Exemplary damages, also known as punitive damages, are awarded in court cases to punish the wrongdoer, not compensate the victim. They are only awarded in cases where the tort was committed intentionally, maliciously, or recklessly. Courts generally do not award exemplary damages in excess of four times the compensatory damages.
Exemplary damages are awards awarded in a court case that go beyond compensation to the victim. These damages are also known as punitive damages in some legal systems. Not all nations allow courts to award exemplary damages, and nations that do generally will not uphold judgments of this nature. They are explicitly intended as retribution to punish the individual found in the wrong, not to compensate the victim for any injuries they may have suffered.
For exemplary compensation to be awarded, a case must generally meet a specific standard. Countries that allow courts to award damages of this type generally require the case to show that the person paying the damages committed the tort intentionally, maliciously, or recklessly. Thus, activities such as fraud and willful libel would be eligible for exemplary damages, while simple negligence would not.
Civil suits allow people to recover compensation who suffer injuries as a result of the actions of others. The Court, however, distinguishes between different types of actions. There is a stark difference, for example, between careless driving leading to an accident and a deliberate decision to bump into someone. In the first case, the accident victim may receive damages for the payment of medical expenses and car repairs, but not exemplary compensation. In the second case, exemplary compensation could be recognized because the driver acted with intent.
These damages are awarded in excess of compensatory damages, so the person who received the damages essentially gets two separate awards. The idea behind assigning damages as punishment is that they serve as a deterrent so that people are less likely to commit similar crimes in the future, and also provide a public object lesson. Members of the public who read about big wins and notice that a portion of the win was punitive in nature will take note and may think twice before engaging in similar activities.
There is debate about when damages of a punitive nature are appropriate and how large they can be. Courts generally will not award exemplary damages in excess of four times the compensatory damages. Extremely large rewards occur in very unique cases, but can be challenged on the grounds that they are unfair. Similarly, courts may debate whether or not a case is a case deserving the award of exemplary damages. Different countries have different standards, which can further complicate things.
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