Exemplary Damages - What Are They?

Exemplary Damages – What Are They?

In civil disputes, a plaintiff will be awarded damages for actual loss or damage suffered by the actions of a defendant. There are four types of damages that a court can award. These include:

  • Nominal damages;
  • Compensatory damages;
  • Aggravated damages;
  • Exemplary damages

This article will focus on what exemplary damages are and how they can be awarded.

What are Exemplary Damages?

Exemplary damages (also known as punitive damages) is the money awarded to a plaintiff that goes beyond the calculated damages. This means that the plaintiff is getting more money than the actual damage or loss they suffered. The purpose behind exemplary damages is to punish and deter others from committing similar acts. 

Courts have discretion in deciding whether it is appropriate to award exemplary damages, and must only consider exemplary damages in exceptional circumstances, or when they believe that the current damages or remedy awarded is insufficient to deter similar conduct in the future. In practice, exemplary damages are rarely awarded as there is an emphasis on compensation and restitution rather than punishment or deterrence within the court system. 

In assessing the sum of exemplary damages, courts in Australia must be careful not to excessively award a plaintiff. Note that exemplary damages are applied differently depending on each State. 

When can Exemplary Damages be Awarded?

Courts will only award exemplary damages when the plaintiff can show that there was an intentional element of harm. The various causes of actions that can trigger an award for exemplary damages include (however this will vary depending on the state in which the act occurred):

  • Property damage;
  • Personal injury;
  • Outrageous and intentional invasions of privacy; and 
  • Acts of deceit

Although common law in Australia allows for exemplary damages for a range of intentional torts, courts are prevented from awarding exemplary damages in a number of circumstances. These include:

  • Defamation claims
  • Breach of equitable obligations
  • Breach of a contractual duty of confidence 

How to Claim for Exemplary Damages

In order to make a successful claim for exemplary damages, a plaintiff or claimant must prove that the defendant either:

  1. Engaged in conscious wrongdoing; or 
  2. Had “contumelious disregard of another’s rights”

Summary

Exemplary damages are awarded as a means to punish and deter specific behaviour from being committed in the future. Exemplary damages can only be awarded in exceptional circumstances, and mainly applies to intentional tortious acts only.

About Alex Oum

Alex is a fifth-year student studying a Bachelor of Laws and a Bachelor of Communication (Digital Social Media). He has been working in the not-for-profit sector for 3+ years, as well as spending 3+ years in customer experience and B2C sales. Alex is motivated about making the law more accessible to individuals and businesses so that they are able to achieve their goals.