How to Prove Punitive Damages

• April 29, 2024
• Attorney Matt Stoddard
• Personal Injury

Punitive damages are an additional sum that a civil court may order a negligent party to pay, on top of the assessed value of the actual damages the victim suffered.  It is, essentially, a fine.

The purpose of punitive damages is to punish and deter particularly reprehensible behavior, and it not designed to compensate the victim. As a result, the process for proving that punitive damages are appropriate is more difficult, there are often statutory maximums, and some the money often goes to the State – not the victim.

Negligence and Serious Injuries Don’t Automatically Justify Punitive Damages

Generally, winning a civil lawsuit requires the Plaintiff to prove that someone (or some company) harmed that plaintiff through a negligent action or inaction.  Negligence can take many forms, but essentially, it’s a failure to behave the way a reasonable person would behave in the same situation.

The “reasonable person” standard varies according to the defendant’s knowledge and responsibilities. For example, to determine whether a crane manufacturer was negligent in failing to include certain safety devices in its crane design, the manufacturer’s decision will be compared to what a reasonable engineer with experience manufacturing cranes would have done, and not what a layperson without any engineering background might do.

Furthermore, it’s entirely possible for someone to commit an act of negligence without intending to do something wrong, and without knowing that someone got hurt.   Said differently, megligence caused by poor judgment, or ignorance of safety practices, is still negligence.

If you’ve been a victim of negligence, the law allows you to seek compensation for your losses even if the defendant did not intend to cause you harm.  Basic negligence, however, is not grounds for punitive damages.

To successfully argue for punitive damages, you and your lawyer will need to prove recklessness, conscious indifference to the consequences, or willful misconduct.

Proving Punitive Damages Based on Recklessness or Conscious Indifference.

The most common form negligence warranting punitive damages is recklessness or conscious indifference to the consequences.

Unlike negligence, which can arise from a lack of awareness, recklessness is a conscious indifference to the safety of others. For an act to be reckless, the person committing it must be generally aware of the danger it poses to others, either based on specific personal knowledge, or because the danger is extremely obvious.  And then with that knowledge, the person must choose to move forth with the reckless conduct anyway so as to showcase an indifference to whether that conduct ultimately harms someone.

Car accidents are a great example of the difference between basic negligence and recklessness. A driver who fails to notice a pedestrian in a crosswalk is negligent, but not necessarily reckless. On the other hand, a driver who hits a pedestrian while doing something blatantly risky, such as racing, drinking, or knowingly driving with faulty brakes, is both negligent and reckless.

The same distinction can apply to all sorts of other negligent accidents. For example, a business owner who fails to notice a crack in the floor until someone trips on it might be negligent. A business owner who chooses not to fix the crack after someone has already tripped on it could be considered reckless when the second victim trips and falls.

Proving Punitive Damages Based on Intentional Harm

Punitive damages are also appropriate in cases where the defendant was not just indifferent to the consequences of their actions, but actively trying to cause harm.

Intent to cause harm is quite a bit more difficult to prove than recklessness. It’s easiest with violent crimes, such as assault, but individual assailants rarely have the means to compensate their victims fully, let alone pay for additional punitive damages.

Companies can, unfortunately, cause a lot of harm to a lot of people in completely foreseeable ways, and still not be credited with the same “intent” as an individual.  This is because the law often determines that an employee “stepped outside their employment” when committing intentional acts such that those acts are not attributable to the employer.  They can be exceptions to this rule though.

However, if you believe that a company has deliberately harmed you, it’s always worth talking to a lawyer about your chances of proving it to a court’s satisfaction. There are situations where you can argue intent and win – especially in the racketeering context.

Punitive Damages Are Not the Most Reliable Source of Compensation

Because punitive damages are aimed at punishing recklessness, conscious indifference, and intentional conduct, rather than compensating victims for the harms suffered, the rules for recovering punitive damages are not designed with victims’ best interests as a top priority.

The main issues you may encounter when pursuing punitive damages in Georgia are:

1. Award limits. Punitive damages are capped at a maximum of $250,000.00, except for cases of product liability, intentional harm, and harm caused during voluntary intoxication. In product liability cases, however, the plaintiff only gets 25% of the punitive damages, and the rest goes to the State of Georgia.
2. Lack of coverage. Regardless of what a court rules, a plaintiff can’t collect compensation unless the defendant has the money, or has applicable liability insurance. In cases of intentional or intoxicated harm, where there is no cap on punitive damages, the law specifically forbids insurance coverage for these acts for public policy reasons.  After all, as a society, we would not want someone to be able to buy insurance in case they get caught for shooting and killing someone.  That encourage someone to commit murder.  Even without intentional conduct, most insurance policies have chosen exclude coverage for punitive damages altogether.
3. Taxes. Compensation granted to a victim in a civil trial or out-of-court settlement for a personal injury case is usually not considered taxable income.  Legally, that money is a replacement for something the victim already had and lost, not something they’ve gained as so there is typically no tax. Punitive damages, on the other hand, are not calculated as a replacement for something lost, so they’re fully taxable as income.

These drawbacks don’t mean that you shouldn’t pursue punitive damages when they’re appropriate.  Punitive damages can still add a significant amount to your settlement, if the court chooses to grant them, and you will only be taxed on the amount you actually receive.

Arguing for punitive damages can also help your case in other ways, which we’ll discuss below.

The Stoddard Firm Puts Clients First When Pursuing Punitive Damages

The Stoddard Firm is passionate about holding powerful companies accountable for their indifference to human health, safety, and well-being. We believe in the power of punitive damages to help change the way the world works for the better.

However, our first priority is getting the best possible outcome for our client. If we recommend pursuing punitive damages in your case, it’s because we believe it’s in your best interests, for either or both of these reasons:

1. You have a worthwhile chance of collecting the additional punitive damages.
2. Arguing for punitive damages will give us the opportunity to discuss relevant facts that could increase your compensation and/or your odds of winning, whether the court ultimately imposes punitive damages or not.

To maximize efficiency and prevent judges from overreaching, courts are only supposed to answer the minimum number of questions necessary to resolve the issue at hand, and the proceedings must focus on evidence that’s relevant to answering those essential questions.

In theory, a defendant’s assets are not relevant to a basic negligence case. The calculation of appropriate compensation is supposed to be based strictly on the defendant’s level of fault and the victim’s losses. In practice, however, juries sometimes do consider the defendant’s ability to pay when determining a fair-seeming sum.

When the possibility for punitive damages is in play, the defendant’s assets are very relevant, because a penalty that would seriously deter one entity might barely inconvenience a richer one. As a plaintiff, this gives your lawyer the chance to talk about the facts of the defendant’s finances, rather than leaving the jury to make assumptions.

Pursuing punitive damages also allows for examination of more of the defendant’s behavior, before and after the incident in question. Rather than simply asking what a reasonable person would have done in this one instance, the court must determine whether the defendant is in need of a serious wakeup call about their overall unethical behavior.

In some cases, the defendant’s past is highly relevant to the question of their negligence. If the defendant has been involved in similar incidents before, it might prove that they have knowledge that would cause a reasonable person to behave differently. Yet without punitive damages on the table, evidence of those past incidents might be erroneously excluded as irrelevant attacks on the defendant’s character.

The Stoddard Firm uses the pursuit of punitive damages not only to send messages to unethical businesses and their owners, but to make sure judges and juries have all the facts they need to treat our clients with the fairness they deserve.

To speak with a lawyer about your case, and about whether arguing for punitive damages is right for you, reach out to the Stoddard Firm any time by phone or chat.