Punitive damages are controversial. US courts award punitive damages in civil cases, but other countries like Japan prohibit them. Punitive damages refer to money that a court orders a party to pay as punishment for extremely bad conduct. For punitive damages to serve as an effective punishment, courts set punitive damages far higher than actual damages. For example, suppose that John’s restaurant serves food that John knows is dangerous, and John has repeatedly ignored warnings from government inspectors to make his food safer. As a result, John’s customer Mary gets very sick. If Mary sues John, the court could order John to pay Mary $100,000 for her medical expenses, plus an extra $300,000 in punitive damages. Proponents praise punitive damages for: (1) achieving justice by punishing wrongdoers; and (2) discouraging others from engaging in bad conduct. However, critics fault punitive damages for providing victims with an undeserved financial windfall.