Whether you’re considering filing a claim with the help of a personal injury lawyer or you’re in the middle of the process, you might have heard of exemplary or punitive damages. But what are punitive damages, and when might you be entitled to them?
We look at what they are, how punitive damages differ from compensatory damages, when punitive damages are awarded, some common examples, and how much you could receive.
What Are Punitive Damages?
Punitive damages, also known as exemplary damages, are a type of monetary award sometimes given to plaintiffs (or claimants) of personal injury claims. Unlike compensatory damages, which we’ll look at in a moment, punitive damages are awarded to punish defendants or set an example (hence the word “exemplary”). Punitive damages are only awarded in certain circumstances, such as when a person displays extreme negligence or outrageous conduct or the defendant’s actions show extreme disregard that warrants deterring both the defendant and other individuals from ever engaging in similar wrongful behavior.
What Are Compensatory Damages?
Compensatory damages are an essential component of a personal injury claim.
Not every case will result in an award of punitive damages, but every successful personal injury claim will include compensatory damages.
As the name suggests, compensatory damages are designed to compensate plaintiffs for the losses they’ve experienced.
There are two types of compensatory damages:
- Economic damages
- Non-economic damages.
Let’s break those down a bit further.
Economic damages are for actual expenses (to the present day) and future expenses. They include lost wages, future loss of income, repairs (such as the cost of fixing damage to your car after a collision), and past and future medical bills. These are typically easy to calculate and prove since they have a monetary value.
Non-economic damages are harder to calculate because you can’t easily quantify them in monetary terms. These are more subjective and can include compensation for pain and suffering, emotional distress, and loss of enjoyment. For example, if you have a traumatic brain injury or are disabled after your accident, you may not be able to enjoy the same quality of life as you did before your injury. If your accident leaves you disfigured, it can severely impact your mental health and may affect your confidence and ability to form relationships.
Non-economic damages are determined either by adding a multiplier or for each day a victim suffers (called the “per diem” method). Typically, the more severe the impact of your injury on your life, the more compensatory damages you will receive. This can lead to a hefty payout, especially if you’re younger and your injury is life-changing.
Want to see how much compensation you could receive? Find out with our quick and easy personal injury calculator.
When Can You Get Punitive Damages?
If punitive damages aren’t available in every case, when might you receive them?
Punitive damages in Texas can only be awarded by the court, meaning that they do not apply in most cases. For example, if you hire a personal injury lawyer and they achieve a settlement without going to court, this will only include compensatory damages. However, that’s not to say that a settlement won’t be significant — payouts can be six or seven figures.
Sometimes, taking your case to court can be the better option, as a judge may rule that you are entitled to a larger payout than any settlement previously offered. If the court orders compensatory damages, that doesn’t mean you will also receive punitive damages. Either way, personal injury lawsuits come with risk, as the judge may rule in favor of the defendant. In this case, you wouldn’t be entitled to any compensation.
If your case goes to court, the jury can decide if you are entitled to punitive or exemplary damages, but the determining factors can vary by state.
How Are Punitive Damages Awarded?
The Texas Civil Practice & Remedies Code outlines when a court should award punitive damages for cases in the Lone Star State.
It states that the jury must be unanimous that there is “clear and convincing evidence” that the harm resulted from fraud, malice, or gross negligence.
This burden of proof is slightly different from the usual burden in tort law — or civil law. If “a preponderance of the evidence” (the burden of proof required for successful civil lawsuits, including personal injury cases) is at one end of the scale and “beyond a reasonable doubt” (the burden of proof required for a criminal conviction) is at the other end, “clear and convincing evidence” falls somewhere around the middle.
When determining whether a plaintiff is entitled to punitive damages, they must consider the following:
- The nature of the wrong
- The character of the defendant’s conduct
- The degree of culpability of the wrongdoer
- The situation and sensibilities of the parties concerned
- The extent to which such conduct offends a public sense of justice and propriety
- The net worth of the defendant.
This high standard, combined with the requirement that the jury be unanimous in their decision, makes it challenging to receive a punitive damage award.
