc. Every branch of law regulates and controls a particular field of activity (Collin, 1998). Ignorance of the law is no excuse. Everyone should know the law to which he is subject. E.g., if a business person is caught operating without a license, he cannot plead that he was not aware of the law regarding obtaining the business license, and therefore, he may be excused.

Since the origin of society, laws have been adopted as a way of governing the conduct of individuals. These laws evolved for different purposes. They were meant to prescribe certain kinds of behavior that society finds objectionable. This is termed as public law and concerns business law with society constituted as government (Emerson, 2004). Law was also meant to make an injured party citizen, corporation, or other entity) whole. This falls under private law and concerns an individual relationship with another individual (pp.4). It includes tort, agency, contract, corporation, partnership, and property law. Lastly, the law was meant to end disputes, e.g., Contract law and the law governing agreements.

The united federal government or congress legislature may enact laws (statutes) that modify the common law. These statutes also subject to judicial interpretation are called codes: along with case law, the codes form the law generally applied in court. Common law, unlike civil law, codes are not intended to be entire statements of the whole law.

Punitive Damage

Punitive damages or exemplary damages are those designed to punish a dependent where behavior is causing the plaintiff’s injuries was especially egregious. In most cases, punitive damages are rarely awarded and are reserved for very serious misconduct. (Collin, 1998). In other words, there is damage awarded in addition to actual damages when the defendant acted with deceit, recklessness, or malice.

Punitive damages generally serve a variety of overlapping and sometimes conflicting public policies. The two primary policies are punishment and deterrence. In punishment, punitive damages are designed to punish extreme and outrageous conduct committed with the requisite culpability. The punishment rationale in this category focuses on the nature of the actor’s conduct and state of mind, not on the plaintiff’s injuries. (Collin, 1998).

The punishment rationale should punish the actor at a level commensurate with the actor’s conduct and mental state. This system enables the injured party to seek private revenge for the wanted misconduct of and then it also serves to rectify the negative effects of the wrongdoer’s misconduct morally. Society is able to express its outrage about certain egregious acts by punishing wrong doors in accordance with the nature of their wrongful act. (pg 13)

Punitive damages also serve as a deterrent function. Under this rationale, punitive damages are appropriate and necessary to deter the actor and others in similar situations from committing similar extreme and outrageous acts in the future. The matter is, however, subject to debate. The rationale arises in several specific factual situations. In the first situation, punitive damages are important to deter wrongful conduct motivated by profit (Pg 15).

When certain conduct is profitable and compensation damages are low, an actor may decide to pay any compensatory damages and continue that conduct because it remains profitable. Punitive damage may deter such wrongful conduct by removing the profit motive. In the second situation, punitive damages may be appropriate when a defendant may otherwise be able to avoid liability for compensatory damages because proof of causation would be difficult or such damages are capable of being concealed (pg 16).

Compensation also serves as punitive damage, though not recognized as one of the primary rationales, on the same basis as punishment and deterrence. The compensation function is seen when punitive damages are awarded for destroying a successful plaintiff’s litigation expenses and Attorneys’ fees. Under American law, the costs are paid by the plaintiff. The rationale is also present when the plaintiff has suffered some intangible harm, such as injury to dignity that is not compensable under traditional rules of compensation.

Federal and Florida statutes

In the federal government, punitive damages are a matter of state law, and they thus differ in application from state to state. In most states, they are determined through statutes that are formal, the written law of these states written and enacted by its legislative authority. The statutes command, prohibit and declare policy. Published statutes are organized in topical arrangements called codes. Under the federal law, punitive damages may be awarded when the evidence shows that the defendant official acted with an evil motive or reckless or callous indifference to the federally protected rights of others (Schwartz, 1999).

In Florida, the punitive damages title XLV section 768.73 states that except as provided in paragraphs (b) and (c) below (Florida statutes 2007), an award of punitive damages may not exceed the greater amount of; Three times the amount of compensatory damages awarded to each claimant entitled thereto consistent with the remaining provision of this section; or the sum of $500,000. Paragraph (b) state that where the fact finder determines that the wrongful behavior under this section was motivated solely by unreasonable financial gain and determines that the unreasonably dangerous nature of the conduct, had in hand with the likelihood of injury resulting from the conduct, was actually known by the agent, officer or another person responsible for formulating policy decisions on behalf of the defendant, may award an amount of punitive damage not to exceed:-

  1. four times the amount of compensatory damages awarded to each claimant entitled thereto and consistent with the remaining provision of this sections (2007 Florida statutes) or
  2. The sum of 2 million.

