There are many situations in which compensatory damages have to be considered. For example, let’s say that you undergo a medical procedure, only to realize that it has caused more damage to your physical and mental health than ever before. In this case, you would likely be entitled to compensatory damages.

Of course, there is a lot of work that has to be done by lawyers to figure out what makes sense regarding a compensatory damages definition. There are also different classifications of compensatory damages. Let’s take a look deeper so that we might understand the compensatory damages definition in detail.



Compensatory damages are awarded to a plaintiff to compensate for injury, damages, or any other incurred loss. Often times, compensatory damages are awarded thanks to a negligent party - whether it involves lost wages, equipment that doesn’t work, or a situation where there was a clear loss attributed to the defendant.

Once it is clear that a loss is attributed, a monetary amount has to be decided. The point of compensatory damages is simple: to cover the losses incurred by the defendant. Compensatory damages are awarded in civil court, not criminal court. The damages are meant to replace strictly what was lost, not to account for emotional damages, pain and suffering, or punitive damages.

There are also actual damages and special damages. Actual damages are meant to recover only what was lost, while special damages include extra costs, the cost of replacing property, the loss of irreplaceable items, and consequential/economic losses from lost profits, and so forth.


You might be confused about the compensatory damages definition at this moment, and unsure about what situations will lead to compensatory damages in the first place. There are many potential situations where this could be the case. How do you measure “damage” in the first place?

Courts often use a variety of methods to measure damage, including the “per diem” method, which attaches a dollar value to each day that the plaintiff suffered. Other courts may implement a “multiplier method”, which starts with the actual damages then considers the severity of those damages/injuries/etc.

Compensatory damages are often awarded in situations involving medicine, such as hospital bills, rehabilitation expenses, or compensation for lost earnings. The compensatory damages may vary wildly depending on the individual, their status, and the value of their lost wages.

If your job pays $500,000 a year, you will likely to be entitled to more compensatory damages than an individual who is paid $50,000 a year, assuming that you both were unable to work for the same period of time.

If you were hit in a car accident, your compensatory damages would obviously include the medical costs associated with your injuries. However, it would also include the pay that you missed from work and may lose in the future.


There are different interpretations of the compensatory damages definition, and it should be noted that compensatory damages are much different from punitive damages. It can be difficult to estimate loss when it comes to compensatory damages.

Actual damages are compensatory damages that are meant to cover actual bills, such as hospital bills, medical bills, physical therapy, domestic services, ambulance expenses, and more. General, or “special” damages, are compensatory damages that attempt to place a value on things like mental anguish, future lost wages, disfigurement, and more.

Still have questions about compensatory damages or searching for personal injury legal support? Reach out to Erjavec Injury Law at External link opens in new tab or windowour website or call 941-907-1133.