Although there is no maximum amount, punitive damages usually don't exceed four times the amount of compensatory damages. Punitive damages can be much higher than compensatory damages if the defendant's actions justify a significant fine. However, the courts often review the relationship between the two to ensure that it is fair in the U.S. UU.
The Supreme Court has ruled that compensation that is extremely disproportionate to the actual harm may infringe the due process. While many judges and juries prefer a low single-digit ratio, very extreme cases of misconduct could justify a higher ratio. Each award depends on the specific facts of the case and the seriousness of the defendant's conduct. German courts do not award punitive damages and consider foreign punitive damages to be unenforceable to the extent that the payment exceeds the damages plus an allowance to cover reasonable defense expenses high enough for the plaintiff to receive full reimbursement for his loss, but no more.
As this is a somewhat new law so far, no other explanatory regulation has been enacted regarding the detailed amount and applicable scope that guides the application of this rule, so a judicial judge may have discretionary powers to decide punitive damages on a case-by-case basis under this new law. Heydon JA (as it was then) said that he was not empowered to award punitive compensation with respect to an equity claim, although he was content to decide the case on the more limited basis that there is no power to award punitive compensation for the specific equitable act in question. Unlike compensatory damages, which represent losses such as medical bills, lost wages, and pain and suffering, punitive damages are intended to punish the defendant for very bad behavior and prevent him and others from doing the same again. Mason P disagreed and took the view that there was no reason of principle to award punitive compensation in connection with common law torts, but that there was no reason of principle to award compensation for similar equitable damages. In Canada, punitive compensation may be awarded in exceptional cases for willful, oppressive and arrogant misconduct.
For example, if a driver drives drunk repeatedly and causes a serious accident, punitive damages may be awarded to punish the driver for persisting in making very dangerous decisions. Williams (200 years old), the Supreme Court ruled that punitive damages cannot be imposed for the direct harm that the misconduct has caused to other people, but that harm to other people can be considered based on how reprehensible it was. Exemplary damages go beyond the philosophical objectives of a contractual remedy and are not available as damages for breach of contract. For more information on punitive damages, see this note from the Yale Law Journal and this note from the University of Minnesota Law Review.
With respect to the relationship between the principal and the agent, the courts are reluctant to award punitive compensation to the principal for the agent's reckless actions. The New South Wales Court of Appeal held that no punitive compensation can be awarded both for breach of contract and for breach of fiduciary duty. In Virginia, punitive damages are recoverable if the at-fault driver acted “with malice” toward the victim or if their “conduct was so deliberate and unrestrained that it demonstrated a conscious disregard for the rights of others.” In many states, including California and Texas, punitive damages are determined based on the law; in other places, they can be determined solely on the basis of case law. These damages are more common in personal injury lawsuits, such as those involving drunk driving, dangerous products, or very serious medical errors.