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Amount received (other than workers' compensation) through prosecution of a legal suit or action based on tort or tort-type rights, or through a settlement agreement entered into in lieu of such prosecution. Reimbursement for loss of income or recovery of previously deducted expenses is normally taxable. Damage income for personal injuries or sickness is generally not taxable.
The amount recoverable by a person who has been injured in any manner, including physical harm, property damage, or violated rights, through the act or default of another. See Compensatory Damages.
Example: Abel forfeited his Earnest Money to the owner of property as damages for failing to purchase as agreed.
Compensation or indemnity that may be recovered in the courts by any person who has suffered loss, detriment, or injury to person, property, or rights through the unlawful act or negligence of another.
For more information on damages, visit Britannica.com.
Monetary compensation that is awarded by a court in a civil action to an individual who has been injured through the wrongful conduct of another party.
Damages attempt to measure in financial terms the extent of harm a plaintiff has suffered because of a defendant's actions. Damages are distinguishable from costs, which are the expenses incurred as a result of bringing a lawsuit and which the court may order the losing party to pay. Damages also differ from the verdict, which is the final decision issued by a jury.
The purpose of damages is to restore an injured party to the position the party was in before being harmed. As a result, damages are generally regarded as remedial rather than preventive or punitive. However, punitive damages may be awarded for particular types of wrongful conduct. Before an individual can recover damages, the injury suffered must be one recognized by law as warranting redress and must have actually been sustained by the individual.
Three major categories of damages are recognized: compensatory, which are intended to restore what a plaintiff has lost as a result of a defendant's wrongful conduct; nominal, which consist of a small sum awarded to a plaintiff who has suffered no substantial loss or injury but has nevertheless experienced an invasion of rights; and punitive, which are awarded not to compensate a plaintiff for injury suffered but to penalize a defendant for particularly egregious, wrongful conduct. In specific situations, two other forms of damages may be awarded: treble and liquidated.
Compensatory Damages
With respect to compensatory damages, a defendant is liable to a plaintiff for all the natural and direct consequences of the defendant's wrongful act. Remote consequences of a defendant's act or omission cannot form the basis for an award of compensatory damages.
Consequential damages, a type of compensatory damages, may be awarded where the loss suffered by a plaintiff is not caused directly or immediately by the wrongful conduct of a defendant, but instead results from the defendant's act. For example, if the defendant carried a ladder and negligently walked into the plaintiff, a model, injuring the plaintiff's face, the plaintiff could recover for the loss of income resulting from the injury. These consequential damages are based on the resulting harm to the plaintiff's career. They are not based on the injury itself, which was the direct result of the defendant's conduct.
The measure of compensatory damages must be real and tangible, although it can be difficult to fix the amount with certainty, especially in cases involving claims such as pain and suffering or emotional distress. In assessing the amount of compensatory damages to be awarded, a trier of fact (the jury or, if no jury exists, the judge) must exercise good judgment and common sense, based on general experience and knowledge of the economic and social affairs of life. Within these broad guidelines, the jury or judge has wide discretion to award damages in whatever amount is deemed appropriate, so long as the amount is supported by the evidence in the case.
A plaintiff can recover for a number of different injuries suffered as a result of another person's wrongful conduct. The plaintiff can recover for a physical impairment if it results directly from a harm caused by the defendant. The jury, in determining damages, considers the present as well as long-range effects of the disease or injury on the physical well-being of the plaintiff, who must demonstrate the disability with reasonable certainty.
Compensatory damages can be awarded for mental impairment, such as a loss of memory or a reduction in intellectual capacity suffered as a result of a defendant's wrongful conduct.
A plaintiff may recover compensatory damages for both present and future physical pain and suffering. Compensation for future pain is permitted when there is a reasonable likelihood that the plaintiff will experience it; the plaintiff is not permitted to recover for future pain and suffering that is speculative. The jury has broad discretion to award damages for pain and suffering, and its judgment will be overturned only if it appears that the jury abused its discretion in reaching the award.
