Under Indiana law, individuals who have been wronged by another party can seek compensation for damages. But what are compensatory and punitive damages? Knowing the difference is important in understanding what you can expect from a lawsuit.

Compensatory Damages

Compensatory damages are meant to provide the plaintiff with monetary compensation for losses or injuries caused by the defendant. These damages are designed to make the plaintiff “whole” and return them to the financial position they would have been in had the wrongdoing never occurred.

Types of Compensatory Damages

There are two types of compensatory damages: economic damages and non-economic damages.

Economic Damages

Economic damages are tangible expenses the plaintiff has incurred. These are commonly associated with things like medical expenses, lost wages, and property damage. Economic damages are easily calculated because they have a set monetary value.

Non-economic Damages

Non-economic damages are intangible damages that don’t have a direct financial cost but still impact the plaintiff’s quality of life. For instance, non-economic damages can include emotional distress, loss of consortium, or pain and suffering.

Punitive Damages

Punitive damages, unlike compensatory damages, are designed to punish the defendant. The purpose of punitive damages isn’t to make the plaintiff whole but rather to discourage the defendant and others from engaging in similar wrongdoing in the future. Punitive damages are awarded only in cases of particularly egregious behavior, such as gross negligence or intentional harm.

How Are Punitive Damages Calculated?

There is no set formula for determining punitive damages. The amount awarded varies by case and is often based on factors like the defendant’s conduct, the extent of the harm caused to the plaintiff, and the defendant’s ability to pay. It’s important to note that punitive damages are subject to a lower burden of proof than compensatory damages, which makes them harder to win.

Conclusion

Understanding the difference between compensatory and punitive damages is important in determining what you can expect from a lawsuit. If you’ve been wronged by another party and are thinking of taking legal action, it’s important to consult an experienced attorney who can help you identify which types of damages may apply in your case.