Punitive damages are a form of non-compensatory damages in a personal injury case. The purpose of punitive damages is to “punish” defendants for their conduct. Even though this is the purpose, the injured victim still receives compensation from punitive damages.
Not many personal injury cases justify an award of punitive damages. However, when punitive damages are awarded, they can substantially increase the amount of damages the injured party receives for their losses and injuries.
A personal injury or accident can result in significant financial losses and other damages. Even though the legal system cannot undo the damage, the law provides a legal process for obtaining compensation for damages.
What Is the Difference Between Compensatory Damages and Non-Compensatory Damages?
Compensatory damages reimburse or compensate the injured party for damages and losses. Texas divides compensatory damages into two categories:
Economic damages reimburse you for financial losses you incur because of a personal injury. Examples of economic damages include:
- Medical bills
- Nursing care
- Household services
- Out-of-pocket expenses
- Loss of income and benefits
- Diminished earning capacity and future lost wages
The second category of compensatory damages is non-economic damages. These damages compensate the injured party for the pain and suffering they experience because of the personal injury. Examples of non-economic damages include:
- Physical discomfort and pain
- Loss of enjoyment of life
- Permanent impairment and disability
- Mental anguish
- Diminished quality of life
- Scarring and disfigurement
- Emotional distress
Non-compensatory damages are not intended to compensate the injured party for their damages or losses. Instead, these damages are directed at the party who caused the injury. Punitive damages are a form of non-compensatory damages.
Why Are Punitive Damages Awarded in Texas Personal Injury Cases?
Another term for punitive damages is exemplary damages. They are awarded to deter the defendant from repeating the same conduct that resulted in the plaintiff’s injuries. Punitive damages also serve to deter others from engaging in similar conduct.
When Does the Court Award Punitive Damages?
Texas law explains when punitive damages may be awarded. The statute directs that punitive damages may be awarded as a “penalty” or “punishment” for the defendant’s conduct.
However, before punitive damages can be awarded, the plaintiff must prove that the defendant acted with “fraud, malice, or gross negligence.”
The law defines fraud as any fraud other than constructive fraud. Malice means the defendant acted intending to cause substantial harm or injury to the victim.
Gross negligence is conduct that involves:
- An extreme degree of risk of harm to others; or,
- Conduct the defendant had actual or subjective awareness could cause harm to others.
The burden of proof is higher for punitive damages than compensatory damages. Plaintiffs must prove their claim for compensatory damages by a preponderance of the evidence. That means it is more likely than not that the defendant is guilty of the allegations.
However, punitive damages require clear and convincing evidence. This level of proof means the evidence supports the finding that the allegations are substantially and highly likely to be true than untrue.
Does Texas Have Limits or Caps on Punitive Damages?
Texas places caps on the amount of punitive damages that can be awarded to punish the defendant. The amounts awarded for punitive damages cannot exceed the greater of:
- Double the amount of economic damages awarded in the case, plus an amount equal to the award for non-economic damages, not to exceed $750,000; OR,
- $200,000.
However, there are exceptions to the caps for punitive damages. Generally, when the defendant’s conduct constitutes a felony, caps do not apply. Examples include:
- Sexual assault
- Aggravated kidnapping
- Murder
- Trafficking of people
- Aggravated assault
Because the amount of punitive damages could be based on compensatory damages, maximizing the value of economic and non-economic damages is crucial. Therefore, our legal team works with you to document all damages to value your claim correctly.
Are Punitive Damages Fair To the Defendant?
The United States Supreme Court has addressed the constitutionality of punitive damages. The Supreme Court found that a defendant must be afforded due process when awarding punitive damages. It found that a ratio of nine to one was appropriate in all cases except the most egregious cases.
Texas courts consider three factors when determining the constitutionality of punitive damages:
- How reprehensible was the defendant’s conduct;
- The difference between the actual harm or potential harm sustained by the plaintiff and the amount of the award; and,
- The difference between the award of punitive damages and the civil penalties imposed in comparable cases.
A defendant can appeal the decision to award punitive damages. On appeal, the court uses the above factors to determine if the punitive damage award was constitutional.
Schedule a Free Consultation With Our Personal Injury Lawyers
Our personal injury attorneys from FVF Law review each case to determine if punitive damages are justified. It is a step we take to assess the value of your injury claim. Contact our law firm to schedule your free consultation with one of our experienced injury lawyers at (512) 982-9328.