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What are Compensatory & Punitive Damages?


When a civil lawsuit occurs over personal injury, the person injured (the plaintiff) sues the defendant because of an injury sustained due to  the defendant’s negligence or failure to obey the law.  A person who wins a civil lawsuit is usually entitled to compensation or “damages.”  The amount awarded is determined by the jury and varies with each case.  There are two types of damages, including compensatory damages and punitive damages, and each type functions for a different reason in the lawsuit.

Compensatory Damages

There are both monetary and nonmonetary damages that the jury can award.  The injured party may be awarded funds to cover monetary losses:

  • Medical expenses (hospital bills and other expenses to treat injuries)
  • Lost wages (the income lost because of the person’s inability to work)
  • Damaged property (any damaged property like a wrecked car)
  • Cost of living with a disability (any expenses that go towards living with a disability)
  • Any other expenses that the jury decides are appropriate

The injured party can also be awarded funds to compensate nonmonetary losses:

  • Pain and suffering (physical pain and emotional suffering as results of the accident)
  • Loss of consortium (the spouse of the victim can receive compensation if the injury deprives the victim of participating in the emotional elements of marriage)
  • Emotional distress (to receive this compensation, the defendant must be found liable for causing emotional distress intentionally)
  • Any other non-monetary expenses that the jury decides are appropriate

Punitive Damages

Unlike compensatory damages, punitive damages aren’t awarded with the goal of compensating the victim.  They are awarded to punish the victim for their negligence or law-breaking actions, and to deter others from doing the same thing.  Courts usually limit punitive damages to be less than ten times the total amount of compensatory damages awarded.

A great example of punitive damages is in the Liebeck v. McDonald’s case.  Stella Liebeck spilled McDonald’s coffee in her lap and the coffee was at such a high temperature that it severely burned and harmed her.  The court awarded Stella Liebeck compensatory damages along with punitive damages at $480,000 to punish McDonald’s for their negligence.  They had been keeping the coffee at temperature way above the accepted industry standard, leading many people to be scalded by the coffee.  After numerous warnings, McDonald’s continued to keep the coffee at the extremely high temperature.  The court awarded punitive damages to both punish and deter McDonald’s from continuing the same dangerous practice.

If you have questions about the difference between compensatory and punitive damages or have been injured because of a business’s negligence or lack of care such as the McDonald's example above, contact Colley & Colley law firm in Tyler, Texas for a free consultation.  We are dedicated to protecting your rights.