Compensatory damages are money awarded to a plaintiff to compensate for damages, injury, or another incurred loss. Compensatory damages are awarded in civil court cases where loss has occurred as a result of the negligence or unlawful conduct of another party.
To receive compensatory damages, the plaintiff has to prove that a loss occurred and that it was attributable to the defendant. The plaintiff must also be able to quantify the amount of loss in the eyes of the jury or judge.
- Compensatory damages represent the money awarded to a plaintiff in a lawsuit.
- This type of compensation is awarded in civil court cases.
- There are two types of compensatory damages—general and actual.
- Actual damages are intended to provide funds to only replace what was lost.
- General compensatory damages awarded are more complex, as these compensatory damages do not represent a monetary expenditure.
Understanding Compensatory Damages
Actual damages are intended to provide the monetary amount necessary to replace what was lost and nothing more. Usually, compensatory damages are awarded in civil court cases in order to compensate for damages, injury, or another incurred loss. As we'll explore further in the article, they are different from punitive and treble damages.
Examples of Actual Compensatory Damages
- Medical and hospital bills
- Medical treatments
- Rehabilitation expenses
- Physical therapy
- Ambulance expenses
- Medicine and Prescription drugs
- Nursing home care
- Domestic services
- Medical equipment
- Lost wages or lost employment income
- Increased living expenses
- Property replacement or repair
To be awarded actual compensatory damages, the plaintiff must prove that losses suffered equate to a defined monetary value.
Compensatory damages can be classified into two types: actual and general.
Examples of General Compensatory Damages
General compensatory damages, meanwhile, include estimates of loss not involving actual monetary expenditure. Some courts use the "multiplier method," which calculates general damages by multiplying the sum total of one's actual damages by a number that signifies the seriousness of the injury.
In other jurisdictions, courts will use the "per diem" method, which attaches a dollar value to each day a plaintiff suffers and adds the value of all those days together. In some cases, a court will use a hybrid of these two methods to calculate general compensatory damages. These general compensatory damages include:
- Mental anguish
- Future medical expenses
- Future lost wages
- Long-term physical pain and suffering
- Loss of consortium
- Loss of enjoyment of life
- Loss of opportunity
Compensatory damages are typically awarded in medical malpractice lawsuits, usually for medical bills, hospital bills, rehabilitation expenses, and compensation for lost earnings. Some compensatory damages can be difficult to assess. For example, the value of lost wages will be much higher for a more affluent member of society versus someone who is poor or retired.
Compensatory Damages vs. Punitive Damages
Compensatory damages differ from punitive damages, which may compensate over and above any loss or damage incurred and are meant to provide an incentive against repeating the act that caused the plaintiff’s loss or damages.
Cases related to compensatory and punitive damages are a major source of debate in the field of health insurance, as proponents of tort reform claim that excessive damages above the actual loss incurred can increase the overall cost of healthcare.
Compensatory damages are intended to compensate the plaintiff of a lawsuit with enough money to cover the loss caused by the defendant.
Compensatory Damages vs. Treble Damages
Treble damages are also a kind of punitive damage, meant to dissuade others from committing the same offense. Often, treble damages–which indicate that a statute exists to award a plaintiff up to three times actual or compensatory damages–are invoked when a plaintiff has purposefully or willfully violated a law.
Compensatory Damages FAQs
What Is Another Word for Compensatory?
Another word to describe compensatory damages is offsetting, redeeming, or remunerative.
What Is a Compensatory Activity?
As it applies to the law, compensatory activities are usually awarded in the form of monetary payments.
What Are the 3 Types of Damages?
The three types of damages are economic damages, non-economic damages, and punitive damages.
What Are General Compensatory Damages?
General compensatory damages cover all non-monetary damages when referencing an injury claim, such as for pain and suffering.
Do Compensatory Damages Include Emotional Distress?
Compensatory damages can refer to emotional distress, including mental anguish and loss of enjoyment of life.
The Bottom Line
To receive compensatory damages, the plaintiff has to prove that a loss occurred. Compensatory damages, as the name implies, hope to "compensate" for any damages, whether physical, emotional, or mental. They are not to be confused with punitive or treble damages.
