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RC practice Passage with Explanation -25

Over the past five years, lawyers have increasingly sought to have juries award punitive damages to their clients in product liability cases. The Supreme Court of the United States has expressed concerns that punitive damages have "run wild. " In California alone, juries awarded $1.6 billion in punitive damages between 1990 and 1994. In one county in Texas, lawyers in nearly one—half of all civil cases ask for punitive damages.

Punitive damage awards can be made in addition to many other payments that a claimant may receive—including payments for medical costs, for loss of past and future income, for "pain and suffering, " and payments for "fear of future harm. " Some states even allow payment for so—called hedonistic losses, that is, deprivation of future pleasure.

While five states prohibit any award of punitive damages—New Hampshire and Louisiana by statute and Massachusetts, Nebraska and Washington by common law—many observers believe that, under certain limited conditions, granting punitive damages can have merit, especially if there is a reasonable standard to define the conditions warranting their award and an appropriate cap on the amount.

The concept advanced for adding punitive damages awards to all the other remedies is that the defendant is found by the jury to have caused damage that should be punished further to ensure that "a lesson has been learned. " However, the current practice of allowing them to be awarded over and over again to different plaintiffs against the same defendant for essentially the same issue seems to defy any logic. That is, if the point of the punishment is to deter future behavior with a massive award to "warn the defendant, " can there be any conceivable logic to continue to "punish and warn " the same defendant over and over again in future cases for the same past act?

Those who favor allowing multiple awards of punitive damages for the same set of events argue that, since each jury may be aware of only the facts of its own case, effective punishment may need multiple awards; that allowing only one punitive damage award will allow companies to avoid paying a just recompense by paying an earlier, lower award; that common law has permitted multiple punitive damages and that they therefore reflect the popular will.

Opponents of allowing the imposition of multiple punitive damage awards can easily counter all of these (appropriate legal measures can avoid the first two problems; common law did not initially have as wide an application as it does now, etc.). In 1995, a representative group of forty—three large U.S. corporations—the deep—pocket targets of trial lawyers—reported that in the past five years a total of $4.4 billion was involved in settlements driven by punitive damages. One company alone suffered $2 billion in punitive damages.

Extrapolate that to the growing number of companies, large and small, involved as defendants in punitive damages trials, and you get some idea of the scope of the problem. Punitive damages effects are hardly harmless, infrequent incidents as asserted so often by trial lawyers.

The real damage caused by multiple punitive damages is that the U.S. public has been hit with a "hidden litigation tax. " The costs of the multiple punitive damages lottery are passed on to consumers in higher prices or unavailability of useful products. A number of proposals to stop the awarding of multiple punitive damages have been made, but most of them are unwieldy and impractical in either state or federal courts. The Supreme Court has so far elected not to hear a case that might settle the issue. The most practical answer available is federal legislation.


Legal reform has become something of a mantra for some activist groups in this country. If Congress takes serious notice of the clamor and begins debating potential remedies, the author of the passage would probably support most strongly a federal law that:

[A] requires every state to prohibit awards of punitive damages.
[B] sets a cap on the amount that can be awarded for punitive damages in a single case.
[C] forbids the award of punitive damages for an act that has already earned punitive damages.
[D] limits the number of times a particular corporation can be sued.
Option: 3

Review the author's main points, including the idea in the last paragraph that federal legislation is the "most practical answer. " What does the author want the legislation to do? Most likely to restrict the number of times damages can be awarded. Careful prediction beforehand helps you step through the minefield to (C).

Wrong answers:

(A): Distortion. The author isn't arguing against punitive damages in general, only against multiple punitive damages.

(B): Out of Scope. The author argues that multiple punitive damages should be restricted, but says nothing about the amount.

(D): Distortion. The author is concerned only with the number of times punitive damages can be awarded for a single act, not with the number of times a company can be sued in general.


The author's argument would tend to be more psychologically persuasive if it were generally known that the author is:

[A] a successful plaintiff lawyer who specializes in product liability cases.
[B] a chief executive officer of a major pharmaceutical corporation.
[C] a former member of the jury in a civil court proceeding.
[D] a columnist who regularly covers legal affairs.
Option: 1

An unusual question, but still highly vulnerable to prediction. If you're having difficulty, rephrase: What would make an argument compelling based on something other than the merits of the argument itself? Here, it is the identity of the author. What sort of author would be most persuasive when arguing about the need to reform product liability? Probably someone who had a vested interest in product liability law, but wasn't arguing out of self—interest (a plaintiff lawyer would typically be the one suing for punitive damages). (A) fits this.

