What is the Difference Between Compensatory and Punitive Damages?

Close-up car accident

Many people ask us about damages after a lawsuit, and if you’re not familiar with all of the terminology, it can be difficult to understand. The term damages, at least in the personal injury law context, simply refers to the amount of money a jury awards you after a lawsuit.

However, there’s a little bit more that you need to know if you intend to sue someone for hurting you.

Awards and Settlements: What’s the Difference?

A jury can award you damages if your case goes to trial. Many cases don’t go to trial, though; instead, they choose to settle out of court. That means that the injured party and the responsible party (or the responsible party’s insurance company) talk with each other, usually with legal representation, and determine a fair amount. This keeps the victim and the at-fault party from having to go to court, which can save money in legal fees and can result in a workable solution for both parties.

When insurance companies are unfair, however, people often choose to take their lawsuits to court. When that happens, your personal injury lawyer will argue your case and prove that the other party is to blame for your injuries, your pain and suffering, and the other losses you’ve had to endure. A jury will then decide whether you are entitled to receive compensation for what you’ve been through, and if they believe you and your attorney, they have three options: they can award you compensatory damages, punitive damages, or both.

A Word on Compensatory Damages

Compensatory damages help make up for the money you’ve spent on medical care (to include the money you’ll have to spend in the future), the money you lost because you were forced to miss work, and many other expenses.

About Punitive Damages

Punitive damages are also a financial award, but their main purpose is to punish the guilty party. If a trucking company’s safety violations caused your injuries, for example, teaching them a financial lesson that they’ll never forget is the main goal of punitive damages.

A jury can award you compensatory and punitive damages at the same time; it happens often. It’s up to you and your personal injury lawyer to decide what your case is worth and then aggressively pursue justice.