Whenever discrimination is found, the goal of the law is to put the victim of discrimination in the same position (or nearly the same) that he or she would have been if the discrimination had never occurred.
The types of relief will depend upon the discriminatory action and the effect it had on the victim. For example, if someone is not selected for a job or a promotion because of discrimination, the remedy may include placement in the job and/or back pay and benefits the person would have received.
The employer also will be required to stop any discriminatory practices and take steps to prevent discrimination in the future.
A victim of discrimination also may be able to recover attorney’s fees, expert witness fees, and court costs.
Remedies May Include Compensatory & Punitive Damages
Compensatory and punitive damages may be awarded in cases involving intentional discrimination based on a person’s race, color, national origin, sex (including pregnancy, gender identity, and sexual orientation), religion, disability, or genetic information.
Compensatory damages pay victims for out-of-pocket expenses caused by the discrimination (such as costs associated with a job search or medical expenses) and compensate them for any emotional harm suffered (such as mental anguish, inconvenience, or loss of enjoyment of life).
Punitive damages may be awarded to punish an employer who has committed an especially malicious or reckless act of discrimination.
Limits On Compensatory & Punitive Damages
There are limits on the amount of compensatory and punitive damages a person can recover. These limits vary depending on the size of the employer:
- For employers with 15-100 employees, the limit is $50,000.
- For employers with 101-200 employees, the limit is $100,000.
- For employers with 201-500 employees, the limit is $200,000.
- For employers with more than 500 employees, the limit is $300,000.
Age Or Sex Discrimination & Liquidated Damages
In cases involving intentional age discrimination, or in cases involving intentional sex-based wage discrimination under the Equal Pay Act, victims cannot recover either compensatory or punitive damages, but may be entitled to “liquidated damages.”
Liquidated damages may be awarded to punish an especially malicious or reckless act of discrimination. The amount of liquidated damages that may be awarded is equal to the amount of back pay awarded the victim.
A compensatory damages example is if a negligent driver hit your 2008 Honda and totaled it; the compensatory damages should equal the market value of your 2008 Honda at the time of its demise, less any scrap or salvage value, and you could be entitled to the fair market value of the vehicle.
Compensatory damages are the sum of money that may be entitled to a party in compensation for damage to property, an injury, or other loss. These differ from punitive damages (also referred to as exemplary damages), which aim to punish the person for their wrongdoing and are typically only required when the person has been intentionally and especially harmful. Compensatory damages are meant to restore the plaintiff to the level they were before the harm was inflicted.
Types of Compensatory Damages
In general, there are two types of compensatory damages: special and general.
- Special damages are intended to return the plaintiff to the position in which they were prior to an injury, accident, or other harmful situation, by paying for medical expenses, damage to property, loss of earnings, and other quantitative losses.
- General damages involve losses not easily determined by monetary calculations and may include emotional distress, loss of consortium (the loss of participating in family life as experienced previously,) and defamation.
Special (Actual) Damages
Special damages, which are also referred to as actual damages, are meant to provide the monetary amount necessary to replace what was lost and nothing more. Special damages are those that are easily calculable and not really up for debate, and typically have a firm dollar figure attached to them.
In order to be awarded special compensatory damages, the judge or jury must be able to determine the actual monetary value of losses suffered by the plaintiff. In cases of personal property damage, the amount to be compensated is generally determined by the market value of the item at the time of loss, which can mean a depreciated value. In medical malpractice lawsuits, special compensatory damages are the most common type of damage awards.
- Medical treatments
- Physical therapy
- Medical and hospital bills
- Ambulance expenses
- Domestic services
- Medical equipment
- Lost wages or unemployment income
- Increased living expenses
- Property repair
General damages involve losses not as easily determined by a monetary value, and may include:
- Pain and suffering: aches, pains, scarring, and permanent or temporary limitations on activity
- Emotional distress: mental anguish or emotional distress caused by a physical injury, physical contact, sexual harassment, slander, or libel
- Loss of consortium, also known as loss of companionship: deprivation of the enjoyment of a normal family relationship, where the inability of a spouse to provide the same love, affection, comfort, or sexual relations as they did previously is due to injury or death.
