Punitive Damages System

Punitive damages is a legal succors measure in the common law of the Anglo-American legal system. Its significant difference from the actual damages in the Continental legal system lies in the fact that it's designed not only to compensate the victim but also to punish the offender and deter them from similar behaviors. China's legal system falls into the category of the Continental legal system. Traditionally, in the area of civil compensation, compensatory damages is designed to compensate the victim, and thus the whole civil compensatory system has actual damages as its basis. However, the limitations of such a system in today's world have been brought to broad light. It can not sufficiently compensate the victim, nor can it prevents similar behaviors. The author of this essay thus thinks it urgent that proper punitive damages be build up in China.This essay is divided into six parts.Part I History of punitive damages .Punitive damages can be traced back to ancient times. In the early stage of human civilization, punitive damages had extensive application because there was no distinction between civil and criminal laws. The legal system operated to punish offenders rather than compensate victims. Since the Middle Ages, fault liability principle has been one of the three theoretical cornerstones of the capitalist civil legal system. To enhance economic development, liability for damages is based on the actual damage by intentional or involuntary negligence. Compared with earlier practices, the punitive element receives less weight. Since the 18th century, actual damages has not been able to serve the function of deterring malice, fraud and infringement, while businesses have been operating on a larger scale and more risks are always involved. Punitive damages receives refreshed attention the world over. In the 20th century, punitive damages has beenincluded into the legal systems of many countries such as the USA, the UK, Australia, Canada and New Zealand. There have also been theoretical studies of, and theories relevant to, punitive damages in countries where the traditional Continental legal system is in effect.Part II Punitive damages in today's China. Since the founding of the PRC, China has been practicing actual damages based on the former Soviet civil legal principles, but there have already been punitive elements in People's Republic of China Consumer Rights Protection and People's Republic of China Contract Law. In legal practice, the major controversy revolves around the condition and range of application, amount of compensation and distinction of civil and criminal offences.Part III Comparison between punitive damages and actual damages. Actual damages has its inborn limitations in that it can not sufficiently perform its salvage and preventive functions, while punitive damages serves the punitive, deterrent, salvage and market-stimulating functions. In comparison, the latter has a different goal, a different basis on which the damages will be calculated, and a different compensation method.Part IV Analysis of the rationality of punitive damages. Punitive damages has been in effect in countries such as the USA and the UK for over 200 years. Its history can be traced even further back. It stands firm in the long course of history because it's such a principle that has been safeguarding the treasured values such as order, justice, equality, freedom, safety and efficiency. We can safely conclude, on the basis of the rational analysis, such values can be better preserved.Part V Designing of punitive damages in China. China is now in a fast-growing economic development stage where many outdated practices are prevalent, and as a result, there are huge number of daily occurrences of infringement and breach of contract. Using theexperience of other countries for reference will help perfect our legal system, create a harmonious social environment, punish those who maliciously infringe other people's rights, and in the end foster honesty and credit among the citizens. The author believes that wh...