Monetary compensation awarded to an injured party that goes beyond that which is necessary to compensate the individual for losses and that is intended to punish the wrongdoer.
Punitive damages, also known as exemplary damages, may be awarded by the trier of fact (a jury or a judge, if a jury trial was waived) in addition to actual damages, which compensate a plaintiff for the losses suffered due to the harm caused by the defendant. Punitive damages are a way of punishing the defendant in a civil lawsuit and are based on the theory that the interests of society and the individual harmed can be met by imposing additional damages on the defendant. Since the 1970s, punitive damages have been criticized by U.S.business and insurance groups which allege that exorbitant punitive damage awards have driven up the cost of doing business.Punitive damages have been characterized as "quasi-criminal"because they stand halfway between the criminal and Civil Law. Though they are awarded to a plaintiff in a private civil lawsuit, they are non compensatory and in the nature of a criminal fine. Punitive damages were first recognized in England in 1763 and were recognized by the American colonies almost immediately. By 1850, punitive damages had become a well established part of civil law.
The purposes of punitive damages are to punish the defendant for outrageous misconduct and to deter the defendant and others from similar misbehavior in the future. The nature of the wrongdoing that justifies punitive damages is variable and imprecise. The usual terms that characterize conduct justifying these damages include bad faith, fraud, malice, oppression,outrageous, violent, wanton, wicked, and reckless. These aggravating circumstances typically refer to situations in which the defendant acted intentionally, maliciously, or with utter disregard for the rights and interests of the plaintiff.
Unless otherwise required by statute, the award of punitive damages is left to the discretion of the trier of fact. A small number of states refuse to award punitive damages in any action, and the remaining states have instituted various ways of determining when and how they are to be awarded. In some states, an award of nominal damages, which acknowledges that a legal right has been violated but little harm has been done, is an adequate foundation for the recovery of punitive damages. In other states, the plaintiff must be awarded Compensatory Damages before punitive damages are allowed.