Mental pain and suffering can be considered in assessing compensatory damages. Included in mental pain and suffering are fright, nervousness, grief, emotional trauma, anxiety, humiliation, and indignity. Historically, a plaintiff could not recover damages for mental pain and suffering without an accompanying physical injury; today, most jurisdictions have modified this rule, allowing recovery for mental anguish alone where the act precipitating the anguish was willful or intentional or done with extreme carelessness or recklessness. Ordinarily, mental distress brought on by sympathy for the injury of another will not warrant an award of damages, although some jurisdictions may allow recovery if the injury was caused by the willful or malicious conduct of the defendant. For instance, if an individual wrongfully and intentionally injures a child in the presence of the child's mother, and as a result, the mother suffers psychological trauma, the defendant can be liable for the mother's mental suffering. In some jurisdictions, a bystander can recover damages for mental distress caused by observing an event in which another negligently, but not intentionally, causes harm to a family member.
Compensatory damages of a more economic nature may also be recovered by an injured party. A plaintiff may recover for loss of earnings resulting from an injury. The measure of lost earnings is the amount of money that the plaintiff might reasonably have earned by working in her or his profession during the time the plaintiff was incapacitated because of the injury. In the case of a permanent disability, this amount can be determined by calculating the earnings the injured party actually lost and multiplying that figure out to the age of retirement — with adjustments. If the amount of earnings actually lost cannot be determined with certainty, as in the case of a salesperson paid by commission, the plaintiff's average earnings or general qualities and qualifications for the occupation in which she or he has been employed are considered. Evidence of past earnings can also be used to determine loss of future earnings. As a general rule, lost earnings that are speculative are not recoverable, although each case must be examined individually to determine if damages can be established with reasonable certainty. For example, a plaintiff who bought a restaurant for the first time immediately before suffering an injury could not recover damages for the profits he might have made running it, because such profits would be speculative. A plaintiff unable to accept a promotion to another job because of an injury would stand a better chance of recovering damages for loss of earnings, because the amount lost could be established with more certainty.
Individuals injured by the wrongful conduct of another may also recover damages for impairment of earning capacity, so long as that impairment is a direct and foreseeable consequence of a disabling injury of a permanent or lingering nature. The amount of damages is determined by calculating the difference between the amount of money the injured per- son had the capacity to earn prior to the injury and the amount he or she is capable of earning after the injury, in view of his or her life expectancy.
Loss of profits is yet another element of compensatory damages, allowing an individual to recover if such a loss can be established with sufficient certainty and is a direct and probable result of the defendant's wrongful actions. Expected profits that are uncertain or are contingent upon fluctuating conditions would not be recoverable, nor would they be awarded if no evidence existed from which they could be reasonably determined.
A plaintiff can recover all reasonable and necessary expenses brought about by an injury caused by the wrongful acts of a defendant. In a contract action, for example, the party who has been injured by another's breach can recover compensatory damages that include the reasonable expenses that result from reliance on the contract, such as the cost of transporting perishable goods wrongfully refused by the other contracting party. In other actions, expenses awarded as part of compensatory damages may include medical, nursing, and prescription drug costs; the costs of future medical treatment, if necessary; or the costs of restoring a damaged vehicle and of renting another vehicle while repairs are performed.
Interest can be awarded to compensate an injured party for money wrongfully withheld from her or him, as where an individual defaults on an obligation to pay money owed under a contract. Interest is ordinarily awarded from the date of default, which is set by the time stated in the contract for payment; the date a demand for payment is made; or the date the lawsuit alleging the breach of the contract is initiated.
Nominal Damages
Nominal damages are generally recoverable by a plaintiff who successfully establishes that he or she has suffered an injury caused by the wrongful conduct of a defendant, but cannot offer proof of a loss that can be compensated. For example, an injured plaintiff who proves that a defendant's actions caused the injury but fails to submit medical records to show the extent of the injury may be awarded only nominal damages. The amount awarded is generally a small, symbolic sum, such as one dollar, although in some jurisdictions, it may equal the costs of bringing the lawsuit.
Punitive Damages
Punitive damages, also known as exemplary damages, can be awarded to a plaintiff in addition to compensatory damages where a defendant's conduct is particularly willful, wanton, malicious, vindictive, or oppressive. Punitive damages are awarded not as compensation, but to punish the wrongdoer and to act as a deterrent to others who might engage in similar conduct.
