How compensatory and punitive damages differ

The kinds of damages awarded in Massachusetts civil litigation cases take many forms, but perhaps the two most prominent types involve compensatory and punitive damages. These forms of damages generally depend on the nature of the actions of the offending party. A plaintiff who has suffered a particularly malicious injury may be more likely to receive punitive damages than compensatory damages.

Compensatory damages, as Investopedia points out, are intended to compensate an injured party for a loss. Compensatory damages are measured by the loss a person or party has suffered and can take many forms, including medical bills if a person suffered physical injury or reimbursement for property or assets if someone experienced material loss. A person can even receive damages for mental anguish if the person suffered emotional distress.

On the other hand, parties that pay out punitive damages go beyond what they would pay if they were paying compensatory damages. The aim of punitive damages is to punish the offending party, not merely to compensate for loss. As FindLaw explains, punitive damages are awarded in cases that are not motivated merely by negligence or just the intent to commit a wrong. The conduct by the offending party must be particularly egregious and include any of the following:

  • The party engaged in fraud and deceit
  • The party acted with malice toward the plaintiff
  • The party was reckless and irresponsible
  • The conduct of the party was outrageous and unethical

Punitive damages, if sought, will be subject to the determination of a judge or jury. However, damages that are too excessive will likely be appealed and reduced. While there is no hard and fast rule on how big punitive damages can be, the U.S. Supreme Court has stated that most punitive damages should not exceed ten times that of compensatory damages. So anything above that faces a risk of being overturned.

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