To the average Joe, the word ‘damages’ might be seen as physical damage that affects something’s value or function. And in this way, that’s right. However, in the legal world, the word ‘damages’ refers to something very different. Damages, in legal terms, are a monetary amount given to a successful party to compensate them for their suffering. They are only awarded in civil cases.
Exemplary damages take this a step further. Exemplary damages are essentially further punishment on top of compensatory damages. Their aim is to deter exceptionally bad behaviour. It requires somebody to intentionally do wrong or act recklessly without regard for others.
When Do Courts Award Exemplary Damages?
In Australia, there are six types of damages that courts can award to the winner of a case. These include:
- General/Compensatory Damages
- Pecuniary Loss
- Income Loss
- Aggravated Damages
- Exemplary Damages
- Nominal Damages
Exemplary damages punish somebody that has intentionally disregarded the rights of another. The main focus of the courts is on intention. This will involve malice, violence, and cruelty. Damages of this kind are only awarded in exceptional circumstances. Courts usually give winners of civil cases exemplary damages when they want to make an example of certain behaviour. The purpose of this is to recognise that this behaviour was seriously wrong and to deter anybody else from doing the same. However, the courts will not just award exemplary damages when they disapprove of something.
An example of this from a famous case involved somebody intentionally driving into another person with their car. They were seriously injured. The driver then left them in agony on the side of the road. The courts considered this to be cruel and that there was evidence of serious and intentional disregard of the injured person. Exemplary damages were awarded in this case.
When Do Courts Not Award Exemplary Damages?
Some statutory schemes do not award exemplary damages. For example, they cannot be awarded in workers compensation cases. The Workers Compensation Act 1987 (Cth) states this and so do other areas of law. The Motor Accidents Competition Act 1999 (Cth) and the Motor Accident Injuries Act 2017 (Cth) also don’t award them. The Civil Liability Act 2002 (NSW) will not award them in some cases, such as when they involve negligence.
Exemplary damages are entirely discretionary. This means that the courts decide entirely whether they should be awarded based on their own assessment. Courts are to be very careful, which is why they rarely do so.
How Much Can Be Awarded?
In Australia, there is no limit to how much money can be awarded. That does not mean that Judges like to give out large amounts, however. In the USA, this may be the case. In Australia, it is not. The largest sum of exemplary damages that have been awarded to date, is $300,000.
Courts will consider the amount of compensatory money when determining the exemplary amount. This is because compensatory damages are already punishment. They may also consider the ability of the losing party to pay.
Conclusion
The main consideration is whether there has been a serious disregard for a person’s rights. If a person has gone out of their way to do harm, this will likely result in exemplary damages being awarded. How much will be awarded will depend on the circumstances. If you are in need of advice in any matter outlined above, visit our lawyer marketplace.
