Chapter 4 made clear that the international public policy exception is the yardstick used by the courts in the five Member States examined to decide on the enforceability of American punitive damages judgments. Like any type of private law judgment, a foreign punitive damages judgment should not violate international public policy if it wants to stand a chance at the enforcement stage. Similarly, chapter 3 made clear that the penetration of U.S. punitive damages through the field of applicable law is only possible if the international public policy of the forum is not offended by this type of damages.

In this chapter we explore the concept of international public policy. Rather than preoccupying ourselves with further defining the notion, we focus on what it contains, or better, what it should contain. We briefly categorise and expand upon the arguments employed by the Member States courts under the international public policy exception to deny the enforcement of U.S. punitive damages awards. Where possible, we attempt to refute them. Finally, we express and elaborate on the opinion that Member States’ courts should not refuse the enforcement of American punitive damages because their own legal systems contain private law instruments akin to punitive damages or pursuing identical or similar goals. This opinion forms the main contention of this chapter.

The relevant issue is not whether these ‘punitive traces’ are completely identical to punitive damages or form an alternative to them. The question is rather whether their existence in the legal systems of the Member States as well as in European Union law supports our contention that European continental systems sometimes pursue penal and/or deterrent goals in private law. In this chapter we answer this question in the affirmative.

We argue that courts should not treat U.S. punitive damages as, in themselves, contrary to international public policy. American punitive damages should only be analysed under the excessiveness prong of the international public policy test. Although this chapter focuses on the enforcement of judgments, it should be noted that the inferences drawn also apply to the private international law area of applicable law. U.S. punitive damages as such should not be disallowed under international public policy when they are part of the applicable law. They should only be barred to the extent that they are of an excessive nature.