Courts ♦ Online 61 Va. J. Int’l L. Online 1 (2020)

The Conflict Between American Punitive Damages and German Public Policy—a Reassessment

JOACHIM ZEKOLL & WIEBKE VOẞ

German and European tort law and civil procedure currently may be undergoing an important sea change. The question of punitive damages was anathema to most European civil law systems. Classically, damages in European civil law systems have a purely compensatory function. To award anything other than compensation to a plaintiff would be to grant that plaintiff a windfall—the plaintiff would be the better off for having been injured. European civil law traditions—and German law chief among them—rejected such a windfall as violative of fundamental constitutional principles. Unsurprisingly, then, it has been a long-held view that punitive damages awarded by American courts are categorically precluded from recognition and enforcement in Europe. As this Essay will show, this absolute rejection of American punitive damages in European civil law jurisdictions is starting to crack. Noticeable trends towards partial convergence between the German concept of civil liability and the U.S. approach towards punitive damages call for a reassessment of the enforceability of American punitive damages awards in German court proceedings: Instead of categorically rejecting the recognition and enforcement of punitive damages on grounds of German public policy, a case-by-case analysis ought to be carried out, based on the principles of proportionality and legal certainty.