The Enforcement of American Punitive Damages in the European Union

Abstract

The enforcement of judgments is the third area of private international law in which the study of punitive damages is relevant. When an American court orders punitive damages against the defendant, he or she must pay the amount due to the plaintiff. If a debtor is unwilling to pay, the judgment needs to be enforced against his assets. When the debtor has no or insufficient assets in the jurisdiction where the judgment was rendered, enforcement needs to take place in a country where the judgment-debtor has assets. This chapter looks at the enforcement of United States punitive damages judgments in the European Union. In this regard the book addresses five European Union countries: Italy, Germany, England, France and Spain. The reason for choosing these five Member States is twofold. First, these countries play an important role in the EU as over 60% of the European Union's population lives in those five nations. Moreover, these five countries represent the five largest economies of the European Union. Second, in Italy, Germany, France and Spain the Supreme Court has decided on the enforceability of (American) punitive damages. England is also included because it is one of the only Common Law countries in the European Union. As England is familiar with punitive damages, it is important to get acquainted with their position on foreign punitive damages. The aim of the chapter is to describe these countries’ current attitude towards foreign punitive damages. The order in which we discuss these countries has been carefully considered. It ranks the countries’ stance from conservative (Italy and Germany), over mixed (England) to progressive (France and Spain). In all these countries the enforceability of American punitive damages awards depends (at least in part) on the interpretation of the public policy exception. It is once again underlined that international cases trigger the more narrow concept of international public policy. This is the appropriate yardstick when dealing with cases which are not purely domestic. In cases with a cross-border element a legal system is supposed to be more tolerant and cannot impose its rules of domestic public policy on the matter. Especially in the field of enforcement of judgments, legislators, courts and scholars sometimes fail to make the appropriate distinction between public policy and the narrower concept of international public policy.