The amount of punitive damages to be awarded lies within the discretion of the trier of fact, which must consider the nature of the wrongdoer's behavior, the extent of the plaintiff's loss or injury, and the degree to which the defendant's conduct is repugnant to a societal sense of justice and decency. An award of punitive damages will usually not be disturbed on the ground that it is excessive, unless it can be shown that the jury or judge was influenced by prejudice, bias, passion, partiality, or corruption.
In the late twentieth century, the constitutionality of punitive damages has been considered in several U.S. Supreme Court decisions. In 1989, the Court held that large punitive damages awards did not violate the Eighth Amendment prohibition against the imposition of excessive fines (Browning-Ferris Industries of Vermont v. Kelco Disposal, 492 U.S. 257, 109 S. Ct. 2909, 106 L. Ed. 2d 219). Later, in Pacific Mutual Life Insurance Co. v. Haslip, 499 U.S. 1, 111 S. Ct. 1032, 113 L. Ed. 2d 1 (1991), the Court held that unlimited jury discretion in awarding punitive damages is not "so inherently unfair" as to be unconstitutional under the Due Process Clause of the Fourteenth Amendment to the U.S. Constitution. And in TXO Production Corp. v. Alliance Resources Corp., 509 U.S. 443, 113 S. Ct. 2711, 125 L. Ed. 2d 366 (1993), the Court ruled that a punitive damages award that was 526 times the compensatory award did not violate due process. Both Haslip and TXO Production disappointed observers who hoped that the Court would place limits on large and increasingly common punitive damages awards. In a 1994 decision, the Court did strike down an amendment to the Oregon Constitution that prohibited judicial review of punitive damages awards, on the ground that it violated due process (Honda Motor Co. v. Oberg, 512 U.S. 415, 114 S. Ct. 2331, 129 L. Ed. 2d 336).
In a jury proceeding, although the amount of damages to be awarded is an issue for the jury to decide, the court may review the award. If the court determines that the verdict is excessive in view of the particular circumstances of the case, it can order remittitur, which is a procedural process in which the jury verdict is reduced. The opposite process, known as additur, occurs when the court deems the jury's award of damages to be inadequate and orders the defendant to pay a greater sum. Both remittitur and additur are employed at the discretion of the trial judge, and are designed to remedy a blatantly inaccurate damages award by the jury without the necessity of a new trial or an appeal.
Treble Damages
In some situations, where provided by statute, treble damages may be awarded. In such situations, a statute will authorize a judge to multiply by three the amount of monetary damages awarded by a jury and to order that a plaintiff be paid the tripled amount. The Clayton Anti-Trust Act of 1914 (15 U.S.C.A. § 12 et seq.), for example, directs that treble damages be awarded for violations of federal antitrust laws.
Liquidated Damages
Liquidated damages constitute compensation agreed upon by the parties entering into a contract, to be paid by a party who breaches the contract to a nonbreaching party. Liquidated damages may be used when it would be difficult to prove the actual harm or loss caused by a breach. The amount of liquidated damages must represent a reasonable estimate of the actual damages a breach would cause. A contract term fixing unreasonably large or disproportionate liquidated damages may be void because it constitutes a penalty, or punishment for default. Furthermore, if it appears that the parties have made no attempt to calculate the amount of actual damages that might be sustained in the event of a breach, a liquidated damages provision will be deemed unenforceable. In determining whether a particular contract provision constitutes liquidated damages or an unenforceable penalty, a court will look to the intention of the parties, even if the terms liquidated damages and penalty are specifically used and defined in the contract.
Money paid to the victor in a court case in which loss of property or income is alleged, covered by the law of torts. Simple damages are assessed on the value of the actual loss. Punitive or exemplary damages are in excess of simple damages and are awarded as a punishment against the loser in the suit if it is judged that the tort was an aggravated one, and that the defendant has been, for example, wilfully and recklessly neglectful.
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In law, damages refers to the money paid or awarded to a claimant (UK) or plaintiff (US) following a successful claim in a civil action.
Compensatory damages are paid to compensate the claimant for loss, injury, or harm suffered by(see requirement of causation) another's breach of duty.
