Learn how compensatory, economic, non-economic and punitive damages are defined, calculated and awarded in civil lawsuits across different jurisdictions.

Topic overview

Damages in a lawsuit are often monetary compensation awarded to a person harmed by another party’s negligence, recklessness or legal wrongdoing. The categories or types of damages that may be awarded include compensatory (covering both economic and non-economic losses) and punitive damages, which are meant to punish misconduct and deter others from similar actions. Amounts and availability vary by case and jurisdiction.

Key takeaways about types of damages in a lawsuit

  • Compensatory damages reimburse plaintiffs for actual losses. These include both economic and non-economic damages.
  • Punitive damages may be awarded in cases involving especially harmful conduct. They are intended to punish the defendant and deter others from similar actions.
  • State and federal laws can affect how damages are awarded and whether they are limited or taxed.

What are the types of damages in a lawsuit?

In civil litigation, courts award damages to compensate individuals for harm caused by another party’s actions. The primary types of damages in a lawsuit are compensatory damages and punitive damages. Compensatory damages seek to restore the plaintiff to their condition before the injury. Punitive damages penalize defendants for especially harmful conduct and deter others from similar actions.

Type of Damages

Purpose

Common Examples

State-Specific Limits?

Compensatory

To make the plaintiff “whole”

Medical bills, lost wages, emotional distress

Some states cap non-economic damages

Economic (Compensatory)

Reimbursement for tangible losses

Treatment costs, property damage, lost income

Rarely capped but must be proven

Non-economic (Compensatory)

Compensation for subjective harm

Pain and suffering, emotional distress

Often capped in medical malpractice cases

Punitive

To punish and deter wrongful conduct

Drunk driving, fraud, product liability

Capped or restricted in many jurisdictions

Compensatory damages fall into two categories:

  • Economic damages, which cover tangible losses like medical bills and lost income
  • Non-economic damages, which account for subjective harms such as pain and suffering or emotional distress

The types of damages that may be awarded depend on whether state or federal law applies in a case. Most civil lawsuits are governed by state law, which can vary significantly based on what damages that state allows. For instance, some states place a cap on the amount for non-economic or punitive damages, while others do not. When a lawsuit is filed under a federal statute, such as the False Claims Act or Title VII, separate rules may limit or enhance the amount of damages awarded.

In multidistrict litigation (MDLs), courts typically apply the state law relevant to each plaintiff’s claim. This means damage awards can vary widely within the same proceeding, depending on what laws apply for each plaintiff.

What are compensatory damages?

Compensatory damages are the most common form of damages awarded in civil cases. They are awarded to cover the losses the injured party suffered due to the defendant’s actions, essentially making the injured party “whole” again. These damages can be economic or non-economic.

State law determines how compensatory damages are defined and calculated, but not all states treat them the same. Some states cap non-economic damages in medical malpractice or personal injury lawsuits, while others do not. At the federal level, certain statutes (such as the Civil Rights Act and Title VII) permit compensatory damages under specific conditions.

Economic damages

Economic damages refer to the measurable financial losses caused by the injury or harm. This often includes medical expenses, lost income, property damage, and other out-of-pocket costs.

For example, a person injured in a car accident may recover the cost of hospital bills or follow-up care. Someone diagnosed with cancer after exposure to hazardous products like glyphosate-based herbicides may have related medical expenses.  Economic damages may account for diminished earning capacity or long-term care costs resulting from the harm or injury that they suffered.

Non-economic damages

Non-economic damages compensate for losses that do not have a clear dollar value that can be calculated/measured, such as the following:

  • Emotional distress
  • Loss of enjoyment of life
  • Pain and suffering
  • Harm to personal relationships

Unlike economic damages, non-economic damages can be difficult to quantify. Courts may rely on expert testimony, witness statements and comparable cases to determine the appropriate compensation for that particular case.

When are compensatory damages awarded?

