In a personal injury claim, "damages" is another word for the compensation that is given or awarded to the injured person, paid by the at-fault party. There are two basic kinds of personal injury damages: compensatory damages, which (as the name suggests) compensate for the claimant's economic and non-economic losses, and punitive damages, which essentially punish the at-fault party for particularly outrageous or unlawful conduct.
Compensatory damages are always available to an injured party in a personal injury case, as long as there is adequate proof of loss. Compensatory damages can take the form of either economic ("special") or non-economic ("general") damages, with most personal injury settlements including payment for both kinds of losses. (Learn more about "general" and "special" damages in a personal injury settlement.)
Punitive damages, however, are very rarely awarded in personal injury cases. In this article, we'll explain what punitive damages are and when they might be an option in a personal injury case. We'll also look at laws that cap punitive damages.
In a personal injury lawsuit, punitive damages are only awarded in clearly-defined instances where the conduct of the responsible party is deemed to be so egregious that punishment is warranted. Since juries in personal injury cases cannot impose criminal punishment on the responsible party, the law instead allows them to impose what amounts to a "civil fine" payable to the injured party.
Depending on the law of the state in which the personal injury case is brought, punitive damages may be awarded in instances where the defendant's action/inaction involved:
It's important to note that punitive damages are definitely not available as a matter of course in a personal injury case; rather, they are either provided for within a statute or as part of the state's common law that has developed over time. Further, punitive damages will never be part of an out-of-court personal injury settlement. They're only possible as part of a court award after a civil trial.
An example of the availability of punitive damages lies in the famous "McDonald's scalding hot coffee case", where the jury awarded the injured party in excess of $2 million in punitive damages on top of her compensatory damages (including medical bills and pain and suffering).
Punitive damages were awarded in that case because the evidence at trial showed that McDonald's had received numerous prior complaints about injuries form scalding hot coffee, but failed to take any action to correct the problem. By awarding punitive damages, the jury was sending McDonald's a message that its conduct—in this case, a failure to take corrective action in the face of a known risk of serious injury to its restaurant patrons—was unacceptable and warranted punishment.
In cases where punitive damages are available, it is common to see a limit or "cap" on the amount that can be awarded. Sometimes this cap is expressed as a pure dollar amount (e.g., $500,000), and in other situations it is expressed as a multiple of the amount of the compensatory damages award. An example of the latter type of cap would be a statute that allows an award of treble (triple) damages for defamation; in this circumstance, the injured party would receive compensatory damages for his injuries plus twice that amount in punitive damages.
Regardless of which type of cap applies, the purpose of these limits is to prevent juries from imposing punishment that is totally out of line with the nature and severity of the wrong committed.
Where a cap does not apply to a punitive damages award, courts may still limit the award to an amount that is reasonable and proportional to the wrong committed—usually on the basis that the failure to do so would amount to a deprivation of property without due process. So, in the extremely rare instance when a personal injury lawsuit goes to trial and the jury awards punitive damages, the judge has the discretion to reduce the punitive damages award if she feels that it is not supported by the evidence.
