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Punitive Damages

What Are Punitive Damages?

Punitive damages are a type of legal damages that are awarded to victims in civil lawsuits as a means of punishing the wrongdoer. They are intended to serve as a deterrent to future bad behavior by the defendant and to compensate the victim for any additional harm that has been suffered as a result of the defendant's actions.

Unlike compensatory damages, which aim to put the victim back in the position they would have been in if not for the wrongdoing, punitive damages are not meant to compensate the victim but rather to punish the defendant. As such, they are typically awarded in cases where the defendant's actions were particularly egregious or malicious, or where they showed a willful disregard for the safety of others.

The purpose of punitive damages is to punish and reform the wrongdoer. Although compensatory damages aim to compensate the victim, punitive damages are intended to punish. As such, they are usually much greater than compensatory damages in civil lawsuits involving personal injury or wrongful death.

What Are The Different Types Of Punitive Damages?

Punitive damages come in many different forms depending on the case at hand. They often involve a multiplier in order to adequately punish the defendant for their wrongdoing. Common types of punitive awards include:

Double or treble damages may be awarded in cases where the defendant has been found guilty of acting willfully, maliciously, or with reckless disregard for safety when harming others. These are sometimes referred to as “exemplary” or “punitive” damages.

Generally speaking, the amount of punitive damages that are awarded will be determined on a case-by-case basis, although this may vary depending on the state in which the lawsuit is filed.
In most states, there are limits to how much a jury can award in total punitive damage awards based on the number of plaintiffs or victims involved in a case, as well as the nature of what was harmed by the defendant's actions (in other words, whether it was one person or many).

While these limits apply to each individual plaintiff or victim, they are often aggregated across all plaintiffs and/or victims involved in a particular case.

The exact rules for punitive damage limits vary from state to state. As such, it is important to check the specific laws in your state before filing a civil lawsuit.

Punitive damages are available in all types of personal injury cases, including defective products cases. However, only certain states allow punitive damages in wrongful death lawsuits.

What Are The Criteria For Awarding Punitive Damages?

Punitive damage awards are not automatic even if the defendant acted particularly egregiously or maliciously. They must be awarded by a jury who has determined that both

  1. compensatory damages have already been awarded; and
  2. there is sufficient evidence to show that the defendant's behavior was egregious enough to warrant an award of punitive damages. This means that these types of cases involve extensive legal proceedings in order to prove that the defendant acted negligently or intentionally and that they deserve additional punishment.

What Damages Can Punitive Damages Compensate?

Punitive damages are intended to compensate the plaintiff for losses that go beyond what compensatory damages can cover.

Compensatory damages specifically aim to return the plaintiff to their pre-harm state, whereas punitive damages factor in additional financial and non-financial factors that might not be covered by compensatory damages.

Compensatory damages are meant to redress a loss. They reimburse a person for financial and non-financial losses that can be measured in money terms. Often, compensatory damages make up for direct costs associated with an injury or accident including:

  • Property damage;
  • Lost wages from time off work;
  • Medical bills; and
  • Physical pain and suffering.

In contrast, punitive damages aim to punish defendants and are intended to deter others from engaging in similar behavior, which is why they are not limited to the plaintiff's injuries or losses.

Additionally, Punitive damages are also meant to communicate to society that this type of behavior is unacceptable and should be discouraged. When punitive damages are used to deter future behavior, it is either because of (1) Specific deterrence or (2) General deterrence.
In other words, the awarding of punitive damages could be a punishment meant for either a specific company or generally for all the companies who engage in the same or similar type of industry.

Not all states allow punitive damage awards on top of compensatory damage awards; however, some states only allow punitive damage awards if they are awarded along with actual or liquidated (or statutory) damages. As such, it is important to check the specific laws in your state before filing a civil lawsuit.

Can Punitive Damages Be Disproportionate To Actual Damages?

It is up to a judge or jury to determine whether or not a plaintiff should receive additional punitive damages on top of what they have already been awarded. This means that sometimes juries award these types of damages even when the actual losses or compensatory damages are not that high.

Some states expressly prohibit such awards if they would be “excessive” and some judges will reduce them accordingly.

For example, in a wrongful death case that was decided by the US Supreme Court involving State Farm Insurance, a lower court awarded $1M in compensatory damages and $145M in punitive damages against State Farm.

The Supreme Court found that State Farm's claims adjustment process was deliberately crafted to prey on consumers who were unlikely to defend themselves in court. They found that State Farm also engaged in an unlawful scheme to deny benefits owed to consumers and policyholders by paying out less than fair value in order to enhance profit targets.

In addition, State Farm falsified and withheld evidence on claim files, unjustly attacked the character, reputation, and credibility of claimants, and made notations in their files if the case ever came before a jury.

Despite all these seemingly egregious acts, the Supreme Court reduced the punitive damages award to $9M, citing that State Farm's conduct is economic in nature, and not something that leads to a catastrophic injury or death.

How Are Punitive Damages Calculated?

The amount of punitive damages that may be awarded is typically based on a ratio between the compensatory or actual damages, and the amount of punitive damages.

For example, if the compensatory damages are $100,000 then the punitive damage award might be capped at 10x that amount, or $1M. However, some states have enacted laws that place a cap on the amount of punitive damages that can be awarded.

Do I Need A Lawyer For Help With Punitive Damage Awards?

If you've been injured as the result of another person or company's negligence and have received a punitive damages award, it is important to speak with an experienced personal injury lawyer.

Punitive damages are intended to punish the defendant for their actions and help make sure that something like this doesn't happen again. A lawyer can help you understand how to collect your award and protect your rights.

Understanding how these awards are calculated is important when trying to determine whether or not you need legal advice or representation.

If you have been injured by another individual's negligence and would like more information on punitive damages awards, contact an attorney today.

Call our office today at 212-994-7777 or complete the convenient online contact form to set up a consultation.