How do Punitive Damages Work?

Exemplary or “Punitive” damages are available under law to punish a particular defendant’s behavior, and to encourage the defendant to change their behavior. In order for a plaintiff to be awarded punitive damages the plaintiff must show that the harm resulted from fraud, malice or gross negligence. While punitive damages are available in Texas, most higher courts look quite unfavorably at these awards and will often reduce the amount of the awards given by the jury.

In order for a plaintiff to be eligible to recover punitive damages, the plaintiff must first establish that he or she sustained actual damages as a result of the underlying claim. For example, if you were injured in a car accident, you must prove your economic and non-economic damages before you can recover on a claim that allows you to be awarded punitive damages.

In Texas, punitive damages have a statutory “cap” limiting the amount that can be awarded. The general rule is $200,000 or sometimes $750,000 plus two times the amount of economic damages, or those damages that a plaintiff actually paid or has incurred.

It is also more difficult to get a judgment for punitive damages from a trial court. In most civil lawsuits a unanimous jury verdict is not required, but in order for a jury to return a verdict awarding a plaintiff punitive damages the verdict must be unanimous. For a plaintiff to be awarded punitive damages each juror must agree that the legal requirements have been met and all jurors must agree on the amount of damages to award.

Jurors are barred from being told about the caps, and are barred from learning about the few exceptions to the caps. Lawyers can’t tell a jury about that part of the law in any part of the trial.

Now, the caps are applicable and strictly enforced unless an exception applies. One of those exceptions is a claim under the “Stowers Doctrine”. If a plaintiff can demonstrate an insurer’s liability under the “Stowers Doctrine,” the plaintiff can recover his or her full actual and punitive damages award without any application of the damage caps.