Punitive damages are defined in Black’s UK law dictionary (7th ed) as “damages awarded in addition to actual damages when the defendant acted with recklessness, malice or deceit” which are “intended to punish and thereby deter blameworthy conduct” (idem). Such damages do not currently exist in French law as they contradict the well-established rules governing compensation.
Distinction between compensation and penalty
The existence of an actual loss is required for a victim to claim for compensation since compensation is, as its name suggests, designed to “make good” that loss. It is therefore distinguishable from punitive damages.
Traditionally, under French law, the aim of civil law is to compensate and the aim of criminal law is to punish.
However, some acts (although they do not constitute criminal offences) may require “penalties” to be paid in addition to compensation. For example, administrative penalties (ordered by administrative courts) to punish anti-competitive acts: companies may be required to pay 10% of their global turnover by the Competition Council and civil penalties (ordered by judicial courts) for, for example, the unlawful demolition of a building.
The main difference between penalties and compensation, under French law, is that penalties are paid to the State and not the victim. Acts punishable by penalties and the levels of those penalties are defined by statute.
The principle of integral compensation (réparation intégrale)
Compensation aims at putting the victim in the same situation as he would have been in had the damage not occurred and the general rule is that the person who is found liable for the damage has to compensate the victim for his “whole but sole” loss. The seriousness of the misconduct or the attitude of the wrongdoer is not therefore taken into account when the level of compensation is being determined.
The French Supreme Court takes a very strict line on this and this principle is reiterated in case-law. For example, in 1964, the French Supreme Court stated that:-
“The indemnity required to compensate the damage incurred shall be calculated based on the amount of the damage, without any influence of the seriousness of the misconduct on the amount of the said indemnity” (Civ. 2e, 08/05/1964)
And in 2000, the Court of Appeal in Versailles stated that “the indemnity is awarded to compensate the incurred damage regardless of the seriousness of the misconduct or of the indemnity’s dissuasive powers”.
Punitive damages are therefore very clearly and strictly prohibited by French courts.
The absence of a duty for the victim to mitigate damages
However, the effect of this is that there is no duty for the victim to mitigate his loss. The victim’s conduct can be taken into consideration when liability is determined but the amount of the damages awarded to the victim cannot be reduced on the grounds that the victim failed to mitigate his loss.
This principle of integral compensation which excludes the application of punitive damages and mitigation is unchallenged in the French courts, but it would be interesting to see how the French courts would treat a foreign judgment awarding punitive damages. This issue has not yet been addressed by the French courts although the French Supreme Court has ruled that the principle of integral compensation does not constitute a fundamental principle under the French International Public Order (Cass. Crim. 16/06/1993: when deciding whether the limitation of compensation provided by an international convention was infringing the French International Public Order). This could suggest that the French courts might treat a decision awarding punitive damages as enforceable in France.