The Difference Between Punitive and Compensatory Damages
Punitive damages and compensatory damages are two categories of personal injury damages that Alabama law allows. While compensatory damages are nearly universal among victorious personal injury plaintiffs, Alabama courts only occasionally award punitive damages.
What are compensatory damages?
The basic concept of compensatory damages is self-explanatory: compensatory damages compensate victims for personal injury damages. The purpose of compensatory damages is to put the plaintiff in just as strong a position as they would have enjoyed had they never suffered an injury in the first place.
Types of compensatory damages
Alabama, like other states, offers two forms of compensation to personal injury victims: economic damages and non-economic damages.
Economic damages
Economic damages include almost any easily countable losses such as:
- Reasonable and necessary medical expenses: An insurance company might question fringe treatments such as homeopathy, however, or perhaps even acupuncture.
- Lost earnings: Income lost because the plaintiff was in the hospital, at home recuperating, or unable to work full-time.
- Diminished earning capacity: If the plaintiff’s injuries are long-term or permanent, diminished earning capacity damages depend on the amount of money that the plaintiff would lose in the future as a consequence of an injury-related inability to return to their previous occupation.
- Property damage: In a car accident, property damage typically refers to a damaged or totaled car but can also include personal items damaged due to the accident.
- Out-of-pocket expenses: Child care expenses during hospitalization, prescription drugs, insurance copays, medical equipment such as a wheelchair, etc.
This is only a partial list of possible economic damages. Any tangible loss that arises directly from the accident might qualify. However, keep in mind that Alabama does not allow compensatory damages in wrongful death cases — only punitive damages.
Non-economic damages
In Alabama, non-economic damages include intangible losses such as the following:
- Pain and suffering
- Emotional distress
- Loss of enjoyment of life
- Disfigurement
- Loss of consortium (loss of companionship or relationship with a spouse, filed by the victim’s family member)
What are punitive damages?
Punitive damages are an amount of money that a jury sometimes awards plaintiffs when the defendant’s conduct was particularly outrageous or consciously disregarded a risk to the plaintiff’s health or safety. You can win compensatory damages without winning punitive damages, but you cannot win punitive damages unless you also win compensatory damages.
What is the purpose of punitive damages?
The purpose of punitive damages is entirely distinct from the purpose of compensatory damages. While the goal of compensatory damages is to restore the plaintiff’s losses, the purpose of punitive damages is to punish the defendant. Another purpose of punitive damages is to deter others from acting in the same manner as the defendant did.
The legal elements of an Alabama punitive damages claim
The elements of an Alabama punitive damages claim include:
- Wrongful conduct
- Causation
- Compensatory damages
- No legal bar
You must prove all these four elements by “clear and convincing evidence,” which is a higher standard than preponderance of the evidence.
Wrongful conduct
In Alabama, to be awarded punitive damages, you must prove that the defendant’s behavior was oppressive, fraudulent, wanton, or malicious:
- Oppressive: A cruel and unjust abuse of power. An example would be disconnecting a tenant’s water supply to force them out and replace them with a higher-paying tenant.
- Fraudulent: The defendant made a knowingly false statement to deceive the plaintiff, and the plaintiff suffered harm by relying on the false statement. An example would be an auto dealer concealing a brake defect from a buyer, causing the buyer to suffer injury in a car accident.
- Wanton: The defendant’s actions exhibited a conscious disregard for the safety or rights of others. An example would be driving 100 mph in a 35 mph zone.
- Malicious: The defendant acted intentionally with the intent to harm. A physical assault, for example, is almost always malicious.
Any of the foregoing mental states could justify punitive damages.
Causation
The defendant’s wrongful behavior must have actually caused the plaintiff’s harm. A drunk driver might have behaved wantonly in running down a pedestrian, for example. But if the pedestrian ran into the street so quickly that even a sober driver could not have stopped, then the defendant’s intoxication did not cause the accident. The link between cause and effect must also be direct (“proximate cause”), so a freak accident cannot justify liability.
Compensatory damages
A plaintiff can win compensatory damages without winning punitive damages. Indeed, this is a typical outcome of a trial. On the other hand, the plaintiff cannot win punitive damages without first winning compensatory damages.
Not allowed against the government
Alabama law forbids the award of punitive damages under certain circumstances. A plaintiff cannot claim punitive damages against a state government entity, for example.
“Clear and convincing evidence”
To win punitive damages, you must prove every element of your punitive damages claim by “clear and convincing evidence.” Clear and convincing evidence means enough evidence to produce a firm conviction in the mind of a reasonable person that punitive damages are warranted.
Clear and convincing evidence is a harder standard to meet than the “preponderance of the evidence” standard that you need to justify compensatory damages. By contrast, it is an easier standard to meet than the “beyond a reasonable doubt” standard that applies to criminal prosecutions.
Contact an Alabama personal injury lawyer
Do you suspect that you might have a valid claim for punitive damages? If so, you will almost certainly need a skilled personal injury lawyer to convince a court to award them. Prince Glover Hayes is a Tuscaloosa personal injury law firm that has recovered hundreds of millions for their clients over the years, including punitive damages. Contact us today to schedule a consultation.