On a breach of contract by a defendant, a court generally awards the sum which would restore the injured party to the economic position that he or she expected from performance of the promise or promises (known as an "expectation measure" or "benefit-of-the-bargain" measure of damages).
When it is either not possible or desirable to award damages measured in that way, a court may award money damages designed to restore the injured party to the economic position that he or she had occupied at the time the contract was entered (known as the "reliance measure"), or designed to prevent the breaching party from being unjustly enriched ("restitution") (see below).
Parties may contract to liquidated damages to be paid upon a breach of the contract by one of the parties. Under the common law, a liquidated damages clause will not be enforced if the purpose of the term is solely to punish a breach (in this case it is termed penal damages). The clause will be enforceable if it involves a genuine attempt to quantify a loss in advance and is a good faith estimate of economic loss. Courts have ruled as excessive and invalidated damages which the parties contracted as liqudiated, but which the court nonetheless found to be penal.
Damages in tort are generally awarded to place the claimant in the position he/she would have been had the tort not taken
place. Damages in
General damages compensates the claimant for the non-monetary aspects of the specific harm suffered. This is usually termed 'pain, suffering and loss of amenity'. Examples of this include physical or emotional pain and suffering, loss of companionship, loss of consortium, disfigurement, loss of reputation, loss or impairment of mental or physical capacity, loss of enjoyment of life, etc. This is not easily quantifiable, and depends on the individual circumstances of the claimant. Judges in the UK base the award on damages awarded in similar previous cases. For example, an accident in which the claimant has suffered the loss of both legs and for which the defendant was legally responsible, will typically attract general damages (at 2006) in the region of £125,000 - £145,000. A list of these are contained in a reference book known as 'Kemp & Kemp'. [1]
General damages are generally awarded only in claims brought by individuals, when they have suffered personal harm. Examples would be personal injury (following the tort of negligence by the defendant), or in the tort of defamation.
Special damages compensate the claimant for the quantifiable monetary losses suffered by the plaintiff. For example, extra costs, repair or replacement of damaged property, lost earnings (both historically and in the future), loss of irreplaceable items, and additional domestic costs etc. They are seen in both personal and commercial actions.
Special damages can include direct losses (such as amounts the claimant had to spend to try to mitigate problems) and consequential or economic losses resulting from lost profits in a business.
Damages in tort are generally awarded to place the claimant in the position he would have been had the tort not taken place.
Damages for breach of contract are generally awarded to place the claimant in the position he would have been had the contract
not been breached. This can often result in a different measure of damages. In cases where it is possible to frame a claim in
either contract or tort, it is necessary to be aware of what gives the best outcome.
If the transaction was a ‘good bargain’ contract generally gives a better result for the claimant.
As an example, Fred sells Bob a watch for £100. Fred tells Bob it is an antique Rolex. In fact it is a fake, worth £50. If it had been a genuine antique Rolex it would be worth £500. Fred is in breach of contract and could be sued. In contract, Bob is entitled to an item worth £500, but he has only got one worth £50. His damages are £450. Fred also induced Bob to enter into the contract through a misrepresentation (a tort). If Bob sues in tort, he is entitled to damages that put himself back to the same financial position place he would have been in had the misrepresentation not been made. He would clearly not have entered into the contract knowing the watch was fake, and is entitled to his £100 back. Thus his damages in tort are £100.
If the transaction was a ‘bad bargain’, tort gives a better result for the claimant. If in the above example Bob had overpaid, paying £750 for the watch, his damages in contract would still be £450 (giving him the item he contracted to buy), however in tort damages are £700. This is because damages in tort put him in the position he would have been in had the tort not taken place, and are calculated as his money back (£750) less the value of what he actually got (£50).
Special damages are sometimes divided into direct losses, and consequential or economic losses.
Direct losses include the costs needed to remedy problems and put things right. The largest element is likely to be the reinstatement of property damage. Take for example a factory which was burnt down by the negligence of a contractor. The claimant would be entitled to the direct costs required to rebuild the factory and replace the damaged machinery.
The claimant may also be entitled to any consequential losses. These are the lost profits that the claimant could have been expected to make in the period whilst the factory was closed and rebuilt.
Damages are likely to be limited to those reasonably foreseeable by the defendant. If a defendant could not reasonably have foreseen that someone might be hurt by his or her actions, then there may be no liability. This is known as remoteness.
