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What are Compensatory Damages and Punitive Damages?

 

what are compensatory damages and punitive damagesIn civil court, damages are the “award” or sum of money, the plaintiff receives during either due to a settlement or a decision reached after a trial. This award essentially functions as compensation for the loss the plaintiff experienced, whether that be from personal injury, a faulty drug or device, or another catastrophe. A positive outcome for the plaintiff is welcomed in all litigations, but you may find yourself asking, “What are compensatory damages and punitive damages?”. These are the two main types of damages, each with their own set of ramifications against the defendant.

 

What are Punitive Damages?

Punitive damages often occur when a company has been negligent, and people are harmed as a result of that negligence. They are designed as a monetary way to penalize the defendant for their actions. Often, punitive damages are used to make an example of the defendant. By charging the defendant large amounts of money, the courts are setting an example for other companies and discouraging the repeated behavior.

The defendant must pay the plaintiff the punitive damages.

 

What are Compensatory Damages?

Compensatory damages, or “actual damages,” are designed to compensate the plaintiff for the damages they have incurred. These damages are intended to compensate the plaintiff for their loss.

 

Two Types of Compensatory Damages

1. Special Damages

Special damages are those damages that are easy to calculate. They include medical bills, lost wages, lost or damaged property, and any other out of pocket costs for the litigation. If there is a receipt, the expense is likely to qualify as a special damage. Special damages are often not up for debate as counsel can easily prove how much the injury cost the plaintiff.

 

2. General Damages

General damages are harder to quantify as they include subjective material. When a personal injury occurs, there is the obvious injury but then there are the damages that are not immediately visible: the healing, the emotional distress, the lasting trauma. Individuals often have incredibly different reactions to similar scenarios, therefore making it hard to put a cost on general damages.

However, a general rule of thumb is the more serious the injury, the higher the general damages. If someone is out of work and has multiple surgeries as a result of a serious car accident, they are likely to have higher general damages than someone who was in a fender bender.

What Counts as a General Damage?

  • Pain and Suffering- The permanent, physical distress caused by the injury including but not limited to: scarring, chronic pain, and limitations of activity
  • Emotional Distress- Anxiety, depression, and other emotional struggles occurring as a result of the injury
  • Defamation- The intentional spreading of false information to harm a person or entity. Also known as loss of reputation.
  • Disfigurement- A permanent change in appearance as a result of an injury such as scarring or amputation.
  • Loss of Consortium- The inability for relationships with family and spouses to continue as they had prior to the injury, also known as loss of companionship.
  • Loss of Physical or Mental Capacity- The inability to care for oneself as they could prior to the injury.
  • Loss of Enjoyment if Life- The inability to participate in and enjoy activities as they had prior to the injury as a result of the injury.

What are your General Damages Worth?

The two most common methods of calculating a plaintiff’s general damages are the multiplier method and the per diem method. The multiplier method calculates the general damages by multiplying the sum total of the plaintiff’s by a set number dependent on the severity of the plaintiff’s injury. The per diem method attaches a monetary value to every day the plaintiff has suffered because of the accident and adds the total of those days together. On occasion, the courts may use a combination of the multiplier method and the per diem method.

 

Disclaimer: As each case is unique, the monetary amount of damages may vary greatly between two cases. The types of damages sought after are often negotiated by the attorneys on both sides and can vary greatly between cases. If you have questions regarding your case, please contact us.

+ - References

“What Is PUNITIVE DAMAGES? Definition of PUNITIVE DAMAGES (Black's Law Dictionary).”The Law Dictionary, 25 Feb. 2014, thelawdictionary.org/punitive-damages/.

Hayes, Christi. “The Two Different Types of Compensatory Damages.” The Law Dictionary, thelawdictionary.org/article/two-different-types-compensatory-damages/.

Hayes, Christi. “Compensatory vs. Punitive Damages: What's the Difference?” The Law Dictionary, thelawdictionary.org/article/compensatory-vs-punitive-damages-whats-difference/.

 

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