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Understanding Punitive Damages

Most community members only learn about the damages that one is entitled to recover in a legal case when they are involved in a matter personally. There is understandably much confusion regarding exactly how damages are calculated. Even though most nursing home neglect cases settle before trial, the settlement itself is guided significantly by the damages that a judge or jury might award.

One area where there is significant confusion is that of punitive damages. Most of the jury awards that involve blockbuster sums–hundreds of millions (or even billions)–involve punitive damages. This week, Justia published an interesting essay that discusses the history of punitive damages, making it a helpful primer for those seeking to learn more about the legal issues connected with these awards.

Punitive Damages – The History
The article explains how punitive damages are only available when the defendant’s conduct is particularly awful. That occasionally happens in the nursing home neglect context when caregivers act with reckless abandon. It is impossible to say with exact precision what conduct qualifies for these awards, but those cases where potential criminal neglect are implicated are likely candidates. In fact, some commentators refer to punitive damages as “quasi criminal,” because, like actual criminal sanctions, they are intended to punish not restore those harmed
Over the years there have been many legal fights surrounding the merit of punitive damages. Large defendants (like insurance companies) have argued that all punitive damages actually violate the federal Constitution. They claim that the excessive awards violate defendant’s due process rights under the 14th Amendment.

In fact, ten years ago the U.S. Supreme issued a ruling that held a specific punitive damage verdict as excessive in State Farm v. Campbell. In that case, a verdict provided $146 million to the plaintiff. Of that amount $1 million was for compensatory damages (medical costs, pain and suffering, etc.) while $145 million was for punitive damage–to punish the defendant’s conduct.

In overturning the decision the court found that the reasonableness of the punitive damage award must be considered in comparison to the compensatory damages. The ruling offers some guidance, noting that punitive damages generally should not be more than ten times larger than any compensatory award. Importantly, this is a far cry from the claims of some defendants that all punitive damages are unconstitutional.

In the most recent U.S. Supreme Court case on the issue, in 2007, the Court again seemed to strike down a large punitive damage award. However, in so doing, it did not reiterate the “less than 10x larger” argument made in the State Farm case. Instead, it involved a procedural issue regarding whose harm can be considered when examining the size of a punitive damage award. They remanded the case back to the state Supreme Court, but ultimately the significant punitive damage award ($100 million) was upheld.

Attorney Help with Punitive Damages
Illinois residents should remember that punitive damages are simply one more tool that may be available in unique cases to provide another layer of accountability follow negligent conduct that harms. An attorney can explain the likelihood of such damages after hearing the facts of your particular case. Even when they are not feasible, compensatory damages include a wide range of facets to ensure one is made as whole as possible following an injury.

See Other Blog Posts:

Illinois Nursing Home Violator’s List

Nursing Home Preparedness for Fall Related Injuries