When someone suffers a personal injury due to the negligence of another party, they may be entitled to compensation for their losses. This compensation is referred to as compensatory damages. However, in cases where the defendant’s conduct is particularly egregious, the court may also award punitive damages, which are a monetary amount meant to punish the wrongdoing.

In this guide, we explore the concept of punitive damages in California personal injury cases, including when they may be awarded, how they are calculated, and the legal requirements for obtaining them.

What Are Punitive Damages?

Punitive damages, also known as exemplary damages, are a form of monetary award that goes beyond compensating the plaintiff for their losses. Rather, the goal of these damages is to hold the offender accountable for their actions and discourage future occurrences of the same kind of behavior. 

Unlike compensatory damages, which are intended to make the plaintiff “whole” again after the losses they suffered, punitive damages are not directly related to the plaintiff’s injuries or damages. Instead, the court may award punitive damages to the plaintiff on top of their compensatory damages. The defendant will then have to pay these damages as penalty for their egregious negligence.

When Are Punitive Damages Awarded in California?

Punitive damages are not often granted in personal injury cases in California. Instead, they are reserved for cases where the defendant’s conduct is deemed to be particularly egregious, malicious, or oppressive.

The California Civil Code 3294 outlines the requirements for awarding punitive damages in personal injury cases. This law states that punitive damages may be granted when the plaintiff can demonstrate by unambiguous and compelling evidence that the defendant behaved with oppression, fraud, or malice. The following definitions apply to these terms:

• Oppression: Oppression is defined as heinous behavior that intentionally disregards someone’s rights while subjecting them to cruel and unjust hardship.
• Fraud: This is the deliberate misrepresentation, deception, or hiding of a substantial fact that the defendant knew in order to deny the plaintiff property or legal rights.
• Malice: This refers to actions with the deliberate and knowing disdain for the safety or rights of others, or actions meant to harm the plaintiff.

The standard of proof for punitive damages is higher than the standard for compensatory damages. Punitive damages demand clear and compelling evidence, which is a higher level of proof than compensatory damages, which merely require a preponderance of the evidence (“more likely than not”). Examples of cases where punitive damages may be awarded in California include:

• Intentional tort, such as assault, battery, or intentional infliction of emotional distress
• Drunk driving accidents resulting in injury or death
• Product liability cases where the manufacturer knowingly concealed a defect or danger
• Cases involving fraud, misrepresentation, or concealment of material facts
• Cases involving elder abuse or nursing home neglect.

How Are Punitive Damages Calculated in California Courts?

There is no predetermined method for calculating punitive damages in California, in contrast to compensatory damages, which are determined by the plaintiff’s actual losses. Instead, the amount is left to the discretion of the jury or the court, based on several factors. California Judicial Council of California Civil Jury Instruction 3940 (CACI 3940) states that the jury must consider the following factors when determining the amount of punitive damages:

• The reprehensibility of the defendant’s conduct: This factor considers the nature and severity of the defendant’s actions, as well as any potential harm or risk of harm to others.
• The amount of compensatory damages awarded: While punitive damages are not directly related to the plaintiff’s losses, the amount of compensatory damages awarded can serve as a reference point for determining the appropriate level of punishment.
• The defendant’s financial condition: The defendant’s ability to pay punitive damages is taken into account to ensure that the award is not excessive or disproportionate to their financial resources.

Additionally, the California Supreme Court has provided guidance on the appropriate ratio between punitive damages and compensatory damages. In general, the court has stated that punitive damages should not exceed a single-digit ratio to compensatory damages, except in cases of particularly egregious conduct or where a higher ratio is necessary to achieve the goals of punishment and deterrence.

Note that there is no cap or limit on the amount of punitive damages that can be awarded in California personal injury cases. However, the court has the authority to reduce or overturn a punitive damages award if it is deemed to be excessive or unconstitutional.

The Role of Punitive Damages in Personal Injury Cases

Punitive damages play a crucial role in personal injury cases by serving as a deterrent to egregious or reckless conduct. By imposing a significant financial penalty on the defendant, exemplary damages remind society that such behavior is unacceptable and will not be tolerated by society.

