Limits on Exemplary Damages

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 What are Damages Awards in a Personal Injury Lawsuit?

In personal injury cases, there is a party, called the plaintiff, who has suffered some type of injury, property damage, or other type of loss. A plaintiff is commonly awarded compensatory damages as a result of their personal injury lawsuit in order to compensate them for issues caused by the defendant, including:

  • Injury;
  • Death; or
  • Property damage.

These damages are typically paid by the party who caused them, known as the defendant. Compensatory damages include compensation for losses such as:

  • Medical expenses;
  • Lost wages; and
  • The repair or replacement of property.

Compensatory damages are only one type of damages awards which may be available to a plaintiff in a personal injury lawsuit. In addition to compensatory damages, there are other categories of damages which a plaintiff may be able to obtain, including exemplary damages, which are also referred to as punitive damages.

What are Exemplary Damages?

Exemplary damages are damages which are awarded to a plaintiff for the purpose of punishing the defendant. A court may also award this type of damages in order to prevent or deter other individuals from engaging in the same or similar conduct.

In order for a plaintiff to be eligible to receive exemplary damages, the conduct of the defendant must typically be considered:

The conduct of the defendant must have been so malicious or egregious that it should be used as a public example of how not to behave. For example, driving 5 miles over the speed limit would likely not be considered grossly reckless.

In these types of cases, an individual who was injured by another driver may be awarded compensatory damages for the injuries they sustained. Courts, however, would be reluctant to award punitive damages in this type of case.

In contrast, if an individual was driving 50 miles over the speed limit, it would likely be considered grossly reckless conduct. If an individual was injured by that driver, a court may issue a punitive damages award to the plaintiff in addition to compensatory damages.

Injuries which a defendant causes intentionally may also result in a plaintiff being awarded exemplary damages. For example, if an individual purposely strikes another vehicle or individual with their car.

When Will a Plaintiff Receive Punitive Damages?

Not all plaintiffs who win personal injury cases will receive exemplary damages awards. A court may award these damages after a careful analysis in order to determine if the case meets the following requirements:

  • The plaintiff was awarded:
  • The defendant acted in a malicious or intentional manner;
  • The punitive damages are calculated in an amount that is proportionate to the actual damages, for example, two or three times the amount of the original damages; and
  • Punitive damages are awarded for the direct harm the plaintiff suffered.

How are Exemplary Damages Calculated?

Exemplary damages are often calculated in proportion to or with consideration of the compensatory damages which are awarded to the plaintiff. The majority of states place a limit on the amount of exemplary damages a plaintiff is able to obtain.

A plaintiff may typically receive up to around three times the amount of the compensatory damages award. In most states, a plaintiff is required to receive a compensatory damages award prior to receiving exemplary damages.

Punitive damages are not generally awarded in cases involving a breach of contract. If, however, an injury occurred in a contract setting, punitive damages may be awarded for the separate tort.

For example, if a defendant assaults a plaintiff during the contract formation process, the plaintiff may be awarded punitive damages if the requirements are met. It is important to note that an exemplary damages award is at the discretion of the court and, although the plaintiff may request punitive damages, the court may determine if there is reason enough to award them.

Are There Limits on Exemplary Damages?

As previously noted, punitive damages, also called exemplary damages, are monetary damages which are awarded to the plaintiff to punish a defendant in order to deter similar conduct from members of the public. These damages are not awarded in every personal injury case.

It is important to note that in cases where punitive damages are awarded, a cap, or limit, may be placed on the amount which can be given to the plaintiff.

How Do Compensatory Damages Limit Exemplary Damages?

There are many states which place caps on the amount of punitive damages which depend on the amount of compensatory damages that are received by the plaintiff. Most states require that the plaintiff be awarded compensatory damages before they are eligible to receive punitive damages.

What is the Limit for Punitive Damages?

The limits placed on punitive damages vary by state. Generally, a plaintiff usually can receive two to three times the amount of the compensatory damages award.

Some states also place limits on the amount of punitive damages which can be awarded. States which place a limit on punitive damages to three times the amount of compensatory damages or $500,000 include:

  • Alabama;
  • Alaska; and
  • Florida.

Georgia and North Dakota also limit punitive damages to three times the amount of the compensatory damages but place the limit on the amount at $250,000. New Jersey and Virginia limit punitive damages to give times the amount of the compensatory damages award or $350,000.

The limit on punitive damages in California ranges from three to ten times the amount of the compensatory damages award but does not place a specific amount limit.

Does Every State Award Exemplary Damages?

No, every state does not award exemplary damages. States which do not allow exemplary damages awards include:

  • Louisiana;
  • New Hampshire;
  • Massachusetts;
  • Nebraska; and
  • Washington.

There are no states which allow exemplary damages in breach of contract cases.

Are There Other Limits on Punitive Damages?

Other limits on punitive damages depend on the state. For example, the State of Texas has additional provisions which apply to awards of punitive damages.

In Texas, plaintiffs can only receive punitive damages awards if awarded unanimously by a jury.

Are There Any Other Factors that Would Prevent Exemplary Damages?

In many cases, the plaintiff’s conduct may affect their ability to receive a punitive or exemplary damages award. For example, this may apply in cases when a plaintiff engaged in the same type of reckless or dangerous behavior as the defendant.

For example, if a defendant caused injury to a plaintiff because they were driving drunk but the plaintiff was also driving drunk at the time of the accident, it may limit the amount of damages the plaintiff receives. In some states, the plaintiff may be completely barred from receiving damages because they were contributorily negligent.

The punitive damages which are awarded will vary by case and state as each case will have a unique set of facts and circumstances and the laws governing damages vary by state.

Should I Hire an Attorney?

It is essential to have the assistance of a personal injury attorney for any issues, questions, or concerns you may have related to an exemplary damages award. Your attorney can review your case, advise you of the applicable laws in your state, and inform you of whether your case is eligible to receive exemplary damages.

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