Understanding compensatory damages in defective product liability lawsuits

Compensatory damages are awards of money to compensate for losses the injured party has suffered as a result of the injury. There are basically two categories of compensatory damages – those which compensate for economic losses and those which compensate for non-economic losses.

Economic losses

Economic losses include medical expenses and the cost of any changes in your lifestyle the injury has necessitated (such as having to hire someone to help around the house, or re-configuring your home to make it wheelchair accessible). Economic losses also include the cost of any repair to or replacement of personal property damaged or destroyed by the defective product and any lost wages from being unable to go to work due to your injury.

Non-economic losses

Also known as “general damages,” non-economic losses are intended to compensate for things such as pain and suffering and loss of consortium with a spouse. It is virtually impossible to put a dollar figure on these things, so attorneys typically look to the amounts awarded in similar cases to come up with an appropriate amount.

In most cases, compensatory damages are the only form of damages awarded in a product liability case. The exception is if the defendant has been so reckless in their disregard for the safety of their products, the court can impose punitive damages in addition to compensatory damages. Punitive damages are intended to punish the defendant and are calculated by considering the nature of the defendant’s malfeasance in relation to their wealth.

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