Dateline: October, 2007, Issue 6

Why do jurors award higher damages against corporate versus individual defendants?

Jurors often award greater damages against corporate defendants than individuals for the same behavior. Is it because a corporate defendant has deeper pockets (i.e., more financial resources) than individuals?

Hans and Ermann (1989) asked two groups of mock jurors to decide the same civil lawsuit, with the only difference between the cases given to the jurors being that one group of jurors heard the defendant was a corporation (The Jones Corporation), while the other group of jurors heard the defendant was an individual (Mr. Jones).

Jurors believed the financial resources available to "Mr. Jones" were less than those of the "Jones Corporation," they placed more responsibility on the corporation, and they recommended higher damages against the corporation. However, the presumed financial resources of the defendant were not the primary determinant of jurors' damage awards. Damage awards were linked to jurors' judgments about the corporate defendant's recklessness, with jurors attributing more recklessness to the corporate versus individual defendant.

Source Hans, V. P. & Ermann, M. D. (1989). Responses to corporate versus individual wrong-doing. Law and Human Behavior, 13, pp. 151-166.