May 01, 2017 Articles

Understanding Split-Recovery Punitive Damages Statutes

Familiarity with the nuances can help you manage client expectations and reach a meaningful settlement

by Michael K. Robertson

Depending upon one's perspective, the prospect of a punitive damages award in a civil action can dramatically shape one's approach to litigation. Most attorneys, therefore, are intimately familiar with the efforts by state legislatures over the past few decades to pursue comprehensive tort reform, in particular, with respect to punitive damages awards. While statutory maximums on punitive damages awards may receive the most attention, attorneys should also remember an often overlooked aspect of punitive damages reform: "split-recovery" statutes.

Split-recovery statutes, also known as apportionment or allocation statutes, provide that in the event a plaintiff is awarded punitive damages, a percentage of that award must go to the state. Today, a handful of states maintain split-recovery statutes, including Alaska, Georgia, Illinois, Indiana, Iowa, Missouri, Oregon, and Utah. The amount of the punitive damages award that must be paid to the state is not insignificant. In fact, most states with split-recovery statutes require that 50–75 percent of the punitive damages award be paid to the state. Some states require that the money be paid into the state treasury, while others require that the money be designated for specific recipients. Most often, recipients are state-operated funds that provide for victim compensation, indigent representation, or similar state services.

Premium Content For:
  • Litigation Section
Join - Now