When someone is hurt because of another person's carelessness, a personal injury claim is meant to make them whole by paying for medical bills, lost income, and pain and suffering. Some conduct goes far beyond ordinary carelessness, though. When a company or person knowingly puts others in danger, the law allows an additional award meant to punish. These are called punitive damages.
In Texas, punitive damages are officially called exemplary damages, and they are governed by Chapter 41 of the Texas Civil Practice and Remedies Code. They are not available in every case. The injured person must meet a higher standard of proof, and the amount is usually limited by a statutory cap.
This guide explains what punitive damages are, when Texas law allows them, how the cap works, and what they could mean for your case.
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Most money recovered in an injury case is compensatory, meaning it pays the injured person back for real losses. Texas law separates compensatory damages into two groups, and punitive damages form a third, separate category.
Economic damages cover actual financial losses. Common examples include hospital and doctor bills, future medical care, lost wages, and reduced earning capacity. These amounts can usually be documented with bills, pay records, and expert testimony.
Noneconomic damages compensate for losses that do not come with a receipt. Texas law lists physical pain and suffering, mental anguish, loss of consortium, disfigurement, and physical impairment among them.
Texas defines exemplary damages as damages awarded as a penalty or by way of punishment, not to compensate the victim. Their purpose is to punish serious misconduct and discourage the defendant and others from doing the same thing again.
Under Texas Civil Practice and Remedies Code Chapter 41, exemplary damages may be awarded only if the injured person proves that the harm resulted from one of three things: fraud, malice, or gross negligence. Ordinary negligence is not enough.
Gross negligence is the basis for most punitive damage claims in injury cases. Texas law defines it as an act or omission that, viewed objectively at the time, involved an extreme degree of risk, and where the defendant actually knew about that risk but went ahead anyway with conscious indifference to the safety or welfare of others. For example, a company that knows a piece of safety equipment is broken, receives repeated warnings from workers, and keeps running the unit anyway may be found grossly negligent if someone is injured. Serious workplace disasters, such as a refinery explosion, are often investigated for this kind of conduct.
Malice means a specific intent by the defendant to cause substantial injury or harm to the injured person. These claims are less common in accident cases because they require proof of intent, not just a reckless disregard for safety.
Fraud can also support exemplary damages, such as when a defendant knowingly misrepresents important facts and the injured person relies on them to their harm.
Most civil claims are decided by a preponderance of the evidence, meaning something is more likely true than not. Exemplary damages require more. Section 41.003 requires clear and convincing evidence, which Texas defines as proof that produces a firm belief or conviction in the mind of the jury. The burden stays on the injured person and cannot be satisfied with evidence of ordinary negligence, bad faith, or a deceptive trade practice.
The jury must also be unanimous, both on whether the defendant is liable for exemplary damages and on the amount. In addition, a person must first recover actual damages beyond a nominal amount before exemplary damages can be awarded.
If a defendant asks, the court must split the trial into two phases. In the first phase, the jury decides liability and the amount of compensatory damages, and whether the defendant is liable for exemplary damages. Only then does the second phase address how much in exemplary damages to award. In setting that amount, Texas law directs the jury to consider:
• The nature of the wrong
• The character of the conduct involved
• The degree of the wrongdoer's culpability
• The situation and sensibilities of the parties
• How much the conduct offends a public sense of justice and propriety
• The defendant's net worth
When there is more than one defendant, an exemplary damages award must be specific to each defendant. Prejudgment interest cannot be added to an exemplary award.
Section 41.008 limits exemplary damages to the greater of two amounts:
1. Two times the economic damages, plus the noneconomic damages found by the jury up to $750,000, or
2. $200,000
The $750,000 limit applies only to the noneconomic portion of the formula, not to the total award. Here are simple examples of how the math works:
• Economic damages of $100,000 and noneconomic damages of $300,000: the cap is 500,000(200,000 plus $300,000).
• Economic damages of $100,000 and noneconomic damages of $1,000,000: the cap is 950,000(200,000 plus the $750,000 maximum).
