What is the purpose of exemplary (punitive) damages?

The purpose of exemplary, or punitive, damages is to deter the defendant and others from similar conduct. These damages are awarded in addition to compensatory damages, which are intended to make the plaintiff whole for their losses. Punitive damages are not meant to directly compensate the plaintiff for any specific loss but rather serve as a form of punishment for particularly egregious behavior by the defendant.

By imposing these damages, the court aims to send a clear message that certain behaviors will not be tolerated, thereby encouraging better conduct in the future. These damages act as a warning to both the defendant and the public, reinforcing ethical standards and legal compliance. This intent to prevent future misconduct distinguishes punitive damages from those that simply aim to restore the affected party's financial situation.