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What Does "Punitive Damages" Mean?
If you believe you have a personal injury claim, you might also be asking the question “what are punitive damages?” Punitive damages have the two-fold purpose of punishing defendants for their actions and deterring them from committing the acts again in the future. These types of damages are very different from compensatory damages, which are meant to reimburse the plaintiff for their economic loss or physical injury.
For example, in a personal injury suit, compensatory damages would cover items such as the victim’s medical bills and hospital expenses, as well as any damage to property. The court would then determine whether it would be appropriate to award the victim with punitive damages in addition to or “on top of” compensatory damages.
When Are Punitive Damages Awarded?
Punitive damages are not awarded in every case, and a court must submit a punitive damages claim to a very rigorous and thorough analysis. They are typically available in civil matters such as tort and personal injuries claims where the defendant’s conduct is particularly reprehensible. Punitive damages are usually not awarded for breaches of contracts, although they may be issued in some situations such as for independent torts committed in a contract setting.
The court will look for the following elements to be satisfied before awarding punitive damages:
- The plaintiff must first be awarded another type of actual damages, such as compensatory, nominal, or restitutionary damages. Punitive damages are never awarded alone by themselves.
- The defendant in the case must have acted in a way that is more than merely negligent or accidental; for example they must have acted maliciously or purposefully.
- The punitive damages must be awarded in an amount that is “relatively proportionate” to the actual damages. Punitive damages for excessive amounts are considered unconstitutional.
- They are usually available only for acts that directly harm the plaintiff
Punitive damages will only be awarded if the above factors are all entirely satisfied. The most challenging area for courts issuing punitive damages has to do with determining what a “relatively proportionate” amount is.
How Are Punitive Damages Calculated?
Generally speaking, there is no maximum dollar cap for issuing punitive damages. However, this does not mean that plaintiffs are entitled to claim as much as they want for punitive damages. Several Supreme Court cases have provided guidelines as to how punitive damages should be calculated in relation to compensatory damages. Calculations also vary from state to state.
What Is the Limit to the Amount That a Plaintiff Can Recover?
Generally, punitive damages should not exceed a total that is four times the amount of compensatory damages. So, for example if the plaintiff was allowed to recover $100,000 in compensatory damages, most courts would place the limit at 4 times that amount, or $400,000. This may vary from state to state, but a ratio of 4:1 is usually considered reasonable and “relatively proportionate.” Courts have stated that significantly larger ratios such as 10:1 are unconstitutional and disproportionate.
Are There Any Other Factors Courts Use to Determine Punitive Damages?
Yes, courts will also consider other factors to determine punitive damages. These may include:
- How reprehensible the defendant’s conduct is - particularly egregious or malicious actions would justify a higher punitive damages award.
- The difference between the harm actually suffered by the plaintiff and the amount of punitive damages being requested.
- Amounts of punitive damages awarded in similar cases.
Particularly high amounts of punitive damages may be justified under some circumstances, such as:
- Those involving non-economic harm that is difficult to calculate
- Injuries that are difficult to detect
- Conduct that is considered extraordinarily offensive.
In all instances, especially those involving large amounts of punitive damages, the defendant is entitled to fair notice as to both the amount of punitive damages being awarded and the conduct they committed which justified the high award.
Do I Need to Hire a Lawyer If I Am Involved in a Suit with Punitive Damages?
You should contact an attorney to help you understand whether or not you may be able to obtain punitive damages in your case. As mentioned above, punitive damages must be coupled with actual damages, such as compensatory damages. This means you cannot file solely to obtain punitive damages, and therefore a court would have to hear the merits of your case.
In any claim where punitive damages may be a factor, the services of a lawyer are indispensable in determining the amount awarded. On the other hand, if you are the defendant and punitive damages are being requested from you, a lawyer can help defend you against claims for excessive amounts.
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Last Modified: 02-28-2014 02:44 PM PST
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