What are Punitive Damages?

December 26, 2019 | Chris Costello, Esq.

When you have been injured by the negligence of someone else you are entitled to be compensated, provided liability and damages can be proven. You can receive different types of compensation for your damages.  Typically, the plaintiff (the injured party) are awarded compensatory damages – which are damages to pay them back for their medical bills, cover the damages to their property or to compensate them for pain and suffering. There is another type of compensation the plaintiff can be awarded and that is punitive damages. 

Punitive Damages are….

Punitive damages are awarded as a way to punish the defendant since they are required to pay additional damages for their behavior. Think of punitive damages as a fine for behaving in an unsafe or intentionally wrong way. Punitive damages are also used a way to deter others from committing wrongful actions that can cause harm to others, an example would be drunk driving.

What statue governs punitive damages in New Jersey?

Let’s get legal here for a second, I mean we are a law firm so you probably expected that. We are going to dive into the statue that governs punitive damages but don’t worry, I’ll try and break it down so it can be easily understood.

Punitive damages, as mentioned are above, are awarded as a way of punishing the defendant for grossly malice or negative behavior. The New Jersey statute governing punitive damages (N.J.S.A. 2A15-5.10) states punitive damages are awarded for “actual malice” and “means intentional wrongdoing in the sense of an evil-minded act.” In order for punitive damages to be awarded the plaintiff must prove the defendant knew their action was wrong and continued to do it anyway.

How much are punitive damages?

Unlike compensatory damages, punitive damages are not related to the plaintiff’s injuries, their lost wages, the amount of their property damage or any permeant disabilities they may have received due to injuries. Punitive damages are awarded based on the Defendant’s action and the level of its harmfulness. New Jersey does have a cap on the amount of punitive damages that can be awarded.

According to N.J.S.A. 2A:15-5.9 the most that can be awarded for these damages is five times the compensatory damages or $350,000, whichever amount is greater.

For example, if the case had $25,000 in compensatory damages the punitive damages cap would be $350,000 since five (5) times the compensatory damages are less than $350,000. Whereas say compensatory damages were $100,000, then the cap would be $500,000 as the five (5) times amount is greater than $350,000.

Proving Punitive Damages

Punitive damages are rarely awarded in New Jersey as the state does require the circumstances to be very reckless or intentionally harmful. For a judge to award punitive damages it has to be proven that the defendant acted in a manner they knew to be wrong and was intentionally negligent or harmful. The Plaintiff will have to present clear proof that the defendant:

  • knew the behavior was wrong;
  • had a history of behaving in a wrongful manner;
  • attempted to conceal or hide their behavior;
  • knew the action could cause harm to others;
  • participated in the wrong behavior for an extended period of time; and
  • still continued to behave inappropriately even after learning their actions could or would cause harm to others.

When a judge addresses a jury to charge them to determine if they will award punitive damages the following is what the Judge tells them to consider when making their decision:

  1. How likely it would have been at the time of the incident for harm to come to someone else by behaving in such a manner.
  2. That the Defendant was aware or reckless disregarded the potential of harm coming to others if they performed the action.
  3. How the Defendant behaved once they learned that someone else could be harmed based on this action.
  4. How long the Defendant behaved in the manner or if the Defendant tried to conceal their actions in any way.

When determining if punitive damages will be accessed the court also considers the defendant’s ability to pay the damages. Punitive damages are most frequently accessed against corporations or wealthy individuals who have the means to pay the damages and would feel the additional “sting” of the punishment. If the Defendant does not have the means to pay the damages then a judgment could be placed against them but it would really bear no weight since there is nothing to recover.

Since every case is different and every judge and jury is different, each case may have specific different elements that must be proven. Proving punitive damages is very difficult as there are a lot of factors that play a part in proving the claim. It is always best to consult an experienced and licensed attorney to help determine what damages you may be entitled to recover and if you have the necessary proof to make a claim.

Example of Punitive Damages

Now that we have discussed: what punitive damages are, how they are awarded, the caps on them and what a jury must consider when determining if they will be awarded, let’s look at an example.

Defendant A is driving a vehicle at a high rate of speed while drunk. Defendant A runs a red light and crashes into Plaintiff A causing Plaintiff A to break their arm and sustain a concussion. While at the scene Defendant A tried to flee the scene since they were intoxicated.

After Plaintiff A has completed their medical treatment and is working to settle with Defendant A’s insurance company, Plaintiff A’s attorney learns that this is the 3rd time Defendant A has been charged with driving while intoxicated and one of those other incidents also involved a deadly crash that involved a wrongful death claim. Plaintiff A’s attorney also learns Defendant A is the CEO of a large corporation and has the means to pay a punitive damage claim.

Based on this new information Plaintiff A’s attorney decides to pursue a punitive damages claim since they now had proof Defendant A had knowledge that this behavior could cause harm to others, but continued to drive while drunk and attempted to conceal their action by fleeing the scene of the crash.
The above example would be a good claim for seeking punitive damages as Defendant A clearly knew their actions were wrong and harmful and are a good candidate for a judge to try and make an example of to deter other drivers from doing the same.

After reading the above information, if you have questions or would like to discuss a potential punitive damage claim contact Costello Law Firm to get an appointment with one of our experienced and licensed attorneys. It is always best to consult a licensed attorney  when pursuing any type of legal action as there are always complicated factors to consider in the law and each case.

*This article is not intended to be legal advice and should only be used for informational purposes. You should always consult a licensed attorney with case specific questions or to seek legal advice.

 

Chris Costello, ESQ.

Chris Costello, ESQ.

Chris handles matters in both New Jersey and Pennsylvania and is an active member of the New Jersey Association for Justice as well as the Burlington County Bar Association. As a Burlington County personal injury lawyer, Mr. Costello has served as chairman of the Burlington County Bar Association Personal Injury Committee and lectured on topics related to auto accidents and insurance law.
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