- Defamation, also known as loss of reputation: the purposeful communication of false information that damages the reputation of a person or entity, which may include any unfounded criticism or false information that results in the loss of respect, regard, or confidence of a person or entity, or that provokes aggressive feelings against them; may be written or spoken; includes libel.
- Disfigurement: permanent change in a person’s body or physical characteristics, such as scars
- Loss or impairment of physical or mental capacity: the loss of a person’s ability to think clearly, physically care for, or make decisions for him or herself
- Loss of enjoyment of life: the loss of a person’s ability to experience and participate in the activities and pleasures of life as compared to before the incident or injury
Case Examples of Compensatory Damages
In Wisconsin in the nineteenth century, a boy hurt his knee. A while later, while in school, a classmate lightly kicked the same knee. The boy did not feel any pain at the time, but the knee later became seriously infected. The boy was left permanently unable to use his leg ever again. The boy sued his classmate. The court determined that the classmate was at fault, and they required him to compensate the boy for his loss, even though he did not expect his kick could result in such serious consequences.
Compensatory Damage Legal Assistance
If you’ve been injured or in an accident, you could be eligible for compensatory damages.
If you need help understanding compensatory damages, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top five percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.
When an individual suffers personal injury or financial loss as the result of the negligence or willful misconduct of someone else, then a court will sometimes award the injured party compensatory damages. These damages compensate the injured party for their loss.
A court hopes to make an injured individual financially whole by awarding compensatory damages. Punitive damages are sometimes awarded in conjunction with compensatory damages, but punitive damages are intended to punish the wrongdoer or to deter the wrongdoer from committing the same act in the future.
What Courts Consider When Calculating Compensatory Damages
Compensatory damages are often calculated to compensate people who have suffered financial loss during contract disputes. Financial records, invoices, and purchase orders will help the court determine how much to award the injured party.
If an injured party lost specific items, then the court will need documentary evidence to determine the fair market value of the lost property. The replacement value needs to be determined as well so the court can calculate compensatory damages.
The court will add up the total cost of replacing the lost or damaged property. Next, the court will add the attorneys’ fees, filing fees, and postage fees you paid to assert your contract claim. You will also be permitted to ask the court to add lost wages and lost future earnings as part of your total compensatory damages amount.
It is important to remember that compensatory damages compensate the injured party for the injuries they suffered. Compensatory damages may also include costs of medical treatment and rehabilitation.
An injured party may not be able to work in their chosen profession due to the injuries they suffered. This may also be a factor the court considers when calculating compensatory damages.
If an injured party suffered an additional loss that affects their quality of life, then these losses may also be considered by the court when compensatory damages are calculated.
Compensatory damages may also be reduced if the injured party contributed to his or her own injuries.
Contact Us Today to Schedule a Free Case Evaluation with a Kansas City Injury Lawyer
At Krause & Kinsman, we are committed to helping accident victims obtain as much compensation as possible. To schedule your free consultation with an attorney, call our office today or contact us online.
[Related Posts] : What Are Special Damages in Personal Injury Cases?
Do I need a lawyer to file a claim?
No, but it’s highly advisable to retain a lawyer after any injury-causing accident.
How much does a personal injury attorney cost?
Personal injury attorneys usually work on contingency, which means that they will receive a percentage of any award or settlement you recover.
How long will my case take?
Personal injury cases can take anywhere from a few months to more than a year to conclude.
If you want to seek compensatory damages, pull together all the documents you have that relate to any expenses you incurred as a result of the injury or property loss you sustained. Compensatory damages aren’t limited solely to costs to replace or repair damaged property or doctor’s bills for your injury.
What are special compensatory damages?
Special Compensatory Damages Special damages compensate for monetary expenses incurred because of an injury. An award of special damages should make a victim whole for expenses incurred or for money lost due to the incident or accident that caused their injuries.
Is pain and suffering a punitive damage?
Damages for pain and suffering are a type of compensatory damages. Punitive damages are damages which are assessed against the defendant for egregious misconduct and are intended to punish the defendant and to deter others from similar misconduct.
