When someone is injured or suffers a loss, they may seek damages from the person or company responsible. Damages can be compensatory, meant to compensate the victim for their losses, or punitive, intended to punish the defendant and deter them from similar behavior in the future.
So, how do courts decide between these two types of damages? First, we need to understand the difference between the two, and then we’ll look at some factors that courts consider.
Compensatory Damages in South Carolina
“Compensatory” is just another word for “compensation.” As such, these damages are meant to make the victim “whole” again by putting them in the position they would have been if the injury or loss had never occurred.
This could mean reimbursing someone for medical bills, lost wages, property damage, or future costs that may be incurred. Compensatory damages also cover things like pain and suffering or emotional distress.
Punitive Damages in South Carolina
“Punitive” is another word for “punish.” These damages go beyond compensating the victim–they are designed to punish the wrongdoer. The hope is that hitting defendants with sizable punitive damage awards will discourage them and others from engaging in similar behavior.
Punitive damages are usually only awarded in cases where the defendant’s actions were particularly egregious, such as when they were intentional, were the result of the violation of a statute, or showed complete disregard for the safety of others.
Factors Courts Consider When Deciding Between Compensatory & Punitive Damages
In many cases, both types of damages will be awarded, but there are some instances where one may be favored over the other. Here are some factors courts typically consider:
The nature of the conduct
According to the United States Supreme Court, punitive damages may be properly imposed by a court to punish unlawful conduct and deter its repetition. In order to determine the appropriate amount of punitive damages, the court must consider the “degree of reprehensibility” of the defendant’s conduct.
South Carolina’s Supreme Court has set forth at least four factors to consider when determining the degree of reprehensibility of the Defendant’s conduct: (1) the defendant’s degree of culpability; (2) the duration of the conduct; (3) the defendant’s awareness or concealment; (4) the existence of similar past conduct. See Gamble v. Stevenson, 305 S.C. 104, 406 S.E.2d 350 (1991).
The intent of the defendant
Punitive damages are usually only awarded when the defendant’s actions were particularly egregious. This means that they must have acted with intent to harm, with reckless disregard for the safety of others, or in violation of a statute.
For example, if a drunk driver hits and kills someone, they may be ordered to pay punitive damages because they knew their actions put others at risk but did so anyway.
In South Carolina, additional special circumstances surrounding punitive damages are part of a medical malpractice case. These awards may be given if the health care provider committed a criminal offense, destroyed records, engaged in fraud, or other similar actions.
The best way to determine if these factors are present is to discuss them with your attorney.
The ability of the defendant to pay
One reason courts may award compensatory damages over punitive damages is that defendants may not be able to pay significant punitive damage awards. This is especially true in cases where the defendant is an individual rather than a large corporation.
The court will also consider whether awarding one type of damages would bankrupt the defendant, ultimately punishing innocent people, like the defendant’s employees or family.
How an Experienced Personal Injury Attorney Can Help
If you’ve been injured due to the negligence of another, it’s important to speak with an attorney as soon as possible. An attorney can help you understand your legal rights and options and will fight to get you the compensation you deserve. Contact us today for a free consultation.
Compensatory and Punitive Damages FAQs
Can I get both compensatory and punitive damages?
Yes, it is possible to receive both types of damages. However, South Carolina has a cap on punitive damages, currently set at $500,000 or three times the amount of compensatory damages, whichever is greater. The cap on punitive damages is increased or even eliminated if the conduct involved the commission of a crime or the use of drugs or alcohol.
How are damages calculated?
The amount of damages you may receive will depend on the severity of your injuries, the extent of your losses, and other factors. An experienced personal injury attorney will be able to evaluate your case and give you a better idea of what to expect.
Will I have to pay taxes on my settlement?
Generally, you will not have to pay taxes on your compensatory settlement. This is because you are being reimbursed for losses you’ve already been taxed on. However, if you receive punitive damages, you may be required to pay taxes on that amount.
David Price is a Personal Injury, Civil Litigation, Collections, and Criminal Defense Attorney who practices in Greenville, SC. He graduated from the University of Georgia School of Law, and has been practicing law for 12 years. David Price believes in helping those who have been injured. Learn more about his experience by clicking here.