The legal system does not fine those men and women that behave in ways that are legal but inappropriate and harmful. Still, it does not want to encourage the performance of such behavior. For that reason, the law has stipulated the issuance of punitive damages.
The amount of money called for in the punitive damages goes beyond compensation.
It is not supposed to help the plaintiff become whole again. It serves as a form of punishment. The defendant gets punished. The legal system has put certain restrictions on punitive damages. The amount of money requested must seem like a reasonable amount. Those restrictions were created so that members of the public would not feel inclined to make frivolous claims, when involved in a personal injury lawsuit.
The money received as punitive damages can be taxed.
The Injury Lawyer in Hamilton knows that the amount of that money exceeds the value for what was lost. For that reason, the punitive damages should be viewed as income. Because it is income, it can be taxed. The plaintiff does have some control over the size of the punitive damages. The plaintiff’s lawyer can ask that money that was meant for a different damage be increased, in exchange for a reduction in the punitive damages.
How do punitive damages placed on a poor defendant serve as a punishment, if that same defendant lacks the money to pay the demanded damages?
The legal system records the existence of that debt. The legal system then determines when money can be taken from funds going to the defendant, in order to pay that debt. Moreover, the defendant cannot escape the existence of that debt on the defendant’s record. As an example, take what happened recently, when the Congress passed a bill that would provide stimulus money to every taxpayer. At that time, one taxpayer that owed a sum of money to some person or group asked if those funds could be taken from his stimulus check.
That questioner was told that the funds would not be taken from that check, unless that questioner happened to be a man that was supposed to be making child support payments. The government had ruled that a man’s unpaid child support payments could be taken out of his stimulus check.
That example helps to illustrate the extent to which the government can, if it so desires, force the payment of punitive damages by a given defendant. In that way, the threat acts as a form of punishment. Understand that defendant has no way of knowing when, if ever, the government might decide that it is going to squeeze from the defendant every dollar that he or she then owes, as a result of the punitive damages.