Have you been injured and are wondering what compensation you may be entitled to? Many clients ask us about punitive damages and when they could come into play. These “punishment awards” go above and beyond the losses covered by regular compensatory damages.
Punitive damages serve an important role – deterring future misconduct and bad behavior by making an example out of a defendant. However, they are only awarded under certain circumstances, which we will unpack here using real-world case studies.
What Purpose Do Punitive Damages Serve?
Punitive damages serve a straightforward purpose despite their complex-sounding name – to punish defendants for especially harmful conduct and deter similar actions in the future. Sometimes also called “exemplary damages,” they are an amount awarded to plaintiffs in addition to compensatory damages, which cover actual losses.
Whereas compensatory damages made plaintiffs “whole” again by compensating for property damage, medical bills, lost income, pain and suffering, etc., punitive damages mainly target the defendant’s behavior. Their goal is to hit malicious, deceitful, or grossly negligent parties where it hurts most – their wallets. The possibility of paying exponentially more in punitive damages makes defendants think twice about repeating such harmful actions later.
Big Time Gross Negligence: The McDonalds Hot Coffee Case
The 1994 lawsuit against Mcdonald’s over its dangerously hot coffee remains one of the most famous gross negligence cases ever. An elderly customer suffered third-degree burns after spilling a scalding cup of coffee on her lap.
Evidence introduced at trial showed McDonald’s kept its coffee between 180-190 degrees F – hot enough to cause third-degree burns in seconds. The company had received over 700 complaints about burns over the prior decade yet made no effort to reduce the temperature to safer levels.
The jury found McDonald’s liable for gross negligence and initially awarded the plaintiff $2.7 million in punitive damages – though the final figure was later reduced through settlements and appeals. Nonetheless, the suit fundamentally changed the fast food industry’s practices regarding hot beverage safety.
When Punitive Damages May Apply
Punitive damages are typically awarded in civil lawsuits, not criminal cases. They are reserved for situations where the defendant’s actions go beyond mere negligence and demonstrate a reckless disregard for the plaintiff’s rights and safety.
Some examples of cases where punitive damages may be warranted include:
Product Liability Cases
Punitive damages may apply if a manufacturer or company is aware of a dangerous defect but takes no action to remedy it or warn consumers. One example involved GM ignition switches that caused fatal crashes. Evidence showed GM was aware of the defect for over a decade but failed to issue a recall.
Medical Malpractice Cases
Punitive damages may be awarded if a healthcare provider engages in actions that represent gross negligence or willful misconduct. For instance, a surgeon operating while intoxicated.
Defamation Cases
Spreading information known to be false, such as a media company doctoring photos, could warrant punitive damages. The goal is to deter others from making such false and damaging statements.
Factors Considered in Awarding Punitive Damages
According to Illinois law, some factors the jury can consider in determining if punitive damages should be awarded and how much include:
- The defendant’s net worth
- The nature and enormity of the wrong
- The potential liability of the defendant
- The defendant’s financial vulnerability
The jury may also examine the circumstances of each case, including:
- Repeated misconduct over an extended period
- Concealment of wrongdoing
- Financial gain at the plaintiff’s expense
- The plaintiff’s vulnerability
- Damage that could have resulted from the misconduct
Limits on Punitive Damage Awards
Although juries have wide discretion in awarding punitive damages, courts have imposed limits to avoid excessive awards that may violate due process:
Statutory Limits
Many states, like Illinois, have passed laws capping the amount of punitive damages that can be awarded. For example, punitive damages are capped at 3 times the compensatory damages or $500,000 in Illinois.
Constitutional Limits
The Supreme Court has ruled that excessive punitive damage awards may violate the Constitution’s due process protections. Awards should be reasonably proportional to the harm caused.
Taxability
Another limit on punitive damages is that they are taxable, unlike compensatory damages for physical injuries. Plaintiffs must pay income tax on punitive damage awards.
Injured in Illinois? Contact a Personal Injury Lawyer
If you or a loved one suffered harm in an accident caused by negligence in Illinois, contact Onward Injury Law for a free case review. With decades of experience winning injury claims statewide, their lawyers can build a strong claim and fight for maximum compensation.
Don’t wait – call or visit their website. Their Bloomington personal injury attorneys will evaluate your potential to recover damages. Act quickly while the evidence is fresh. Get the justice you deserve with their law firm by your side.
