Hanover Insurance Co. v. Hayward: Imposition of Punitive Damages in Addition to Criminal Sanctions

In Hanover Insurance Co. v. Hayward, the Maine Supreme Judicial Court, sitting as the Law Court, addressed the issue whether punitive damages may be awarded against a defendant who has been criminally convicted for the conduct giving rise to the punitive damages claim. Although it affirmed the superior court's decision not to allow the award of punitive damages, the Law Court concluded that the imposition of criminal sanctions did not by itself bar punitive damages. Instead, the court indicated that criminal punishment is merely one factor to consider in determining whether an award of punitive damages would serve a meaningful deterrent function. The Hayward court thus avoided an opportunity to resolve the long standing question whether punitive damage awards are proper under Maine law. Further, in addressing the narrower question whether civil punitive damages are available in spite of a defendant's prior criminal conviction, the court failed to explain why two successive proceedings should be allowed to accomplish one purpose: to punish a wrongdoer in order to deter similar conduct by the wrongdoer and by other members of the community. An examination of the relevant case law relied upon by the court reveals that the justifications offered in prior Maine cases for allowing punitive damages when criminal punishment could be imposed may no longer be valid. Furthermore, the justification for punitive damage awards in Maine may no longer be differentiated from the justification for criminal punishment as expressed in Maine's new Criminal Code. Finally, there are significant procedural safeguard problems in allowing punitive damage awards in civil actions.