Have you been hurt? Is someone else to blame? If so, they could owe you money in the form of damages, a legal term for the remedy that a plaintiff (an injured party) can seek from a defendant (the person the plaintiff alleges hurt them). They come in two distinct types of damages: compensatory and punitive damages. Let’s explore compensatory vs. punitive damages in detail, including what they are, what differentiates them, and how a personal injury attorney could help you pursue them.
What Are Compensatory Damages?
As the name suggests, compensatory damages are compensation for how the plaintiff has suffered due to the defendant’s actions. Generally, the goal of damages is to make the plaintiff “whole” again–that is, to restore them as closely as possible to their pre-accident position. While no amount of money can undo the accident or its consequences, compensatory damages aim to do the next best thing.
Georgia does not place a cap on compensatory damages. In other words, there is no statutory limit to the amount of compensatory damages you can recover as long as they align with the nature of your injuries.
Furthermore, while the IRS considers compensatory damages to be a form of gross income, it does not tax them. This is because compensatory damages are meant to offset the cost of injuries the plaintiff should never have suffered. Effectively, damages represent no change in the plaintiff’s economic position.
Compensatory damages can be either economic or non-economic in nature. Let’s explore that in detail.
Economic Damages
Economic damages refer to compensable losses in legal claims that can be quantified in monetary terms. They represent actual financial losses a plaintiff suffers due to the defendant’s actions. Economic damages are objective, meaning a plaintiff can calculate them using evidence such as bills, receipts, or financial records.
Here are some examples of economic damages:
Medical expenses: Costs associated with medical treatment, including hospital stays, surgeries, medications, physical therapy, and in-home care
Lost wages: Income lost due to the inability to work while recovering from an injury, including past lost wages as well as future lost earning capacity if the injury affects long-term ability to work
Property damage: Costs to repair or replace property damaged due to the incident, such as a vehicle in a car accident or personal belongings in a fire
Out-of-pocket expenses: Money spent directly because of the incident, like travel expenses to medical appointments, home modifications due to disabilities, and other related expenditures
Non-economic Damages
Non-economic damages, on the other hand, concern losses that are subjective rather than financial in nature. They compensate the plaintiff for the intangible, personal effects of an injury, which do not have a direct cost but nonetheless impact the victim’s life. Non-economic damages can be more difficult to quantify than economic damages.
Here are some examples of non-economic damages:
Pain and suffering: Compensation for the physical pain and emotional distress experienced from an injury, potentially including ongoing discomfort and future pain
Emotional distress: Compensation for the psychological impact of an injury, such as anxiety, depression, trauma, and loss of sleep
Loss of enjoyment of life: Damages for the inability to enjoy hobbies and recreational activities that the plaintiff used to participate in before the incident
Loss of consortium: Compensation awarded to the spouse or family of an injured person for the loss of companionship, affection, and support caused by their loved one’s injuries
What Are Punitive Damages?
Punitive damages, also known as exemplary damages, punish the defendant. Section 51-12-5.1 of the Georgia Code specifies that they may be awarded for:
Willful misconduct
Malice
Fraud
Wantonness
Oppression, or
Conscious indifference to consequences
Unlike economic and non-economic damages, which aim to compensate the victim, punitive damages, on the other hand, serve as a penalty against the defendant. Only a court may award these damages, meaning a plaintiff must go to trial to recover them. Insurance companies will not include punitive damages in settlements.
Here are some examples of what qualifies for punitive damages:
Intentional harm: If the defendant intentionally harms the plaintiff, such as in cases of assault or battery
Gross negligence: When the defendant’s conduct demonstrates a substantial disregard for the safety of others, such as drunk driving accidents where the driver was well over the legal alcohol limit
Fraud: In cases where the defendant intentionally deceives others for personal gain, causing harm in the process
Oppressive behavior: Actions by a large corporation that are deemed oppressive or unfair to individuals, such as wrongful termination in violation of employment laws
It is important to understand that courts award punitive damages only in rare cases.
Does Georgia Cap or Tax Punitive Damages?
Unlike Compensatory damages, Georgia caps punitive damages. Plaintiffs can recover no more than $250,000 in punitive damages. Furthermore, the IRS considers punitive damages taxable, as they are in excess of the money it takes to restore a plaintiff to their pre-accident standing.
How a Georgia Personal Injury Lawyer Can Help
Now that you understand punitive vs compensatory damages, are you ready to learn if your injury entitles you to them? If so, contact Chris Hudson Law Group today. Our Georgia personal injury lawyers will start by investigating our injuries to determine what happened and who is to blame. Next, we will review evidence to calculate a fair value of compensatory damages. This evidence could include:
Medical records and bills
Pay stubs, tax returns, and other proof of lost income
Repair estimates for property damage
We can also work with experts in fields like medicine and accounting to determine the long-term costs of your injuries. At the same time, we’ll get to know you and understand how your injuries affect your daily life and personal well-being. Doing so will help us put a fair value on your non-economic losses.
We may also determine that the person who hurt you acted with willful misconduct, recklessness, or wantonness. If so, we will not hesitate to prepare your case for trial and build a strong argument that they owe you punitive damages.
Contact Chris Hudson Law Group Today
Don’t wait another moment to demand the compensatory damages and punitive damages you deserve. Contact Chris Hudson Law Group today, and a Georgia personal injury lawyer with our law firm will answer your questions during a free consultation. Our attorneys have the legal knowledge and proven track record to handle your case.
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