Punitive damages, also known as exemplary damages, are awarded by a court as a form of punishment to the wrongdoer. They often serve as a means to deter others from engaging in the same wrongful actions. Punitive damages may be awarded in certain cases when someone commits an act that is particularly egregious (wanton, intentionally negligent, fraudulent, etc.), and are awarded in addition to compensatory damages. Some states have a cap on the amount of punitive damages that can be awarded, whereas other states limit punitive damages to a “reasonable” amount based on the value of the entire case and additional factors.
Punitive damages are awarded in a small number of cases, but if they are awarded, they relate to personal injury cases. These usually involve cases where the plaintiff is injured or suffers losses due to the defendant’s extremely reckless or negligent behavior. They are also issued in cases involving intentional acts that injure the plaintiff, such as a civil battery case.
Punitive damages cannot be issued alone; instead, they are awarded in addition to compensatory damages (damages to compensate the victim, or to put her back in the position she was in before the injury). Punitive damages are not a “given.”
Have you ever seen the movie Erin Brockovich? In the movie, it is discovered that PG&E dumped poisonous chemicals into the town’s drinking water, making hundreds of residents very ill. A jury found that PG&E should pay $333 million in compensatory and punitive damages to the people they made sick.
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Punitive damages may be awarded for various acts in a personal injury claim. Examples of conduct that usually result in punitive damages may include:
- Extreme negligence in a medical malpractice case, such as performing the wrong surgery or leaving a surgical implement in the patient’s body.
- Conduct that is extremely dangerous and exposes the public to a high degree of harm (such as taking out a weapon in a crowded place).
- Conduct that displays an extreme disregard for laws and statutes (such as driving at speeds well above the limit in crowded areas).
Punitive damages awards may be issued for injuries that are caused either intentionally, or that result from negligence. If a person acts negligently and should have known their acts would result in substantial harm, they can be liable for punitive damages. Personal injury lawsuits that commonly result in punitive damages include auto accidents, medical malpractice suits, assault/battery, drunk driving accidents, and defamation.
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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. The requirements vary from state to state.
Many states cap the amount of punitive damages that can be awarded. Some states set a ratio between the amount of actual damages in the case and the amount of punitive damages. For example, in Missouri, a defendant cannot be awarded more than five times the actual damages or $500,000, whichever is greater. Note that in many states, no punitive damages may be awarded if there are no other damages in the case.
Other states focus on the ability of the defendant to pay based on their income or net worth. In Montana, punitive damages cannot exceed $1,000,000 or 3 times the defendant’s net worth, whichever is less.
Finally, the United States Supreme Court has set a limit on punitive damages. Punitive damages cannot exceed a 10:1 ratio. In other words, punitive damages cannot be more than 10 times the initial award given. If the trial court or jury awards $100,000 in recovery, the court must give less than $1,000,000 in punitive damages. The only exception is if the case was extremely egregious or shocking to the court.
These limits exist because punitive damages are a form of punishment, and so must be used fairly. They also exist to reform tort law, making it more difficult for plaintiffs to seek exorbitant damages for wrongful acts and making the legal system more predictable.
There are many nuances to the law of punitive damages. A personal injury lawyer can help you understand whether you have a claim that warrants punitive damages. Working with an attorney can help ensure that you use all remedies available in your situation.