New Jersey Personal Injury Damages Caps Explained

If you are injured by the negligence of another person, you may seek monetary compensation in the form of damages. While no amount of money can every take away the pain, suffering, and emotional trauma that you may experience following an accident, it is the best way that we have to make things as right as possible. If you talk with a New Jersey personal injury lawyer, they might discuss damages in the terms of compensatory vs. non-compensatory, or “punitive” damages. This article discusses the caps that the law places on punitive damages.

Compensatory vs. Punitive Damages in New Jersey

When you hear the term compensatory damages, these refer to damages that compensate you for things like:

  • Property damage
  • Medical bills
  • Lost wages (past and future)
  • Pain and suffering
  • Emotional distress
  • Loss of consortium/companionship
  • Loss of enjoyment of life

Because compensatory damages are intended to “compensate” you for your financial losses, these types of damages are not capped.

Punitive damages, on the other hand, are designed to punish the defendant — the person or entity responsible for your injuries. Punitive damages are awarded when a defendant’s behavior is so egregious that a judge or jury wants to make an example and deter future bad behavior. Unlike compensatory damages, punitive damages are capped at a fixed amount.

New Jersey Punitive Damages Caps

Section 2A:15-5.14 of the New Jersey Revised Statutes sets down the caps on punitive damages. All punitive damages must be determined by a judge to be reasonable and justified under the circumstances. In no case are punitive damages to exceed $350,000 or five times the amount of any compensatory damages, whichever amount is greater.

This means that if you are awarded $100,000 in compensatory damages, your punitive damage award could not exceed $500,000 under New Jersey law. Even if a jury awarded you $1 million in punitive damages, the judge has the right, and the duty, to reduce that amount to $500,000.
There are certain cases where damages caps are not applied, for example, when the defendant is convicted of a crime in connection with your injuries.

Why do we Have Damages Caps?

Policy-makers argue that exorbitant damages caps do more harm than good, making it more likely for insurance premiums to skyrocket and smaller businesses to go under. From a medical malpractice standpoint, they also argue that extreme punitive damages awards can reduce access to medical care and chill innovation on the medical front. Regardless of the reason, New Jersey punitive damages caps are here, so we must work to obtain justice for you and your family as best we can.

If you have been injured by someone else’s negligent behavior, you have the right to receive compensation. For more information about damages caps and how they might apply to your case,
contact our New Jersey personal injury attorneys at Nagel Rice, LLP.