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Can Decoupling Punitive Damages Deter an Injurer’s Harmful Activity?

Author

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  • Ikeda Yasuhiro

    (Kumamoto University, Faculty of Law, Kumamoto, Japan)

  • Mori Daisuke

    (Kumamoto University, Faculty of Law, Kumamoto, Japan)

Abstract

This study theoretically analyzes the effect of decoupling punitive damages under the adversarial system. Decoupling means taking punitive award windfalls away from plaintiffs and placing them into state-administered funds. In particular, it aims to reveal the incentive structure of decoupling and examine how this affects human behaviors. Although some commentators argue that decoupling punitive damages effectively disgorges plaintiffs of any potential windfall without diminishing the deterrent effect of punitive damages, we demonstrate that decoupling actually reduces the deterrence effect under the adversarial system.

Suggested Citation

  • Ikeda Yasuhiro & Mori Daisuke, 2015. "Can Decoupling Punitive Damages Deter an Injurer’s Harmful Activity?," Review of Law & Economics, De Gruyter, vol. 11(3), pages 513-528, November.
    • Handle: RePEc:bpj:rlecon:v:11:y:2015:i:3:p:513-528:n:5
    DOI: 10.1515/rle-2014-0033
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    References listed on IDEAS

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    More about this item

    Keywords

    decoupling; punitive damages; adversarial system; deterrence; split-recovery statute;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process

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