Punitive Damages in Law Punitive damages, which are also known as exemplary damages, are damages that are separate and in excess of the compensatory damages awarded to a plaintiff in a legal suit that is the result of some type of misconduct by the defendant. Punitive damages are intended to serve as a punishment for the defendant.

Punitive damages are not based on a victim's injuries. Instead, they are a way to punish the defendant for some type of negligence. Punitive damages are seen in cases where behavior that is so excessive that a civil court penalty is needed to deter the defendant from committing the same negligence again. For example, if a doctor practices without a license and botches an operation that disfigures a patient, the plaintiff may ask for punitive damages to penalize the doctor.

It is difficult...

In business law, there are no maximums and no minimums -- the jury determines how large the award will be. For this reason, many problems result from punitive e damages decisions, as juries often act emotionally and with little regard to the greater implications of their decisions.
While a jury initially decides the amount of damages awarded, a court can review it. In many cases where punitive damages have been awarded, the punitive damages aspect of the award seems excessive and grossly out of proportion to compensatory damages. As a result, many of these awards are appealed by the defendant and reduced by the appeals court. One example of this was the recent Texas court decision in Ballard v. Farmers Insurance…