An exception is damages for fraudulent misrepresentation when all damages suffered by the claimant are claimable.
It may be useful for the lawyers for the plaintiff and/or the defendant to employ forensic accountants or forensic economists to give evidence on the value of the loss. In this case, they may be called upon to give opinion evidence as an expert witness.
Statutory damages are laid down in law. Mere violation of the law can entitle the victim to a statutory award.
The possible remedies for misrepresentation for example are codified in the Misrepresentation Act 1967.
On the other hand, nominal damages are very small damages awarded to show that the loss or harm suffered was technical rather than actual. Perhaps the most famous nominal damages award in modern times has been the $1 verdict against the National Football League (NFL) in the 1986 antitrust suit prosecuted by the United States Football League. Although the verdict was automatically trebled pursuant to antitrust law in the United States, the resulting $3 judgment was regarded as a victory for the NFL. Historically, one of the best known nominal damage awards was the farthing that the jury awarded to James Whistler in his libel suit against John Ruskin. In the English jurisdiction, nominal damages are generally fixed at £2.
Many times a party that has been wronged but is not able to prove significant damages will sue for nominal damages. This is particularly common in cases involving alleged violations of constitutional rights, such as freedom of speech.
Generally, punitive damages, which are also termed exemplary damages in the United Kingdom, are not awarded in order to compensate the plaintiff, but in order to reform or deter the defendant and similar persons from pursuing a course of action such as that which damaged the plaintiff. Punitive damages are awarded only in special cases where conduct was egregiously invidious, and are over and above the amount of compensatory damages. Great judicial restraint is expected to be exercised in their application. In the United States punitive damages awards are subject to the limitations imposed by the due process of law clauses of the Fifth and Fourteenth Amendments to the United States Constitution.
In England and Wales, exemplary damages are limited to the circumstances set out by Lord Patrick Devlin in the leading case of Rookes v. Barnard. They are:
Rookes v Barnard has been much criticised and has not been followed in Canada or Australia or by the Privy Council.
In certain areas of the law another head of damages has long been available, whereby the defendant is made to give up the profits made through the civil wrong in restitution. The plaintiff thereby gains damages which are not measured by reference to any loss sustained. In some areas of the law this heading of damages is uncontroversial; most particularly intellectual property rights and breach of fiduciary relationship.
In England and Wales the House of Lords case of Attorney-General v. Blake opened up the possibility of restitutionary damages for breach of contract. In this case the profits made by a defecting spy, George Blake, for the publication of his book, were awarded to the British Government for breach of contract. The case has been followed in English courts, but the situations in which restitutionary damages will be available remain unclear.
The basis for restitutionary damages is much debated, but is usually seen as based on denying a wrongdoer any profit from his wrongdoing. The really difficult question, and one which is currently unanswered, relates to what wrongs should allow this remedy.
In addition to damages, the successful party is entitled to be awarded his reasonable legal costs that he spent during the case. This is the rule in most countries other than the United States. In the United States, a party generally is not entitled to its attorneys' fees or for hardships undergone during trial. See American rule.
Among the Saxons, a price called Weregeld was paid for homicide by the killer, in part to the family of the victim, in part to the local king.
This entry is from Wikipedia, the leading user-contributed encyclopedia. It may not have been reviewed by professional editors (see full disclaimer)
Dansk (Danish)
n. pl. - skadeserstatning
Français (French)
n. pl. - (Jur) dommages et intérêts, dommages-intérêts, indemnisation
Deutsch (German)
n. pl. - Schadenersatz
Ελληνική (Greek)
n. pl. - (νομ.) αποζημίωση
Italiano (Italian)
risarcimento, danni
Português (Portuguese)
n. pl. - danos (m pl)
Русский (Russian)
убытки, стоимость
Español (Spanish)
n. pl. - daños y perjuicios
Svenska (Swedish)
n. pl. - skadestånd
中文（简体） (Chinese (Simplified))
索赔
中文（繁體） (Chinese (Traditional))
n. pl. - 索賠
한국어 (Korean)
n. pl. - 손해액, 배상금
עברית (Hebrew)
n. pl. - פיצויים, דמי נזק
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