How much should I ask for in pain and suffering?
Unless the accident left you critically or permanently injured, your demand for pain and suffering will probably be between one and three times the amount of your special damages. Your final settlement amount depends on the circumstances of your injury and your ability to justify your pain and suffering.
Can I counter sue for false accusations?
Criminal Defense Lawyer The short answer is yes, you can sue someone who has falsely accused you of a crime. Filing a lawsuit is pretty easy – just about anybody can figure out how to do it. If the person you wish to sue is in fact collectible, then you have to consider whether there is actual likelihood of success.
How long does a negligence claim take?
It’s difficult to say without knowing any details, but as a very rough ballpark figure then an average medical negligence claim might take between 12 and 18 months to resolve.
How do you prove medical negligence?
To prove that medical malpractice occurred, you must be able to show all of these things:
- A doctor-patient relationship existed.
- The doctor was negligent.
- The doctor’s negligence caused the injury.
- The injury led to specific damages.
- Failure to diagnose.
- Improper treatment.
- Failure to warn a patient of known risks.
What is the most common reason for malpractice?
Medical malpractice lawsuits are sometimes the result of a poor relationship between doctors and medical staff, and patients. Something as simple as poor phone etiquette or inattention to a patient’s concerns can result in a lawsuit. Doctors and their staff need to treatment patients with respect.
In a legal case, “damages” refers to the money that you are seeking in order to compensate you for some legal wrong that was committed by the other party. The court may award you “damages,” which will be paid by the other side, if you can prove that you were harmed and the other party caused it.
A lawsuit in District Court usually involves “actual damages.” Actual damages are the amount of money the Court will allow for the actual harm that you have suffered because of:
- Some action by the other side or
- Something that the other side failed to do (that they should have done).
Actual damages are also called “compensatory damages.” This type of money award is designed to “compensate” you by returning you to the position you were in before the harm occurred. Usually damage awards cover items such as the cost of repairing or replacing your property, lost wages, or other expenses.
There are other kinds of damages, including:
- “Punitive damage” (additional money awarded to punish the defendant when the damage was caused deliberately and with malice);
- “Special damages” (awarded to cover related expenses such as lost wages resulting from an accident); or
- “Statutory damages” (awarded because the law specifically requires it).
If you think that one of these other kinds of damages might apply to your case, contact an attorney for advice. It will depend on your type of case, the facts of your case and whether you are suing in small claims court. You may decide that the case should be heard in Circuit Court. An attorney can help you to decide.
More about “actual” damages
- Actual damages may result from a “tort.” A tort is a civil wrong that someone commits against you; (for example, damaging your car in an auto accident).
- Actual damages may also result from a “breach of contract.” A breach of contract occurs when someone fails to “make good” on a formal agreement made with you; (for example, an auto mechanic’s failure to make a repair for which you have paid). A contract can be written or oral. The existence of an oral contract can be harder to prove. The other side may not agree with your recollection of terms of your oral contract.
What do I need to prove?
It is not enough to go into Court and simply demand money damages. If you are the plaintiff (the person who started the case), then the law says that you have the “burden of proof.” This means two things:
- First, it is your responsibility to prove to the court that your version of what happened is true. You must collect and submit to the court evidence that your version of the events is true.
- Second, there are different levels of “proof.” Your case must also meet certain legal requirements.
You may have seen television shows where lawyers use the term “beyond a reasonable doubt.” That is the level of “standard of proof” used in criminal trials.
In a non-criminal case like the case you have in District Court, you need to prove your case by a “preponderance of the evidence.” This means that you must persuade the court that your version is more likely to be true than not to be true. Here is another way to look at this. You must show that over 50% of the believable evidence is in your favor.
The Court will consider whether:
- You have suffered a loss or injury that can be compensated with a fixed sum of money; and
- The party named in your complaint is the party responsible for your loss or injury.
How do I prove damages?
It will depend on the type of case you have and the facts of your case. Here is some general information.
First, research the law on your type of case. You have to understand the elements that are needed to prove your case.
