Anchoring in the Courtroom: The Effects of Caps on Punitive Damages

Responding to the perception that civil damage awards are out of control, courts and legislatures have pursued tort reform efforts largely aimed at reigning in damage awards by juries. One proposed method for reigning in civil juries is to limit, or cap, the amount that can be awarded for punitive damages. Despite significant controversy over damage awards and the civil litigation system, there has been little research focusing on the process by which juries determine damages. In particular, there is a paucity of research on the possible effects of placing caps on punitive damages. The present research examines punitive damage caps and reveals an anchoring effect of the caps on both compensatory and punitive damages. A second experiment replicates this effect and examines the moderating effect of bifurcating the compensatory and punitive damage decisions.