compensatory damages | Definition

Doc's CJ Glossary by Adam J. McKee
Course: Civil Liability

Compensatory damages are a type of damages that are awarded in a civil lawsuit to compensate the plaintiff for losses or injuries that have been suffered as a result of the defendant’s actions.

Compensatory damages are a form of monetary remedy awarded in civil lawsuits. The objective is to offer financial compensation to the plaintiff, the party that has been wronged, to account for the losses or injuries they have suffered due to the defendant’s actions. In essence, these damages serve as a legal mechanism to restore balance and ensure justice by placing the plaintiff as closely as possible in the position they would have occupied had the defendant’s wrongful actions not occurred.

Purpose of Compensatory Damages

The primary purpose of compensatory damages is restitution. They are intended to make the plaintiff “whole” again by financially offsetting the negative impacts resulting from the defendant’s actions. The underlying principle is to restore the status quo and to reimburse the plaintiff for actual losses suffered. Compensatory damages are not designed to enrich the plaintiff or to penalize the defendant but to accurately reflect the plaintiff’s experienced or projected losses.

Types of Losses Covered

Compensatory damages may cover a broad spectrum of losses, both tangible and intangible. Tangible losses are those that can be quantified in monetary terms, such as:

  1. Medical expenses: These include costs for hospital stays, surgeries, medication, therapy, and any future medical expenses resulting from the injury.
  2. Lost wages or earning capacity: If the plaintiff’s ability to work and earn income is affected, the defendant may be required to compensate for the lost income, both past and potential future earnings.
  3. Property damages: If the plaintiff’s property was damaged as a result of the defendant’s actions, they may receive compensation for repair or replacement costs.

Intangible losses, on the other hand, are not as straightforward to quantify. These may include:

  1. Pain and suffering: This refers to the physical pain and emotional distress the plaintiff has endured because of the injury.
  2. Emotional distress: In some cases, the psychological impact of an incident may be considered, such as anxiety, depression, or post-traumatic stress disorder.
  3. Loss of reputation: If the defendant’s actions resulted in harm to the plaintiff’s reputation, this could be factored into compensatory damages.

Calculation of Compensatory Damages

The exact amount of compensatory damages awarded depends on the specific circumstances of each case. Factors such as the plaintiff’s age, earning capacity, the severity of the harm suffered, and the expected duration of the consequences may be considered. The process often involves complex calculations and may require expert testimony to determine the long-term financial impact of the defendant’s actions on the plaintiff.

Distinction from Punitive Damages

Compensatory damages differ from punitive damages, another form of monetary award in civil cases. While compensatory damages aim to restore the plaintiff’s financial status and compensate for harm suffered, punitive damages are intended to punish the defendant for particularly egregious conduct and to deter them and others from engaging in similar behavior in the future.

In conclusion, compensatory damages play a crucial role in civil law by ensuring that plaintiffs receive financial compensation for the harm they’ve suffered due to the defendant’s wrongful actions. By covering a wide array of losses, they help to restore balance and fairness in situations where one party’s negligence or intentional misconduct has resulted in harm to another.

[ Glossary ]

Last Modified: 05/14/2023

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