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Punitive damages are a form of compensation that go above and beyond the initial rate. Let’s say that one of your employees is injured while at work. They sue on the ground of company liability. The first thing your company might have to pay is compensation awards. This is a figure designed to compensate the employee for any loss of earnings and health care costs. However, they can also ask for ‘punitive damages’ to be applied. This is a figure beyond the compensation damage. It intends to punish the defendant for negligence or misconduct. The punitive damages also acts as a deterrent and discourage them from committing a similar offense. One question we get asked a lot here, is how are these damages calculated?

Extent of the defendant’s actions

The first thing any judge will take into account is the extend of the defendant’s actions. Generally, a court will look to find that the defendant’s actions were beyond simple negligence. Their behaviour would have to be reckless, or intentional. There must be clear disregard for safety, and little regard for the plaintiff’s well being. The level to which the defendant fits this description goes a long way to determining the damages. If the defendant has acted with gross misconduct, the damages figure will be much higher.

Proportionate to the compensation award

Usually, the punitive damages are awarded in proportion to the compensation damages. Let’s say a court granted $10,000 in compensation damages to a plaintiff. Now, the punitive damages are traditionally awarded in proportion to that figure. In most states, including Florida, that figure cannot exceed four times the amount. In this case, the maximum amount of punitive damages a plaintiff can seek is $40,000. A figure four times higher is rare, and must warrant a level of gross misconduct.

State limits

As mentioned in the previous paragraph, most states have a built-in proportion limit. However, there are some states with cash limits on certain types of case. For example, many states have a limit of $250,000 in cases of medical malpractice. In others, that limit is much higher. The amount of punitive damages therefore reflects the state laws that limit or define it.

Double or treble damages

Typically a plaintiff will ask the court for double damages. That simply means asking for double the compensation figure. If they were awarded $10,000, they would ask for a ‘top-up’ of punitive damages to make $20,000. A double damages award is typically seen as proportionate and reasonable. However, in serious cases, a plaintiff can pursue treble damages. As outlined before, the most extreme cases can ask for four times the damages.

If you’d like to learn more about punitive damages, contact one of our experts. We can help you figure out whether you’re entitled to punitive damages, and help calculate a figure. We’re also on hand to help explain the issues in simple terms, without any lawyer jargon. We understand these topics get confusing, but we are experts in the subject. Don’t hesitate to get in touch.