What Are Compensatory Damages?

Author: Mesriani Law Group
Posted on: August 27, 2022


In law, damages refer to monetary compensation a victim may be awarded for their loss or injury caused by another party. There are various types of damages in personal injury cases including compensatory damages.

According to civil Code §3333 the definition of compensatory damages is, “For the breach of an obligation not arising from contract, the measure of damages, except where otherwise expressly provided by this Code, is the amount which will compensate for all the detriment proximately caused thereby, whether it could have been anticipated or not.”

Also referred to as actual damages, these damages are intended to compensate the victim for the actual losses they experienced. Sometimes called the “made whole” rule, the goal of compensatory damages is to put the injured victim in the same financial position as they were if not for the accident or injury. However, there’s no set standard to determine compensatory damages. The total sum of compensatory damages varies depending on the specific facts of each case. Recoverable damages usually include ones that have already been incurred, present damages, and future damages.

Here are shortcuts to the specific topics:

  1. What Are Compensatory Damages?
  2. Types of Compensatory Damages
    1. Example of Special or Actual Damages
    2. Examples of General Damages
  3. Caps on Compensatory Damages in California
  4. Compensatory vs Punitive Damages
  5. Assessing Damages with a Personal Injury Lawyer
  6. Contact a Personal Injury Lawyer if You Have Compensatory Damages
  7. Compensatory Damage FAQs

Types of Compensatory Damages

Generally, the two separate types of compensatory damages are special and general damages.

  • Special damages – The goal of these damages is to return the victim back to the position they were in before the accident or injury. Compensation typically includes money for medical expenses, lost earnings, property damage, and other quantifiable losses. These out-of-pocket costs are typically easy to calculate because they can be verified by receipts or bills. Special damages are sometimes referred to as tangible or actual damages.
  • General damages – These are non-economic damages that are subjective losses and typically more challenging to calculate. They include compensation for pain and suffering, emotional distress, defamation, and loss of consortium.

In California, personal injury victims may be entitled to one or both types of damages.

Example of Special or Actual Damages

To get awarded special or actual damages, the victim must prove that they suffered quantifiable losses. In other words, the victim must be able to show proof of their loss.

Common examples of special or actual damages include:

  • Past and future medical and hospital expenses
  • Medical treatment bills
  • Rehabilitation costs
  • Disability accommodations
  • Physical therapy
  • Ambulance bills
  • Prescription drugs and medicine
  • Live-in care or nursing home care
  • Domestic services
  • Medical equipment
  • Lost employment income or lost wages
  • Property repair or replacement costs
  • Transportation and travel costs
  • Attorney fees and legal expenses

Any money you spent on your accident or personal injury claim could be included as part of the economic damages you could obtain from the defendant.

Medical Expenses

Personal injury victims may be entitled to damages for both past and future medical expenses. To recover past medical expenses, the victim must prove the following elements:

  • That the medical cost was reasonable
  • That medical treatment was reasonably necessary
  • That medical treatment was received

To prove that the cost was reasonable, the injured victim can show a copy of their medical bills. Through a treating physician’s testimony, they can prove that the medical treatment was reasonably necessary.

To obtain compensation for future medical expenses, the medical expenses must be:

  • Reasonably priced
  • Reasonably necessary
  • Reasonably certain that it will be required in the future

A medical expert can be asked to testify in court to prove this. For future medical expenses, the testimony doesn’t necessarily need to come from the treating physician. Rather, an economist can also testify to the costs.

Examples of General Damages

Since general damages include lost estimates rather than the actual monetary amount, there isn’t a set standard for calculating the total sum. Various methods can be used to determine the sum total such as the multiplier method and the per diem method.

  • The multiplier method – This equation calculates the damages by multiplying total sum of a victim’s actual damages by a number that represents the seriousness of the injury.
  • The per diem method – Applies a fixed dollar amount to each day the victim suffered and sums up the value of all those days together. For this method, the victim’s actual daily earnings are commonly used to calculate the total.

