What Is the Difference Between Compensatory Damages and Punitive Damages?

Compensatory damages reimburse a victim for the losses they suffered because of the negligence of the at-fault party. These damages help victims recover the actual losses they suffered with the objective of making the victim “whole” again.

Punitive damages are a type of punishment awarded to the victim, but are meant more to deter the at-fault party from engaging in the same behavior again. Punitive damages are less common and often limited to cases involving gross negligence.

Consider the following details about the difference between compensatory damages and punitive damages from an experienced Nashville personal injury lawyer. Call us at (615) 864-0343 for a free consultation with a legal professional.

Compensatory Damages Make You Whole Again

Compensatory damages include both economic and non-economic damages. They are specifically meant to pay you back for what you lost. The premise is to make you whole again, which means that the at-fault party should pay you for any damages you can prove you suffered as a result of the incident. 

Economic damages are out-of-pocket costs that are easily proven through receipts or other measurable means. Examples of economic damages include:

• Medical costs
• Ongoing medical support
• Lost wages
• Hospital bills
• Specialist care
• Property damage
• Future earnings
• Other out-of-pocket expenses

Non-economic damages are intangible losses and more subjective in terms of value. The losses are still very much your right and are meant to compensate you for what you experienced. However, they are less clear about value. Examples of non-economic damages include:

• Emotional distress and mental anguish
• Pain and suffering
• Disfigurement
• Loss of quality of life
• Loss of consortium

Both economic and non-economic damages are forms of compensatory coverage, meant to help you recover what you lost. You can receive these when you prove the other party is at fault and demonstrate the value of the losses on your day-to-day life and long-term well-being.

Punitive Damages Are a Punishment

In Tennessee, under Tennessee Code Annotated Section 29-39-104, punitive damages may be awarded to victims who can prove clear and convincing evidence of the defendant’s grossly negligent actions. These are exemplary damages, paid out only in limited cases involving egregious, malicious, or willful conduct on the part of the defendant.

If you believe your losses qualify, you have a strict burden of proof to adhere to in that you must show that the defendant acted:

• Maliciously
• Intentionally
• Fraudulently
• Recklessly

If you can demonstrate this, the court may decide to award punitive damages as a type of punishment against the defendant. However, the state caps most punitive damages at no more than $500,000 or two times the total compensatory damages you receive. There are some exceptions to this cap, such as in situations where the defendant acted with an intent to cause serious physical injury, destroyed or falsified records, or was under the influence of alcohol or drugs while committing the act.

Both Types of Compensation May Be Available

In some personal injury cases, both types of compensation are available to victims. However, it is much harder and less common to receive punitive damages because of the higher standard of proof required for gross negligence.

In both cases, the burden of proof is on the victim, which is why it is so important for victims to hire an accident attorney in Nashville. This can also help explain the difference between compensatory and punitive damages in your case.