What are Punitive Damages & When Can I Seek Them?

In the context of a lawsuit, damages are an award, usually money, meant to compensate the injured plaintiff for his injury or loss. There are two main categories of damages a plaintiff may receive when he prevails in a suit: compensatory and punitive. Compensatory damages, also referred to as actual damages, reimburse the plaintiff for tangible losses, such as medical bills or lost wages, and also for non-economic losses, such as pain and suffering or potential future lost wages. The main purpose of these damages is to try to put the plaintiff back in the position he or she would be in had the injury never occurred. Although money is not a very good substitute for being in good health, it is usually the only remedy the justice system can offer.

The second type of damages which may be awarded is punitive damages, which go above and beyond the plaintiff's provable injuries. Punitive damages are designed to punish and deter improper conduct in the hope that it will prevent a person or corporation from injuring someone else in the future. Punitive damages are generally not available in contract cases, but mostly awarded in personal injury tort cases. Courts intend for punitive damages to have retributive and deterrent effects on defendants, and the United States Supreme Court has stated that such damages reflect a jury's “moral condemnation” of the defendant.

Over the last couple of decades, the Supreme Court has heard several cases in which it analyzed when it was appropriate to award punitive damages, and whether large punitive damage awards violated the Due Process Clauses of the Fifth and Fourteenth Amendments of the United States Constitution. The Supreme Court has held that for punitive damages to be constitutional, the award must be reasonably related to the plaintiff's injury. In a recent case, Philip Morris USA v. Williams, the Court also held that punitive damages are not allowed to penalize a defendant for harm to people not party to the lawsuit. For example, the defendant, Philip Morris, should only have to pay punitive damages in regard to this specific plaintiff's injuries, and not injuries to all smokers.

The Supreme Court has also looked at the ratio of punitive damages to compensatory damages to determine whether or not a punitive damages award is excessive. In the 1993 case TXO Production Corp. v. Alliance Resources Corp., the Court declined to establish mathematical bright line rule for an acceptable punitive award. However, in 2003, the Court stated that awards exceeding a single-digit ratio of punitive to compensatory damages will rarely be allowed under the Due Process Clause. Each state further has the ability to statutorily set more specific limits on punitive damages.

When Can You Seek Punitive Damages?

When you file a lawsuit, your Indianapolis personal injury attorney will help determine whether you should ask for punitive damages in addition to compensatory damages. If the defendant's actions were obviously careless or outrageous, you will likely be able to seek punitive damages. In Indiana, for example, the Indiana Code limits punitive damages to 3 times the amount of awarded compensatory damages, or $50,000, whichever is greater. Additionally, much of the punitive damage awards goes to a state fund to help compensate crime victims, not to the injury victim hurt by the Defendant’s conduct. However, even the threat of punitive damages is often a powerful motivating factor for a Defendant to pay a fair amount to settle your personal injury claim.

It is important to contact an experienced Hammond personal injury attorney to help you determine whether seeking punitive damages is appropriate in your case.