Wrong answers:

(B): Opposite. This would suggest that the author might have a vested interest in arguing for the reform.

(C): Opposite. This person would also be potentially biased.

(D): Opposite. A columnist would have neither bias nor any claim to be particularly compelling in arguing for restrictions.


Proponents of punitive damages argue that the threat of punitive damages makes the introduction of unsafe products financially risky for corporations. The author of the passage would most likely respond to this by pointing out that:

[A] the amounts involved in punitive damages are minor in a corporation's eyes.
[B] any losses incurred by taking this supposed risk are passed along to the consumer.
[C] very few unsafe products manage to make it to the marketplace.
[D] the threat of punitive damages has never stopped a corporation from marketing an item.
Option: 2

An application question. How would the author respond to the argument that punitive damages serve a valuable purpose for protecting public safety? He likely wouldn't dispute that the damages have their place, but would argue that imposing them many times for the same offense doesn't add to public safety, and only adds to customer costs (as in 8). (B) matches up with the last point.

Wrong answers:

(A): Opposite. The author argues in 6 that the damages are major.

(C): Out of Scope. The author never makes this point.

(D): Out of Scope. The author never mentions this either.


A RAND study that covered the years 1960—1984 came to the conclusion that punitive damages are seldom awarded and that judicial review prevented excessive awards. What effect does this information have on the argument made in the passage?

[A] It would strongly support the argument.
[B] It would support the argument somewhat.
[C] It would neither support nor weaken the argument.
[D] It would substantially weaken the argument.
Option: 3

An incorporation question. What would a study that demonstrated that punitive damages were restrained do to the author's argument? In general, it might seem to weaken it. However, since the study deals with a much earlier time period than the one the author is concerned with (as mentioned in paragraph 1), this information would be outside the scope of the author's argument. (C) reflects this.

Wrong answers:

(A): Opposite. The author isn't concerned with the time period studied.

(B): Opposite. As above.

(D): Opposite. As above.

Strategy Point: Pay attention to dates in passages and accompanying questions. The CAT will often test your awareness of the time period being discussed.


In arguing that "effective punishment may need multiple awards " (5th paragraph) since each jury may be aware of only the facts of its own case, which of the following assumptions do advocates of multiple awards make?

[A] III only
[B] I and II
[C] II and III
[D] I, II and III
Option: 3

Review the arguments for multiple awards made in paragraph 5: different information is presented in different cases, and a fully just punitive damage can sometimes only be obtained by presenting all the information over multiple cases. You're looking for assumptions, so use the denial test to check the Roman numerals. Start out with RN III: if multiple cases won't be brought against the same defendant for the same act, then the entire argument becomes moot. Eliminate (B). Go to RN II: this is an assumption that closely follows from the argument in the passage that some juries are only partially aware of the facts. Eliminate (A). Try denying RN I: Even if the defendant hasn't committed repeat offenses, the argument that multiple damages for the same offense is still valid.

Wrong answers:

(A): Opposite. For the reasons listed above.

(B): Opposite. As above.

(D): Opposite. As above.


Suppose a survey shows that over sixty percent of Americans think that granting multiple punitive damages awards serves as a deterrent of future corporate misbehavior. How is this information relevant to the passage?

[A] It strengthens the claim that punitive damages ensure that corporations learn their lesson.
[B] It weakens the claim that most Americans are opposed to multiple damage awards.
[C] It weakens the claim that using punishment to deter future behavior is illogical.
[D] It strengthens the claim that many observers believe punitive damages can have merit.
Option: 4

An incorporation question. How would public opinion that favored multiple punitive damages affect the author's argument? It wouldn't effect the argument (even though it opposes it) because the author doesn't base his argument on public opinion. Therefore it would only strengthen the author's claim that observers (here 60% of Americans) believe punitive damages have merit. (D) paraphrases this

Wrong answers:

(A): Out of Scope. The author never makes this claim.

(B): Out of Scope. As above.

(C): Out of Scope. The author argues that multiple punitive damages are illogical, but doesn't deal with punishment in general.

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