The Punitive Damages' Cause, Influence and Liability Insurance

In this paper, we study the causes and characteristics of punitive damages and the relationship between the liability insurance and punitive damages. Firstly we know through the analysis, there are three causes why one legal system will adopt the punitive damages: the possibility of the injurer to escaping responsibility; the damage by the injurer undervalued and the damage caused by the injurer intentionally. Then this paper shows the punitive damages calculation process by the punitive damages multiplier. This paper also point out the negative effects of the implementation of punitive damages: increasing the litigation costs and distorting the punishment effect of tort law. This paper also studied the relationship between punitive damages and liability insurance, and discussed whether the liability insurance should guarantee the punitive damages. At the end of the paper we summarized.