When someone’s actions that resulted in the accident are reckless, dangerous, or even knowingly put others at risk, the law allows for something more than compensatory damages: punitive damages. These damages aren’t just about making the victim whole. They punish outrageous behavior and deter others from doing the same.
Suppose you are pursuing a personal injury case and wondering how to increase your settlement. In that case, this article will help you understand punitive damages and how to seek them, ensuring you get the maximum compensation.
What Are Punitive Damages?
Under California Civil Code §3294, courts can award punitive damages, also called exemplary damages, not just to compensate the victim, but to punish the wrongdoer and set an example for others.
Punitive damages in small claims courts are not awarded in every case. They’re reserved for situations where a defendant’s behavior blatantly disregards human life or safety. It can be applicable in extreme situations like:
- A driver who gets behind the wheel drunk or high again.
- A company that hides serious risks about its product.
- An employer who knowingly allows an unsafe driver on the road.
Remember that, unlike standard damages that cover medical expenses or emotional distress, punitive damages punish wrongdoing. These are financial consequences, establishing that the at-fault party’s actions or behavior will not be tolerated.
Can All Victims Claim Punitive Damages?
No, not all personal injury victims are eligible to claim punitive damages.
In a personal injury claim, you can seek compensation for the compensatory damages if you can prove that the other party’s negligence resulted in an accident. In this sense, negligence in a personal injury case occurs when a person doesn’t act with the level of caution that a reasonable person would under similar circumstances, and their carelessness causes someone else to get hurt.
For instance, a driver is texting while approaching a red light and fails to stop in time, resulting in a rear-end collision with the car in front. Because a reasonably careful driver would have been paying attention and stopped, the texting driver’s inattention is considered negligence. As a result, they can be held responsible for the injuries caused in the crash.
On the other hand, to qualify for punitive damages, the defendant’s actions must involve more than just negligence. We’re talking about despicable conduct carried out with malice, oppression, or fraud, such as drunk driving, knowingly violating safety rules, or ignoring known health risks.
When Do Courts Award Punitive Damages?
Punitive damages often apply in cases involving deeply harmful or outrageous behavior, such as:
- Assault, battery, or sexual assault
- DUI-related crashes that leave victims permanently injured
- Medical malpractice involving gross negligence or cover-ups
- Intentional infliction of emotional distress
- Workplace retaliation or wrongful termination done with malice
Many believe their case isn’t “serious enough” to qualify, but that’s often untrue. With punitive damages, it’s not just about how badly you were hurt. It’s about how wrong the other person’s actions were. If we can prove they acted with conscious disregard for your safety or rights, you may be entitled to much more than just the cost of recovery.
What Counts as “Egregious” Behavior in Punitive Damages?
Under CVC 3294, courts may award punitive damages when a defendant acts with:
Malice
Malice means the wrongdoer intended to cause you harm, or behaved so despicably that they clearly didn’t care if someone got hurt. For example, a rideshare driver with a known violent record attacks a passenger during a ride, and the company failed to act on prior complaints.
Oppression
Oppression involves cruel, unjust hardship inflicted in conscious disregard of your rights. For instance, a landlord refuses to fix toxic mold in a tenant’s apartment, despite knowing it is making their children sick.
Fraud
Fraud happens when someone lies, conceals the truth, or manipulates facts to hurt or deprive you intentionally. Let’s say a nursing home falsifies patient records to hide neglect, leading to a senior suffering bedsores and severe infection.
Willful and Wanton Negligence
In some cases, California courts also award punitive damages for willful and wanton negligence, which goes beyond ordinary carelessness. It means the defendant knew their behavior could hurt someone, but went ahead anyway. For instance, a trucking company allows a driver with untreated epilepsy and a suspended license to stay on the road, resulting in a catastrophic crash.
How to Prove Punitive Damages in Small Claims Court
If you’ve been injured in California, the law allows you to seek compensatory damages, the money meant to help you recover from what you lost. These damages cover your medical bills, lost wages, pain and suffering, and emotional distress.
You don’t need to prove everything beyond a reasonable doubt to win compensatory damages. You simply need to show that it’s more likely than not, or just over a 50% chance, that the other party was at fault and caused your injuries. This is called the “preponderance of the evidence” standard.
However, when you seek punitive damages, the rules change because much more is at stake.
Courts don’t award punitive damages lightly. These damages are reserved for the most serious cases where someone acted with malice, oppression, or fraud. And to recover them, you must meet a much higher standard of proof: “clear and convincing evidence.”
This means it’s not enough to show that the defendant was probably in the wrong. Instead, you must prove, with a high level of certainty, that:
- They intended to cause harm, or
- They consciously ignored your rights or safety, or
- They lied, deceived, or covered up the truth in a way that seriously hurt you.
How Do California Courts Decide the Value of Punitive Damages?
Under California law, the amount of punitive damages isn’t based on a strict formula. Instead, juries are given thoughtful guidance, specifically from the California Civil Jury Instruction 3940 (CACI 3940), to help them reach a fair and meaningful decision. This process is designed to balance justice with reason.
Here’s what juries must weigh before deciding on an award:
1. How outrageous was the defendant’s behavior?
The more shocking, deceptive, or malicious the actions, the stronger the need to send a message. Cases involving cruelty, conscious disregard for human life, or intentional harm often result in higher punitive awards.
2. How much harm did the defendant cause?
The greater the physical, emotional, or financial suffering, the greater the potential for a higher punitive sanction.
3. Did the defendant know better and do it anyway?
Punitive damages increase when the wrongdoer knew the risks, understood the potential for harm, and chose to ignore it. Intentional and reckless decisions are punished more harshly than simple mistakes.
