Punitive vs. Compensatory Damages

Damages are an award in the form of money that is recovered as compensation for an injury, wrongful death, property damage, and/or lost wages. There are two main classifications for damages which may be recovered if a personal injury lawsuit is won in court.

A plaintiff will always seek compensatory damages, which are designed to “compensate” or make a person feel whole. However, in some specific circumstances, the defendant may be subject to punitive damages, which are generally reserved for the most blatant acts of negligence or recklessness.

Compensatory Damages

Sometimes referred to as “actual damages,” compensatory damages are awarded for actual injuries and any losses suffered in an accident. There are two sub-types of compensatory damages: economic and noneconomic losses.

Economic compensatory damages refer to any tangible loss that costs money, such as medical expenses, lost wages, loss of property, and legal fees. Generally, there are no limitations on damages a plaintiff receives that compensates them for their injuries, although some limitations do exist under specific circumstances. The estimation of damages needs to be reasonably certain, especially for those damages projected for the future (i.e. future medical expenses or future lost wages).

By contrast, noneconomic compensatory damages refer to intangible losses, such as pain and suffering, and emotional distress. These damages are not based on money the plaintiff actually paid, but are more subjective.

Punitive Damages

These damages can be awarded to plaintiff which are in addition to compensatory damages. They go above and beyond compensatory damages in that they are a monetary award that the defendant must pay the plaintiff, in order to punish the defendant for his or her negligent and careless behavior.

Montana law specifically provides that “reasonable punitive damages may be awarded when the defendant has been found guilty of actual fraud or actual malice.” When punitive damages are imposed, Montana law sets forth several factors which must be considered in the setting of the amount.

These factors include, but are not limited to, the following:

  • The nature and reprehensibility of the wrongdoing
  • The extent of wrongdoing
  • The defendant’s intent to committing the wrong
  • The wrongdoer’s net worth
  • The profitability of the defendant’s wrongdoing
  • The amount of actual damages awarded to the injured party
  • Any potential or prior criminal sanctions against the defendant based upon the wrongful act
  • Any previous awards of punitive damages against the same defendant for the same conduct

In Montana, punitive damages cannot be greater than $10 million or three percent of a defendant’s net worth, whichever is less. There may be some exceptions to these limits.

One thing to keep in mind about any personal injury lawsuit or wrongful death claim is proving fault. It is critical to speak with a personal injury attorney when an accident has occurred.

For more information, contact our Billings personal injury lawyers at Odegaard Braukmann Law, PLLC today.

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