What Is the Difference Between Compensatory and Punitive Damages in a Personal Injury Case?

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You may have heard of the term “damages” in the context of a lawsuit.  In a civil suit, damages are what a plaintiff gets paid when they win their case.  But how are damages calculated?  What is it about the facts of a lawsuit that determines how much a plaintiff deserves?  We will answer all of your questions below.

Damages are broken down into two main categories: compensatory and punitive damages.  As the name suggests, compensatory damages are meant to compensate the plaintiff for what they have actually lost or suffered as a result of the events that landed them in a courtroom.  These are based entirely on the plaintiff’s experience and can account for medical expenses, lost wages, and even pain and suffering.  Punitive damages, on the other hand, are based on the conduct of the defendant.  While only available in certain instances, punitive damages are imposed to punish the defendant’s wrongdoing and discourage that type of behavior in the future.

Deciding whether to press charges requires the plaintiff to do some calculation, and proper calculation can only be done with the help of an experienced Dallas personal injury attorney.  At The Queenan Law Firm, P.C., we can examine the facts of your personal injury and present you with the options so that you can decide what makes sense for you.  We can file on your behalf, negotiate with opposing counsel, and advocate for you in court so that you get the justice you deserve.  For your free consultation, call us at (817) 476-1797.

Key Differences Between Compensatory and Punitive Damages in a Personal Injury Case

To determine how much you could recover in your personal injury cases, you should first have a thorough understanding of how damages are calculated in a court of law.

Compensatory damages are meant to pay back the victim, while punitive damages are intended to penalize those responsible.  Compensatory damages will always be available in a successful personal injury lawsuit because the plaintiff would not have a case without injuries.  Recovery for compensatory damages will be based on economic factors, such as medical expenses incurred and loss of wages while recovering from the injury.  However, they will also include non-economic considerations, such as the pain and suffering that a personal injury victim has endured as a result of the accident and their injuries.

Conversely, the availability and severity of punitive damages depend on the nature of the liable party’s conduct and often has little to do with the plaintiff.  If the defendant’s actions (or inactions) were reprehensible to the point that public policy should want to discourage them, chances are that punitive damages will be available.

Punitive damages will also typically be larger than compensatory damages.  Sometimes, punitive damages are set at double or triple the amount of compensatory damages.  This is because punitive damages are imposed where they could make a difference in the conduct of bad actors and other similarly situated parties in the future.  Generally, this implies that some sort of power imbalance existed, and damages need to be large to make a difference.

Such a power imbalance often takes the form of a wealth disparity.  Courts don’t typically see a point in imposing punitive damages on a defendant who will have difficulty paying the compensatory damages, to begin with.  In fact, judges may instruct the jury to consider the relative wealth of the defendant when determining a fair amount for punitive damages.  Therefore, punitive damages are most often seen when they are imposed on corporate offenders who act recklessly.

When Are Punitive Damages Available in a Personal Injury Case?

Courts will award punitive damages in civil cases, such as a personal injury lawsuit where the conduct that caused the injury was “willful and wanton.”  In other words, the defendant must have intentionally acted (or failed to act) while knowing and choosing to disregard the risk of harm that they caused.  Some states use a standard of “gross negligence” instead, which goes beyond typical mistakes and errors in normal negligence cases.

Punitive damages are only assessed in roughly 5% of verdicts.  This is because punitive damages are typically severe and are reserved for the most reprehensible of instances where a defendant’s behavior is deemed grossly negligent, malicious, intentional, or reckless.

Examples of instances where punitive damages are available to personal injury victims include

  • Deceptive or reckless retail practices
  • Fraud
  • Drunk driving accidents
  • Reckless maintenance of common carrier vehicles (e.g., airplanes or cruise ships).

Are There Caps on Compensatory and Punitive Damages in Personal Injury Cases?

Many states impose caps on how much a plaintiff may recover in punitive damages alone.  Some states base their caps on specific arbitrary numbers, and others will use the subjective amount of compensatory damages as a baseline.

For example, Texas uses a hybrid statutory cap on punitive damage recovery.  Plaintiffs in Texas may only recover punitive damages in an amount greater than $200,000 or twice the amount of economic damages plus non-economic damages, up to $750,000.

There are fewer restrictions on compensatory damages since these are based primarily on actual figures that accurately represent the scale of the harm.  Some states will limit the amount of non-economic damages in specific circumstances of personal injury, such as medical malpractice.

Determining what is available, where it is available, and when it applies to you can be a tremendous undertaking for a personal injury victim on their own.  For a full accounting of what is available to you in your jurisdiction for your personal injury case, you should speak to a seasoned Arlington personal injury attorney.

We Can Help with Compensatory and Punitive Damages in Your Personal Injury Case

If you are a potential personal injury plaintiff, you deserve to know what is at stake.  Our experienced Fort Worth personal injury attorneys can work with you to come up with an estimate of what you deserve.  Speak to us for free about your options by calling The Queenan Law Firm, P.C. at (817) 476-1797.