Next, look at the facts of your case. What evidence can you collect to persuade the judge that: (1) you were harmed and that (2) the other side caused this harm directly or hurt you via their failure to act?
Remember that proving you have been harmed in some way is not necessarily the same as proving how much you should be compensated. It is your responsibility to prove to the judge that the amount you ask for is justified. It is up to the judge to decide damages, however, you should be prepared to make an argument for the amount that you think is fair.
If you are the defendant – You need to understand the law and what the plaintiff (the person who sued you) must prove. You can prepare in advance, but plan on being able to react to what the other side says during the trial. Your job is to show one or more of the following:
There are several remedies for breach of contract, such as award of damages , specific performance , rescission , and restitution . In courts of limited jurisdiction, the main remedy is an award of damages. Because specific performance and rescission are equitable remedies that do not fall within the jurisdiction of the magistrate courts, they are not covered in this tutorial.
What Damages Can Be Awarded?
There are two general categories of damages that may be awarded if a breach of contract claim is proved. They are:
1. Compensatory Damages. Compensatory damages (also called “actual damages”) cover the loss the nonbreaching party incurred as a result of the breach of contract. The amount awarded is intended to make good or replace the loss caused by the breach.
There are two kinds of compensatory damages that the nonbreaching party may be entitled to recover:
A. General Damages. General damages cover the loss directly and necessarily incurred by the breach of contract. General damages are the most common type of damages awarded for breaches of contract.
Example: Company A delivered the wrong kind of furniture to Company B. After discovering the mistake later in the day, Company B insisted that Company A pick up the wrong furniture and deliver the right furniture. Company A refused to pick up the furniture and said that it could not supply the right furniture because it was not in stock. Company B successfully sued for breach of contract. The general damages for this breach could include:
• refund of any amount Company B had prepaid for the furniture; plus
• reimbursement of any expense Company B incurred in sending the furniture back to Company A; plus
• payment for any increase in the cost Company B incurred in buying the right furniture, or its nearest equivalent, from another seller.
B. Special Damages. Special damages (also called “consequential damages”) cover any loss incurred by the breach of contract because of special circumstances or conditions that are not ordinarily predictable. These are actual losses caused by the breach, but not in a direct and immediate way. To obtain damages for this type of loss, the nonbreaching party must prove that the breaching party knew of the special circumstances or requirements at the time the contract was made.
Example: In the scenario above, if Company A knew that Company B needed the new furniture on a particular day because its old furniture was going to be carted away the night before, the damages for breach of contract could include all of the damages awarded in the scenario above, plus:
• payment for Company B’s expense in renting furniture until the right furniture arrived.
2. Punitive Damages. Punitive damages (also called “exemplary damages”) are awarded to punish or make an example of a wrongdoer who has acted willfully, maliciously or fraudulently. Unlike compensatory damages that are intended to cover actual loss, punitive damages are intended to punish the wrongdoer for egregious behavior and to deter others from acting in a similar manner. Punitive damages are awarded in addition to compensatory damages.
Punitive damages are rarely awarded for breach of contract. They arise more often in tort cases, to punish deliberate or reckless misconduct that results in personal harm.
How are Compensatory Damages Calculated?
The calculation of compensatory damages depends on the type of contract that was breached and the type of loss that was incurred. Some general guidelines are:
Standard Measure. The standard measure of damages is an amount that would allow the nonbreaching party to buy a substitute for the benefit that would have been received if the contract had been performed. In cases where the cost of the substitute is speculative, the nonbreaching party may recover damages in the amount of the cost incurred in performing that party’s obligations under the contract.
Contracts for the Sale of Goods. The damages are measured by the difference between the contract price and the market price when the seller provides the goods, or when the buyer learns of the breach.
Are There Any Limitations on the Award of Compensatory Damages?
An important limitation on the award of damages is the duty to mitigate. The nonbreaching party is obligated to mitigate, or minimize, the amount of damages to the extent reasonable. Damages cannot be recovered for losses that could have been reasonably avoided or substantially ameliorated after the breach occurred. The nonbreaching party’s failure to use reasonable diligence in mitigating the damages means that any award of damages will be reduced by the amount that could have been reasonably avoided.
