Volume 27 (2010) / Issue 3
In recent years, the everlasting debate over the award of punitive damages in arbitration has rather intensified, not least because in certain jurisdictions, such as the United States, the awards are now larger than in the past and the attitude of the U.S. courts has grown to allow arbitrators to hear claims for which punitive damages are available. In the United Kingdom, however, the legal scenery and judicial attitude are rather different and punitive damages are not awarded save in a few cases in the law of torts. This article comments and comparatively discusses the position in the United Kingdom and in the United States in relation to punitive damages. The analysis concludes that punitive damages should be awarded to deter outrageous breaches of contract in cases where compensatory damages are inadequate and gain-based damages are unavailable. This article also contemplates the future and viability of the measure of punitive damages and the lessons to be learnt for drafters of arbitration agreements.
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