Types of Compensatory Damages Explained

To gain a proper understanding of compensatory vs punitive damages in a personal injury case, It’s important to become familiar with the differences. Both types of damages may be awarded in the same case, but compensatory damages must be established first before punitive damages can be considered.

What are Compensatory Damages?

In civil litigation, the definition of compensatory damages is when a plaintiff receives a monetary award to make up for losses or injuries caused by the defendant’s actions. Restoring the harmed party to the status they would have had in the absence of the act is the goal. These damages are meant to cover both non-economic and economic losses. Economic damages are measurable monetary losses, including missed wages, property damage, medical costs, and future earning potential. Non-economic damages like pain and suffering, emotional distress, loss of enjoyment of life, or loss of companionship.

Compensatory damages aren’t the same as punitive damages, which are intended to punish the defendant and deter future misconduct. Compensatory damages focus solely on addressing the harm experienced by the plaintiff. The amount awarded depends on the nature and extent of the injury or loss, which are supported by evidence an attorney presents in court.

What Do Compensatory Damages Include?

What are the two types of compensatory damages? Compensatory damages include economic and non-economic losses to reimburse a plaintiff for harm suffered due to the defendant’s actions.

Economic Damages: Tangible, measurable losses with a clear monetary value, including:

Medical Expenses: Costs for treatments, hospital stays, medications, therapy, and future medical care.

Lost Wages: Income lost because of an inability to work.

Future Earnings: Compensation for reduced earning capacity if the injury affects the plaintiff’s ability to work in the future.

Property Damage: Costs to repair or replace damaged property, like vehicles or personal belongings.

Non-Economic Damages: Intangible losses without specific monetary worth that affect plaintiff’s standard of living including:

Pain and Suffering: Physical discomfort and emotional distress caused by the injury.

Emotional Distress: Anxiety, depression, or trauma resulting from the event.

Loss of Enjoyment of Life: Inability to participate in activities or hobbies enjoyed before the disability.

Loss of Consortium: Compensation for loss of companionship or relationship with a spouse or loved one.

Restoring the injured party to the status they would have had before the incident is the goal of compensatory damages. The amount of compensation is decided by the court based on the evidence and expert testimony.

Special Compensatory Damages

Special compensatory damages, also known as economic damages, are awarded to cover specific, measurable financial losses directly resulting from the defendant’s actions or negligence. These damages reimburse the plaintiff for expenses and losses that can be documented with bills, receipts, or pay stubs. Medical expenses like doctor visits, surgeries, hospital stays, medications, rehab, and future care are included in special compensatory damages.

The award covers lost wages due to an inability to work, as well as compensation for reduced earning capacity. Costs to repair or replace damaged property, include cars or personal belongings, and reimbursement for transportation, child care, or home modifications for disability. Special compensatory damages restore the plaintiff’s financial situation to what it was before the harm occurred, based on documented losses.

General Compensatory Damages

General compensatory damages are awarded to compensate for non-monetary harm that cannot be easily quantified but directly results from the defendant’s actions or negligence. These damages, also known as non-economic damages, address the emotional, physical, and psychological impact of the harm on the plaintiff’s life. Some types of damages include pain and suffering, emotional distress, reduced quality of life, and damages to compensate for loss of companionship, affection, or support resulting from the incident.

In contrast to special damages, which are tied to specific monetary losses, general compensatory damages address subjective harm and vary based on the injury, long-term repercussions, and case circumstances. To determine the appropriate amount for damages, courts review the expert testimony and the evidence.

Wrongful Death Damages

Compensatory damages are given to surviving family members in wrongful death cases to make up for the monetary and psychological losses brought on by the death of a loved one due to the conduct of the defendant. Their purpose is to compensate for non-economic and economic harm.

Economic damages from wrongful death may include:

Medical Expenses: Costs incurred for the deceased’s medical treatment prior to death.

Funeral and Burial Costs: Expenses for laying the deceased to rest.

Lost Income: Compensation for the income the deceased would have earned to support their family.

