[FOUNTAIN]Punitive damages can hurt

Erin Brockovich was a divorcee living in the small desert town of Hinkley, California. She was a single mother of three and had only $16 in her bank account. She had been fired from her job and had filed for bankruptcy. Desperate to make a living, Ms. Brockovich visited an attorney she met in the course of settling a car accident she was involved in. She pleaded to get a job at his office and was hired to handle miscellaneous jobs there. One day in 1992, she stumbled upon some medical records and realized something was not right.
The records showed that Pacific Gas & Energy Company (PG&E), a utility giant providing gas and electricity to Hinkely, a town with a population of 650, was discharging toxic chemicals into the town’s water. Local residents were suffering from illnesses but kept silent because PG&E paid their medical expenses. Ms. Brockovich began talking to the residents. She persuaded more than 600 victims to give her power of attorney. She then built a case against PG&E, a $28-billion enterprise. The landmark case of the town of Hinkley vs. PG&E stirred all of America.
Four years later, the court ordered PG&E to pay $333 million, the largest settlement in U.S. history. The movie “Erin Brockovich” was based on this true story. Julia Roberts won the Academy Award for Best Actress for her role as Ms. Brockovich. The movie is now used to teach about punitive damages at U.S. law schools.
Compensation for punitive damages started in England in the 1760s in order to punish malicious, antisocial and immoral offenders. It is a system that forces offenders to indemnify enormous sums as punishment in addition to the compensation for actual damages.
The O.J. Simpson case is also a notable example of punitive damages. In February 1997, the district court of Santa Monica ordered the former football star to pay $33.5 million in damages to the family of his former wife. Though he had been acquitted in a criminal court of charges of murdering his ex-wife and her friend, a civil court ruled him responsible for the deaths. The actual damage was estimated to be only $8.5 million, with the remaining $25 million being punitive damages.
The Presidential Committee on Judicial Reform will soon introduce a punitive damages system. It could be way to deter antisocial crimes such as kidnapping, embezzlement, drunk driving and violent demonstrations. However, a pharmaceutical company, for instance, might be discouraged from developing new medicine, such as an AIDS vaccine, for fear of being sued. The committee should consider that consumers might be the ones to suffer damage.

by Ko Dae-hoon

The writer is a deputy city news editor of the JoongAng Ilbo.