Compensatory Damages Example: Everything You Need to Know
Compensatory damages are the sum of money that may be entitled to a party in compensation for damage to property, an injury, or other loss. 3 min read
A compensatory damages example is if a negligent driver hit your 2008 Honda and totaled it; the compensatory damages should equal the market value of your 2008 Honda at the time of its demise, less any scrap or salvage value, and you could be entitled to the fair market value of the vehicle.
Compensatory damages are the sum of money that may be entitled to a party in compensation for damage to property, an injury, or other loss. These differ from punitive damages (also referred to as exemplary damages), which aim to punish the person for their wrongdoing and are typically only required when the person has been intentionally and especially harmful. Compensatory damages are meant to restore the plaintiff to the level they were before the harm was inflicted.
Types of Compensatory Damages
In general, there are two types of compensatory damages: special and general.
- Special damages are intended to return the plaintiff to the position in which they were prior to an injury, accident, or other harmful situation, by paying for medical expenses, damage to property, loss of earnings, and other quantitative losses.
- General damages involve losses not easily determined by monetary calculations and may include emotional distress, loss of consortium (the loss of participating in family life as experienced previously,) and defamation.
Special (Actual) Damages
Special damages, which are also referred to as actual damages, are meant to provide the monetary amount necessary to replace what was lost and nothing more. Special damages are those that are easily calculable and not really up for debate, and typically have a firm dollar figure attached to them.
In order to be awarded special compensatory damages, the judge or jury must be able to determine the actual monetary value of losses suffered by the plaintiff. In cases of personal property damage, the amount to be compensated is generally determined by the market value of the item at the time of loss, which can mean a depreciated value. In medical malpractice lawsuits, special compensatory damages are the most common type of damage awards.
- Medical treatments
- Physical therapy
- Medical and hospital bills
- Ambulance expenses
- Domestic services
- Medical equipment
- Lost wages or unemployment income
- Increased living expenses
- Property repair
General damages involve losses not as easily determined by a monetary value, and may include:
- Pain and suffering: aches, pains, scarring, and permanent or temporary limitations on activity
- Emotional distress: mental anguish or emotional distress caused by a physical injury, physical contact, sexual harassment, slander, or libel
- Loss of consortium, also known as loss of companionship: deprivation of the enjoyment of a normal family relationship, where the inability of a spouse to provide the same love, affection, comfort, or sexual relations as they did previously is due to injury or death.
- Defamation, also known as loss of reputation: the purposeful communication of false information that damages the reputation of a person or entity, which may include any unfounded criticism or false information that results in the loss of respect, regard, or confidence of a person or entity, or that provokes aggressive feelings against them; may be written or spoken; includes libel.
- Disfigurement: permanent change in a person's body or physical characteristics, such as scars
- Loss or impairment of physical or mental capacity: the loss of a person's ability to think clearly, physically care for, or make decisions for him or herself
- Loss of enjoyment of life: the loss of a person's ability to experience and participate in the activities and pleasures of life as compared to before the incident or injury
Case Examples of Compensatory Damages
In Wisconsin in the nineteenth century, a boy hurt his knee. A while later, while in school, a classmate lightly kicked the same knee. The boy did not feel any pain at the time, but the knee later became seriously infected. The boy was left permanently unable to use his leg ever again. The boy sued his classmate. The court determined that the classmate was at fault, and they required him to compensate the boy for his loss, even though he did not expect his kick could result in such serious consequences.
Compensatory Damage Legal Assistance
If you've been injured or in an accident, you could be eligible for compensatory damages.
If you need help understanding compensatory damages, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top five percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Stripe, and Twilio.