Crime and Punishment, Well, At Least Punishment

By Rob Howard

Generally, tort law is designed to compensate a party who has suffered injury through the fault of another.  However, in certain egregious circumstances, additional monetary damages may be allowed to punish the at-fault party for their conduct.  These are known as punitive or exemplary damages which one may receive in addition to their compensatory damages.

Punitive damages, as the name clearly implies, are meant to punish.  They are governed by the Iowa Code, which will allow the damages if the conduct of the at-fault party constituted willful and wanton disregard for the rights and safety of another.  Iowa courts have interpreted this level of disregard to exist when an at-fault party “has intentionally done an act of an unreasonable character in disregard of known or obvious risk that was so great as to make it highly probable that harm would follow, and which is usually accompanied by a conscious indifference to the consequences.”  The conduct of the at-fault party is the focus of the inquiry.  Such damages can be available in many contexts such as negligence, employment, contracts, products liability, and others. 

While insurance policies may cover negligent lawsuits, punitive damages are not always covered under an insurance policy.  In Iowa, punitive damages must be specifically excluded from an insurance policy.  If they are not, and broad enough language exists to include them, they may be covered.  However, when specifically excluded Iowa courts will follow the agreement.  Due to this, the financial wealth of the at-fault party may become a relevant issue in the proceedings regarding punitive damages as the jury will need to consider the appropriate amount of monetary damages that will punish the at-fault party personally and be a deterrent to others from acting in the same manner.

These higher damages also require a higher burden of proof than the negligence standard of preponderance of the evidence.  Punitive damages require clear, convincing, and satisfactory evidence, which Iowa courts have stated is higher than a preponderance of evidence but less than beyond a reasonable doubt.  Interestingly, this area between civil and criminal standards also causes punitive damages to implicate certain constitutional constraints.  For instance, an Iowa court must look to the reasonableness of the punitive damages in comparison with the potential harm and actual harm caused because of constitutional considerations. 

Punitive damages in Iowa have a long history and many interesting facets.  If you believe you have a lawsuit that may include a claim for punitive damages or if you are currently in a lawsuit where punitive damages are being claimed, it is important that you discuss such a claim with a lawyer.