Jessica is a practicing attorney and has taught law and has a J.D. and LL.M.
Imagine that you were injured in a car accident where the car malfunctioned. It turns out that the car was part of a recall because the gas pedal would stick. During the case, the manufacturer of the car admits that the company knew of the problem, but decided to still make the car and sell it to the public. At the end of a trial, the car manufacturer is found responsible to you for your damages. The court decides that the car manufacturer should be punished for its actions. Therefore, the court imposes punitive damages, which are damages that are designed to punish the wrongdoer.
Punitive damages, also known as exemplary damages, are a type of damage category that a judge or a jury can place on a party that is liable. Someone who is liable has been found responsible to the other party for wrongdoing. There are instances where the court or a jury may find that the liable party has acted in such a wrongful way that the party deserves a punishment. This is when punitive damages will be awarded.
Punitive damages are awarded in addition to other kinds of damages. For example, a judge or jury can award actual damages, which are the exact amount of damages one actually sustained from something. Moreover, compensatory damages can be awarded to compensate a party for an injury.
The objective of a punitive damages award is not only to deter similar behavior from the liable party in the future, but also to punish the party for past wrongdoing. Moreover, punitive damages are usually not awarded in contractual cases.
The best way to understand punitive damages is to look at an example. Imagine that Abe is a doctor who administers flu shots. He gives Barbara a flu shot out of a new batch of shots just received at his clinic. These shots are made by Flu Shot Services. Barbara immediately has a reaction and suffers a stroke. It turns out that the flu shots were contaminated. Further investigation demonstrates that Flu Shot Services was aware of the problem but decided to sell the flu shots anyway, choosing to hide evidence of the problem from the Federal Drug Administration, who oversees the production of the shots. Subsequently, Barbara sues Flu Shot Services for negligence. She wins, and the judge imposes punitive damages on Flu Shot Services to punish the company and deter future misconduct by the company.
Punitive damages are awarded as a punishment and to deter future wrongful conduct. Moreover, punitive damages can be awarded where other kinds of damages (such as actual and compensatory) are insufficient. The intention is that the wrongdoer will hopefully learn a lesson from the high price of the damages and not act in a similarly harmful way in the future.
- punitive damages/exemplary damages: those damages that are designed to punish the wrongdoer
- liable: being found responsible to the other party for wrongdoing
- actual damages: the exact amount of damages one actually sustained from something
- compensatory damages: damages that can be awarded to compensate a party for an injury
Once you complete learning about punitive damages, you should also be able to:
- Identify and explain the other kinds of damages that can be placed upon the liable party
- Describe the objective of a punitive damages award
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