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What Is the Difference Between Compensatory and Punitive Damages?
When a person suffers harm or loss due to the actions or negligence of another party, they may be entitled to seek compensation in the form of damages. The goal of an experienced personal injury attorney is to restore the plaintiff to their pre-incident state as much as possible.
However, damages are not a one-size-fits-all concept. They can be categorized into various types, with two common distinctions — compensatory damages and punitive damages.
Compensatory damages are designed to compensate the injured party for their actual and general losses, including economic and non-economic damages. Punitive damages go beyond compensation and are awarded to punish the defendant for particularly flagrant conduct and to deter similar actions in the future.
While compensatory damages focus on restoring the plaintiff, punitive damages emphasize accountability. They are still only available in civil cases and aren’t technically criminal in nature, but there is a definite justice component to punitive damages. Understanding these distinctions is crucial when seeking legal representation and ensuring fair recovery in any personal injury case.
What Are Compensatory Damages?
Compensatory damages refer to the financial award provided to an injured party with the intention of compensating them for their losses. These damages aim to restore the plaintiff to the physical and financial position they were in prior to the accident.
Key features of compensatory damages include:
- Actual damages – Also known as "special damages," actual damages are quantifiable losses that the injured party has suffered. They can include medical expenses, property damage, lost wages and other measurable economic losses.
- General damages – Unlike actual damages, general damages are non-monetary losses that are more subjective in nature. They encompass pain and suffering, loss of companionship, emotional distress and loss of enjoyment of life. General damages attempt to provide compensation for the intangible hardships (i.e., non-economic damages) resulting from the incident.
- Future damages – In cases where the harm or injury has long-term consequences, such as permanent disability or the need for ongoing medical treatment, future damages may be awarded. These damages account for the projected future financial losses that the injured party is likely to incur.
What Are Punitive Damages?
Key characteristics of punitive damages, also known as exemplary damages, include:
- Gross negligence or intentional misconduct – Punitive damages are typically awarded in cases where the defendant's actions are deemed especially reckless, intentional or malicious. They are intended to add an additional cost on people whose actions go beyond simple negligence into especially egregious behavior.
- Non-compensatory – Unlike compensatory damages, punitive damages are not directly tied to the losses suffered by the plaintiff. Instead, they exceed the amount necessary for compensation and are meant to send a strong message to the defendant.
- Varying standards – The criteria for awarding punitive damages differ across jurisdictions and legal systems. Some jurisdictions require a higher burden of proof, while others have specific punitive damage limits or guidelines regarding the scenarios in which punitive damages can be awarded.
Consider an accident caused by someone who ran a red light. If the at-fault driver simply misjudged the length of the yellow light and failed to brake in time, a case can be made that the driver was negligent and failed to uphold their duty of care to other people on the road. This is less egregious behavior than a drunk driver who fell asleep at the wheel and ran the red light, causing a crash.
In both scenarios the result can be the same, but the behavior of the driver who made a mistake isn’t by nature malicious or a reckless disregard for the safety of others. Punitive damages would likely only be available in the drunk driving accident.
Five Types of Personal Injury Claims that May Be Awarded Damages
While compensatory damages are more commonly awarded in personal injury cases, punitive damages can only be awarded in certain situations where the defendant's behavior is deemed particularly intentional or malicious.
Types of personal injury claims that may result in compensatory and punitive damages, include:
- Medical malpractice – If a healthcare professional's negligence or misconduct leads to harm or injury, compensatory damages may be awarded to cover medical expenses, rehabilitation costs, lost wages and pain and suffering. In cases involving extreme misconduct, punitive damages may also be considered.
- Product liability –
When a defective product causes injury or harm, compensatory damages can cover medical expenses, property damage, lost income and other losses suffered by the injured party. Punitive damages may be awarded if the manufacturer's conduct is found to be grossly negligent or intentionally harmful.
- Workplace accidents – In cases of workplace injuries resulting from employer negligence or unsafe working conditions, compensatory damages can cover medical expenses, lost wages, rehabilitation costs and other related damages. Punitive damages may be awarded if the employer's actions display a willful disregard for employee safety.
- Car accidents – Compensatory damages are frequently awarded in auto accident cases to cover medical expenses, property damage, lost wages, pain and suffering and more. Punitive damages may be considered if the responsible party's behavior (such as drunk driving or extreme recklessness) warrants punishment.
- Premises liability – When an individual sustains injuries on another person's property due to negligent maintenance or unsafe conditions, compensatory damages may be awarded to cover medical expenses, rehabilitation costs and other damages. Punitive damages may be considered if the property owner's conduct is deemed willful or malicious.
The availability and specific criteria for compensatory and punitive damages can vary depending on the jurisdiction and the circumstances of each case. It may be in your best interest to seek legal advice from a qualified attorney who can help you understand your personal injury claim and any potential damages.
Injured In an Accident? Schedule Your Free Personal Injury Consultation with an Atlanta Lawyer
The attorneys at the Law Office of Rickard, Drew & Nix have extensive experience representing clients in all types of personal injury cases, including premises liability, workplace accidents, car accidents and more. We’ll fight for the compensation you need to recover from your injuries and move on with your life.
Schedule your free consultation with one of our experienced attorneys by contacting our office at (404) 588-1001.
