Free Paper Sample: Differences Between Compensatory, Punitive, and Nominal Damages

Published: 2023-10-06
Free Paper Sample: Differences Between Compensatory, Punitive, and Nominal Damages
Type of paper:  Essay
Categories:  Company Law Court system Judicial system
Pages: 3
Wordcount: 596 words
5 min read

Compensatory damages is money awarded in a civil action to indemnify a person for loss, detriment, or loss for unlawful conduct by a person. The award provides a plaintiff with monetary compensation to replace what was lost and nothing more (Kubasek et al., 2016). For instance, if a person was emotionally abused, they will receive compensation to cover sleep loss, missed working days, and money spent on therapy. The out-of-pocket expenses include medical bills, lost wages after a car accident (Descheemaeker, 2017). Compensation will depend on the severity of damage or loss. Still, a court of low should satisfactorily compensate a plaintiff to recover all their expenses due to unlawful conduct.

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On the other hand, punitive damages are determined to punish an offender for their unlawful behavior (Descheemaeker, 2017). The damages also are meant to encourage an offender to engage in similar conduct in the future. It also prevents offenders or other people at risk from being hurt by an offender in the future (Kubasek et al., 2016). A judge can decide to make an offender an example to others to deter them from engaging in unlawful conduct.

A court of law can award compensatory damages and punitive damages if the compensation is not sufficient depending on the severity of an offense. For example, punitive damage was awarded in October 2017 against Johnson & Johnson as the court upheld that their product talcum powder caused cancer (Client v. Johnson & Johnson, 2017). The award amounts to $347million in punitive damages also included a $70 million compensatory fee. The historic court ruling was indicative of law courts' commitment to encouraging companies to act legally and deter them from unlawful actions.

The purpose of awarding punitive damage is to bar the company from engaging in similar events and encourage them to change their actions (Kubasek et al., 2016). For example, companies manufacturing health products are at risk of facing legal charges if their products do not meet the necessary safety threshold. For example, companies developing weight loss products should take precautions to ensure their products do not react with other medications patients take. Various companies incur punitive damage and compensatory damages if sufficient evidence shows they did not take the necessary precautions to provide healthy products. Different federal and state court rulings indicate that companies incur punitive and compensatory damages as courts attempt to prevent future activities.

Nominal damages are awarded when a plaintiff is legally right but did not sustain any substantial loss. The amounts awarded due to nominal damages are small since the plaintiff does not need compensation (Kubasek et al., 2016). It is unlike compensatory damages that involve actual losses or expenses such as loss of a job, loss of income, or medical bills. The purpose of nominal damages to legally acknowledge infringement of rights, although no actual losses were incurred. On the other hand, the purpose of punitive damages is to deter an offender from similar actions in the future and promote society's safety (Kubasek et al., 2016). For example, if a person breaches a contract, and no financial loss was incurred, nominal damage may be awarded (Descheemaeker, 2017). The purpose is to seek vindication of being right while also assessing if punitive measures can be awarded to deter an individual from acting in unlawful conduct or infringing human rights.


Client v. Johnson & Johnson, 918 Ca. 2d 925 (Ca 2017).

Descheemaeker, E. (2017). Claimant-Focused Damages in the Law of Privacy. Remedies for Breach of Privacy (Oxford: Hart Publishing, 2018), 141-161.

Kubasek, N. K., Brennan, B. A., & Browne, M. N. (2016). The legal environment of business: A Critical Thinking Approach. Pearson.

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