Between that and the numerous state and federal statutes governing damages, it can be difficult to understand when and why punitive damages apply in the real world. Punitive Damages ExamplesĮven though it may seem like punitive damage awards happen in every lawsuit that makes headlines, courts only assess punitive damages in about 5% of verdicts. For example, Connecticut state law says that punitive damages awards are limited to the actual cost of litigation, including attorney's fees, while other states have placed no formal limitations on them. Some states allow an unlimited amount of punitive damages, while others have strict limitations on both the size of the award and the burden of persuasion necessary to merit such an award. State Limits on Punitive DamagesĪs with many things, each state addresses punitive damages in their own way. In the case of exceptional recklessness, or very modest compensatory awards, most courts will mandate a maximum punitive award of nine times the amount of compensatory damages, but there have been some exceptions to that rule. will satisfy due process.' Therefore, most courts will assess a maximum punitive award of four times the compensatory damages, unless the defendant's behavior was exceptionally reckless. According to the court, 'Few awards exceeding a single-digit ratio between punitive and compensatory damages. Was the harm caused by intentional ill will, trickery, or deceit, or was it just an accident?īased upon this analysis, the Supreme Court overturned the punitive damages award in State Farm and established general limits on punitive damages awards.Is the behavior part of a pattern or just an isolated incident?.Was the plaintiff financially vulnerable?.Did the behavior indicate indifference or reckless disregard for the health or safety of others?.The court also used five factors to evaluate the egregiousness of the defendant's behavior.Ĭriteria used to determine if a defendant's behavior is reprehensible enough to justify punitive damages: The difference between the punitive damages and applicable civil penalties applied in similar cases.The difference between the actual or potential harm suffered by the plaintiff and the punitive damages award.The egregiousness of the defendant's conduct.The Supreme Court analyzed the punitive damages on three criteria: Supreme Court ruled that disproportionately large punitive damage awards violate the due process clause of the United States Constitution. In State Farm Mutual Automobile Insurance Company v. Constitutional Limits on Punitive Damages Every lawsuit has its own set of nuanced special circumstances, especially those involving personal injury, making it difficult for anyone but an experienced lawyer to determine which limits apply to any single case.

Punitive damages do not usually apply in breach of contract cases, and they are limited by state laws and federal judicial precedents. Learn More About Damages > Punitive Damages Limits Punitive damages are awarded at the discretion of the court, though they are limited by some laws and judicial precedents. Sometimes punitive damages are also awarded when compensatory damages seem insufficient to make up for the defendant's behavior. If the harm inflicted by the defendant is difficult to estimate financially, or the defendant's actions were particularly reckless, the court can also award punitive damages as a way to punish the defendant and discourage similar behavior. In most cases this compensation comes from actual damages, also called compensatory damages, encountered by the plaintiff, like damaged property, medical bills, and lost wages. When a plaintiff wins a civil lawsuit, the court essentially says they have been wronged by the defendant and are entitled to financial compensation for that wrong. They are the legal system's method of discouraging future bad behavior by making it financially harmful to the defendant. Punitive damages, or exemplary damages, are awarded to a plaintiff in addition to compensatory damages as a way to punish the defendant for a purposeful or especially negligent action. Boarding & Prep School Sexual Abuse LawsuitĪuthored by: Katy Moncivais, Ph.D., Medical Editor.

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