Compensatory damages are awarded to a plaintiff in a lawsuit as a way to repay them for the loss or harm they encountered as a result of the defendant's actions. They are intended to place the plaintiff in the position they would have occupied if not for the defendant's harmful acts.
What Are Compensatory Damages?
When a plaintiff in a lawsuit demonstrates that they, their property or their reputation have been harmed by the bad actions of another, the law entitles them to reparations for that harm. The justice system uses compensatory damages as a way to restore the plaintiff to the position they would have occupied if not for the defendant's damaging behavior. As the term implies, compensatory damages are a form of compensation for wrongs inflicted by another and thus are seen frequently in personal injury cases.
Types of Compensatory Damages
There are many types of compensatory damages, but the two main types are special damages and general damages. Special damages correspond directly to tangible financial losses inflicted on the plaintiff. This can include things like medical treatment, lost wages and property damage.
According to some definitions, special damages are any easily calculated financial losses. In general, a plaintiff must prove they incurred an actual, documentable expense directly resulting from the defendant's actions in order to receive special damages in that amount.
On the other hand, general damages are more subjective and usually correspond to injuries for which the financial value is difficult to determine. Pain, suffering, mental anguish and anxiety occurring as a result of a car accident would qualify as general damages. As such, the financial value of general damages can be quite challenging to assess.
Some courts value general damages by applying a multiplier to special damages based upon the severity of the plaintiff's injuries. Others use a per diem method in which the duration of suffering is multiplied by a daily amount to get the total general damages.
Examples of Compensatory Damages
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Compensatory Damages Limits
Compensatory damages are limited by various state laws, though most limits apply to general damages and not special damages. Some state laws do limit the total damages award (special and general) in medical malpractice suits. Overall, 39 states plus the District of Columbia have no caps on general damages for personal injury or product liability cases. Florida, Illinois, New Hampshire, and Washington have passed caps that were later found unconstitutional, and the remaining states have capped general damages for product liability, personal injury or both.
When it comes to medical malpractice lawsuits, more states have found it necessary to limit the amount of compensatory damages. Colorado, Indiana, Louisiana, Nebraska, New Mexico, and Virginia have placed caps on the total award amount for medical malpractice including special and general damages. As of 2019, 26 states have passed caps on general damages for medical malpractice, and the remaining 19 states have not limited medical malpractice damages.
Compensatory Damages Examples
It is easiest to understand the nuances of compensatory damages in the context of real world court cases. To that end, we've gathered a few examples from the lawsuits we cover here at ConsumerSafety.org.
Lucas Wozny - $7.5 Million Compensatory Damages Award
An unsecured scaffold threw construction worker Lucas Wozny from quite a height down to the scaffolding floor below, crushing his foot in the process. He can no longer walk unassisted and must rely on painkillers to manage the pain associated with permanent reflex sympathy dystrophy.
Wozny's New York construction accident lawsuit ended with a jury awarding him $2.25 million for future pain and suffering, $1.8 million for future medical expenses, $3.1 million for lost future wages, and $400,000 for past pain and suffering.
Were you injured in a construction accident? Talk to a lawyer who can helpDecker v. GE Healthcare - $4.5 Million Compensatory Damages Award
In 2005, Paul Decker received a gadolinium-based medication used to increase visibility of certain anatomical structures in a magnetic resonance imaging (MRI) procedure. After taking the drug known as Omniscan, he developed nephrogenic systemic fibrosis (NSF), a rare kidney disease that can cause skin thickening, inhibition of joint movement and various internal organ problems.
Patients living with advanced kidney disease, like Mr. Decker was at the time of his MRI, are at high risk of developing NSF when exposed to gadolinium-based medicines. Mr. Decker sued GE Healthcare, claiming they failed to warn him about the possibility of NSF, causing his kidney disorder. A jury awarded Mr. Decker $4.5 million in compensatory damages covering both special and general damages in his gadolinium lawsuit.
Huskey v. Johnson & Johnson - $3 Million Compensatory Damages Award
Jo Huskey's physician recommended using an implanted pelvic mesh to treat her stress urinary incontinence (SUI), and she took her doctor's advice. Within weeks of the surgery, Mrs. Huskey was left with eroded mesh and pelvic pain. After multiple surgeries including repairs and unsuccessful attempts to remove the failed mesh, Mrs. Huskey still had implant remnants, SUI, and chronic pain.
Huskey sued Ethicon and Johnson and Johnson, alleging they had failed to warn her of the possible complications. A jury unanimously agreed, awarding her $3.07 million in compensatory damages for past medical expenses, previous pain and suffering, and future pain and suffering for her transvaginal mesh lawsuit.
Injured by a transvaginal mesh implant? Talk to a lawyer nowHow Are Compensatory and Punitive Damages Different?
Courts base compensatory damages on the plaintiff's actual experiences including medical bills, property losses, pain and suffering. Even though some of these losses may pose a challenge in terms of quantification, they still correspond directly to the plaintiff's circumstances - past and future - presumably caused by the defendant.
Punitive damages (exemplary damages) have very little to do with the plaintiff and instead depend upon the outrageousness of the defendant's behavior. Courts decide to use punitive damages only in cases where, in the court's opinion, the defendant's actions were so reprehensible as to warrant punishment in the form of monetary loss.
In summary, compensatory damages force the defendant to restore what their actions took from the defendant. Punitive damages punish the defendant and attempt to discourage them from engaging in similar bad behavior in the future. Both exist as legal remedies available within tort law.
Compensatory Damages Terminology
Actual Damages
Synonym for compensatory damages
Consequential Damages
Type of special damages, occurring due to a defendant's failure to fulfill a contractual obligation, encompassing the downstream financial losses associated with the results of a breach of contract
Example: In the example below (Incidental Damages), if Stoopy had sold tickets to a party at his doghouse and had to refund them as a result of his lack of electricity, the refunded party tickets would be consequential damages.
Economic Damages
Synonym for special damages
Incidental Damages
Type of special damages, occurring due to a defendant's failure to satisfy a contractual obligation, accounting for the costs incurred as a direct result of the breach of contract
Example: Say Stoopy paid Charles Brown to provide electricity to his dog house within two days, and Lulu promised to provide the extension cord to Charles but did not, forcing him to refund Stoopy his money. The refunded money would be considered incidental damages.
Non-Economic Damages
Synonym for general damages
Tort Law
Part of the justice system that forces wrongdoers to financially repair damage they inflicted on another (the plaintiff) with their negligent or harmful behavior.