Punitive Damages

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Punitive Damages

Punitive Damages

In most cases, the purpose of the money awarded to a personal injury victim in a lawsuit is meant to compensate the victim for what they lost due to the defendant’s misconduct. The purpose of punitive damages, however, is to punish the defendant for outrageous behavior. The idea is to deter the defendant and others from repeating such behavior. Georgia has a punitive damages statute that governs this form of damages.

Punitive Damages vs. Compensatory Damages

Although you can win compensatory damages without winning punitive damages, you cannot win punitive damages without winning compensatory damages. In other words, if they are awarded, punitive damages are awarded in addition to compensatory damages, not as a substitute for them. 

Statistically, even if you win your claim and the court awards you compensatory damages, it will probably not award you punitive damages. Courts do award punitive damages under certain circumstances, however. Ask your lawyer about your chances of winning punitive damages under the facts of your particular case.

Typical Cases Where Victims Win Punitive Damages

The following types of cases generate punitive damages more often than most types of personal injury cases.

No matter the circumstances, there is no guarantee that a court will award you punitive damages. It is up to the discretion of the court. Furthermore, a court is unlikely to award you punitive damages simply because the defendant was negligent. The defendant’s behavior must have been reckless or intentional. That is why running a stop light is probably not enough to justify punitive damages, but driving while intoxicated might be enough.

To win a punitive damages claim, you must prove:

  • The defendant’s actions harmed you physically or economically. You cannot win punitive damages for psychological harm alone. Once you establish physical or economic harm, a court might award you more punitive damages if you also suffered psychological harm such as emotional distress.
  • The defendant’s misconduct was active, not passive. Although misconduct through failure to act can justify compensatory damages, the defendant’s misconduct must have involved positive misconduct for you to win punitive damages. 
  • The defendant’s behavior must have been outrageous enough for the court to characterize it as recklessness or intentional misconduct. Ordinary negligence is not enough to win punitive damages, even though it is enough to win compensatory damages.

You must prove these elements with “clear and convincing” evidence. Clear and convincing evidence is a more difficult standard of proof than the “preponderance of the evidence” standard that you need to win compensatory damages. Nevertheless, it is still much easier to prove a fact with clear and convincing evidence than to prove it “beyond a reasonable doubt,” which is the standard of proof that courts apply to criminal prosecutions.

How To Pursue a Punitive Damages Claim

To seek punitive damages, you must:

  • Demand them in your original lawsuit complaint;
  • Assert facts that would justify punitive damages if you prove they are true. 

Proving punitive damages at trial proceeds in at least two stages—one to decide whether you qualify for punitive damages and another to determine the exact amount. 

Determining the Amount of Punitive Damages

A court must take into account the following factors to determine the amount of punitive damages:

  • The defendant’s past behavior;
  • The likelihood that the defendant will re-offend;
  • Whether the defendant has taken remedial acts to prevent future injury to others;
  • The ratio between punitive damages and  compensatory damages; and
  • The defendant’s ability to pay,

No single factor determines the amount of punitive damages a court will award you, although the defendant’s ability to pay might determine how much you collect.

Georgia usually limits punitive damages awards to $250,000.00. There are three exceptions, however:

  • Product liability claims. You can ask for as much as you want, but 25% of punitive damages go to the victim and the remainder to the State of Georgia.
  • Cases where the defendant caused the accident through some form of intoxication. This exception is not limited to DUI accidents.
  • Cases where the defendant specifically intended to harm the victim, such as an assault or a road rage incident.

Even if one of these exceptions applies, courts traditionally limit punitive damages to one order of magnitude above the amount of compensatory damages. For example, if compensatory damages are tens of thousands of dollars, punitive damages cannot exceed hundreds of thousands of dollars. If you receive punitive damages, you might also recover your attorneys’ fees under a different statute, O.C.G.A. Section § 13-6-11.

Federal Tax Implications

The IRS taxes punitive damages as income but does not tax compensatory damages except for post-judgment interest. 

You Almost Certainly Need a Lawyer for a Punitive Damages Claim

Hire a lawyer if you plan to seek punitive damages. Punitive damages claims are hard to win, and they require special procedures. Additionally, a defendant is unlikely to agree to punitive damages in settlement negotiations, so you will probably need to file a lawsuit. 

If you suffered an injury that you believe someone else is liable for, seek compensatory damages. Seek punitive damages, too, if you qualify for them.

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