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What Are Compensatory Damages?

Learning about the different forms of compensation in lawsuits is essential for anyone involved in a legal action. Compensatory damages are one of these forms. It has a distinct purpose and application compared to other types of damages. Compensatory damage is designed to reimburse the plaintiff for the losses incurred due to their injury. It also covers the monetary value and various costs resulting from the defendant's actions.

This article provides a comprehensive overview of compensatory damages. It details its function and the costs that it can cover. It also differentiates it from other types of damages, such as punitive damages. By looking at the real-life cases that the court decided, you'll also have an idea of how these legal principles apply.

What Is the Difference Between Compensatory and Punitive Damages?

If you win a lawsuit, you may be entitled to money. This is known in the legal world as damages. In many cases, damages come in two major categories: punitive and compensatory.

Punitive damages seek to punish the person for their wrongdoing. The court awards punitive damages separately from actual damages in an event. In general, the courts only award punitive damages when they determine that the defendant acted in a harmful manner. This type of damages is also called exemplary damages, which are damages that are more than what is caused by the plaintiff.

In contrast, the court awards compensatory damages to the plaintiff to cover the actual losses the injury victim incurred due to the defendant's actions. Compared to punitive damages, compensatory damages mainly focus on the actual harm the plaintiff suffered. They don't seek to punish the defendant.

What Kinds of Costs Can Be Compensatory Damages?

Compensatory damages can cover economic and noneconomic damages incurred by the plaintiff resulting from the defendant's wrongful actions. These damages aim to restore the injured party to their previous position.

Types of Compensatory Damages

The following are some types of compensatory damages that the plaintiff can claim against the defendant:

  • Medical expenses: Medical expenses include the costs you incurred for medical treatment, emergency services, hospital care, prescription drugs, assistive devices, and ongoing hospital bills and medical care. It could also cover expenses related to rehabilitation, such as physical therapy and future medical bills resulting from the injury.
  • Lost wages and earning capacity: This compensatory damage covers the wages lost while you could not work because of your injuries. For instance, if you were in a car accident, and the injury you sustained impacted your ability to earn money in the future, you can also seek damages.
  • Pain and suffering: This covers the physical pain and discomfort you experienced due to your injury.
  • Emotional distress: Aside from pain and suffering, the plaintiff can also claim compensation for emotional distress. This covers the psychological impact of the injury. In some injury claims, the victim suffers from disfigurement, which can result in mental anguish and depression.
  • Loss of consortium: This type of damages can be awarded to the spouse or family members of the person injured. It awards damages for the loss of affection, companionship, help, and relationship resulting from the plaintiff's injury.
  • Loss of enjoyment of life: Suppose the plaintiff's injury prevented them from enjoying the daily activities and activities they used to participate in before their injury. In that case, the plaintiff can also claim this type of damages.
  • Property damage: If the accident destroyed or damaged personal property due to the defendant's conduct, the plaintiff can claim the replacement or repair cost.
  • Legal and court costs: The plaintiff can also claim the costs incurred in pursuing the lawsuit, including legal expenses and attorney's fees.

These categories handle different aspects of the plaintiff's harm. They aim to provide compensation for the effects of the defendant's actions.

Example Cases About Compensatory Damages

It's worth noting that the amount of compensatory damages a plaintiff can seek depends on the kind of case the plaintiff brings. To show the difference, look at two famous textbook cases about damages, one in personal injury and one in contracts.

Case 1: The McDonald's Coffee Spill Incident

In a notable personal injury case, a customer suffered third-degree burns after accidentally spilling coffee on her lap. The scalding coffee bought from the fast-food chain caused burns on almost 16% of the customer's body, causing her to stay in the hospital for seven days. She also had to recover at home for three weeks, where her daughter looked after her. The court awarded compensatory damages to the plaintiff for the pain and suffering caused to her. The court likewise decided on the punitive damages award.

Case 2: Medical Malpractice Case

A man in Tampa, Florida, was left disabled and brain-damaged after a severe misdiagnosis by emergency room doctors. The doctors misdiagnosed his stroke symptoms as a headache, and this oversight resulted in irreversible brain damage that left the man disabled. The civil court ordered $116.7 million in compensatory damages to the victim and his family. It covers the medical bills, ongoing rehabilitation, and loss of quality of life, reflecting the extensive nature of the injury and the care the victim requires. The jury also issued a $100.1 million monetary award as punitive damages, highlighting their intent to punish the medical error and prevent it from happening again.

Case 3: Playground Games Gone Wrong

A boy in Wisconsin injured his knee. He was in school sometime later, and a classmate kicked his knee. The kick was so light that the boy didn't feel any pain at first. But later on, the knee became infected, and the boy could never use his leg again. He sued his classmate. The court found that the classmate was at fault and had to compensate the boy for the loss of his leg, even though the classmate could not have known that his kick would have such extreme consequences.

Case 4: The Case of the Cracked Crankshaft

A mill owner in 19th century England discovered that part of his mill, the crankshaft, was broken. The miller hired someone else, a carrier, to bring the crankshaft to Greenwich for repair. The carrier did not deliver the crankshaft on time and returned it to the miller much later than expected. But the carrier didn't know that the mill could not operate without the crankshaft and that the miller lost a lot of money while the crankshaft was gone. The miller sued the carrier, but the court held that the carrier didn't need to pay the miller for lost profits. The carrier did not know he could be responsible for these profits when he made the contract.

See FindLaw's section on Litigation for more information.

Seek Legal Advice

Understanding your rights to compensatory damages is essential after experiencing personal injury, property damage, or other losses due to someone's wrongful actions. Consulting with an attorney specializing in civil litigation is advisable. They can help you assess the damages applicable to your case and effectively represent your interests.

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