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What Are Punitive Damages and How Do They Work?

PUNITIVE DAMAGES

What Are Punitive Damages and How Do They Work?

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The primary purpose of damages in a civil dispute is compensate the injured party for their loss. However, in certain circumstances “punitive” damages may be awarded in order to punish the defendant or deter future wrongful conduct.

Availability of Punitive Damages

Punitive damage awards in California are governed by Civil Code section 3294. That statute provides that punitive damages are only available in actions for “the breach of an obligation not arising from contract,” i.e. tort claims. In addition to having a proper claim, to obtain punitive damages a litigant must also prove that the defendant acted with either oppression, fraud, or malice.

Additional Prerequisites to Obtaining Punitive Damages

A party can only obtain punitive damages if they recover damages on the underlying tort claim. A failure to obtain an award of damages on the underlying claim forecloses the possibility of punitive damages. Further, even where punitive damages are available, a jury in its discretion can determine not to award them.

 

What Are Punitive Damages and How Do They Work?

Jury Awards $3,250,000 for fraud and punitive damages in sale of restaurant.

Punitive Damages Must be Proven by Clear and Convincing Evidence

 

Most claims in civil court must be proven by a “preponderance of the evidence”. A preponderance of the evidence generally means more likely than not. However, a claim for punitive damages is subject to a higher, clear and convincing evidence standard. Clear and convincing evidence generally requires that the punitive damage claim be proven to a “high probability.”

Amount of Punitive Damages Available

Punitive damages are assessed in an amount which depending on the defendant’s financial worth will deter them from committing similar misdeeds. In California, there is no numerical limit on how large a punitive damages award can be. However, due process requires that that there be a reasonable relation between the amount of punitive damages and the amount of actual damages awarded in a case. Further, the United States Supreme Court has stated that most punitive damages awards should be a single digit multiple of the amount of actual damages awarded in the case.

Getting Legal Help

Brown & Charbonneau, LLP represents individuals as well as large and small companies in cases involving all forms of business disputes. If you are involved in a business dispute, or would like to learn about your rights and how to protect them, we can provide you with the information you need. Contact us or call today at 714-505-3000 to schedule a consultation and learn more about how we can help you.

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