In addition, punitive damages serve to hold the defendant accountable for their actions and to provide a sense of justice for the plaintiff. When a defendant’s conduct is particularly egregious or malicious, compensatory damages alone may not be sufficient to address the gravity of the situation. Punitive damages provide an additional layer of accountability, ensuring that the defendant faces consequences beyond simply compensating the plaintiff.

Furthermore, punitive damages can have a broader impact on society by encouraging companies and individuals to prioritize safety and ethical conduct. The threat of substantial punitive damages can incentivize businesses to implement stronger safety measures, improve product quality, and prioritize consumer protection. This, in turn, can help prevent future injuries and promote a safer environment for everyone.

Frequently Asked Questions (FAQs)

What distinguishes punitive damages from compensatory damages? 

The purpose of compensatory damages is to make up for the plaintiff’s real losses, while the purpose of punitive damages is to penalize the wrongdoing.

Compensatory damages are intended to make the plaintiff “whole” again by restoring them to the position they were in before the injury occurred. On the other hand, punitive damages are not directly related to the plaintiff’s losses. Rather, they are granted in order to penalize the offender for their heinous or malevolent actions and to discourage future occurrences of the same kind. Punitive damages are intended to send a strong message to the defendant and society that such conduct is unacceptable.

How frequently do personal injury cases involve punitive damages?

Punitive damages are rare in personal injury cases. They are typically reserved for cases where the defendant’s conduct was particularly egregious, malicious, or oppressive.

Is it possible to receive both compensatory and punitive damages?

Yes, punitive damages can be awarded in addition to compensatory damages in California personal injury claims. Compensatory damages are intended to compensate the plaintiff for their losses, while exemplary damages are a separate award designed to punish the defendant and deter similar conduct.

Does California have a ceiling or restriction on punitive damages? 

No, there is no statutory cap or limit on the amount of punitive damages that can be awarded in California personal injury cases. However, the court has the authority to reduce or overturn a punitive damages award if it is deemed to be excessive or unconstitutional under the Due Process Clause of the Fourteenth Amendment.

In California, how are punitive damages calculated?

In California, there is no fixed formula for computing punitive damages. Instead, the amount is left to the discretion of the jury or the court, based on several factors outlined in the California Civil Jury Instruction. These factors include the reprehensibility of the defendant’s conduct, the amount of compensatory damages awarded, and the defendant’s financial condition.

Can wrongful death lawsuits result in the awarding of punitive damages?

Yes, punitive damages can be awarded in wrongful death cases in California if the deceased person would have been eligible for punitive damages had they survived. The deceased person’s personal representative or surviving family members may be able to pursue punitive damages on their behalf.

Are punitive damages subject to taxes?

Indeed, under both federal and state tax regulations, punitive damages are typically regarded as taxable income. However, there are certain exceptions and deductions that may apply, depending on the specific circumstances of the case.

Can punitive damages be covered by insurance?

Punitive damages are typically not covered by insurance coverage. This is because punitive damages are intended to punish the defendant for their conduct, and allowing insurance to cover these damages would defeat the purpose of punishment and deterrence.

Can a defendant appeal a punitive damages award?

Yes, a defendant can appeal a punitive damages award if they believe the award is excessive or unjustified. The appellate court will review the case and determine whether the punitive damages award is appropriate based on the evidence and legal standards.

Can punitive damages be awarded in cases involving intentional torts?

Yes, punitive damages are often awarded in cases involving intentional torts such as assault, battery, or intentional infliction of emotional distress. These types of cases typically involve conduct that is considered egregious or malicious, making them eligible for punitive damages under California law.

Let Hamparyan Personal Injury Lawyers Help You Get Punitive Damages That You May Be Owed

While they are not awarded in every case, punitive damages can provide a sense of justice and accountability when a defendant’s actions are particularly reprehensible.

If you or a loved one has been the victim of a personal injury caused by someone’s intentional or reckless conduct, it is important to consult with an experienced personal injury attorney. At Hamparyan Personal Injury Lawyers, our attorneys can evaluate your case and determine if you may seek punitive damages. We understand the complexities of California’s personal injury laws and will fight tirelessly to ensure that you receive the compensation and justice you deserve.

Contact Hamparyan Personal Injury Lawyers today at (619) 550-1355 to schedule a free consultation and learn more about your legal options.