Sometimes, a combination of these two methods can be used to calculate the total general compensatory damages. Regardless of the method used, examples of general damages typically include:

  • Disfigurement
  • Future lost income or wages
  • Future medical expenses
  • Inconvenience
  • Mental anguish
  • Physical long-term pain and suffering
  • Loss of consortium or grief
  • Loss of quality of life
  • Loss of enjoyment of life
  • Loss of opportunity
  • Emotional distress
  • Psychological trauma
  • Anxiety or depression
  • Humiliation

Caps on Compensatory Damages in California

Generally, California doesn’t have a cap for the number of compensatory damages in a personal injury lawsuit. A judge or jury can award any reasonable and fair monetary award in a car, bike, pedestrian, slip and fall, or any other personal injury accident case.

There is an exception with malpractice lawsuits. California law caps damages for malpractice lawsuits at $250,000. This includes compensation for pain and suffering and other non-economic damages. The Supreme Court has deemed this cap constitutional and it applies to any malpractice case– regardless of the severity of the victim’s injuries or number of defendants.

Compensatory vs Punitive Damages

Compensatory damages are meant to compensate the plaintiff with a sufficient sum of money that would cover the losses caused by a defendant. On the other hand, punitive damages are intended to punish the defendant for their outrageous behavior. It’s also meant to deter the defendant and others from acting in a similar manner in the future.

Keep in mind that California does not put a cap on the number of punitive damages (also known as exemplary damages) a victim can get awarded. But punitive damages are only awarded in rare cases where the defendant’s actions were particularly outrageous or harmful. The intent of punitive damages is punishing the defendant for their actions and to prevent others from acting in similar manner in the future. A common example of punitive damages is when a defendant was drunk driving or driving while distracted. In these cases, the defendant knowingly decided to engage in reckless behavior which could harm another person.

Assessing Damages with a Personal Injury Lawyer

Trying to determine the total sum of damages to claim in a personal injury lawsuit can be challenging. To avoid shortchanging yourself, you can work with a personal injury lawyer who can help you calculate a reasonable settlement amount for your injuries. A lawyer will use expert opinions from medical and financial industry professionals to calculate a reasonable demand amount.

Also, don’t be afraid to share every piece of relevant information with your attorney including any medical issues that you might not feel too comfortable sharing.  Attorney-client privilege ensures that the communication between you and your attorney is kept confidential. It is important to share as much as possible about your accident and injuries so your attorney can calculate the maximum settlement amount possible for your losses. If you’ve been injured in an accident in Los Angeles or anywhere in California, contact our law firm to find out more about your rights and legal options.

Contact a Personal Injury Lawyer if You Have Compensatory Damages

If you or a loved one has suffered from injuries and need to discuss recovery for compensatory damages incurred, call Mesriani Law Group to get the legal representation you need today. Our law firm has a team of licensed and experienced personal injury lawyers who can examine your personal injury claim and get you the compensation you deserve. Schedule a free consultation today and a Mesriani Law Group personal injury lawyer will reach out immediately to discuss how to move forward and protect your rights.

Compensatory Damage FAQs

What is an example of compensatory damages?

Examples of compensatory damages include medical and hospital expenses, medical treatment bills, rehabilitation bills, physical therapy, ambulance bills, prescription drugs and medicine, nursing home care, domestic services, and medical equipment. Other common examples include lost employment income or lost wages, property repair or replacement costs, and transportation costs.

What is also known as compensatory damages?

Compensatory damages are also sometimes referred to as actual damages. These damages are meant to compensate a victim for the actual losses they experienced. Sometimes called the “made whole” rule, actual damages are intended to put the injured victim in the same financial position as they were if not for the accident or injury.

How is compensatory damages different from consequential damages?

Compensatory damages are meant to compensate for the actual losses suffered by the plaintiff. Sometimes referred to as actual damages, compensatory damages are awarded in cases where a loss happened as a result of someone else’s negligence or unlawful behavior. The two types of compensatory damages include general and actual damages. On the other hand, consequential damages are intended to compensate a plaintiff for indirect damages suffered as a result of a breach of contract. A plaintiff can claim consequential damages as a form of remedy for harm as a consequence of the defendant's behavior.