Punitive damages are one of the most controversial issues of modern civil law. Its two characteristic features are that it is overcompensatory and that malice or wanton disregard of the victim's rights need to be shown. It origins in Anglo-Saxon common law, where it developed most within the American law. On the other hand, the continental law’s attitude towards punitive damages is traditionally unfavourable. First, the research in this work focuses on characteristic features of punitive damages and related controversies. The underlying grounds for its development are societal. Feeble social security system, belief in market operation and its laws, the importance of economic analysis of law in the realm of tort law and state’s relative passiveness, requiring higher level of individuals’ engagement all contributed to punitive damages development. Traditionally, punitive damages have developped in the realm of tort law, where they are predominantly being used in contemporary law as well. In the last few decades, the opposite opinions were voiced, stating that this siting should be overcome, so that punitive damages would be available in contract law as well. Punitive damages are primarily aiming at punishment of the defendant and prevention of the future wrongdoing. Additionaly, it is fulfilling several other functions of secondary importance.
The analysis of comparative law researches punitive damages elements in continental and EU law. From the continental law perspective, in the process of recognition and enforcement of foreign judgments, the compensatory function of punitive damages should be considered. One of punitive damages’ characteristic features is also the requirement of reprehensability of the tortfeasor’s conduct, which deserves to be punished. In this sense, punitive damages represent a deviation from general tort law, where the degree of the tortfeasor’s culpability is generally irrelevant. Punitive damages’ classification inside the private tort law deprives the tortfeasor of the procedural safeguards of criminal law. Furthermore, punitive damages are usually a windfall for the aggrieved party. These two elements are the two utmost controversial features, underlying the continental law’s rejection of punitive damages doctrine.
Nevertheless, continental law does sometimes allow damages, exceeding the compensatory damages, mostly in order to prevent future deliberate profitable wrongdoing. In this sense, elements of punitive damages can be found in areas of antitrust, competition and personal rights law. EU legislation and European Union Court jurisprudence both emhasize the importance of effective means to ensure compliance with EU law.
Furthermore, the work focuses on the relation between punitive damages and the disgorgement of wrongfully gained profits in private law. When the public criminal or administrative law cannot ensure the disgorgement of wrongfully gained profits, it should be allowed to take it from the defendant through private law mechanisms. The principle that no one is allowed to make profit by a wrong, done to another, shall in this case be given supremacy over the principle that the aggrived party shall not be enriched by damages payment.
Finally, the work concludes by several concluding observations and directions for future development of non-compensatory and punitive elements in continental tort law. The differentiation between retributive punitive function of punitive damages and its other aims is of utmost importance. The retributive punitive function is inadmissable, whereas prevention, disgorgment of illigaly gained profits and the law’s efficiency should be recognized and allowed. Notwithstanding the fact that the implementation of these functions may sometimes lead to overcompensation of the aggrived party, their realization is more important and has far-reaching consequences. This should also be taken into account in the process of recognition and enforcement of foreign judgment, which shall be partially recognized where punitive damages do not in fact aim at retribution.