Punitive Damages: Definition and Meaning

If compensatory damages are regarded as an insufficient remedy, punitive damages are frequently granted. The court may impose them in order to protect plaintiffs from receiving insufficient compensation, to provide redress for hidden torts, and to reduce the burden on the criminal justice system. Punitive damages are crucial in cases of law violations that are difficult to find.

What is the Meaning of Punitive Damages?

Punitive damages, also known as "exemplary damages" or "exemplary punishment," are financial penalties imposed on the defendant for egregious behaviour and/or to reform or prevent the defendant and others from repeating the actions that gave rise to the litigation. Even though punitive damages are not meant to make up for lost wages for the plaintiff, they may be awarded to them in full or in part.

In addition to compensatory damages, a defendant who is found guilty of a crime or violation is also required to pay punitive damages. When compensatory damages, or the money paid to the injured party, are deemed to be insufficient, they are granted. Punitive damages go above and beyond reimbursing the wronged party. They are intended specifically to penalize defendants whose actions are deemed to be willful or extremely negligent. Since they are meant to serve as a warning to prevent repeat offences, punitive damages are also known as exemplary damages.

Illustration

The plaintiff orders a medication after hearing from a firm that it will aid in speedy weight loss and is made of natural materials. Yet, the plaintiff becomes very ill as a result of the tablets' specific components. In this case, the court has the option of awarding punitive damages to the plaintiff in addition to compensatory damages due to the company's fraudulent statements and to deter future misconduct.

Purpose of Punitive Damages

Punitive damages are always awarded in conjunction with other damages; they are never awarded separately. In essence, they provide a means of imposing further punishment on the criminal for their actions. Making the offender pay a sum that goes above compensatory damages is intended to prevent the defendant and other people from committing the same wrongdoing in the future. Punitive damages may be included in a personal injury claim's compensatory damages, which pay for the victim's medical bills, hospital bills, property damage, and other costs.

Punitive Damages in Tort Law

In tort lawsuits involving personal harm or medical negligence, plaintiffs may ask for punitive damages in the majority of states. While state laws vary in the specific criteria for punitive damages, plaintiffs normally must demonstrate that the defendant did one of the following −

• With malice aforethought or

• In a flagrantly careless or reckless manner.

Consider the scenario when research and development testing reveals a product isn't suitable for usage or consumption by the general public. The maker of the goods, however, unintentionally misreads these data and releases the product for sale under the false assumption that it is secure. Even though there was no carelessness or malicious intent, the maker could still be held at fault if someone was hurt by the product and filed a lawsuit.

Compare this to a scenario where a manufacturer decides to distribute a product even if test findings indicate it may not be safe for use or consumption by the general public. In such a situation, the plaintiff can use the manufacturer's knowledge as evidence of extreme carelessness or negligence to support a claim for punitive damages.

What Factors Influence Punitive Damages

As previously stated, a defendant should only be given punitive damages for particularly heinous behaviour. Some of the elements that may affect whether or not punitive damages are awarded include the following −

Intent to Harm

An intentional tort is one that is done with the intent to cause harm. For instance, you may bring a claim for intentional assault: In an assault, the perpetrator is acting with the goal of causing injury.

Gross Negligence and Recklessness

Punitive damages may be awarded to a defendant who engages in conduct that is "wanton and wilful wrongdoing," which is defined as gross negligence or recklessness. This kind of gross negligence or recklessness is exemplified by the driver who was driving through the school zone above.

Bhim Singh V. State of J.&K

Exceptional damages were awarded by the Supreme Court in cases of unlawful detention. Bhim Singh, a member of the Legislative Assembly, was in this case held and arrested in order to keep him away from attending the Assembly meeting. Bhim Singh had already been released when the Supreme Court's judgement on the writ suit to challenge the imprisonment was made. Although the Supreme Court decided it was an appropriate case to impose exemplary damages in the amount of Rs. 50,000 within two months, it was no longer necessary to order that he be released.

How Often Are Punitive Damages Given

According to the most recent report issued by the US Department of Justice, although court cases involving significant punitive penalties appear to make the headlines frequently, plaintiffs don't pursue punitive damages that frequently. Punitive damages were only granted in 30% of the situations where the plaintiffs won against the offender when they were pursued. Because plaintiffs often need to demonstrate that the defendant acted in a particularly abhorrent manner, punitive damages can be challenging to obtain.

Conclusion

In the coming decade, there will be close attention paid to the issue of how punitive penalties should be. Legislative bodies are flooded with lobbyists hawking legislation to curtail or abolish punitive damages as a result of the uproar over their revision. As a result of numerous provisions of the federal and state constitutions, courts are also being dragged down by claims of due process, illegal takings, and disproportionate fines.

Limits may eventually serve only to undermine public confidence in our legal system by eliminating the only remaining civil process that punishes a party for acting with fraud, oppression, or malice against another. While the fate of such damages will be decided by the legislature or the courts, at some point, setting limits may not serve any useful purpose.

FAQs

Q1. Is punitive damages a penalty?

Ans. Punitive damages are often defined as losses that exceed what is required to fully compensate the plaintiff. Punitive damages, in accordance with the majority of courts, are assessed to hold the defendant accountable for its violation and to dissuade the offender and others from repeating the same behaviour.

Q2. What is the test for punitive damages?

Ans. In order to establish a case for punitive damages, the plaintiff must demonstrate that the defendant's actions were harsh, vengeful, repugnant, or malevolent, according to the terms used by McIntyre J. in writing for the majority in Vorvis v.

Q3. Are moral damages punitive damages?

Ans. Punitive damages are not compensatory, in contrast to moral damages. They are intended to punish the defendant for acting in a way that clearly deviates from accepted norms of decency by being spiteful, repressive, and haughty.

Q4. Are punitive damages available in arbitration?

Ans. Nonetheless, unless the parties expressly exclude such a remedy in the governing arbitration clause, punitive damages may be granted in arbitrations under the Federal Arbitration Act ("FAA"), according to the United States Supreme Court and a New York intermediate appellate court.

Q5. What are punitive damages under Consumer Protection Act?

Ans. A claim or award of relief cannot be made or granted based solely on evidence of "unfair trade practises"; loss must also be proven to have occurred. Punitive damages are given in response to willful misconduct unrelated to the actual loss incurred. A claim of this nature must be especially argued.