Evolution of the concept of punitive damages in takaful insurance in the kingdom of Saudi Arabia: lessons learned from British common law

الملخص EN

The concept of punitive damages is evolving in the legal system of the Kingdom of Saudi Arabia (KSA) along with the insurance industry (Islamic insurance, known as takaful).

The meaning of punitive damages is a kind of remedy where the party has endured irreparable damages, occured because of a breach of duty of care by the defendant.

The Saudi laws and courts have developed a good deal of jurisprudence on how these punitive damages, in general, are ascertained by the courts.

In takaful insurance, the objective of punitive damages is to provide the insured with a remedy beyond insurance compensation in the cases of reckless breach of duty of care.

There is a difference of opinion on including punitive damages, a remedy where compensation is not adequate, in the scope of takaful.

However, the idea of including punitive damages under the operation of takaful is evolving and this may benefit the takaful insurance framework in the KSA.

This paper develops an argument that the concept of punitive damages has been accepted in medical practice under the Saudi legal system and has not yet been recognized in the scope of Saudi takaful insurance laws.

Using a doctrinal research method complemented with an analytical and comparative approach, this study answers the question of how the legal system in the KSA is evolving toward adopting the British Common Law standards of punitive damages and applying them to Saudi takaful laws.

This paper contributes to the evolution of the takaful industry in the KSA by applying punitive damages on abuseful takaful companies as a remedy in the takaful framework.