• Economic damages of $20,000 and noneconomic damages of $10,000: the formula yields $50,000, so the $200,000 floor applies instead.
The cap does not apply when the harm comes from certain felony conduct committed knowingly or intentionally, including murder, aggravated assault, sexual assault, and certain theft and fraud offenses. Intoxication assault and intoxication manslaughter are also excluded from the cap, which can matter in serious drunk driving car accident cases.
Exemplary damages can be part of a wrongful death case when the death resulted from gross negligence or malice. Workplace deaths raise special rules. For employers that carry workers' compensation, benefits are generally the exclusive remedy, but Texas Labor Code Section 408.001 still allows a surviving spouse or children to seek exemplary damages if the death was caused by the employer's intentional act or gross negligence. Employers that do not carry coverage, known as non-subscribers, can face negligence lawsuits directly.
Most personal injury cases do not include punitive damages. They are reserved for conduct that shows a conscious disregard for safety, and proving that state of mind often requires internal documents, safety records, prior complaints, and witness testimony. A thorough investigation early in the case can uncover that evidence before it is lost.
Situations where gross negligence is often alleged include:
• A trucking company that keeps a driver on the road despite known safety violations or falsified logbooks
• An employer that ignores repeated worker complaints about a broken safety system
• A drunk driver who causes a serious crash
• A plant or well operator that skips required inspections to keep production moving, a pattern seen in many oil field accidents
Even when punitive damages are not available, you may still be entitled to full compensation for your economic and noneconomic losses. Keep in mind that most Texas injury lawsuits must be filed within two years, so waiting too long can cost you every type of recovery.
Founder John Daspit began his career at Fulbright & Jaworski and also worked in insurance defense, so our team understands how companies defend against claims of gross negligence. He devoted 7,000 to 8,000 hours to litigation over the 2005 BP Texas City Refinery explosion. Today our firm has more than 50 attorneys and over 15 offices, and we have recovered more than $500 million for clients.
We handle injury cases on a contingency fee basis, so you pay no legal fees unless we win, and we can visit you at home or in the hospital.
If a company's reckless decisions caused your injury or a loved one's death, call The Daspit Law Firm at (888) 273-1045 for a free consultation, available 24/7. This article is for general information only and is not legal advice. Every case is different, and results depend on the facts.
Punitive damages are money awarded to punish a defendant for especially harmful conduct and to discourage similar behavior, rather than to repay the victim's losses. In Texas they are called exemplary damages. They may be awarded only when the injured person proves the harm resulted from fraud, malice, or gross negligence.
Under Civil Practice and Remedies Code Section 41.008, exemplary damages are capped at the greater of $200,000 or two times economic damages plus noneconomic damages up to $750,000. The $750,000 limit applies only to the noneconomic portion. The cap does not apply to harm from certain intentional felonies and intoxication offenses.
The injured person must prove fraud, malice, or gross negligence by clear and convincing evidence, a higher standard than in most civil claims. The jury must be unanimous on both liability and the amount. The person must also recover actual damages beyond a nominal amount before exemplary damages can be awarded.
In a jury trial, the jury decides. Texas law requires a unanimous jury finding on liability for exemplary damages and on the amount. If a defendant requests it, the trial is split into two phases, with the amount of exemplary damages decided only after liability and compensatory damages are resolved.
Yes, in some cases. Even when an employer carries workers' compensation, Texas Labor Code Section 408.001 allows a surviving spouse or children to seek exemplary damages if the death was caused by the employer's intentional act or gross negligence. Non-subscribing employers may face broader negligence claims.
All too often, accident victims are steamrolled by insurance companies determined to minimize or deny their claims. Don't let this happen to you. Hire us to fight for the compensation you deserve.
At The Daspit Law Firm, Our Team of Attorneys Handles the Full Range of Personal Injury Cases, Including Car and Truck Accidents, Industrial Accidents, Construction Accidents, Maritime & Offshore Accidents, and Much More.
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