4. What will it take to stop this from happening again?
This is where deterrence comes in. Wealthy corporations or individuals may only respond to meaningful financial consequences. A punitive award must be large enough to make future misconduct unthinkable, especially when profits are put ahead of people.
Even when the conduct is egregious, courts in California require punitive damages to be reasonably proportional to actual damages. According to state and U.S. Supreme Court precedent, a common rule of thumb is that punitive damages should be less than 10 times the compensatory damages.
This ensures that awards are meaningful, but not excessive or arbitrary.
Is There a Cap on Punitive Damages?
Unlike many other states, California does not have a hard limit on punitive damages. That means that if a jury believes the defendant’s behavior was truly outrageous, they have the power to award whatever amount they deem just.
But that power comes with responsibility.
In line with a key U.S. Supreme Court ruling, punitive damages must still be “reasonable and proportionate,” not just to the harm you suffered, but also to the amount of compensatory damages you were awarded. In other words, the punishment must fit both the crime and the consequences.
This ensures that justice is served, not only by holding wrongdoers accountable but also by doing so in a fair, not excessive, way.
Are Punitive Damages Taxable in California?
Yes. In California, punitive damages are taxable at both the federal and state levels. Unlike compensatory damages (which cover medical bills, lost wages, or pain and suffering from a physical injury and are usually not taxed), punitive damages are considered taxable income because they’re meant to punish the wrongdoer, not reimburse you.
Example
Imagine you’re awarded $500,000 after a truck accident case:
- $400,000 compensatory damages (medical costs, lost wages, pain and suffering) → not taxable if tied to a physical injury.
- $100,000 punitive damages → taxable under both IRS and California law.
That $100,000 must be reported on your tax return as income.
If you expect punitive damages, speak with a California personal injury attorney to plan ahead and avoid surprises.
Example of a Personal Injury Case with Punitive Damages
A U.S. Air Force captain was waiting patiently at a red light on his motorcycle when a utility truck driver suffered a seizure and plowed into him, dragging his body over 500 feet. As if that wasn’t horrifying enough, the driver, after regaining consciousness, tried to flee the scene. Thanks to bystanders, he was stopped before he could make it onto the highway.
The injuries were catastrophic. After a month in the hospital, multiple surgeries, and a lingering threat of amputation, this man’s life was permanently changed. However, it wasn’t just the crash, but what led up to it.
The lawsuit revealed that the driver had a known seizure disorder and had experienced seizures just six weeks earlier. Despite this, he was behind the wheel of a multi-ton vehicle.
A jury awarded the victim $41.9 million for his damages. But they weren’t finished. They were prepared to add punitive damages because the truck driver’s employer had allowed someone medically unfit to drive. Sensing the risk, the company settled for $46 million before a final verdict could be reached.
How Can a California Personal Injury Attorney Help Me?
Seeking punitive damages proves the other side acted with outrageous disregard for your safety, rights, or well-being. That’s a high legal bar, but it’s one an experienced California personal injury attorney can help you meet.
At The Law Offices of Larry H. Parker, we understand that punitive damages are more than compensation; they’re about justice. Here’s how we help you fight for it:
- We investigate deeply, uncovering critical evidence that shows the defendant didn’t just make a mistake, but knew what they did was wrong and did it anyway.
- We work with medical, financial, and forensic experts who can testify to the full scope of your harm and the recklessness that caused it.
- We frame your story powerfully, showing the court or jury how the defendant’s conduct was not just negligent, but cruel, intentional, or deceitful.
- We push for a higher burden of proof. Because punitive damages require “clear and convincing” evidence, we build a case that leaves no doubt.
- We fight in court if we have to. Some defendants will only change their behavior when hit where it hurts most. If necessary, we’ll take your case to trial to ensure the punishment fits the wrongdoing.
If someone’s reckless or malicious actions changed your life, don’t settle for silence or a lowball check. Punitive damages are your voice and your power to prevent others from suffering the same fate. Call us today at 800-333-0000 for a free consultation.
You deserve real legal advice after your accident. Contact our auto accident attorneys now for a free assessment, no obligation.
What Our Clients Say About Us
No other personal injury lawyer will fight for you as passionately as we will, even though many may take on your case and prepare a legal defense. As proved by our previous clients, our lawyers are extraordinarily well-equipped to put up a claim without making any mistakes:
“You guys were awesome to me. I appreciate the help and concerns everyone had for my case. Everyone is polite and respectful. I hope I won’t have the need to call again, but I will definitely keep you in mind for myself, as well as family and friends. Thank you, LHP. Chandra A.
Frequently Asked Questions About Personal Injury Claims
Need to learn more about accident claims? We want to help you! Here are common questions injured victims ask, which may clarify various aspects of your case.
- Can I Switch California Personal Injury Lawyers?
- Why Won’t a California Personal Injury Attorney Take My Case?
- 6 Things To Consider When Calculating Personal Injury Settlements
- How Insurance Adjusters Impact Your Personal Injury Settlement
References
Civil Code – CIV DIVISION 4. GENERAL PROVISIONS [3274 – 9566]. (n.d.). California Legislative Information. https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=3294.&lawCode=CIV
Civil Jury Instructions (CACI) Revisions. (n.d.). courts.ca.gov. https://courts.ca.gov/system/files?file=itc/caci07-02.pdf
clear and convincing evidence | Wex | US Law | LII / Legal Information Institute. (n.d.). Legal Information Institute. Retrieved September 30, 2025, from https://www.law.cornell.edu/wex/clear_and_convincing_evidence
preponderance of the evidence | Wex | US Law | LII / Legal Information Institute. (n.d.). Legal Information Institute. Retrieved September 30, 2025, from https://www.law.cornell.edu/wex/preponderance_of_the_evidence
