top of page
  • Writer's pictureRobert Schuerger

What Are Punitive Damages in Personal Injury Cases?

Personal injury lawsuits are typically the result of some kind of accident. Perhaps it was a car crash or a slip-and-fall incident. In any case, someone was negligent and it caused another party to suffer some kind of harm, which may have been so severe, that the victim now has a severely diminished quality of life.


Negligence is seen this way up to a point. Perhaps someone didn't fix the ground on their private property because they had not yet realized it was cracked and it caused someone to fall.


However, there is another category entirely when the damage done was intended or gross negligence was displayed. This is the principle of exemplary damages, which are also known as punitive damages. Schuerger Shunnarah Trial Attorneys can also answer questions like What are special damages in personal injury?


Compensatory Damages Are the Standard Type

Compensatory Damages Are the Standard Type


The actual damages awarded to a victim may be a combination of compensatory and punitive damages. Under tort law, compensatory damages are the type that most people think of when they consider personal injury cases. Contact Schuerger Shunnarah Trial Attorneys for answers to questions like What are compensatory damages?


First, there are special damages, which are easier to calculate since they have a monetary value that can be attributed to them, thanks to documentation such as receipts. Examples of these kinds of damages include lost wages, medical expenses, loss of earning capacity, and property damage.


There are also general damages under the compensatory umbrella, which are a little harder to put a dollar value to since they are very subjective and a little more difficult to prove. This will be the series of effects that the accident has had on the victim's quality of life. Examples include pain and suffering, loss of enjoyment, emotional distress, disfigurement, and loss of consortium.


Upon retaining an attorney for a personal injury case, they will assist in ensuring that the required pieces of documentation are gathered to be able to fight for the compensation that the victim deserves. That being said, there's another potentially large piece of the puzzle in the punitive damages awarded that will be discussed below.


What About Punitive Damage Awards?


Punitive damages are intended as a form of punishment to the defendant for a substantial amount of negligence being shown in the causing of the accident. While there are exceptions to this, the typical defendant that will be required to pay punitive damages will be a corporation or some other entity that is legally recognized as a large one.


Product liability or medical malpractice cases are great examples. Under normal circumstances, a company will put out products that may or may not be defective. If a product is discovered to be defective after it has been put out, then the expectation is that a recall will be done of what has already been sent out and improvements will be made before another sale.


Batch numbers are intended to assist in ensuring that the recall is an effective one. The point here is that the company would not have known that there was any kind of defect before the sales were made.


However, there are cases in which a company may realize that there is a defect but they still choose to put out the product anyway so that a profit can be made. If it is possible to prove that this is the case, then there may be a situation where punitive damages are awarded to the affected party or parties.


Individuals who are ordered to pay punitive damages are those who are grossly negligent or who intend to cause harm with their actions. Drunk driving is one example if it results in the plaintiff's injury. Adults are well aware (at least, they are expected to be) that being drunk prevents a severe level of impairment, which makes it next to impossible to reliably operate a vehicle.


Therefore, drunk driving is seen as comprehending this concept and deliberately choosing to do something that puts others in danger. This is why DUI offenses are treated as such serious matters in the state of Texas. When there is someone who is injured in the process, then punitive damages may be on the table.


Based on the description of these damages provided, it's clear that the intent here is not to provide compensation to the plaintiff. Even so, the victim will be awarded the amount of money that is designated.


The Reasons for Awarding Punitive Damages


General Deterrence

While personal injury cases tend to have unique variables, many incidents will bear similarities. For example, many car accidents will happen because someone chooses to run a red light. The deterrence element of punitive damages aims to prevent other individuals or entities from engaging in similar wrongful behavior to the defendant's actions.


Specific or Individual Deterrence

Punishment is one part of the equation. Apart from deterring others from engaging in gross negligence or intentionally harmful conduct, there is also the desire to deter the defendant from repeating the same harmful course of action.


Punishment

In criminal cases, defendants are looking at a potential prison sentence, which acts as a form of punishment meant to fit the crime that was committed. In civil cases, this kind of punishment will not apply, which means that punitive damages can be used to act as that punishment.


Are Exemplary Damages Often Awarded?


It's surprising the extent to which cases that include punitive damage potential may be featured in the news. However, based on what the US Department of Justice has to say, plaintiffs don't often actually pursue them.


When the plaintiffs do decide to pursue them, they have only been awarded in about 30% of the cases where the defendant lost the matter.


Like other damages that can form a part of a personal injury matter, getting punitive damages as a part of a settlement requires proof that the defendant's actions were characterized by an undoubtable amount of reprehensibility.


Examples of Cases Where Victims May Pursue Punitive Damages


Many different kinds of situations may result in punitive damages being awarded or at the very least, considered. Some of the more easily understood examples of same are:


  1. Lawsuits that include a serious level of injury being inflicted on the plaintiff

  2. Cases where there are evil intentions at play in which unacceptable social behavior was engaged in by the defendants

  3. Situations in which the at-fault party intentionally attempted to harm the victim

  4. Severe injury or death that may have been the result of medical malpractice

  5. Class action lawsuits that include a series of people getting hurt.


Punitive Damages in Tort and Contract Law


Most states, including Texas, will allow the plaintiff to seek punitive damages in tort cases. Personal injury cases are a good example of this. The requirements that may exist for this attempt will differ by state, but the elements of gross negligence or an intent to cause harm still need to be proven.


In breach of contract cases, there will usually be no punitive damage awards. Be that as it may, there are incidents in which the specific circumstances that apply to the breach are capable of being enough to constitute a punitive damage award.


An example includes an insurance company using bad faith tactics that see a breach of the contract that has been established with the owner of the insurance policy. in this case, liability may be present for breaching the fair dealing and good faith covenant, which means that punitive damages could be imposed.


Are There Limits to Punitive Damages Awards?


Caps on exemplary damages are set by state laws, which means that reference will need to be made to what obtains for a particular state. In Texas, there are two potential caps. The first is $200,000 and the second is the amount of non-economic damages up to $750,000 plus two times the amount of economic damages. The greater of the two is applied.


For example, if economic damages awarded total $5,000,000 and non-economic damages total $3,000,000, two times the economic damages would equal $10,000,000. This would be added to $750,000, which is the maximum of non-economic damages.


Therefore, the total would be $10,750,000 for the punitive damage award.


How Do Punitive and Compensatory Damages Fit into How Much the Case Is Worth?


This question will only be answered when the award is made, but punitive damages could mean a much larger settlement than would've been achieved with the considerations for the compensatory damages awarded only.


It could mean an additional $200,000 or even millions. The best personal injury lawyers in Houston will do everything possible to fight for the greatest possible amount.


Are There Taxation Concerns When Victims Claim Punitive Damages?

Are There Taxation Concerns When Victims Claim Punitive Damages?


Unlike compensatory damages, which are not taxable, punitive damages must be reported as "other income" on Form 1040 8z, schedule 1. Note, however, that if the punitive damages are for wrongful death, the amount is not taxable.


Schedule a Free Consultation with a Trusted Houston Personal Injury Attorney Today!


No one should be allowed to intentionally harm another party and get away scott-free. If you have been a victim of negligent behavior or intentional harm, you may be entitled to compensation including punitive damages!


Schedule a free consultation today with Schuerger Shunnarah Trial Attorneys in Houston!

Comments


bottom of page