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.



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 ?
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.
Judge Eldon Fallon on Wednesday ruled the $50 million in compensatory damages was too high based on Barnett's health following the heart attack.
A Kentucky jury found Chrysler and Charles Clark each 50 percent at fault and returned a verdict of $471,258 in compensatory damages and $3 million in punitive damages.
In Campbell, the Supreme Court suggested a "single-digit" standard, with punitive damages generally less than 10 times the amount of compensatory damages, which were set at $1 million in the Campbell case.
But in some instances compensatory damages undervalue the actual harm--for example, in wrongful-death or injury cases where tort "reform" statutes cap damages.
As we read the case, a double-digit ratio will be justified rarely, and perhaps never in a case where the plaintiff has recovered an ample award of compensatory damages.
PITTSBURGH, March 31 /PRNewswire-FirstCall/ -- United States Steel Corporation announced today that it has reached a settlement in a case in which a Madison County, Illinois, state court jury on March 28 returned a verdict against the company of $250 million, which included $50 million in compensatory damages and $200 million in punitive damages.
2) For instance, past service and current wages may be a factor in valuing either tort and tortlike compensatory damages or contract and property rights, yet these payments ate not wages.
In those cases in which punitive damages are allowed, they are generally capped at the greater of three times the amount of the plaintiffs compensatory damages or $250,000.
and its subsidiary Vitalink Pharmacy Services (doing business as NeighborCare) filed suits requesting injunctive relief and compensatory damages against HCR Manor Care Inc.
In reviewing a case in which punitive damages were 526 times the amount of compensatory damages, the Court rejected arguments that such awards violated the due process clause of the U.
Two proposals under consideration by the Subcommittee would affect this long-accepted treatment: the first would disallow the cost of compensatory damages under certain environmental laws, and the second would reverse the longstanding deduction for environmental remediation costs by requiring either capitalization of certain costs or capitalization and amortization of certain expenses over uniform periods.