What is the primary purpose of punitive damages in a legal context?

The primary purpose of punitive damages is to punish a wrongdoer for their actions. These damages are awarded in civil cases when the defendant's conduct is found to be especially harmful, reckless, or intentional. Unlike compensatory damages, which are intended to reimburse the plaintiff for actual losses suffered, punitive damages serve a different but important function in the legal system. They act as a deterrent against similar future behavior, signaling to both the defendant and the public that such egregious behavior will not be tolerated. By imposing financial penalties that go beyond mere compensation for damages, punitive damages aim to discourage not just the individual in question but also others in society from engaging in similar misconduct.

In contrast, the focus of compensatory damages is solely on reimbursing the victim for their actual losses, while settlement incentives typically aim to encourage parties to resolve disputes outside of court. Covering legal costs does not align with the nature of punitive damages, as they are not designed to address the expenses incurred by the claimant during the legal process. Thus, the essential role of punitive damages is to hold individuals accountable and promote societal standards of conduct.