What Are Punitive Damages? Everything You Need to Know

In the US, over 20,000 to 30,000 new civil cases get filed each month. That translates to at least a quarter of a million lawsuits in a single year! Most of these are personal injury lawsuits, such as product or medical liabilities.

Personal injury cases also include premises liability, workplace accidents, and vehicle crashes. While many car accidents get resolved out of court, others do end up in litigation. After all, such incidents claim the lives of more than 30,000 people in the US each year.

With that said, compensatory and punitive damages are the “awards” given to plaintiffs. These two refer to the compensation victims receive when they win a personal injury case.

If you or a loved one suffered due to another’s negligence, you may be able to pursue both damages. We’ll share the essential facts about personal injury compensation, so be sure to read on.

A Quick Overview On Personal Injury Cases

Personal injury lawsuits are legal disputes “civil” in nature. This means that it pursues compensation rather than punishment. Lawsuits that seek punishment fall under criminal law.

Personal injury cases occur when a person suffers in the hands of another person or party. In such cases, the victim is the plaintiff, while the one sued is the defendant. The plaintiff can file a lawsuit if their suffering is due to the defendant’s actions (or inaction).

Let’s say that you were driving prudently, but you still got involved in a car accident. You know that you’re in the right, and you can prove that the other driver was in the wrong. For instance, you saw the other driver on their phone while operating their vehicle.

Now, keep in mind that all 50 states enforce a texting ban for all drivers. If you can prove that the other driver was texting, you’re likely to win a personal injury case. You can sue them for negligence and even endangerment.

Inaction, by contrast, is the lack of action that causes someone damages. A perfect example is insufficient workplace safety protocols that endanger workers. Employees can sue their employers if an accident occurs due to these inadequacies.

Employers who violate the Occupational Safety and Health Administration standards are widespread. In 2019, for instance, there were over 20,000 citations for the top 10 most-violated OSHA standards.

Compensatory Damages as the Primary Compensation

All plaintiffs who win their personal injury case will receive compensatory damages. These are the monetary awards given to plaintiffs for their injuries or damages. The compensation can be for damaged property, medical bills, and lost wages.

In most cases, compensatory damages are proportional to the victim’s losses and damages. However, judges can award higher amounts as a form of compensation for “pain and suffering.”

What Are Punitive Damages Then?

If compensatory damages are for compensation, punitive or exemplary damages are for “punishment.” However, they’re still monetary, unlike criminal cases that involve lengthy jail time.

Punitive damages are awarded to plaintiffs on top of compensatory damages. However, that doesn’t mean that all complainants get these “extras.” It’s up to the judge or court to decide if they want to punish the defendant further.

What Exactly Is the Purpose of Punitive or Exemplary Damages?

The goal of punitive damages is to deter a defendant from committing the same crime. The courts aim to keep them from acting in the same negligent manner by “punishing” them further.

Courts may also award punitive damages to make an “example” out of a defendant. Making the sued party pay up more may serve as a warning for others not to commit the same crime.

This is especially true in cases of intentional negligence on the defendant’s part. The same goes if the accused is defiant or unrepentant even if proven guilty. In other cases, judges award exemplary damages if the sued person is a repeat offender.

Requirements for Punitive Damages

Courts review all personal injury lawsuits before deciding on punitive damages. They factor in the defendant’s actions and behaviors before and during the trial. They assess the cases for maliciousness, intent, and gross negligence.

If the defendant’s actions were malicious, they are likely to pay punitive damages. The same goes if the sued party exhibited gross negligence or acted intentionally.

Example of Punitive Damages in a Car Accident Lawsuit

A driver operates a vehicle under the influence of alcohol. The drunk motorist then crashes into another driver, causing property damage and injuries.

To add insult to injury, the drunk driver becomes enraged. That motorist ends up hitting the other driver, causing even more physical injuries.

It’s possible that the DUI driver’s blood alcohol level exceeded the legal limit. The intoxication may also have fueled that driver’s “road rage.”

Do note that studies have found a link between alcohol use and road rage. As such, it’s possible to encounter and get involved in accidents with such motorists.

In this case, the plaintiff can sue the drunk motorist with multiple complaints. For starters, the complainant can file a lawsuit for DUI and another for violent crime.

The court may then decide to award the plaintiff compensatory and punitive damages.

The “compensatory” part will be to pay for the plaintiff’s losses and damages. The exemplary damages will serve as an additional punishment for the defendant. The punitive damages may also act as a warning for others not to drink, drive, and hit other motorists.

Example of Punitive Damages in Health-Related Lawsuits

A consumer purchases a bottle of supplements marketed as safe for all users. There was no mention at all of the product interacting with other prescription drugs.

A few days after, the buyer becomes severely ill and ends up hospitalized. The consumer’s physician then finds out that the supplements were behind the sickness. The pills reacted with the patient’s current medication.

So, the customer seeks help from a personal injury attorney to sue the supplements maker. In this case, the complaint can be that the company failed to list contraindications. The manufacturer should have warned consumers about these potential side effects.

The court can then award the plaintiff with both compensatory and punitive damages. In this case, the exemplary damages can be a warning for the company to stop its misleading ads. It can also act as a “red flag” for other supplement makers to be more careful about their labeling.

Limits and Restrictions on Exemplary Damages

Each state has its say on how much punitive damages a judge can impose on a defendant. For example, in California, exemplary damages should not go beyond 10% of the defendant’s net worth. So, if the sued person’s net worth is $1 million, then the max they should pay is $100,000.

In many other states, the limit is set at no more than four times the worth of compensatory damages.

Let’s say that the plaintiff receives $150,000 in compensatory damages. The court can only order the defendant to pay up to $600,000 in punitive damages.

There would be special considerations, though, especially if the defendant’s actions were extreme. An example is if the sued party displayed severe gross misconduct. In this case, the court may award greater punitive damages.

What to Do if You’re a Victim of Someone Else’s Negligence

It is your every right to sue another person or entity if their negligence caused you harm.

Now, the last thing that may be on your mind as you recover is to think about lengthy lawsuits. You may also be hesitant to go against your employer or a big company.

You can simplify things by seeking the assistance of a personal injury attorney. A lawyer can assess your case and determine how meritable it is. Don’t worry, as most personal injury attorneys provide a free initial consultation.

If the lawyer deems your case to have merits, then you should consider filing that lawsuit. With the help of your attorney, you can pursue compensatory and punitive damages.

It’s also vital to note that states have different “statute of limitations.” This is the deadline for filing claims and lawsuits. They also vary based on the kind of legal dispute that you want to file.

Either way, you’re at risk of missing your chance to sue the negligent party if you postpone your claim. That’s why it’s best to get in touch with a lawyer as soon as you’re able to.

Stand up for Your Rights and Get the Compensation You Deserve

There you have it, your ultimate guide on compensatory and punitive damages. Remember, all successful personal injury cases get awarded with compensatory damages. However, not all can also receive punitive damages.

If you believe that you deserve punitive damages, too, then it’s best to lawyer up. This way, the personal injury attorney can determine the best course of action to take with your case.

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