What damages are recoverable in a products liability lawsuit?

Plaintiffs in products liability lawsuits are usually able to recover all foreseeable damages. In actions based on contract, like some breach-of-warranty cases, some courts may limit the recovery of consequential damages to those that were within the contemplation of the parties at the time they entered into the contract. In other words, in a non-contract case, the plaintiff may be able to recover for any damages that flow from the accident causing the injury, but in a breach-of-warranty case the damages may be much more limited. If a car malfunctions due to a defect and crashes through the plate glass window of a convenience store, the warranty claim would cover the cost of repairs to the car, but a tort claim by the convenience store owner could cover the costs of repairing the business and the lost income for the period of time the store had to be closed.

In order to be recoverable under any theory, damages must be foreseeable. Foreseeable damages generally include economic losses, such as those for repairs to damaged property, medical bills, and lost wages. Recoverable noneconomic damages include awards for pain and suffering, emotional distress, and punitive or exemplary damages. Although some states have placed limits on the amount of noneconomic damages recoverable in products liability cases, these limits have in some instances been declared unconstitutional.

Punitive damages are intended not to compensate the victim for losses but to punish the defendant’s conduct. They are usually not allowed in breach-of-contract (warranty) cases. Although punitive damage awards get a lot of media attention, they are in fact quite rare and are more common in business litigation. The amount of punitive damages is usually based on the wealth of the defendant and the reprehensibility of its conduct. Some states require that a portion of the punitive damages awarded be paid to the state. Whereas compensatory damages are not taxable to the plaintiff, the amount of punitive damages that he or she receives is subject to federal income tax.