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What Are Exemplary Damages?

Exemplary damages might come in addition to compensatory damages, an example of which would be paying someone for the damage done in a car accident.
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  • Written By: Mary McMahon
  • Edited By: O. Wallace
  • Last Modified Date: 14 October 2014
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Exemplary damages are damages awarded in a court case which go beyond compensation to the victim. These damages are also known as punitive damages in some legal systems. Not all nations allow courts to award exemplary damages and nations which do not generally will not uphold rulings of this nature. They are explicitly intended as punishment to penalize the individual found in the wrong, not to compensate the victim for any injuries which might have been experienced.

In order for exemplary damages to be awarded, a case generally needs to meet a specific standard. Nations which allow courts to award damages of this type generally require that the case demonstrate that the person paying the damages committed the wrongful act willfully, maliciously, or recklessly. Thus, activities like fraud and malicious defamation would be eligible for exemplary damages, while simple negligence would not.

Civil cases allow people to recover compensation which they experience injuries as a result of the actions of others. The court does, however, distinguish between different types of actions. There is a distinct difference, for example, between negligent driving which leads to a crash and an intentional decision to run into someone. In the first case, the victim of the crash could receive compensatory damages to pay for medical expenses and repair to the car, but not exemplary damages. In the second case, exemplary damages could be awarded because the driver acted with malice.

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These damages are awarded in excess of compensatory damages, so the person awarded the damages essentially gets two separate payouts. The idea behind awarding damages as punishment is that they serve as a deterrent so that people will be less likely to commit similar crimes in the future, and they also provide a public object lesson. Members of the public reading about large payouts and noting that a portion of the payout was punitive in nature will take note, and may think twice before engaging in similar activities.

There is some debate about when damages of a punitive nature are appropriate and how large they can be. Generally courts will not award exemplary damages greater than four times the compensatory damages. Extremely large awards do happen in very unique cases, but they may be challenged under the argument that they are unfair. Likewise, courts may debate about whether or not a case is one which merits awarding exemplary damages. Different countries have different standards, which can complicate matters further.

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Misscoco
Post 4

@PinkLady4 - I agree. In the case of intentional physical injury cases where the victim is awarded compensatory damages, it might be a better idea to award punitive damages in another form than money paid to the victim. It could be probation or volunteer work.

It's a thorny problem, though, when you are dealing with crimes such as defamation of character. It's kind of hard to put a value on damages to someone's reputation, way of life, a job or whatever. I don't know how the awards for compensatory and exemplary damages work in these kind of cases. Anyone know?

PinkLady4
Post 3

I'm kind of on the fence when it comes to awarding exemplary damages to victims of injury crimes when the act was intentional.

On the one hand, in the case of bodily injury where the victim is awarded compensatory damages for medical and other related costs, the exemplary damages might fulfill two purposes.

One would be to call attention to the crime and hopefully be a deterrent to repeating the crime. Another could be to provide the victim with some extra money - for pain and suffering, perhaps.

Then again, instead of paying money damages, the criminal could do jail time or volunteer work for punitive damages.

Azuza
Post 2

@KaBoom - I think exemplary damages definitely do have a place in our legal system. Some plaintiffs should definitely get more money than just enough to bring them back to "normal."

I also think exemplary damages might be enough to persuade other people not to be negligent, or breach their contract or whatever. If they know they might have to pay a lot of money to someone if they mess up, maybe they'll think twice!

KaBoom
Post 1

I actually don't agree with exemplary damages. They are specifically meant to punish the defendant, and I don't think that should be a civil courts job! That should be for the criminal courts to do.

I think civil courts should just be used indemnify the plaintiff. You know, bring them back to their original condition and pay for all the damages they suffered. Or to settle a dispute. Not to punish people by making them pay a lot of money.

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