Damages that a plaintiff may be awarded in a civil lawsuit are often broken down into compensatory damages, treble damages, and punitive damages. In this article, we will discuss compensatory damages.
What Are Compensatory Damages?
Compensatory damages are damages that “make right” any harm the defendant caused. They reimburse for things like medical bills, property damage, and lost wages. They only cover things that the plaintiff can put a dollar amount on and prove why they have assigned this cost. This proof may take different forms based on whether the damages are tangible or intangible.
Compensatory Damages: Tangible Damages
Tangible damages are compensatory damages that are easy to put a number to. There are already bills and invoices to back up exactly how you came to that number, so there is no guesswork involved. Some examples of tangible damages are:
- Medical bills
- Ambulance bills
- Cost of repairing damage to personal property
- Cost of replacing damaged personal property
- Lost wages during recovery
- Prescription medication
- Domestic services
- Care services
- Rehabilitation services
- Medical equipment
- Cost of renovating your home to accommodate new disabilities
Compensatory Damages: Intangible Damages
Intangible damages are compensatory damages that are more difficult to put a number to. They may be future costs or compensation for emotional distress or pain and suffering. In order to prove these types of compensatory damages, your attorney will need to consult experts to come up with a monetary value. This figure will be proved in court by testimony from friends and family and expert testimony. Some examples of intangible damages are:
- Pain and suffering
- Emotional distress
- Loss of opportunity
- Loss of consortium
- Loss of enjoyment of life
- Future medical costs and rehabilitation costs
- Future care requirements
- Loss of ability to work
- Increased living expenses
- Mental anguish
What Is the Difference Between Compensatory Damages and Other Types of Damages?
As we mentioned at the start of the article, there are three types of damages:
- Compensatory damages
- Punitive damages
- Treble damages
Compensatory damages are there to make right the damages the defendant caused through their intentional actions or negligence. The purpose is to make sure the plaintiff does not suffer financial loss, and they can afford any changes to their lifestyle that injuries may cause.
Punitive damages are there to punish the defendant for recklessness or intentional behavior. While the punitive damages are paid to the plaintiff, they have very little to do with the plaintiff. The court will decide whether they want to charge punitive damages or not and will set the amount.
Treble damages are ones the law sets for certain breaches of the law. Often, the law will provide a multiplier for compensatory damages rather than setting an amount for breaches of the law. For example, the law may state that the plaintiff receives treble (triple) their compensatory damages.
Compensatory Damages Frequently Asked Questions
Will I Be Taxed on My Compensatory Damages?
No, compensatory damages will not be taxed by the IRS or the state of California.
What Are the Three Categories of Damages?
A plaintiff may receive three types of damages in a civil lawsuit:
- Compensatory damages – to rectify any financial losses incurred as a result of the accident.
- Punitive damages – to punish the defendant for poor behavior and to deter repeat offenses.
- Treble damages – a multiplier of compensatory damages for breaking the law.
In order to calculate what damages you may receive from a lawsuit, consult with an attorney. They will be able to calculate what you may be due.
What Is the Purpose of Compensatory Damages?
The purpose of compensatory damages is to rectify any losses the plaintiff received due to the actions of the defendant. They provide compensation for any actual damages and any intangible or future costs. After receiving compensatory damages, the plaintiff should not be worse off financially than before the accident.
Can I Claim Emotional Distress As a Compensatory Damage?
Yes, you can claim emotional distress in your compensatory damages. Your attorney will look at your case to see how much evidence there is to prove emotional distress. This is calculated on a case-by-case basis.