What is not a characteristic of punitive damages?

Punitive damages are specifically designed to punish a wrongdoer and deter future misconduct rather than to compensate the injured party for their losses. While compensatory damages aim to make the injured party whole by addressing the actual losses suffered, punitive damages serve a different purpose. They are awarded when a court finds that the actions of the wrongdoer were particularly egregious, often involving intentional or reckless behavior. By imposing these damages, the legal system seeks not only to penalize the responsible party but also to discourage similar actions by others in the future. Therefore, stating that punitive damages compensate the injured party mischaracterizes their primary function, distinguishing them clearly from compensatory damages.