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What’s the Difference Between Compensatory & Punitive Damages?

by The Cochran Firm Phildelphia   | January 23, 2025

What’s the difference between compensatory and punitive damages? If you’ve been injured, you probably don’t care too much; as long as you get the money you need, you may not be concerned about where it comes from.

However, if you want to maximize the value of your personal injury claim, it’s useful to understand the various potential sources of compensation. Punitive damages don’t apply in every case – where they are available, though, they can massively inflate claim values. 

If you’ve been hurt because of someone else’s negligence, you may as well try to get as much money as possible from them. Punitive damages can allow you to do just that. 

Compensatory Damages: Restoring What You Lost

Compensatory damages aim to make you whole again after you’ve had an accident. They’re divided into two categories: economic damages and noneconomic damages. 

Economic Damages

Economic damages cover your measurable, out-of-pocket expenses. These are losses with a clear price tag, such as:

  • Medical bills, including for any ongoing or future medical care you require
  • Lost wages, including lost future earning potential
  • Property damage, such as vehicular repair expenses after a car accident
  • Other expenses, such as home modifications to accommodate limited mobility. 

Noneconomic Damages

Noneconomic damages compensate for intangible losses that cannot be measured in direct financial terms. They include:

  • Pain and suffering: Compensation for the physical pain and discomfort caused by your injuries.
  • Emotional distress: Anxiety, depression, or PTSD stemming from your accident.
  • Loss of enjoyment of life: If your injuries prevent you from enjoying activities you once loved, you may be entitled to compensation for this.
  • Loss of consortium: This is compensation awarded to your partner for the loss of companionship and intimacy arising from your injuries. 

Punitive Damages: Punishment for Egregious Behavior

Punitive damages aren’t about making you whole—they’re about punishing the defendant in your case. In Pennsylvania, they’re reserved for cases involving intentional or extremely reckless conduct. Even this high bar is more liberal than that in some other states, where only deliberate, malicious conduct will suffice.  

Punitive damages are designed to deter the wrongdoer and others from repeating similar behavior.

The Legal Standard for Punitive Damages in Pennsylvania

To access punitive damages as a plaintiff, you must be able to show that the defendant’s conduct was willful, wanton, or malicious. Ordinary negligence isn’t enough.

The result of a negligent act isn’t relevant when it comes to the decision around whether to award punitive damages. The mindset of the defendant is all that matters. This means that an intentional act that causes only relatively minor damage could entitle you to punitive damages, while a merely negligent act causing much more serious harm might not qualify.

Punitive Damages in Different Case Types

Punitive damages can be significant when they are available. So, even though they’re relatively uncommon, it’s worth considering whether you might be entitled to them based on the facts of your case. 

Here, we’ve looked at examples of cases in which they might attach. 

Car Accidents

The majority of car and truck accidents give rise only to compensatory damages. Things like speeding, running red lights, and switching lanes without proper observation are negligent, but not to the extent required for punitive damages. Also, road accident cases involving intentional malice are quite rare.

However, there are exceptions, such as:

  • Drunk driving: This is the most common justification for punitive damages in road accident cases. Operating a vehicle under the influence demonstrates a blatant disregard for the safety of others; according to statistics from the National Highway Traffic Safety Administration (NHTSA), around 32% of fatal road accidents in the U.S. involve a drunk driver.
  • Street racing: High-speed racing on public roads puts lives at risk and so is often sufficiently reckless to see punitive damages awarded. 
  • Hit-and-run accidents: Leaving the scene of an accident shows a conscious disregard for the well-being of a crash victim. This is especially likely to result in punitive damages in cases where a victim has clearly suffered serious injuries, where there is nobody else around to help the individual, or where the fleeing driver makes no effort to contact emergency services at any point in order to help the injured person. 

Medical Malpractice

Punitive damages apply in medical negligence cases only when a healthcare provider’s actions are particularly egregious. Examples include:

  • Performing procedures while intoxicated: The degree of intoxication is relevant here; the more impaired a practitioner is, the more likely an award of punitive damages will be. 
  • Covering up errors: Falsifying records or lying about a mistake to avoid accountability can justify punitive damages.
  • Institutional negligence: If a healthcare facility (such as a hospital or nursing home) shows consistent disregard for patient welfare through its policies or accepted practices, it may face punitive damages. 

It’s worth noting that there is a cap on punitive damages in most medical malpractice cases, per state legislation. The provision also requires that 25% of any punitive damages in medical malpractice cases go to the Medical Care Availability and Reduction Error Fund. 

Product Liability 

Large-scale product liability cases often involve punitive damages. When a company knowingly puts dangerous products on the market and fails to provide adequate warnings about them, or deliberately misleads consumers about their risks, this can satisfy the standard required for punitive damages. 

Some of the biggest class action settlements in U.S. history have contained significant punitive damages.  In the 1990s, for example, a Miami court ordered five major tobacco companies to pay $145 billion in punitive damages in a class action suit filed on behalf of smokers in the state of Florida. 

Premises Liability

Premises liability cases, like slip-and-fall accidents, rarely involve punitive damages. However, they may apply when the property owner’s behavior is exceptionally reckless, such as if they deliberately ignore a hazard that has repeatedly caused safety issues. 

Assault and Other Intentional Torts

Unlike most of the other categories of tort we’ve discussed, punitive damages are relatively common when it comes to cases of this nature. 

It’s worth noting that, while intentional torts (such as assault, fraud, or sexual offenses) are typically criminal offenses as well, any lawsuit you file in relation to an act like this will unfold separately from any criminal case related to the same act. 

In fact, it’s not uncommon for a criminal case to end in acquittal and a civil lawsuit related to the same incident to result in liability and damages for the plaintiff. This is because of different standards of proof in each case. For a criminal conviction, a prosecutor must prove the defendant guilty beyond a reasonable doubt. In a personal injury lawsuit, you need to show only that the defendant is more likely than not to be responsible for the harm you suffered (this is called the “preponderance of the evidence” standard). 

The Difference Between Compensatory and Punitive Damages

If you’d like to learn more about your likely range of damages entitlements, contact the Cochran Firm in Philadelphia today to schedule a free initial consultation. You can reach us via our website or over the phone at 800-969-4400.

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