Loss of Benefits: The value of lost healthcare, pensions or other benefits the deceased provided.

Non-economic damages may include:

Loss of Companionship: The absence of the deceased’s love, care, and guidance.

Pain and Suffering: Emotional distress experienced by surviving family members.

Loss of Parental Guidance: For children who lose a parent, this compensates for the absence of nurturing and care.

In addition to compensatory damages, punitive damages may also be awarded in some cases, if the defendant’s conduct was reckless or malicious. However, compensatory damages primarily address the measurable and intangible losses suffered by the surviving family. Courts assess these damages based on the deceased’s age, earning potential, relationship with family members, and the individual circumstances of the case.

Compensatory vs. Punitive Damages

Compensatory and punitive damages differ in purpose, basis, and application. Compensatory damages are awarded in most civil cases where harm is proven, because they address measurable economic and non-economic losses. Punitive damages are less common and typically reserved for cases involving extreme negligence, fraud, or intentional harm. Unlike compensatory damages, which are based on the plaintiff’s losses, punitive damages are determined by the severity of the defendant’s behavior and are often significantly higher to emphasize their deterrent effect. Both types of damages can be awarded in the same case, but compensatory damages must be established before punitive damages can be considered.

How Are Compensatory Damages Awarded?

An evaluation of the plaintiff’s economic and non-economic losses is the first step in the process. Non-economic losses, like pain and suffering or mental distress, are assessed based on expert analysis and testimonies, whereas economic damages, like medical costs, missed income, and property damage, are reviewed using receipts, bills, and bank records.

Plaintiff’s attorneys provide evidence linking their losses directly to the defendant’s actions, including medical records, financial documentation, and expert opinions. Courts calculate economic damages based on actual costs and future expenses, while non-economic damages are determined by a multiplier approach or per diem calculations.

A judge or jury then reviews the evidence and determines total compensatory damages, which the defendant must pay the plaintiff.. The goal is to restore the plaintiff as closely as possible to the position they were in before the harm occurred.

Common Cases Involving Compensatory Damages

These notable personal injury and wrongful death cases resulted in significant compensatory damages:

Botham Jean Wrongful Death Lawsuit (2024): The family of Botham Jean, who was fatally shot in his apartment by an off-duty police officer, was awarded nearly $100 million, including $38.6 million in compensatory damages.

Source:https://apnews.com/article/botham-jean-amber-guyger-shooting-dallas-verdict-9212cc71502fb3bc3e1ae90d309ac5a6

Johnson & Johnson Talcum Powder Case (2018): A Missouri jury awarded $550 million in compensatory damages and $4.69 billion in punitive damages to 22 women who developed ovarian cancer after using the company’s talc-based products.

Source: https://www.ncbi.nlm.nih.gov/search/research-news/8551/

Grimshaw v. Ford Motor Company (1981): The Ford Pinto’s fuel tank design led to a fatal fire, and the jury awarded $2,516,000 million in compensatory damages and $125 million in punitive damages.

Source: https://caselaw.findlaw.com/court/ca-court-of-appeal/1835119/

Liebeck v. McDonald’s Restaurants (1994): Stella Liebeck suffered third-degree burns after spilling hot coffee purchased from McDonald’s. The jury awarded her $200,000 in compensatory damages, reduced to $160,000 due to comparative negligence, and $2.7 million in punitive damages, later reduced by the judge.

Source: https://www.ttla.com/index.cfm?pg=mcdonaldscoffeecasefacts

Get Expert Help with Compensatory Damages from Novik Law Group

At Novik Law Group, we pursue justice for the compensatory and punitive damages you deserve. We gather proof of your losses and we have access to many experts who can provide

knowledge, analysis, and persuasive testimony to support your case. If you’re suffering from a severe personal injury, schedule an appointment with our attorney and allow us to carefully review your case. We’ve recovered millions of dollars for our clients who trust us to fight for them. Until we win or settle your case, you pay no out-of-pocket expenses. We fight hard to get you justice against negligence.