Also known as actual damages. The amount of money awarded to a party in a civil action to compensate for an injury or loss caused by another party's unlawful conduct. The purpose of compensatory damages is to make the claimant "whole," not to punish the wrongdoer. In contrast, punitive damages are awarded to punish a wrongdoer who acted intentionally, recklessly, or with gross negligence to harm the claimant.

For information on compensatory damages in product liability cases, see Practice Note, Product Liability Claims, Defenses and Remedies: Compensatory Damages.

For information on compensatory damages in employment cases, see Practice Note, Remedies: Compensatory Damages in Employment Discrimination Cases.