If a New Mexico doctor or medical practitioner harmed you or a loved one, you might have a valid medical malpractice claim.
If you pursue legal action, you may seek compensation for the damages you suffered.
But the types of compensatory damages you can claim will depend on the details of your case. Rest assured, however, that an experienced malpractice attorney will fight to get you the maximum possible damages.
The experienced New Mexico malpractice lawyers of Poulos & Coates, LLP., focus exclusively on this complex area of the law.
We put the sum of our experience and resources to work for you, fighting to maximize your compensation as much as possible.
Contact us today to get started!
What Are Compensatory Damages?
The purpose of compensatory damages is to compensate injury victims for their physical, emotional, and financial harm. The point of these damages is to restore the victim to their pre-injury state as much as possible.
Although no settlement can undo the harm you sustained, a fair settlement can provide the financial stability you need.
After a severe malpractice injury, you need medical treatment and care. Depending on your injuries, you could face significant treatment costs—and you need a way to pay these costs.
If your injuries prevent you from working, you need a way to cover your rent or mortgage payments, pay the utilities and other bills, and put food on your table. If your family relies on your income, recovering damages becomes even more pressing.
When you recover compensatory damages in a medical malpractice settlement or award, you get the resources you need to get through the significant challenges you face.
What Is the Value of Your Medical Malpractice Compensatory Damage Claim?
Consulting an experienced attorney is the most reliable way to determine the potential value of your malpractice claim.
However, you could be entitled to some or all of the following:
- Medical treatment costs to date;
- Future medical treatment and care;
- Lost wages and benefits to date;
- Future lost income and benefits;
- Emotional trauma; and
- Pain and suffering.
If you sustained a permanent injury, scarring, or disability, your attorney can pursue compensation for those damages. You might also have the right to pursue damages for diminished quality of life and diminished earning capacity.
In most cases, malpractice attorneys can successfully negotiate a settlement with the doctor’s medical malpractice insurer. This resolution typically makes the most sense, as it gets you the funds you need as quickly as possible.
However, if the insurance company will not make a reasonable settlement offer, your lawyer can file a civil lawsuit and pursue your case in court.
Call us about your case so one of our attorneys at Poulos & Coates can get to work. Call now at 575-523-4444
Can You Seek Non-Compensatory Damages for Malpractice?
Whereas compensatory damages compensate the victim for actual costs, non-compensatory damages (aka punitive damages) punish the negligent medical practitioner.
Although many U.S. states prohibit the recovery of punitive damages in malpractice cases, New Mexico allows them. Also, New Mexico law places no cap or limit on the amount of punitive damages injury victims can seek.
To recover non-compensatory damages, you must demonstrate that the practitioner acted intentionally or with exceptional recklessness.
Proving this can pose a challenge. However, experienced medical malpractice attorneys understand how to document a case that might warrant punitive damages.
Contact a New Mexico Medical Malpractice Attorney Today
The experienced medical malpractice attorneys of Poulos & Coates, LLP., help New Mexico medical malpractice victims get the justice they deserve.
With our 70+ years of experience and highly personalized level of service, we help ensure the best possible outcome for you. We are experienced litigators. We do everything we can to negotiate a settlement on your behalf. However, we never hesitate to take your case to court, if necessary.
We offer a free consultation and case analysis. This helps you explore your options and provides the information you need to get your claim started. More importantly, you never owe us anything until and unless we win your case.
Contact us online or call 575-523-4444 (toll-free: 1-888-478-5424) to schedule your consultation or to speak with a New Mexico medical malpractice lawyer regarding compensatory damages.
Greig Coates, M.D., J.D.
Over the last thirty years, Dr. Coates has successfully represented plaintiffs in every conceivable type of medical malpractice lawsuit–from single-physician cases to complex litigation involving over a dozen doctors and several hospitals. Dr. Coates has taken several thousand physician depositions in his career involving every known physician specialty and sub-specialty, and almost as many depositions involving hospital personnel such as nurses, techs, and administrators. He has tried several dozen cases to successful verdicts.