Paragraph (c) of this subsection state that in case the fact-finder determiner that at the fine of injury the defendant had a specific intention of harming the claimant and the defendant’s conduct did not harm the claimant, there shall be no cap on punitive damages.

Subsection (d) does not prohibit the court from exercising its jurisdiction under 768.74 sections when determining the appropriateness of a punitive damages award that is less than three times the amount of compensatory damages.

Part 2 (a) of this section provide that punitive damages may not be awarded against a defendant in a civil action if a threat defendant is able to establish that punitive damages have previously been awarded against the particular defendant in any state and in any action alleging harm from the same act for which the claimant seeks compensatory damages subsection 2 (b) dictate that following civil actions involving the same act of single course of conduct for which the damages have already been awarded, the court should determine by clear and convincing evidence that the amount of prior punitive damages awarded was not sufficient to punish the behavior or conduct of the defendant, in this the court may permit a jury to consider an award of subsequent, punitive damages. By permitting the jury to make awards, the court shall have made specific findings of fact in the record to support its conclusion. Any subsequent punitive damage to be awarded must be reduced by the amount of nay earlier punitive damage awards rendered in state or federal court.

The money for the attorney is stated in subsection (3) and is calculated based on the final judgment for punitive damages. It does not, however, limit the payment of the foes based upon an award of damages other than punitive damages.

Generally, in jurisdictions allowing punitive damages, the plaintiffs must, beyond doubt, convince a jury by the door and convincing evidence. To receive punitive damages, the plaintiff’s persuasion should show that the defendant’s conduct was worse than negligent. The conduct should be reprehensible, typically an international act or one with reckless indifference to the rights of others (Shearer, 2003).

The standard used to award punitive damages both under federal and Florida states shows that the plaintiff must first meet the burden of persuasion before a jury may consider an issue of punitive images it should portray beyond reasonable certainly that the plaintiff’s version is factual. The second prerequisite demands that the plaintiff proves in the real sense the defendant performed some reprehensible act that justifies punitive damage. Conducts under these laws deserving punitive damages include fraud, the international misrepresentation of the truth, or the concealment of a major fact causing another to act to their injury. (Shearer, 2003).

In addition, reckless conduct, and one that is unreasonably risky without care for others and intending to harm another reason or justification, justifies punitive damages. The risky behavior brings the issue of wanton and willful conduct. The former is unreasonable or malicious harm without a course of consequences. The latter represent conduct that is not malicious yet may be voluntarily and intentionally performed.

Components of major decisions

The supreme court of the United States regulates makes decisions limiting the awards of punitive damages through due process law. The law requires that the government must respect all of a person’s legal rights instead of just some. In the Fifth Amendment, it says that and quotes.

“No person shall be held to answer for a capital or otherwise infamous crime, unless on a presentment or indictment of a Grad jury, except in cases arising in the land or naval force3s, or in the militia, when in actual service……. Nor shall private property be taken for public use without just competition”. (CRS Annotated Constitution, 2007).

In recent decisions made on punitive damage, we refer to the case of BMW of North American Inc. Verses Gore. This case was the Supreme Court case limiting punitive damages under the due process clause of the 14th Amendment.

The section of the 14th Amendment states that:-

“All persons both in the USA and subject to the jurisdiction thereof are citizens of ht Unites States where they reside. And that no state shall abridge the privileges of citizens of the United States, nor shall any state deprive any person of life, liberty, or property without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws. (Constitutional Amendments USA, PDF).

The case was argued on October 11, 1995, and decided on May 20, 1996, in Alabama. In this case, the plaintiff or the claimant Dr. Gore had bought a BMW but discovered later that it was repainted before he bought it. BMW, who were their defendant, revealed that their policy was to sell damaged cars as new if the damage could be fixed for less than 3% of the cost of the car. Dr. Gore, who sued for punitive damages, was awarded $4000 and another $4000 for compensatory damages, i.e., lost value of the car by later reduced to 2.22 million by the same Alabama Supreme court. This was a case of excessive damages and violated the procedural due process. In compensation or punitive changes to stand, the damages must be reasonably necessary to vindicate the state’s legitimization interests in punishment and deterrence, as we have discussed above. The decisions by the Supreme Court to rule out these cases were based on three components.

First, they were based on the degree of reprehensibility of the defendant s conduct; the second on the ratio of compensatory damages awarded, i.e., the actual or potential harm inflicted on the plaintiff. Lastly, they compared the punitive and damage award and civil or criminal penalties that could be imposed for misconduct. BMW’s conduct was, therefore, found not to have a reckless disregard for health or safety or even evidence of bad faith (federation of insurance and corporate counsel quarterly, 1998).

