Compensatory damages are intended to compensate an injured person for their losses. If you are hurt in an accident, you can suffer financially, physically and emotionally. Compensatory damages include everything you get in a settlement or in a money verdict to return you to the condition you were in before the accident as much as possible.
Compensatory Damages vs. Punitive Damages
The term "damages" sounds as if it refers to the injuries a person suffers in an accident. But that is not the case. A person's damages are the moneys they receive from the at-fault party in a personal injury case. The at-fault person (or their insurer) pays these damages.
There are two types of damages in California: The first type is compensatory damages, which is the money awarded to an injured person to compensate for losses resulting from the accident. Most damage awards are compensatory, and every injured person who wins a personal injury case is awarded compensatory damages.
The other type of damages is called punitive, which are awarded in only a very small percentage of personal injury cases. These are damages assessed against a party who acted recklessly or intentionally with malice, oppression or fraud. Punitive damages are not awarded to benefit the injured person but to punish the at-fault party's conduct and deter others from behaving in the same manner in the future. Any punitive damages awarded are in addition to the compensatory damages.
Read More: How to Calculate Compensatory Damages
Compensatory Damages in California
If you talk to someone who was involved in a serious accident, they may tell you that the accident changed their life and riddled it with holes. If someone else caused the accident and is held liable, most damages assessed against that person will be those intended to compensate the victim's losses and make them whole again.
These are known as compensatory damages and are intended to replace what was lost. Compensatory damages compensate for many different types of losses. Some compensatory damages are for economic losses and some are for non-economic losses.
Compensatory Damages for Economic Loss
Economic damages are also termed special damages. What are the kinds of economic losses one suffers from an accident or injury? It's impossible to list all the possible losses, but some are fairly common.
Most people who suffer personal injury in an accident have to go to the doctor and incur medical expenses. They may lose pay for the time they can't go to work or have to take a different, lower-paying job due to injuries from the accident. In the case of a car accident, the injured person might also have to pay to repair the car and sometimes replace it, and also pay for transport while the car is in the shop.
All of these classify as economic damages, and it's fairly easy to figure out a money value for them. This is not the case with non-economic loss.
Compensatory Damages for Non-Economic Loss
Non-economic damages are those that an injured person doesn't pay for out of pocket. They are also called general damages and include more subjective losses like:
- Pain and suffering.
- Emotional distress.
- Fear and anxiety.
- Loss of the use of some body part.
- Loss of life enjoyment.
Caps on Compensatory Damages
Some states have set caps on compensatory damages in a personal injury case to rein in awards for general damages. California does not have that. A court or jury has authority to award any amount that seems to be fair and equitable.
The only exception is for medical malpractice cases. In these cases, California law sets a top limit on a pain and suffering award at $250,000, no matter how many defendants are involved. This has been upheld as constitutional by the California Supreme Court.
If you believe that you have a case where you are due compensatory damages, the State Bar of California provides information on how to find and hire the right lawyer on its "Need Legal Help?" page.
Teo Spengler earned a JD from U.C. Berkeley Law School. As an Assistant Attorney General in Juneau, she practiced before the Alaska Supreme Court and the U.S. Supreme Court before opening a plaintiff's personal injury practice in San Francisco. She holds both an MA and an MFA in English/writing and enjoys writing legal blogs and articles. Her work has appeared in numerous online publications including USA Today, Legal Zoom, eHow Business, Livestrong, SF Gate, Go Banking Rates, Arizona Central, Houston Chronicle, Navy Federal Credit Union, Pearson, Quicken.com, TurboTax.com, and numerous attorney websites. Spengler splits her time between the French Basque Country and Northern California.