What Are Punitive Damages?

When a court issues a ruling in a civil court, it may award two types of damages. One is actual or compensatory damages, and the other is punitive or exemplary damages. Actual damages can be quantified as they are compensation for measurable things such as medical bills, lost wages, or damages to a vehicle. This type of award attempts to make the plaintiff whole, to the extent possible. By awarding compensatory damages, the court attempts to return the plaintiff to his or her condition prior to the injury or damages.

Intended to discourage repeated bad behaviors, punitive or exemplary damages may be added to compensatory damages. This action punishes defendants who behave outrageously. Punitive damages are also intended to discourage other members of society from engaging in similar behaviors. In most states, punitive damages go to the plaintiff. However, a few do allow a split between the plaintiff and the state.

How Much Is Usually Awarded in Punitive Damages?

Juries set the amount of punitive damages based on state laws. Among other things, jurors can take into account the defendant’s behavior and how large the verdict should be in relation to the defendant’s wealth. The court may also instruct the jury to consider whether the punitive damages are in line with the plaintiff’s injury.

Some people believe that punitive damages should not be available in every case. Instead, they feel that this sort of punishment should be reserved for especially malicious actions. However, in most states, punitive damages can be awarded when a defendant’s actions are intentional, fraudulent, or careless.

How Do Punitive Damages Work in Contract Law?

Contracts may include liquidated damages in the event of a breach of the agreement. Liquidated damages is a term roughly akin to actual damages. However, courts have the option to ignore that language if it finds that the liquidated damages are punitive. The court will evaluate two things in order to answer this question.

  • The damages must be reasonable in proportion to the harm caused by the breach.
  • The harm must be impossible to estimate or quantify.

If both of these are true, the court may rely on the liquidated damages rather than assessing punitive damages.

While significant awards for punitive damages often appear in Hollywood movie scripts, in reality, punitive damages are only awarded in about five percent of cases. Laws concerning awarding punitive damages vary by state and can be very complicated. A knowledgeable and experienced personal injury attorney in Washington, DC can help you assess your situation to determine if punitive damages make sense in your circumstances.

 

Thanks to The Law Firm of Frederick J. Brynn, P.C. for their insight into personal injury claims and punitive damages.

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