Compensatory DamagesCredit Repair Definition
Money awarded in a lawsuit to compensate the plaintiff for actual losses or injuries suffered.
Definition
Compensatory damages are a sum of money awarded by a court in a civil lawsuit to compensate the injured party (plaintiff) for actual losses or harm suffered as a direct result of the defendant's wrongful actions (like breach of contract or negligence). The goal of compensatory damages is to restore the plaintiff to the position they would have been in had the injury or breach not occurred ('make them whole'). These damages can cover tangible losses, such as medical expenses, lost wages, and property damage (known as special or economic damages), as well as intangible harm, like pain and suffering, emotional distress, or loss of enjoyment of life (known as general or non-economic damages). Compensatory damages are distinct from punitive damages, which aim to punish the defendant rather than compensate the plaintiff.
Frequently Asked Questions
What are the two main types of compensatory damages?
Compensatory damages are typically divided into: (1) Special Damages (Economic Damages): Quantifiable monetary losses, such as medical bills, lost income (past and future), repair costs, and other out-of-pocket expenses. (2) General Damages (Non-Economic Damages): Compensation for subjective, non-monetary harm, such as pain and suffering, emotional distress, loss of consortium, or disfigurement. Calculating general damages is often more challenging.
How are compensatory damages calculated?
Special damages are calculated based on documented evidence like bills, receipts, and wage statements. General damages are more subjective and depend on factors like the severity and duration of the injury, the impact on the plaintiff's life, and legal precedents. Juries often determine the amount of general damages based on the evidence presented.
Can compensatory damages be awarded in credit-related lawsuits?
Yes, consumers who successfully sue creditors, debt collectors, or credit bureaus for violations of laws like the Fair Credit Reporting Act (FCRA) or Fair Debt Collection Practices Act (FDCPA) may be awarded actual compensatory damages for harm suffered, such as financial losses due to credit denial, emotional distress, or damage to reputation.
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