Compensatory damages are awarded when a plaintiff proves they suffered harm as a result of another party’s negligent, reckless or wrongful actions. These damages are common in personal injury, product liability and mass tort cases.

Motley Rice has pursued compensatory damages for clients in a wide range of high-impact litigation, including:

  • Representing 9/11 victims and families under the Justice Against Sponsors of Terrorism Act, where courts have allowed plaintiffs to seek compensatory damages against foreign governments and alleged co-conspirators
  • Helping injured workers and their families pursue damages for asbestos exposure through multidistrict litigation (MDL)
  • Securing settlements for Gulf Coast businesses and residents harmed by the BP Deepwater Horizon oil spill, including awards for lost income and property damage
  • Representing individuals and families in wrongful death lawsuits involving fatal injuries, toxic exposures and catastrophic harm

Calculating compensatory damages

Calculating compensatory damages is case-specific and requires documentation, testimony and sometimes expert analysis.

  • Medical expenses: Damages may account for costs associated with both past treatment and projected future care needs.
  • Lost wages: Damages may cover time missed from work and reductions in long-term earning ability.
  • Reduced quality of life: Courts may use multipliers based on the severity of the injury and the level of disruption to the plaintiff’s daily life.

Contact a personal injury attorney today

If you suffered harm due to someone else’s negligence or suffered another personal injury, a knowledgeable attorney can help you pursue compensation.

For more information, contact our team by filling out our online form or call 1.800.768.4026.

What are punitive damages?

In civil cases, punitive damages punish the defendant and discourage future misconduct. They are typically reserved for cases in which the defendant acted with malice, fraud or extreme recklessness. Examples include drunk driving accidents where the driver had a high blood alcohol level or was a repeat offender.

Because these damages are added to compensatory damages, many states limit (cap) how and when they can be awarded. Some states cap punitive damages at a multiple of the compensatory damages, while others require clear and convincing evidence of misconduct. Courts also consider the proportionality of punitive awards to the actual harm suffered.

When are punitive damages awarded?

Punitive damages are typically awarded in cases involving:

  • Intentional misconduct such as fraud, deception or assault
  • Gross negligence or reckless disregard for the safety of others, such as drunk driving or corporate misconduct
  • Defective or dangerous products that a manufacturer knew posed serious risks to consumers

Motley Rice has experience pursuing punitive damages in cases involving corporate misconduct, environmental disasters and product liability.

How are punitive damages calculated?

There often is no fixed formula, but courts often consider:

  • The ratio of punitive to compensatory damages
  • The severity of the defendant’s misconduct
  • Whether the award is consistent with due process

Federal statutes such as the False Claims Act and the Civil Rights Act include their own punitive damages provisions. For most personal injury cases, state law applies unless the case is preempted by federal law.

Who receives punitive damages?

Punitive damages are generally awarded to the plaintiff directly. In class actions or MDLs, the court may determine a distribution formula. The availability of punitive damages may also depend on the type of claim and where it is filed.

Frequently asked questions about damages

What are the differences between compensatory and punitive damages?

Compensatory damages are intended to repay the plaintiff for their actual losses (both financial and emotional). Punitive damages punish the defendant for particularly harmful behavior and deter others from similar actions. Only compensatory damages are meant to restore the injured party.

Our litigation experience

Motley Rice has decades of experience recovering damages for clients in some of the most complex and consequential cases in U.S. history. Our attorneys have represented thousands of individuals and families in litigation involving toxic exposures, dangerous products, corporate negligence, mass disasters, and more.

We have litigated against major corporations to achieve compensation for our clients, including regarding the BP Deepwater Horizon oil spill, asbestos-related cancer cases, defective medical device and medication claims.

Whether the goal is to cover the costs of overwhelming medical bills or to pursue punitive damages that send a message to the industry, we build strong cases in both state and federal courts. Our attorneys know how to navigate the legal nuances that can impact damage awards based on jurisdiction.

Read more about our litigation experience.

Sources
  1. The People’s Law Library of Maryland. Proving Damages.