Turbak Law Office, P.C. > Blog > Personal Injury > Compensatory vs. Punitive Damages: What’s the Difference?
When you file a personal injury lawsuit, you may have the right to recover various forms of compensation. Although most compensation in a personal injury case provides financial recovery for economic and personal losses you suffer from an accident, a jury may also award you punitive damages in rare cases. Understanding compensatory vs. punitive damages is essential, as it clarifies how each type serves different purposes in a personal injury case. But how do punitive damages differ from compensatory damages in a personal injury case?

Understanding Compensatory Damages

Compensatory damages in personal injury claims include compensation for the financial and personal/emotional losses an accident victim endures due to their injuries. Common types of compensatory damages awarded in personal injury cases include:

  • Costs of medical treatment and rehabilitation, including hospitalization, surgeries, prescription medications, doctor’s appointments, purchases of durable medical equipment, or physical therapy
  • Costs of long-term disability care, including home health services, wheelchairs/mobility equipment, or disability accommodations for the home
  • Loss of wages/income for time an injury victim misses from work or reduced earnings while working in a part-time/light-duty role during recovery
  • Loss of future earning capacity caused by prolonged or permanent disabilities due to accident injuries
  • Physical pain from injuries and subsequent medical treatment (e.g., postoperative pain)
  • Emotional trauma or distress from the accident, injuries, or disabilities
  • Reduced quality of life caused by disabilities or severe, visible scarring/disfigurement

Compensatory damages seek to put an accident victim in a similar position from before the accident by providing financial recovery for expenses or losses arising from injuries and disabilities.

What Are Punitive Damages in a Lawsuit?

Unlike compensatory damages, punitive damages in personal injury lawsuits punish a tortfeasor rather than compensating an injured person for financial and personal losses they incur due to their injuries. Under South Dakota law, a jury may award punitive damages on top of punitive damages after finding that a defendant acted with fraud or malice, intentionally, or with willful and wanton misconduct in disregard for others’ safety or rights. The law allows juries to impose punitive damages awards to make an example out of or to punish a defendant for their conduct. In addition to punishing tortfeasors for egregious conduct that shocks the conscience, punitive damages can also serve as a deterrent to others to avoid engaging in similar behavior, as they may face similar financial consequences if they do so.

When Are Punitive Damages Awarded?

Common examples of punitive damages include:

  • Drunk driving accidents: A driver with multiple prior DUI convictions may have to pay punitive damages when they severely injure a person in a subsequent drunk driving accident since the driver should have known about the dangers of intoxicated driving from their past convictions, yet they choose to get behind the wheel after consuming alcohol.
  • Medical malpractice: A medical provider may become liable for punitive damages if they disregard a substantial risk that treatment will cause severe injuries or complications for a patient and perform the procedure without obtaining the patient’s informed consent. Providers can also face punitive damages if they provide or withhold treatment to force patients to return for additional or more expensive care.
  • Intentional torts: A person who commits assault/battery, sexual assault, or homicide may face liability for punitive damages as a means for the jury to punish the person for behavior that might constitute a crime, as the person ultimately may not face a criminal conviction and sentence for their behavior.

Differences of Punitive vs. Compensatory Damages

Compensatory and punitive damages have several critical differences:

  • Purpose: Compensatory damages reimburse accident victims for financial and personal losses arising from their injuries, whereas punitive damages seek to punish at-fault parties for egregious or shocking behavior and deter others from the same behavior.
  • Scope: Compensatory damages seek to offer financial relief for economic and personal/emotional losses an accident victim endures. However, because punitive damages seek to punish an at-fault party for intentional or reckless conduct, a jury may award far more punitive damages than compensatory damages to punish a defendant or deter others from similar conduct.
  • Availability: An accident victim can recover compensatory damages when another party’s ordinary negligence caused the victim’s injuries. However, the at-fault party must have intentionally or recklessly caused the victim’s injuries to recover punitive damages. A jury may award punitive damages only if it finds that a defendant has acted willfully or in wanton disregard for the rights and safety of others.

How Are Punitive Damages Calculated?

State law leaves the calculation of punitive damages to the jury’s discretion when the jury decides to award such damages. Juries typically calculate punitive damages awards to impose a penalty proportional to the severity or wrongfulness of a defendant’s conduct. Some of the factors that a jury might evaluate when calculating punitive damages in a personal injury case include:

  • The degree of the defendant’s culpability: A jury may award more punitive damages in a case where the defendant intentionally injured the plaintiff versus where a defendant caused the plaintiff’s injuries through reckless conduct.
  • The severity of the plaintiff’s harm: Juries may increase punitive damages awards when a plaintiff sustains more severe injuries, develops permanent disabilities, or experiences emotional trauma.
  • The defendant’s ability to pay: A jury might consider a defendant’s financial resources, awarding a more significant punitive damage award against a wealthy defendant or shrinking a punitive damage award that might bankrupt an individual defendant with less culpable conduct.
  • The deterrent effect of the award: Juries may increase the value of a punitive damages award to deter other parties from engaging in similar conduct as the defendant.

Contact a Personal Injury Lawyer to Learn More About the Difference Between Compensatory and Punitive Damages

When you get hurt in an accident caused by another party’s recklessness or intentional actions, you may have the right to recover compensation and punitive damages in a personal injury lawsuit. Call Turbak Law Office, P.C. today at 605-886-8361 for a free, no-obligation consultation with an experienced Watertown personal injury lawyer to better understand compensatory vs. punitive damages and what compensation you may have the right to recover in your case.

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