International Law

Punitive Damages: Will they be enforced in a foreign court?

By Michelle Schindler

In the past, foreign courts have refused to enforce or have been wary about enforcing American punitive damages awards because the large awards offend the foreign court?s notion of public policy. One reasoning being that punishments should come from the criminal court system which has more elaborate due process protections. However, several recent articles have indicated that this past wariness may be changing; see John Gotanda, Charting Developments Concerning Punitive Damages: Is The Tide Changing, 45 Colum. J. Transnat'l L. 507 (2007) and Adam Liptak?s March 26, 2008 New York Times article ?Foreign Courts Wary of U.S. Punitive Damages.?

Both Gotanda and Liptak note that recent decisions and developments in Spain, Canada, Germany indicate a willingness to enforce American punitive damages awards. However, on the other hand, some foreign courts are still just as eager to strike down awards of punitive damages. Liptak?s article reports that recently the Italian Supreme Court refused to enforce an American award that lumped together compensatory damages with punitive damages. Since the American court did not designate how much was for the compensatory damages, the Italian Supreme Court refused to enforce the entire award.

Thus, while there may be a shifting trend enforcing punitive damages, some foreign courts are still hesitant. Given this resistance, a practical suggestion would be to request or petition the American court to designate the amount awarded as compensatory damages and the amount awarded as punitive damages. This practice would help ensure that at least the compensatory damage award was enforced even if the court refused to enforce the punitive amount.

Full post as published by International Asset Recovery Law Blog on March 31, 2008 (boomark / email).