What are compensatory damages?

• A. Damages designed to punish the defendant for actions taken with recklessness, malice, or deceit.
• B. Damages designed to compensate for actual property damage, harm, or injury suffered by the plaintiff.
• C. Damages awarded for emotional distress without physical injury.
• D. Damages intended to deter lawsuits.

Answer: (B)

Compensatory damages are the payment meant to make the plaintiff whole by covering actual losses from a wrongful act. They reimburse tangible harms like medical bills, property damage, and lost wages, and they can also include non-economic harms such as pain and suffering, depending on the law and the specifics of the case. The essential point is to restore the plaintiff to the financial position they would have been in if the harm had not occurred.

This is different from punitive damages, which are intended to punish the defendant for especially wrongful conduct, not to compensate the plaintiff. The idea of deterring lawsuits is not the purpose of compensatory damages. While emotional distress without physical injury can be compensable in some situations, the defining feature here is compensating actual loss, not imposing punishment or broad deterrence.