What Are Punitive Damages?
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 punitive damages.
What Are Punitive Damages?
Punitive damages are additional damages that a judge may charge a defendant in order to punish them for particularly reckless or malicious behavior and deter similar behavior in the future. In cases involving companies or entities, punitive damages serve to make an example out of a defendant in order to change processes or standards. While the punitive damages are paid to the plaintiff, they are not necessarily about the plaintiff but about the actions of the defendant.
For example, a medical malpractice case may receive a relatively small payout as the plaintiff’s damages are small. On reviewing the case, the judge sees that the case is a symptom of a much larger problem. The much larger problem may be a lack of policy to ensure patient safety or tired or inebriated medical staff. Because of the relatively small damages, the judge knows that the case will be chalked up as a mistake, and the hospital will move on. By ordering large punitive damages, the judge can make the hospital take notice of the underlying problem and hopefully incentivize them and other hospitals to implement policy to prevent such cases in the future.
The Purpose of Punitive Damages
There are two main reasons why the court may charge the defendant with punitive damages: to punish particularly bad behavior or to make an example of a defendant.
Punitive damages are often charged when the defendant’s actions were reckless or show a disregard to other people. They are commonly charged to drunk drivers or people driving under the influence of controlled substances in order to punish the defendant for their disregard for others around them. Punitive damages are also often charged in product liability lawsuits to punish companies who do not do their due diligence in ensuring consumer safety or, worse, companies who knowingly sell unsafe products.
One of the main reasons for charging punitive damages is to hit defendants where it hurts, their bank account in the hope that it deters the defendant and other people from that behavior. The idea is that forcing the defendant to pay a huge amount of damages will make them think twice before doing the same thing again. It might also stick in the mind of other people or companies and deter them from engaging in similar behavior.
A court may award punitive damages when a defendant acts willfully/wantonly, intentionally, or fraudulently. Therefore, they are uncommon in personal injury negligence cases. They are most commonly awarded in cases involving intentional disregard for the safety of others.
Is There a Maximum Amount of Punitive Damages?
No, there is no cap on how much the court can charge in punitive damages. In many cases, the punitive damages can far exceed the compensatory damages awarded to the plaintiff. This is in order to make people and companies take notice of what would otherwise be a small and unremarkable lawsuit.
A famous example of this is Liebeck v. McDonald’s (1994). This very public case saw a woman sue McDonalds after she spilt a just bought cup of coffee in her lap, resulting in serious burns to her body. She was admitted to the hospital for 8 days following the incident and underwent skin grafts and two years of treatment in order to restore her health. Immediately following the incident, Liebeck requested a $20,000 settlement from McDonalds, which was rejected; they refused to offer more than $800. After the extent of her injuries became apparent, she sought legal help, and it became one of the most widely discussed legal cases.
Liebeck and her legal team presented evidence during legal proceedings of $640,000 in compensatory damages, and the courts suggested punitive damages of $2.7 million. It is believed that the punitive damages came from a combination of the way McDonalds treated Liebeck following her injuries and the fact that they were aware that the temperature of their coffee is dangerous.