The reprehensibility guide just that some wrongs are blameworthy than others. Many states, including Florida, considers reprehensibility in their review of punitive damage awards under state law 39. When reviewing cases, courts must carefully examine the nature of the defendants’ misconduct, including former similar ones and acts that took place in other states.

Implications on Business

The implication of punitive law the business practice can be accessed if somehow the business has any harm to an individual. In such cases, an individual may assert a tort claim and demand punitive damages (Englert and Walmfish, 2006). The question, however, arises if the jury has to punish the business not just for what that person has suffered but for the total harm the jury believes the business inflicted on everyone else in the state. In other words, the jury will tend to ask if there is collective punishment in an individual action.

In an example of a business case of Jesse Williams, an Oregon resident, a chain smoker of Marlboro cigarettes died, and his wife Philip Morris sued for negligence and fraud. The jury awarded the widow $821,485.00 in compensation damages and $79.5 million in punitive damages. This was 97 times as large as the compensatory awards. This case has enormous implications for any business with a mass customer base (Englert and Walmfish, 2006). The type of punishment on such a basis creates the possibility of multiple punitive damage awards for the same conduct.

Although courts and commentators alike have expended much energy debating on the purpose and value of punitive damages, the majority of American jurisdictions permit the recovery of punitive damages. (Anderson, Stanzler, & Masters, 2000)

Punitive damages are not recovered for breach of contract. Though in some American states, contractual agreements such as insurance contracts constitute an independent wrong for which punitive damages may be recovered. The wrong is characterized as a breach of the duty of good faith and fair dealing. It only arises when the plaintiff can show a confidential or special relationship between the parties. (Collin, 1998) Many jurisdictions hold that they are revocable for negligence.

The business sector suffers the compensatory damage that may be imposed on them if any of the above happens. Punitive damages are recoverable for tortious interference with contract or with the prospective contract, business expectancy, or economic advantage. In tortuous interference, claims have repeatedly produced some of the very largest punitive damages incurred by businesses. Punitive damages are also recovered for breach of the covenant of good faith and fair dealing misrepresentation and fraud, the beach of judiciary duty or a confidential relationship (pg 35) Also invasion of property.

Section 35 (a) of the federal statutes, the Lanham act provides that a court may award additional damages not exceeding three times the amount of actual damages for remedies against infringement and false advertising, which preclude separately for a violation of the act. In Texas, under the deceptive trade practices act, economic damages may be trebled, and the act is not subject to the state’s recently enacted legislation capping punitive damages at two times actual damages (Collins,1998, pg 37). When a business conduct warrants both Wanton and Willful acts, punitive damages for tortious interference may be upheld.

Recommendations and Conclusion

As we have seen, punitive damages are not awarded in order to compensate the plaintiff but in order to reform or deter the defendant and similar persons of such intentions from pursuing a course of action such as that which damaged the plaintiff. It is important for all individuals to understand the legal binding that falls under their practice, whether in the public sector or private. The individual must be conscious of the effects that may have a severe risk to society or authority.

Legal remedies exist for those who want to seek damages for violations of rights. The two types of damages that exist include money and injunctive relief. Money damages exist in case of the loss of property rights and the violation of civic rights. Injunctive relief means that the authority may intervene to stop the individuals who have violated one’s civil rights from continuing with the act. This remedy exists for civil rights violations, including those under the federal anti-discrimination statutes.


Amendments to the constitution of the United States of America’. Web.

Anderson, E.R., Stanzler, J.S., & Masters, J.S.2000. On Insurance Coverage Litigation, Aspen Publishers.

Bad enough to punish, the application of the responsibilities guidepost in punitive damages cases after BMW v. Gore’. Web.

Collin, T. J. 1998. Punitive Damages and Business Torts: A, American bar Association press.

Emerson, R.W. 2004. Educational Business Law, Barron’s.

Englert, R.T. & Walfish, D.R. 2006. Too Much? The Supreme Court debates whether a judge was wrong to smack, ‘Philip Morris with $79.5 million in punitive damages’ VOL. XXIX, NO. 44. Web.

‘Florida senate statutes 2007’. Web.

‘Law Offices of Timothy C. Karen’. Web.

Mallor, Barnes, Bowes Phillips and Lanvant 1996. Businness law and Regulatory environment,12th ed., Richard D Inc, London.

Shearer, P. . Orl research report. Web.

Tulsian, P. C.2000. Business Law. Tata McGraw-Hill publishers. Web.

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