What Are Damages?

An Overview of Damages

Most of us have a general concept of “damages” as they relate to a lawsuit, but what does the term really mean?

Damages are the monetary remedy awarded by a court in a civil action to one party (a plaintiff) who has been injured by another party (a defendant) through wrongful conduct, a breach of duty, or a violation of a right. Damages attempt to measure the financial harm the defendant caused the plaintiff.  The purpose of damages is to restore the injured person to the position he/she was in before being harmed.

Damages are separate from costs, which are the expenses associated with the lawsuit. Damages are also different than the verdict, which is the final decision issued by a judge or jury.

Ordinarily, the law recognizes three types of damages: compensatory, nominal, and punitive. Compensatory damages are awarded to restore what a plaintiff has lost due to the wrongdoing of a defendant. Nominal damages are awarded when a plaintiff has suffered no significant loss or injury, but has endured an invasion of rights. Punitive damages are awarded to penalize a defendant for particularly malicious acts or conduct. General rules determine what types of damages can be awarded in each situation.

Compensatory Damages

Compensatory damages, as the name suggests, compensate the plaintiff for loss and injury. These damages must be measured as real and tangible, although this can be difficult with cases claiming emotional distress, pain, and/or suffering.

A plaintiff can recover damages for a variety of reasons:

  • physical impairment, including long-term effects
  • mental impairment, such as memory loss or reduced intellectual capacity
  • physical pain and suffering, including present and future
  • mental pain and suffering, including trauma, grief, anxiety, and humiliation
  • loss of earnings, including present and future
  • reasonable and necessary expenses, such as medical costs

Nominal Damages

Nominal damages are typically awarded when the harm is minimal, but an award is justified based on the circumstances. These awards are typically symbolic sums, such as one dollar or the court costs.

A famous case of nominal damages was when Winston Churchill sued author Louis Adamic. Adamic had falsely written that Churchill was intoxicated at a White House dinner. Churchill was awarded one schilling, or approximately 25 cents. 

Punitive Damages

Punitive, or exemplary, damages can be awarded to a plaintiff in addition to compensatory damages in cases where a defendant has acted in an explicitly vindictive or malicious manner. Punitive damages do not serve as reimbursement, but rather as a punishment for the defendant and a deterrent to those who might act in similar ways.

Punitive damages can be awarded based on:

  • the nature of the defendant’s behavior
  • the scope of the plaintiff’s injury or loss
  • how similar cases awarded punitive damages
  • the amount that would discourage the defendant based on the defendant’s assets

Punitive damages are awarded infrequently and have limitations. Most often, the defendant’s actions had to be willful, wanton, reckless, malicious, oppressive, or fraudulent. Monetary compensation from punitive damages is most often awarded to the plaintiff, although some states have a split-recovery rule where some of the damages are given to the state.