Consider. While the intent may be punitive damages to dissuade the bad actor from bad actions in the future, the effect is often instead resentment by many towards the awardee. This then perpetuates a cycle of suspicion, hostility, and potentially harms minorities rather than helping them, as this cycle inevitably anneals into right-wing politics. On a small scale, this might be an employer deciding to avoid hiring minorities in order to avoid the risk of a huge settlement. On a large scale, a country could go to war over reparations that they felt were unjust.

I think there’s a happy medium. Let the awardee have an award equivalent to their actual harm - and the punitive damages all go to charity, or to a governmental or quango fund to combat the issues that have caused the fund to grow.

This inhibits selfish motivations and the perceptions of them, and would still perform the same function in terms of punishment.