By James P. Krupka, Esq.

While compensatory damages are intended to compensate a litigant for injuries suffered due to a defendant’s misconduct, punitive damages serve a wholly different purpose; that is, to punish a wrongdoer and deter the wrongdoer from engaging in similar wrongful conduct in the future.  Punitive damages are not awarded in routine matters; rather, they are awarded in exceptional cases where a party has acted in a particularly egregious or outrageous manner. In addition, punitive damages are only available if compensatory damages have been awarded.  An award of nominal damages will not support an award of punitive damages.  Furthermore, with the exception of certain environmental claims and discrimination claims, there is a statutory cap on punitive damages that is either five times the amount of the compensatory damages awarded or $350,000, whichever is greater.

To support an award of punitive damages, a plaintiff must prove by clear and convincing evidence that his or her loss was the result of the defendant’s acts or omissions and that either the defendant’s conduct was malicious (intentionally wrong) or that the defendant acted in wanton and willful (deliberate) disregard of plaintiff’s rights.  The evidentiary standard of “clear and convincing” evidence is a more stringent standard than the usual “preponderance of the evidence” standard applicable in most negligence cases.  While a preponderance of the evidence standard is met when the plaintiff demonstrates that a fact is more likely than not to be true, the clear and convincing standard requires proof that leaves no serious doubt.  While the standard for the imposition of punitive damages is higher than that in a routine negligence case, it is to be noted that the clear and convincing standard is still a lesser standard than that required in criminal cases; i.e., proof beyond a reasonable doubt.

In determining whether to award punitive damages and how much to award, a jury must consider all relevant evidence, including but not limited to the following: 1) the likelihood at the relevant time that serious harm would result from defendant’s conduct; 2) defendant’s awareness or reckless disregard of the likelihood that such serious harm would result from the defendant’s conduct; 3) the conduct of defendant upon learning that his/her initial conduct would likely cause harm; and, 4) the duration of the conduct or any concealment of it by defendant.  Other factors to be considered by a jury are the profitability of the defendant’s misconduct and the financial ability of the defendant to pay a punitive damages award.  There must also be a reasonable relationship between the actual injury and the punitive damages in order for a jury to award punitive damages.

Even if a jury awards punitive damages, it is the trial judge who gets the final word on such an award’s reasonableness.  Before entering judgment on a punitive damages award, the trial judge must determine whether the award is reasonable and justified in light of the purposes of punitive damages.  A trial judge may reduce or eliminate a punitive damages award if the judge determines that such action is necessary to satisfy the requirements of the statute authorizing punitive damages, N.J.S.A. 2A:15-5.14(a).

Clearly, obtaining an award of punitive damages from a jury is difficult. However, where a defendant has acted maliciously or with knowing disregard for the safety of others, resulting in damages sustained by a plaintiff, capped punitive damages are obtainable and should be sought where appropriate.