Understand what compensatory and punitive damages are in the legal system and how they differ, can be a daunting task. This guide will help you differentiate between these two types of damages, so that you can make educated decisions when navigating through the court system.
What is the Difference Between Compensatory and Punitive Damages?
Compensatory damages are designed to make the plaintiff whole, meaning that they cover the actual losses incurred as a result of the defendant’s conduct. Examples of compensatory damages can include medical bills, lost wages, and property damage. On the other hand, punitive damages serve as punishment for the defendant and are not related to any specific monetary losses suffered by the plaintiff.
What are Compensatory Damages?
Compensatory damages are designed to compensate the victim for any losses that were caused by the defendant’s actions. This type of damage typically covers costs such as medical bills, lost wages, pain and suffering, and other out-of-pocket expenses that the injured party incurred because of the defendant’s negligence. In some cases, compensatory damages may also include “consequential” damages, which are losses that were not necessarily directly caused by the defendant’s actions but are related to them regardless.
What are Punitive Damages?
Punitive damages are designed to punish the defendant for their actions. This type of damage is usually only awarded in cases where the defendant’s conduct was particularly egregious or malicious. In some cases, punitive damages may be used to set an example and discourage similar conduct in the future. Punitive damages can add up quickly, so they are not awarded in every case.
When Can I Seek Punitive Damages?
Punitive damages are only awarded in egregious cases, such as when a defendant’s conduct was particularly unreasonable, reckless or intentional. In order to obtain punitive damages, the plaintiff must prove that the defendant acted with malice or willful disregard and placed the plaintiff at risk of harm.
How Are Punitive Damages Calculated?
Punitive damages are calculated based on the seriousness of the defendant’s behavior and the amount of harm done to the plaintiff. The court must consider a range of factors, including the financial resources available to both parties, the conduct of each party, and any other relevant circumstances. Punitive damages may be much higher than compensatory damages since they serve as a way to punish bad actors and provide a deterrent for similar behavior in the future.
