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compensation

Understanding damages & compensation

by Harsh Upadhyay
February 25, 2023
in Civil Litigation, General Practice, Layman Litigation
Reading Time: 6 mins read
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Introduction

Understanding damages & compensation. Compensatory damages gain money awarded to a plaintiff to compensate for damages, injury, or another incurred loss. Compensatory damages award in civil court cases. Where loss has occurred as a result of the negligence or unlawful conduct of another party. To receive compensatory damages, the plaintiff has to prove that a loss occurred. Also, that it was attributable to the defendant. The plaintiff must also be able to quantify the amount of loss in the eyes of the jury or judge.

Genuine damages expected to give the monetary sum important to supplant what lost and that’s it. As a rule, compensatory damages grant in common legal disputes. Which make up for damages, injury, or one more caused misfortune. As we’ll investigate further in the article, they are unique in relation to corrective and high pitch damages[1].

Damages refers to the sum of money the law imposes for a breach. Where some duty or violation of some right. Generally, there are two types of damages: compensatory and punitive. (The term “damages” typically includes both categories. But the term, “actual damages” is synonymous with compensatory damages, and excludes punitive damages.)

Compensatory damages

Compensatory damages, like the name suggests, intended to compensate the injured party for loss or injury. Punitive damages awarded to punish a wrongdoer. There are other modifying terms placed in front of the word damages like “liquidated damages,”. (contractually established damages) and “nominal damages” (where the court awards a nominal amount such as one dollar). For certain types of injuries statutes provide that successful parties should receive some multiple of their. “actual damages” — e.g., treble damages.

There are general principles governing what types of damages award. It generally recognized, for instance, that punitive damages are not available for breaches of contract. In addition, except when it proven that the breach was wanton, wilful and deliberate. In contract law, if a court determines that damages will not properly compensate the injured party, the court may choose to award specific performance[2].

What Does a Compensatory Damage Mean?

Compensatory damage money awarded to a claimant to compensate for damage, injury, or other loss incurred. Compensatory damage awarded in a civil court case where there has been a loss as a result of another party’s negligence or unlawful conduct.

The claimant must show that a loss occurred and that it was due to the defendant, in order to receive compensatory damages. The claimant must also have the ability to quantify the amount of loss in front of the jury or judge’s eyes.

Compensatory Damages vs. Punitive Damages

Compensatory damages differ from punitive damages, which may compensate over and above any loss or damage incurred and meant to provide an incentive against repeating the act that caused the plaintiff’s loss or damages.

Cases related to compensatory and punitive damages are a major source of debate in the field of health insurance, as proponents of tort reform claim that excessive damages above the actual loss incurred can increase the overall cost of healthcare. Compensatory damages are intended to compensate the plaintiff of a lawsuit with enough money to cover the loss caused by the defendant[3].

Compensatory Damages vs. Treble Damages

Treble damages are also a kind of punitive damage, meant to dissuade others from committing the same offense. Often, treble damages–which indicate that a statute exists to award a plaintiff up to three times actual or compensatory damages– invoked when a plaintiff has purposefully or wilfully violated a law.

Conclusion

Hence, considering the above aspects, compensation and damages even though being used simultaneously and interchangeably, hold dissimilarities. Damages are usually monetary awards and commonly observed in cases of accidents to compensate for the losses suffered by them whether physical, financial or emotional. Damages are not always compensatory in nature. Also, it sometimes considered that damages awarded to deter someone from the same crime again. In contempt of court cases, damages charged and these kinds of damages not compensatory in nature.

While, compensation is a legal right of all those who have been wronged or suffered losses because of guilt or lapse of another person whether it is an injury suffered from an accident or some kind of damage to the skin or other part of body by any treatment undergone at the salon. Individuals who suffer injuries received in road injuries receive compensation from not just their insurance companies but also from the party that has been found guilty of rash driving. Compensation shall be fixed on well-known principles that are applicable to the law of contract, which are to be found inter alia in section 73 of the Contract Act. Therefore, before ascertaining the quantum of both these claims a practice of considering the differentiation between both these claims on the basis of facts in hand is essential to reach a justified conclusion.


[1] https://www.investopedia.com/terms/c/compensatory-damages.asp

[2] https://www.law.cornell.edu/wex/damages

[3] https://cleartax.in/g/terms/compensatory-damages

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