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Punitive Damages In Fatal Car Crash Case

Punitive damages are awarded alongside actual damages in cases where the defendant's conduct was marked by malice, recklessness or dishonesty. Punitive damages are generally for situations where one party acted in a reprehensible manner. A Montana case involving the deaths of three people has led to a $73 million punitive award against the defendant, Hyundai Motor Co. The jury originally ordered $240 million in punitive damages, but the order was reduced by the District Court. Hyundai is expected to appeal.

The car accident in question involved a 2005 Hyundai Tiburon. The accident has been attributed to a defective steering knuckle. The award of punitive damages was based on a jury finding of malice on the part of Hyundai in not fixing the defective part. The 2005 Tiburon was the subject of a limited recall for steering problems, but those problems were not attributed to defective steering knuckles. The company acknowledges 127 warranty reports concerning the steering knuckle, but claims that millions of Hyundai vehicles contain that part and more complaints would be expected if the part was defective. 

The District Court Judge cited the lack of investigation into steering knuckle complaints in supporting an award of punitive damages. With complaints dating back more than 10 years, the automaker had ample time to look into the matter and chose to ignore the complaints. The Judge also ruled the Montana punitive damage cap unconstitutional in supporting the $73 million figure. Damage caps are widely supported by corporations as a way to limit the risk of being penalized for reckless, deceitful or malicious conduct.

Auto makers have a responsibility to consumers to limit safety defects and to respond quickly and effectively when defects occur. Hyundai is the latest to be found guilty of ignoring a defect to the detriment of the driving public.

Source: Bloomberg, "Hyundai Must Pay $73 Million Punitive Award, Judge Says," by Margaret Cronin Fisk, 22 September 2014 

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