If all jurors agree that exemplary damages are applicable, the amount of punitive damages awarded is at the court’s discretion.
How Often Are Punitive Damages Awarded?
Few personal injury claims result in punitive damages, even if they end up in civil court. This is less an indication that juries don’t wish to award punitive damages and more a result of how personal injury claims tend to play out.
Just 5% of liable verdicts result in a punitive damages award, but the amount of personal injury claims that advance to the litigation stage is in the single digits. This means that most cases don’t have punitive damages imposed, even if a defendant’s actions are especially egregious.
Punitive Damages Examples
Punitive damages are only given in certain situations, such as when a defendant’s conduct is so egregious that awarding these damages would deter others from committing similar acts.
But what are some examples of punitive damages?
One example of punitive damages is an intoxicated driver causing a crash that results in a claimant sustaining serious bodily harm. In this case, the court may opt to award punitive damages to send a message to other drivers that driving while intoxicated is unacceptable and will be punished accordingly.
A real-life, high-profile example of punitive damages is a civil lawsuit against the fast-food chain McDonald’s in New Mexico.
The plaintiff, Stella Liebeck, sustained second and third-degree burns when a cup of coffee spilled on her lap in the drive-through. Liebeck spent eight days in the hospital and decided to sue the corporation after it refused to pay $20,000 to cover her medical bills.
During litigation, it was discovered that McDonald’s had faced over 700 similar claims over 10 years, suggesting that the company was aware of the consequences of serving coffee at such a high temperature. Rival firms also notably served coffee at cooler temperatures.
Liebeck was ultimately awarded $2.7 million in punitive damages, after which McDonald’s lowered the temperature of its coffees.
In this case, the string of claims resulting only in compensatory damages before Liebeck’s injury wasn’t enough to deter the company from continuing to serve scalding-hot coffee. Only after the court awarded the plaintiff punitive damages did the company respond by lowering the temperature, making this case an effective demonstration of how punitive damages can act as a deterrent.
How Much Could You Receive in Punitive Damages in Texas?
The $2.7 million awarded to Stella Liebeck in the 1992 McDonald’s case in New Mexico is an outlier, and punitive damage awards are typically much lower. However, they can still be significant.
Calculating Punitive Damages
Many states have punitive damage caps, including Texas. In this state, punitive damages must not exceed $200,000 or twice the number of economic damages plus an equal amount of non-economic damages up to $750,000, whichever is greater.
For example, if your non-economic damages total $300,000 and your economic damages — your lost wages, property damage, and the cost of your medical treatments — come to $100,000, the maximum amount of punitive damages you could receive is $500,000.
However, in certain situations, these limitations may be waived.
In What Personal Injury Cases Can Punitive Damages Apply?
Punitive damages can be awarded in any personal injury case that doesn’t settle during negotiations. At this stage, plaintiffs have the option of going to court to pursue compensation. However, even then, many cases still result in a settlement during pre-trial negotiations — it’s not uncommon for claimants to settle only days before they’re due in court because neither party wants to take the risk.
If you go to court and secure a favorable verdict, you may receive punitive damages — if the jury decides to award them. This means car and truck accidents, traumatic brain injuries, medical malpractice cases, motorcycle accidents, and more can result in punitive damages.
Should You Pursue Punitive Damages?
A personal injury claim can be a long process involving back and forth with insurance adjusters to agree on a fair settlement. If your case goes to court, it can take even longer. If you have a personal injury case, your lawyer will advise you on whether you may be entitled to a higher payout — which may or may not include punitive damages — by going to court.
If you win your case, you could receive compensatory and punitive damages.
This makes it vital to partner with a law firm you trust. Our personal injury lawyers in McAllen and San Antonio are dedicated to getting you the best result. They will fight on your behalf to get you justice and the compensation you deserve. We’ll clearly explain your options and aren’t afraid to take your claim to a jury and pursue punitive damages if we believe you have a strong case.
To find out if you have a claim, speak to our Texas personal injury lawyers at the Patino Law Firm today for a free case review by calling 855-LAW-NINJA or filling in our contact form.