ABSTRACT
German law faces a dilemma when it comes to punitive damages, which potentially exposes it to the criticism of hypocrisy. On the one hand, doctrinally, the German law of damages is intended to be strictly compensatory and free from punitive damages. In order to protect its domestic system, the German Federal Court of Justice (Bundesgerichtshof) held in its 1992 landmark decision that German law does not recognise and enforce foreign judgments awarding punitive damages. Yet, on the other hand, developments in German law both before and after this landmark decision have possibly watered down the doctrinal insistence on damages being solely compensatory. These domestic developments might have made it difficult for German law to maintain the refusal to recognise and enforce foreign judgments in which punitive damages have been awarded. Thus, the question to be answered is: can German law confidently claim that punitive damages are still sufficiently foreign to the domestic system and that punitive damages awarded by foreign courts can thus be rejected without self-contradiction? To respond, the chapter will, after a short explanation of the doctrinal situation in German law, analyse the landmark case. The discussion will afterwards address the caveats that have been made by German courts for dealing with punitive damages. Finally, and changing the perspective slightly from the issue of recognition to applicable law, consideration will be given to how German courts handle claims that are governed by foreign law which allows awarding the remedy of punitive damages.
Ungerer, Johannes, German Law’s Dilemma with Punitive Damages: German Federal Court of Justice, Judgment of 4 June 1992, Case IX ZR 149/91 (BGHZ 118, 312) (December 1, 2023) in Goudkamp and Katsampouka (eds), Landmark Cases in the Law of Punitive Damages (Hart 2023), 129-150, 10.5040/9781509967032.ch-007.
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