Punitive damages are an ancient part of the legal system, some forms of which have been around for centuries. Today, punitive damages, or exemplary damages, continue to be used in all states except for Michigan, Nebraska, and Washington. Keep reading to learn more about these damages, when they are available, and how they differ by state.
What Are Punitive Damages?
Punitive damages are a type of compensation that can be awarded in tort or personal injury lawsuits. The goal of punitive damages is to punish the behavior or the defendant, or to set an example for others. This differs from compensatory damages which specifically aim to compensate the victim for things like medical bills, lost wages and emotional damage. Both compensatory and punitive damages can be awarded to the plaintiff in the same case.
Let’s say, for example, that a personal injury case finds that a corporation continued to produce a product that they knew was defective. Despite being aware that the product could cause harm, the company decided not to cease production so as not to lose money. Punitive damages could be awarded to a victim injured by the product, forcing the company to pay a hefty fine specifically to punish them for their recklessness.
When Are Punitive Damages Available?
There are a few aspects of a personal injury or wrongful death case that can make punitive damages available. While the exact requirements differ by state, in general, the actions of the defendant must be found to be fraudulent, intentional, grossly negligent to qualify.
Fraud
Fraud refers to intentional misrepresentation or deceit by the defendant. For example, imagine a supplement company that advertises their products as being completely safe, but a consumer has an adverse reaction due to other medications they take. Since the supplement company purposely left out this warning about mixing medication, they could be charged punitive damages.
Intentionality
If the behavior of the defendant was intentional, they could also be ordered to pay punitive damages. An example would be if a driver, in a fit of rage, purposely drives their car into some bicyclists because they are angry they have to share the road.
Gross Negligence
There are situations where the defendant could be found grossly negligent, as opposed to just negligent, and punitive damages could be on the table. Gross negligence implies that although the actions were technically not done on purpose, the behavior was extremely reckless. For example, driving extremely drunk or speeding down a road with lots of pedestrian traffic could qualify as gross negligence.
In general, any type of malpractice, dangerous conduct, or general disregard for the law could potentially qualify for punitive damages.
Punitive Damage Limits
Most states put a cap on the value of punitive damages that can be awarded. Depending on the state, punitive damages generally do not exceed four times the amount of compensatory damages. There are certainly exceptions, however, where it is determined that the defendant acted extremely recklessly. One of the largest amounts of punitive damages ever awarded was in 2002 at $28 billion. Philip Morris, the tobacco maker, was charged with these damages for fraud – hiding evidence of the adverse effects of tobacco.
Many states have different limits on economic and non-economic damages. Economic damages refer to measurable losses related to the injury, such as medical bills, or funeral costs in the case of a wrongful death. Non-economic damages are harder to calculate, and refer to losses like pain and suffering. Eleven states currently cap non-economic damages in general tort or personal injury claims, while others have specific caps for product liability or medical malpractice claims.
A few states have even more specific rules for damage caps. Colorado, for example, has two types of medical malpractice damage caps, according to the Denver personal injury lawyers at Kane Dulin McQuinn Young. One is a non-economic damages cap, and the other is a total one covering both economic and non-economic damages in medical malpractice cases. Oregon also has a unique situation in that they declared their non-economic damage caps unconstitutional and then reversed that decision years later.
Again, punitive damage amounts and caps will vary by not only the state, but by what the jury on that case decides. For more information about whether your personal injury case may involve punitive damages, contact a law firm in your area.