Question

In a court of law, Suzy is granted compensatory damages from Karen in the amount of $2,500. In addition, Karen was ordered to pay Suzy $7,500 in punitive damages. Which of the following statements is true?

Option 1: Punitive damages are meant to compensate the victim for their losses.
Option 2: Compensatory damages are meant to punish the wrongdoer.
Option 3: Punitive damages are meant to punish the wrongdoer.
Option 4: Compensatory damages are meant to cover medical expenses.

Answer 1

Option 3 is correct: Punitive damages are meant to punish the wrongdoer, while compensatory damages aim to reimburse the victim for actual losses incurred.

Step-by-step explanation:

In a court of law, when Suzy is granted compensatory damages from Karen for $2,500, it is meant to reimburse Suzy for her actual losses, such as medical expenses or property damage. Additionally, Karen was ordered to pay Suzy $7,500 in punitive damages.

The true statement among the given options is that punitive damages are intended to punish the wrongdoer for their actions and to serve as a deterrent for similar conduct in the future. Thus, the correct statement here is Option 3: Punitive damages are meant to punish the wrongdoer.