Punitive damages

In plain English: punitive damages are extra money a court orders someone to pay to punish outrageous conduct and discourage it in future. They're not meant to make up for your losses. That's what compensatory damages do.

Ordinary carelessness isn't enough

Most accidents happen because someone was careless, and that's what compensatory damages deal with. Punitive damages need something much worse. In the US, courts usually look for conduct that was malicious, fraudulent, or showed a reckless or conscious disregard for other people's safety. Many states also require a higher standard of proof, often "clear and convincing evidence", rather than the usual balance of probabilities.

Situations where they sometimes come up in injury cases:

• A driver who was heavily drunk, or who fled the scene
• A trucking company that knowingly let a driver exceed hours limits or ignored serious safety defects
• A manufacturer that knew about a dangerous defect and hid it
• An insurer acting in serious bad faith toward its own policyholder, in some states

Limits in the US

Many states cap punitive damages, often as a multiple of the compensatory award or a fixed amount, and a few states restrict or bar them. The US Supreme Court has also said that awards grossly out of proportion to the harm can breach due process. Punitive damages can create a practical problem too: in some states, insurance policies can't or don't cover them, so any award may have to be collected from the defendant personally.

The UK and Canada

In England and Wales the equivalent is exemplary damages, and in personal injury cases they're very rare. They're limited to narrow categories, such as oppressive conduct by government officials or conduct calculated to make a profit that outweighs the compensation. A careless or even drunk driver won't normally trigger them. UK courts can award aggravated damages for injury to feelings caused by the manner of the wrong, but these are compensatory.

Canadian courts can award punitive damages, but only for high-handed, malicious or reprehensible conduct, and they're uncommon in accident claims. They've been awarded more often against insurers that treat their own policyholders in bad faith.

Next: bad faith · damages · settlement vs trial.

Related terms