Damages refer to the monetary compensation granted to an injured party in a tort case. A tort case is one in which one party sues another for wrongdoing, alleging that the party’s wrongful act resulted in injury or some other form of harm. If the party who files the suit (the plaintiff) wins the case, he or she receives damages from the other party (the defendant). These damages compensate the injured party for the losses suffered. Sometimes additional damages are awarded to the plaintiff to punish the other party.

Types of Damages

Plaintiffs can obtain several forms of damages depending on the details of the case and the losses they suffered. Here are the most common ones:

Compensatory Damages

Compensatory damages refer to money awarded to compensate injured parties for their losses. These losses can be economic or non-economic in nature. Economic losses are those that can be quantified in dollar terms. Non-economic losses are more subjective.

Examples of economic losses include the following:

  • Medical bills
  • Lost wages
  • Reduced earning capacity
  • Prescription drug costs
  • Home modifications
  • Emergency transportation costs

And here are some common non-economic losses:

  • Pain and suffering
  • Emotional anguish
  • Loss of enjoyment of life
  • Loss of consortium
  • Scarring and disfigurement

Because defining dollar amounts for non-economic losses is not easy, states have different ways of assigning values to them. One way is the multiplier method, which involves multiplying the injured party’s economic losses by a specific factor, such as 2. Another way is the per diem method, which assigns a specific dollar amount, such as $50, to each day the party suffered from their injuries.

Punitive Damages

Punitive damages are awarded in addition to actual damages when the defendant acted with recklessness, malice, or deceit. They are intended to punish the wrongdoer and deter similar behavior by the defendant or others in the future. The right to collect punitive damages, and the types of cases in which they are allowed, varies state-to-state.

Liquidated Damages and Nominal Damages

Two less common forms of damages are: liquidated damages and nominal damages.

Liquidated damages refer to those established by a contract that one party subsequently breached. If a contract obligates Party A to pay Party B a sum of money and Party A fails to do so, Party B can sue for this amount. If awarded to Party B, the sum constitutes liquidated damages.

Nominal damages refer to monetary awards that are very small in amount, such as $1. Courts sometimes award them as a symbolic measure when they want to acknowledge one party’s wrongdoing but do not believe the other party is entitled to substantial compensation.

Limits and Restrictions on Damages

Many laws exist that limit the damages a plaintiff can collect. These laws differ from state to state and can also vary based on the type of lawsuit. Some states, for instance, have hard limits on non-economic damages.

Most states disallow punitive damages in lawsuits involving a breach of contract. The only exception is when the plaintiff can prove that the breach was willful and malicious. Many states impose punitive damages “caps,” or maximum amounts that may be awarded. Some states allow punitive damages only when the defendant acted with intent to harm while others allow them when the defendant acted egregiously, and a few states do not allow them at all.

Schedule a Free Attorney Consultation With Newsome Melton

The attorneys at Newsome Melton will fight for your rights if you were injured by another party’s wrongdoing. To schedule a free consultation to discuss damages related to product law with a member of our team, call us today at 888-221-5316.