What are Exemplary Damages?

25 January 2024

There are four main categories of damages that may be granted by an Australian court: compensatory, nominal, aggravated and exemplary damages — with compensatory damages being the most common, and exemplary damages being the least.

Each damages category serves a specific purpose in addressing different types of harm or wrongdoing in civil cases. Here, we’ll look into exemplary damages: What they aim to achieve, and the steps you can take if you’re considering filing a compensation claim.

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Exemplary damages: An overview
Filing a claim: The next steps

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Exemplary damages: An overview

As a general principle, civil disputes aim to resolve by restoring the claimant to their pre-loss state. This means that courts aim to compensate not out of punishment of the defendant, but rather to rectify the harm caused. Exemplary damages, also called punitive damages, are an exception to this principle.

Exemplary damages are awarded not for the sole purpose of compensating the claimant, but rather for punishing the defendant for their egregious conduct. Exemplary damages serve as a deterrent to prevent similar conduct in the future by others, thereby upholding societal interests.

In Australia, the awarding of exemplary damages is rare and reserved for cases where the defendant’s actions are deemed highly malicious, in complete disregard for the rights and individual sovereignty of others. The goal is to send a strong message that such malice is unacceptable and will attract severe penal consequences.

The purpose of exemplary damages differs from that of compensatory, nominal and aggravated damages, which are as follows:

Compensatory damages are intended to reimburse the claimant for the loss or injury they have suffered, restoring them to the position they would have been in if the harm/loss had not occurred. This may include payment for medical expenses, lost wages, or property damage.
Nominal damages, also called contemptuous damages, are awarded — usually as a small payment — to signify that the claimant’s rights were violated despite the absence of significant harm or financial loss.
Aggravated damages are awarded when the defendant’s conduct has caused the claimant additional harm, often related to noneconomic damages, such as humiliation, degradation or mental distress more generally.

Notably, exemplary damages and aggravated damages are often used interchangeably and do consist of a degree of overlap. However, exemplary damages chiefly consider the defendant’s motivations, rather than aggravated damages’ focus on the severity of the harm suffered by the claimant. With that said, there is the precedential acknowledgment that “in many cases, the same set of circumstances might well justify either an award of exemplary or aggravated damages.”

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Filing a claim: The next steps

If you’ve suffered an injury, illness or loss due to another’s malice, you may be entitled to exemplary damages through filing a compensation claim. While exemplary damages are not confined to one claim type or another, situations where such damages may be awarded — although rarely — include:

Medical negligence claims: Exemplary damages can be pursued if a healthcare professional’s conduct was grossly negligent or showed an intentional disregard for your safety — significantly worsening your condition.
Motor vehicle claims: Exemplary damages in motor vehicle claims may be applicable if the responsible party demonstrated extreme recklessness or intentional misconduct, such as driving under the influence or vehicle tampering.
Public liability claims: Exemplary damages may be awarded if you suffered due to an entity’s or individual’s ongoing, intentional negligence in maintaining the safety of their publicly used space/facility.
Professional negligence claims: Exemplary damages may be awarded if a professional displayed an intentional ethical violation, causing you significant loss or harm.

If you’re considering filing a claim, the next steps are to gather information and evidence to support your claim, then speak with one of GMP Law’s claims solicitors. During your free consultation, your lawyer will assess the strength of your claim, answer any questions you may have, and inform you of your legal rights and options.

If you decide to pursue civil action, your case may either be addressed through a private settlement agreement (mediation) or before the courts (litigation). Litigation occurs when a private settlement is unable to be reached via mediation, and is the context in which exemplary damages are awarded.

The majority of claims settle in mediation and, due to them only being awarded in exceptional circumstances, are resolved without exemplary damages. It’s only when a case is particularly complex and severe that it’s brought before the court and exemplary damages are awarded, and such cases can take many months, if not years to resolve. Regardless of how it is that your claim unfolds, our team at GMP Law will provide you with competent, compassionate and committed legal service at each step, ensuring that you receive the type and amount of compensation you’re legally entitled to.

Book an appointment with our expert team of compensation solicitors.

Call 1800 004 878

Book a free consultation with a compensation claims lawyer

We offer a free, non-obligation consultation with one of our compensation lawyers, meaning that you can take out the guesswork and gain personal legal advice based on the specifics of your case.

At GMP Law, we’re the leading Australian personal injury law firm with a 98% success rate and $4b in settlements delivered to our clients across over 25,000 victories, and counting. Our team of specialised compensation claims solicitors work hard on your behalf so you can focus on what really matters: your recovery and getting your life back to normal. Personal injury claims often involve complicated processes, but you can be assured that GMP Law is here to help you every step of the way.

We offer our clients our no-win, no-fee policy, meaning we take on all the costs associated with your case — from expert examination fees and court payments to the cost of legal representation and advice itself — and only get paid if your case is successful. If on the rare occasion, we lose your case, you won’t have to pay a contingency fee for our work together. This means that you can gain access to expert legal services without the added stress of personal financial strain for such advice and representation.

Book your free consultation online today, or call us on 1800 004 878.

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