Actual damages vs. compensatory damages: What’s the difference?

Personal Injury - September 25, 2024

Actual and compensatory damages are essentially the same in that both refer to financial compensation awarded to a plaintiff to cover losses suffered due to another’s actions. These damages are meant to “compensate” the injured party for measurable, out-of-pocket expenses (like medical bills and lost wages) and other harms, helping to restore the individual to the position they were in before the injury.

Understanding the types of available damages is essential to building a strong claim and knowing what compensation you may be entitled to. At Horwitz, Horwitz & Associates, we guide our clients through the complexities of damages in Illinois, ensuring they seek the full compensation they deserve. Keep reading for more from our skilled Chicago personal injury attorneys, then call (800) 985-1819 to schedule a free consultation.

actual vs compensatory damages

What are compensatory damages?

Compensatory damages are awarded to make an injured party “whole” by financially covering the losses caused by the defendant’s actions. These damages encompass all the losses, costs, and hardships that the plaintiff experienced as a direct result of the injury or wrongdoing. Compensatory damages fall into two main categories: actual damages and general damages.

Compensatory damages aim to replace what was lost and alleviate the hardships suffered by the injured party. In personal injury cases, compensatory damages typically include medical expenses, lost income, and emotional distress.

Types of compensatory damages

Compensatory damages include two primary subcategories: actual (or special) and general.

  • Actual damages (special damages): These are the out-of-pocket expenses directly tied to the injury. They can be calculated precisely, including costs like medical bills, lost wages, and property damage.
  • General damages: These are harder to quantify and cover non-economic losses such as pain and suffering, loss of enjoyment of life, and mental anguish.

What are actual damages?

Actual damages, also called special damages, refer to measurable, out-of-pocket losses the plaintiff incurred due to the injury. These are damages with an actual dollar value, allowing them to be precisely calculated and documented. Unlike general damages, which are subjective, actual damages are based on concrete expenses and financial losses.

Examples of actual damages

Actual damages typically include:

  • Medical expenses: Hospital bills, surgery costs, rehabilitation, medication, and any other necessary medical treatments.
  • Lost wages: Compensation for income lost due to missed work and reduced earning capacity if the injury limits future employment.
  • Property damage: If the injury involved damage to personal property, such as a car in a motor vehicle accident, the repair or replacement cost would be considered actual damages.
  • Out-of-pocket expenses: Costs for assistive devices, in-home care, travel to medical appointments, and other expenses directly tied to the injury.

These measurable losses help plaintiffs recover the money they spent or lost because of the defendant’s actions, making actual damages crucial in achieving financial stability after an injury.

Actual damages vs. compensatory damages: How are they different?

While actual and compensatory damages are related, the distinction lies in their scope. Actual damages are a subset of compensatory damages. All actual damages fall under the broader category of compensatory damages, but not all compensatory damages are actual damages.

Compensatory damages encompass both actual and general damages. Actual damages address specific financial losses, while general damages cover intangible losses like pain and suffering. Together, they provide a comprehensive picture of the harm suffered and the full compensation needed to restore the plaintiff’s quality of life.

The importance of actual and compensatory damages in personal injury cases

Understanding the differences between actual damages vs. compensatory damages is essential for building a strong case. Knowing the types of damages available helps plaintiffs seek fair compensation for the financial, physical, and emotional costs of their injuries.

In Illinois, compensatory damages can significantly improve recovery after an injury. The Illinois legal system aims to provide injured individuals with an avenue to pursue damages and hold negligent parties accountable. For instance, the state’s comparative negligence rule allows plaintiffs to recover damages even if they are partially at fault, though their compensation is reduced by their degree of fault (735 ILCS 5/2-1116).

How Horwitz, Horwitz & Associates can help

At Horwitz, Horwitz & Associates, we have decades of experience advocating for injured clients in Illinois, ensuring they receive the compensation they’re entitled to. We work to accurately calculate actual and general damages, building a thorough case that reflects the true impact of your injury.

If you’ve been injured in Illinois and seek compensation, contact Horwitz, Horwitz & Associates for a free consultation. We’ll help you understand the damages available and guide you through seeking fair compensation. Let us work to secure the recovery you need to move forward.