- Punitive damages should be related to compensatory damages, but higher if the injurer has been or
is more likely to be unpunished (or under-punished) for negligent behavior. What evidence exists
that McDonald’s has not internalized the full cost of harm in the past (prior victims not or undercompensated), and thus deserving of punitive damages on economic efficiency grounds? - Costly litigation deters victims coming forward–which would decrease injurer’s precaution–but also
incentivizes victims to take precaution to avoid litigation. What evidence suggests punitive damages
are needed because the marginal legal cost to the injurer is relatively lower than the marginal legal
cost to the victim, and thus disincentivized victims from coming forward?
Sample Solution
