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What Are Punitive Damages in a Lawsuit?
What You Need to Know

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Punitive damages are part of a personal injury lawsuit. While the majority of personal injury cases focus on compensatory damages, the plaintiff can occasionally be entitled to punitive damages as well.

Schmidt & Clark lawyers have two decades of experience dealing with personal injury cases. We’ve helped countless clients get both compensatory and punitive damages. Today, we’ll explain what punitive damages are, when you are eligible for them, and what damages you can get.

Summary of the Key Findings

  • Same as compensatory damages award, punitive damages are awarded in a personal injury case.
  • United States Supreme Court put a cap on the number of punitive damages. 
  • Several requirements have to be met for punitive damages to be awarded.
  • Punitive damages aren’t determined by the defendant’s net worth.

What are Punitive Damages?

An office man thinkingPunitive damages are part of a personal injury lawsuit when the plaintiff can get a monetary award for emotional distress after being injured in an accident.

“Punitive damages are awarded in addition to actual damages in certain circumstances. Punitive damages are considered punishment and are typically awarded at the court's discretion when the defendant's behavior is found to be especially harmful.

Punitive damages are normally not awarded in the context of a breach of contract claim.” Legal Information Institute

Punitive damages are only available in special circumstances. They have two functions:

  • To punish an individual's behavior — If a person behaved egregiously, punitive damages are intended to punish them. This is usually done via a financial loss, as the more money a person loses, the less likely they are to commit the same offense.
  • Set an example — These damages are also called exemplary damages. They set an example so the person who behaved wrongly and others will be dissuaded from behaving the same way in the future.

Punitive damages awards can be ten times higher than the initial damages because they are of exemplary nature, and the purpose is to make others take notice.

Punitive damages awards often happen in negligent cases, where the defendant is a company or a large entity. For example, this happens in medical malpractice cases or product liability. If a company sells a product they are aware is defective, and a person gets injured, they can sue the company and get a punitive award. 

However, this doesn’t only stand for big companies. Individuals can also be made to pay punitive damages. An example is drunk driving or distracted driving. In these cases, a person consciously decides to engage in behavior that harms another person.

Finally, punitive damages are awarded by a court of law when compensatory damages are seen as insufficient. The court can’t give punitive damages alone, but always with other damages to increase the plaintiff’s award.

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When are Punitive Damages Limited?

An office worker thinkingPunitive damages are limited by some states and by the United States Supreme Court. Certain states limit the types of cases where punitive damages are awarded, and some don’t allow punitive damages to be insured.

The US Supreme Court has put caps on the number of punitive damage awards. One example is State Farm Mut.

Automobiles Ins. Co. vs. Campbell case, where the Supreme Court lowered the punitive damages awarded from $145 million to only $1 million [1].

The court rationed that the ratio of awarding punitive damages to compensatory damages that exceeded 10:1 is unconstitutional.

Apart from Supreme Court limitations, there are also state caps, where states limit the number of punitive damages awarded to a person. For example, Alaska and Alabama have state statute limitations on punitive damages that say they can be up to three times the amount of compensatory damages and not higher [2] [3].

Punitive Damages Requirements

A man holding a paper

Punitive damages aren’t available in all personal injury claims. For example, California limits the situations when a defendant can be made to pay for their actions [4]. The defendant’s conduct has to go beyond just negligence or misconduct in California and some other states.

These are the requirements that have to be met for a plaintiff to get a punitive damages award:

  • Oppression — This means the plaintiff has been subjected to cruel and unjust hardships that violate their rights.
  • Fraud — Can mean two things:
    • Defendant intentionally misrepresented something and was deceitful.
    • Defendant hid the fact with the intention to rob the plaintiff of their property or legal rights or cause them injury.
  • Malice — Can mean two things:
    • Defendant’s conduct that causes injury to the plaintiff.
    • Defendant’s conscious despicable conduct that disregards the safety and rights of the plaintiff.

For the plaintiff to get a punitive damage award, a personal injury lawyer needs clear evidence that the defendant acted with one of these intentions. Clear evidence means that there’s a high possibility that the defendant acted fraudulently, intentionally, or willfully. 

Note: Most personal injury cases claim that the defendant’s actions were negligent. However, some cases may rise to willful or wanton when the defendant intentionally inflicts harm on the plaintiff. If a defendant is negligent, they may not understand their actions are a threat to others. But, if they are willful or wanton, they consciously disregard the risk their actions pose to others.

Examples of situations where you can get a punitive damages award:

What Punitive Damages You Can Get

A lawyer talking to a person

What punitive damages you can get depends on several factors:

  • How bad was the defendant’s action?
  • Did the defendant cause you physical harm?
  • Did the defendant take advantage of you, for example, by knowing your financial vulnerabilities?
  • Did the defendant endanger the safety of others?
  • Was this a one-time occurrence or a pattern?
  • Was the defendant deceitful?
  • What amount of punitive damages the jury determines is enough to discourage future wrongful behavior.

If punitive damages exceed the 10:1 ratio, they are seen as unconstitutional. For example, if the compensatory damages are $100,000, punitive damages can’t be higher than $1,000,000. Also, the award of punitive damages isn’t determined by the defendant’s net worth but by the plaintiff’s injury. 

Also, it’s rare for punitive damages to be awarded in small claims cases because these cases don’t meet the criteria needed for a punitive damage award. Of course, there are some exceptions to this, such as when employers fail to pay wages. Then, the amount of punitive damages serves as both an example to other employers and a lesson to the employer who didn’t pay their workers.

Related Article: What Is Tort Reform?

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FAQ

Are punitive damages and pain and suffering the same thing?

No, punitive damages and pain and suffering aren’t the same thing. Pain and suffering are a kind of compensatory damages. Unlike compensatory damages, punitive damages serve to punish the defendant for egregious behavior and deter others from doing the same.

Can you get punitive and compensatory damages?

Yes, you can get punitive and compensatory damages. The victim has to prove the defendant acted with malice, oppression, or fraud, which caused them intentional harm.

How often are punitive damages awarded?

Punitive damages are awarded in two percent of personal injury cases that go to trial [5].

What Punitive Damages Can You Get?

The punitive damages you can get depend on several factors, such as an established reasonable relationship between the defendant and the plaintiff.

Punitive damages are more complex and difficult to get than compensatory damages, which is why you need an experienced lawyer.

Schmidt & Clark lawyers can provide legal advice and help you determine if you have grounds for punitive damages. Our lawyers can help you gather convincing evidence and present your case in the trial.

Contact us today for a free case evaluation. 


References:

1.https://supreme.justia.com/cases/federal/us/538/408/ 

2.https://law.justia.com/codes/alabama/2006/3069/127388.html#:

3.https://www.akleg.gov/basis/Bill/Text/19?Hsid=HB0158C#

4.https://www.akleg.gov/basis/Bill/Text/19?Hsid=HB0158C#

5.https://law.utexas.edu/faculty/publications/2010-Modern-American-Remedies

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