Punitive damages are designed to punish the offender and provide financial payment to the offended.

Punitive damages are limited to cases with intentional or grave misconduct towards the other person. It is also available only to those with substantial evidence against the wrongdoer. Punitive damages have undergone several amendments under Federal law and the Supreme Court has considered carefully when to apply punitive damages to serious cases.

The lawyer, who will help in filing the lawsuit, is expected to evaluate the applicability of punitive damages to the case before submitting it before the court. Its availability is further assessed by the judge or the jury, or arbitrator.

The California Civil Code section of 3294 has stipulated the following:

1. The plaintiff will receive compensation, in addition to actual damages for the damages suffered due to a wrongful act with malicious intent.

2. The employer can be held liable if he or she has advance knowledge of the employee's potential harm to other employees, has authorized the wrongful action, or is also guilty of malice, oppression, and fraud.

3. Malice is defined as an intentional act to cause harm with willful and conscious disrespect to the rights or safety of the other person.

4. Oppression is defined as a wrongful act that puts the person into an unjust situation with conscious disrespect to his or her rights.

5. Fraud is defined as the conscious decision to conceal truthful information. It has the intention of depriving the other person of legal rights which may cause injury or loss.

6. The offended party can receive additional compensation if the crime is a homicide or other form of felony (theft, rape, murder). The court will ensure that multiple recoveries for the same wrongful act will be prevented.

The defendant may file for an appeal to the U.S. Supreme Court, and ask that the punitive damage award be overturned.

The Court will identify the 'degree of reprehensibility of defendant's conduct". It is the determining factor in evaluating the reasonableness of the decision under the Due Process Clause. The court will review the gravity of the defendant's offense and may

reconsider penalties. Another crucial factor is the degree of the offender's reckless disregard for the rights or safety of other people.

In case of a personal injury case arising from car accidents, the court will weigh the degree of effect of the safety recalls done to the car in proportion to the hazard or injuries that the car caused to the victim.

The court may also measure the ratio between the compensatory damages and the punitive damages. The court may reduce the amount by half. The defendant may appeal if he or she sees that the amount is arbitrary or excessive.

The court also has the power to throw out punitive damages. The state continues to consider tort reform to limit punitive damages.