HAS At the time of the debates on the distribution of the 60 billion euros of budgetary effort, one proposal remains absent: resorting to “punitive” damages to punish multinationals that endanger the health of consumers or the environment.
Punitive damages, also called “exemplary” damages, are intended to punish particularly unlawful or reprehensible behavior. They can be significantly greater than “compensatory” damages, which are intended to compensate the victim for their actual losses. In the United States, their considerable number gives public authorities strong bargaining power.
In the scandal of rigged diesel engines (“dieselgate”), Volkswagen offered to pay 15 billion dollars (14 billion euros) in exchange for stopping the prosecution. The total bill, which includes not only civil and criminal fines, but also buyback (between $5,000 and $10,000 per vehicle), repair and customer compensation, exceeded $25 billion in 2018, of which more than $4 billion was supplied directly into the American public coffers. France, where the number of cars manipulated was approximately double, to date has not collected a single euro from the manufacturer. And for good reason: punitive damages do not exist in French law and compensatory damages are considerably reduced in practice.
Every year, thanks to a legal arsenal that gives it an advantageous position in negotiations, the American justice system obtains colossal payments from the guilty companies, part of which is used to replenish the budgets of public powers. In 2023, cryptocurrency exchange Binance agreed to pay $4.3 billion to resolve money laundering charges. In 2022, three pharmaceutical distributors and the manufacturer Johnson & Johnson, involved in the opioid crisis, have agreed to pay $26 billion.
Balance of power
To appease lawyers concerned about the impact of this sanction on their clients’ cash flow, the Ministry of Justice agreed to spread the settlements over almost two decades. The same thing happened in the late 1990s, when the tobacco industry pledged to pay more than $200 billion over twenty-five years to compensate 46 states for health costs related to cigarettes.
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