Punitive Damages for Corporations in China: Establishment and improvement

Abstract

Punitive damages are remedies for non-specific subjects like communities without specific rights suffering from illegal behaviors. Having the functions of compensation, punishment, and prevention, punitive damages are the necessary solution to the inherent deficiencies in current remedy system in China that both civil and public remedies can hardly cover the losses of communities. However, punitive damages are misunderstood theoretically and practically in China. Traditional critics like caseload of courts, lack of procedural protections, ineffectiveness in punishment and deterrence, and overlapping in functions cannot deny the necessity of establishing punitive damages. Meanwhile, punitive damages in Chinese legal system cannot fit in with their functions, comparing with legal practice in the US. This issue is mainly the result of the inadequate application conditions, narrow scope of factors, and single distribution of damages, which are also the issues to be resolved when reconstructing the punitive damages system. Based on legal analysis of positive law and judicial practice in both America and China, this article attempts to justify the necessity of punitive damages as well as putting forward some approaches to the reconstruction of punitive damages in China.