Compensatory vs. Punitive Damages: What's the difference?

Written by Christi Hayes and Fact Checked by The Law Dictionary Staff  

In the world of civil litigation, damages are the monetary amount a court can award a plaintiff. Damages are meant to compensate for such things as injury, property damage, medical bills, lost income, and other damages that resulted from whatever issue is at the center of the case. By awarding damages, courts ensure that plaintiffs are compensated in a fair manner and that there is a disincentive for other people to engage in the same conduct that led to damages being awarded. When talking about damages, however, it is important to realize that there are two main types of damages, compensatory and punitive. Understanding how these two types of damages work is essential to understanding how civil court cases themselves function.

Compensatory damages

 Compensatory damages, which are sometimes referred to as actual damages, are sometimes seen as the "main" type of damages that a civil court can award a plaintiff. Essentially, compensatory damages are, as their name suggests, designed to compensate the plaintiff for his or her loss. The compensatory nature of compensatory damages means that the plaintiff must prove that he or she suffered some form of loss due to the incident in question (such as a car accident, breach of contract, etc.). Compensatory damages can be awarded for such things as loss of income, bodily injury, property damage, and so on. In civil litigation pertaining to a motor vehicle accident, for example, the plaintiff may claim compensatory damages for vehicle repair, medical bills, and income that was lost as a result of the plaintiff taking time off work to deal with his or her injuries. The plaintiff must prove to the court the loss in question, the amount of the loss, and that the loss was caused by the defendant.

Punitive damages 

In civil litigation, punitive damages can be particularly controversial. Punitive damages go above and beyond compensatory damages in that they are a monetary award that the defendant must pay the plaintiff in addition to any compensatory damages that are also awarded. Punitive damages are essentially designed to punish the defendant for his or her reckless of negligent behavior. Because punitive damages are meant to punish the defendant, they tend to only be available in cases where the defendant's conduct was either reckless or negligent. Again, taking the case of a motor vehicle accident, if the crash was caused because the defendant was impaired by alcohol at the time, then the plaintiff would likely be able to pursue punitive damages against the defendant. Punitive damages are designed to not only discourage the defendant in question from engaging in similar behavior in the future, but are also meant to be a message sent to society at large. Civil courts that punish reckless or negligent behavior with punitive damages indicate to others that such behavior will not be tolerated and that that behavior can lead to monetary consequences.

 In civil courts, damages are one of the main ways that plaintiffs have to seek justice for themselves and ensure that negligent and reckless acts do not go unpunished. While large awards for damages tend to grab media headlines and can sometimes lead to controversy, the system of damages in place is an important tool for ensuring a fairer justice system for those who have been victims of injury or loss that are beyond their control.

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