What is the difference between compensatory and punitive damages?

Compensatory damages are awarded to victims who have suffered losses due to an accident to compensate for their monetary losses. This could include the cost of lost wages, medical bills, property damage, and other out-of-pocket expenses related to the accident. Punitive damages, on the other hand, are awarded to victims to punish the at-fault party for their negligence. Punitive damages are often awarded when the at-fault party acted in a particularly reckless or malicious manner. In Minnesota, punitive damages are only awarded in cases where the conduct of the at-fault party is deemed to be outrageous and the prevailing party is awarded actual damages. Punitive damages in Minnesota are capped at twice the amount of the compensatory damages or $500,000, whichever is less. This cap does not apply to cases of intentional misconduct or those involving death or certain injuries. Ultimately, punitive damages are awarded to punish and deter the at-fault party from engaging in similar conduct in the future.

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What is the difference between compensatory and punitive damages?

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