What is the main difference between "actual damages" and "punitive damages"?

The distinction between actual damages and punitive damages is fundamentally rooted in their purposes and applications in legal cases. Actual damages, often referred to as compensatory damages, are intended to compensate a plaintiff for direct losses suffered as a result of another party's actions. This could include medical expenses, lost wages, property damage, and other measurable financial losses that can be quantified and directly attributed to the wrongful conduct.

On the other hand, punitive damages serve a different function. They are awarded not to compensate the victim for losses but to punish the wrongdoer for particularly egregious behavior and to deter similar conduct in the future. Punitive damages are applicable in cases where the defendant's actions are found to be willful, malicious, or reckless. Their primary aim is to send a strong message that certain behaviors will not be tolerated by the legal system.

Understanding this distinction clarifies that actual damages are focused on rectifying loss, while punitive damages extend beyond mere compensation, aiming to address the broader implications of wrongful conduct. This understanding is crucial in various legal contexts, particularly in civil litigation, where both types of damages can be awarded under differing circumstances.