Compensatory Damages


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Compensatory Damages

A sum of money awarded in a civil action by a court to indemnify a person for the particular loss, detriment, or injury suffered as a result of the unlawful conduct of another.

Compensatory damages provide a plaintiff with the monetary amount necessary to replace what was lost, and nothing more. They differ from Punitive Damages, which punish a defendant for his or her conduct as a deterrent to the future commission of such acts. In order to be awarded compensatory damages, the plaintiff must prove that he or she has suffered a legally recognizable harm that is compensable by a certain amount of money that can be objectively determined by a judge or jury.

One of the more heated issues facing the U.S. legal system during the past quarter century has been the call for reform of states' tort laws. health care providers and other organizations have sought to limit the amount of damages a plaintiff can receive for pain and suffering because they claim that large jury awards in Medical Malpractice cases cause premiums on medical insurance policies to rise, thus raising the overall costs of medical services. California took the lead in addressing concerns with rising medical costs when it enacted the Medical Injury Compensation Reform Act, Cal. Civ. Code § 3333.2 (1997). The act limits the recoverable amount for non-economic loss, such as pain and suffering, to $250,000 in actions based on professional Negligence against certain health care providers. Although the statute has been the subject of numerous court challenges, it remains the primary example of a state's efforts to curb medical costs through tort reform.

Other states have sought to follow California's lead, though efforts to limit compensatory damages have met with considerable resistance. Opponents claim that because these limitations greatly restrict the ability of juries and courts to analyze the true damage that plaintiffs have suffered, defendants avoid paying an amount equal to the harm inflicted upon the plaintiffs. Medical organizations, such as the American Medical Association, continue to advocate for limitations on damages, however, and they have sought to encourage state legislatures to enact such provisions.

Cross-references

Damages.

compensatory damages

n. damages recovered in payment for actual injury or economic loss, which does not include punitive damages (as added damages due to malicious or grossly negligent act). (See: damages, special damages, general damages, punitive damages).

References in periodicals archive ?
Punitive damages are awarded where the conduct complained of merits punishment, hence the quantum, typically large, is added onto compensatory damages.
Supreme Court's ruling in Gore failed to define a "bright line" ratio between punitive and compensatory damages, it enunciated guideposts to determine the constitutionality of punitive damages awards.
These may take the form of absolute monetary caps, a maximum ratio of punitive to compensatory damages, or, often, some combination of the two.
The Court identified only one exception to these general principles--where compensatory damages are small and the defendant's act, to use the words of Gore, was "particularly egregious" or the injury "hard to detect" or difficult to value monetarily.
Clark, the ratio of punitive to compensatory damages was more than 12 to 1.
34) Presumably, disparate impact claims brought under post-1991 Title VII are based on tort-type rights, since such plaintiffs may be awarded a broad range of compensatory damages including future pecuniary losses, emotional pain and suffering, inconvenience, mental anguish, loss of enjoyment of life, and other nonpecuniary losses.
1 million, excluding compensatory damages and other settlements.
2 million in compensatory damages and approximately $28 million in punitive damages in the first major plaintiff victory against a CPA firm performing litigation services (see MATTCO FORGE.
In 1999, the jury returned a verdict against Philip Morris USA on the fraud claim and awarded the plaintiff $821,000 in compensatory damages and $79.
The justices based their analysis on the constitutional principle of "due process," which requires that the measure of punishment be reasonable and proportionate to both the plaintiff's harm and the compensatory damages awarded, said Alan S.
In fact, courts often upheld punitive damages precisely because compensatory damages in that era did not fully compensate a plaintiff for intangible harms such as emotional distress or outrage.
Under Title VII of the Civil Rights Act, compensatory damages are capped at $200,000 per victim.