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What are punitive damages? Pt. 1

While damage awards court cases often receive headlines, they are often misunderstood, sometimes even by those how participate in the trial itself. In American legal cases, there are typically two forms of damages paid for an injury.

Compensatory damages are designed to "make you whole." These cover everything from medical expenses and loss of income in a medical malpractice case to pain and emotional distress, whether caused by a car accident or a wrongful termination. In an employment law case, they also compensate you for loss of future earnings or injury to your reputation or defamation. 

The other type of damage that is more rarely awarded is punitive damages. These damages are not compensation to the victim for some harm they suffered, as that is what compensatory damages cover. Punitive damages, as they name suggests, are designed to punish wrongdoing by fining the wrongdoer often a substantial sum of money, in an effort to deter future wrongdoing.

Because of this, they can often be many times the size of the compensatory damages because they are often related to the economic size of the wrongdoer. If you sued a small business with yearly revenue of $1 million, a punitive damage award would need to be very different in size as compared to suing an entiey like General Motors or ExxonMobil, with billions in revenue every year.

In a case out California, a school coach was fired by the Catholic Diocese of Sacramento, after he reported sexual hazing by students. The school fired him, claiming he was "responsible." He sued for retaliation and was awarded $900,000 for compensatory damages.

And he was requesting $4.5 million in punitive damages. Next time we will discuss that request.

Sacbee.com, "Forewoman: Whistleblowing coach 'lucky' to get $4 million from diocese in sex-hazing case," ANDY FURILLO, March 12, 2015

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