An Introduction to Punitive Damages in Personal Injury Cases

If there’s cause for punitive damages in a personal injury lawsuit, you may be entitled to more money. Learn how it can affect your case.

The American system of civil personal injury lawsuits was designed to make the victims of wrongful conduct whole again. It does this by awarding compensatory damages.

In other words, a successful lawsuit gets you money that compensates you for your injury. It also pays for medical treatment so your injury has less impact on your life.

As anybody familiar with personal injury knows, however, that is not the end of it.

Sometimes, the person or business that hurt you (the defendant in a lawsuit) did so in a way that was truly reprehensible. Maybe they intended to hurt you. Maybe they knew that their conduct would hurt you, but didn’t care if it did. Or maybe they defrauded you or stole from you when you trusted them not to.

This level of misconduct goes beyond simple negligence to something greater. When a defendant does something horrible, the legal system steps in to punish the defendant’s conduct. The result is punitive damages, also known as exemplary damages. The aim of such damages is to make the defendant pay for their bad behavior so they won’t do it again.

Even though the aim of punitive damages is to punish the defendant, you as the plaintiff reap the benefit. Punitive damages are paid to the plaintiff as part of a judgment. Punitive damage awards are often what can make personal injury judgments cost millions, or even hundreds of millions, of dollars.

When Can You Get Punitive Damages?

A female cancer patient is crying

Unlike other types of personal injury damages (also known as actual damages), punitive damages have little to do with your specific injury. Rather, they focus on the behavior of the defendant that caused or led to your injury.

When considering whether to award punitive damages, the trial court has to know whether the defendant acted intentionally or with recklessness.

Some states have sharpened this question to include whether the defendant acted with malice, oppression, or fraud in injuring you. Pattern jury instructions from California show how juries consider these facts.

1. Malice

Malice means that a defendant acted with intent to injure you, or knew that they might injure you with their conduct but didn’t care and went ahead anyway.

For example, if a pharmaceutical company sold a medication they knew had harmful ingredients, and failed to disclose the possible harm, they acted with malice.

Legally speaking, if the defendant committed an intentional tort against you, the jury is more likely to find malice.

2. Oppression

Oppression is more difficult to define. Nevada, for example, has stated that it means despicable conduct that disregards your rights and subjects you to “cruel and unjust hardship.” Generally speaking, when someone acts in bad faith, they may be considered “oppressive” from a legal standpoint.

In legal terms, a person is acting in bad faith when they are being dishonest or trying to deprive you of something to which you are entitled. Selective or biased enforcement of rules can also be bad faith.

For example, let’s say that you are taking a cooking class, and the instructor sees that you have left the gas on for your stove but chooses not to tell you in order to “teach you a lesson” about being careful. The gas then ignites and causes you several painful third-degree burns. The instructor has acted in an oppressive way. They willfully failed to protect your safety.

3. Fraud

Fraud is, for most people, the concept that is easiest to understand. Fraud means that the defendant either made a false statement or made the statement without regard for whether it was true.

Fraud can lead to an award of punitive damages where your injury was caused at least in part by fraudulent behavior on the part of the defendant.

For example, let’s say you were going rock climbing. The defendant sold you defective equipment while representing it as safe. They would of course be liable for your rock-climbing injury. Their fraudulent behavior could also justify a punitive damages award.

How Much Can You Get in Punitive Damages?

An anxious man with a pencil and calculator is looking at his billsOnce a jury or judge has determined that a defendant has acted with malice, oppression or fraud, they need to determine the proper amount for a punitive damages award.

In some cases, this is done as part of the personal injury trial. In other situations, the trial is bifurcated, meaning that the court holds a mini-trial about the amount of punitive damages.

Factors Affecting the Amount of Punitive Damages

Regardless of when the court considers the issue of punitive damages, they will be calculated in the same way. The U.S. Supreme Court’s decision in BMW of North America, Inc. v. Gore provides a clear look at the law of punitive damages and how to calculate them in any given case.

The first factor in determining how much the defendant should be punished is their reprehensibility of conduct. In other words, really bad behavior should be punished more.

In the BMW case, for example, a car company sold a repainted vehicle as new without disclosing that fact. Though deceptive, this behavior is not as bad as, for example, selling a drug that the defendant knows will cause cancer in the user.

The second critical factor in calculating punitive damages is their ratio to compensatory damages. In the BMW case, the purchaser of the car had $4,000 in actual damages connected with the purchase of his vehicle. The Alabama state courts, however, had approved a punitive damages award of $2 million, 500 times the amount of compensatory damages.

The Supreme Court also stated that a punitive damages award should take into account the legal penalties that are normally applied to similar conduct. In the case of BMW, state sanctions for unfair trade practices did not go beyond $10,000. A $2 million punitive damages award, then, was far beyond any other penalty imposed by law.

2. The Single-Digit Ratio Rule: Punitive Damages Are Affected by Compensatory Damages

The Supreme Court therefore reversed the excessive BMW award as violative of due process, though it did not set a clear standard for an acceptable ratio between compensatory and punitive damages. In its later decision in State Farm Mut. Automobile Ins. Co. v. Campbell, the Court suggested that “few [punitive damages] awards exceeding a single-digit ratio” would be acceptable.

As a general rule of thumb, then, punitive damages should not exceed nine times compensatory damages. Even that number should be considered the highest amount one could obtain in most cases.

To illustrate, let’s say you suffer severe chemical burns from the use of a machine the manufacturer knew was unsafe. If you have $100,000 in medical bills and other damages, the most punitive damages you could receive would probably be $900,000.

Also keep in mind that the numbers discussed here are for jury verdicts. The majority of civil cases in the United States settle. Because case settlements are necessarily lower than jury verdicts, most people receive far less than the numbers you read here. Also keep in mind that many cases settle on appeal, after a jury verdict, for less than the amount of the verdict.

Winning Punitive Damage Awards Take a Lot of Effort

A witness swearing on the bible at the court room

It is easy to look at cases like the McDonald’s hot coffee case, with its award of nearly $3 million, and extrapolate that result to your own cause of action.

This is especially true in difficult personal injury cases where you have a lot of medical expenses or you are facing a long future of treatment and rehabilitation.

It’s also understandable to want to punish a defendant’s behavior. You may want your claim to serve as deterrence from future bad faith conduct so that no one else has to suffer as you did. These are worthwhile goals.

You should balance these thoughts against what is reasonable. Also consider your own tolerance for the inconvenience of a protracted lawsuit. The reason so many cases settle is that the litigation process is unpleasant and often long.

You should discuss the facts of your injury and treatment with a qualified personal injury lawyer in your state. You can get a free consultation and case evaluation. Talk about whether punitive damages are appropriate in your case. If so, you can make the most informed decision possible about how to proceed.

Matthew Carter, Esq. has been a licensed attorney since 2004. He’s admitted to practice law in California and Nevada, where he was awarded the rating of AV – Preeminent. Matthew has successfully handled a variety of personal injury and wrongful death cases, as well as trials, appeals, and evidentiary hearings throughout state and federal... Read More >>