Law Society of Ontario (LSO) Paralegal Practice Exam 2025 - Free Paralegal Practice Questions and Study Guide

The correct answer regarding punitive damages is that they are additional payments meant to punish wrongdoing. Punitive damages go beyond mere compensation for losses caused by the wrongful act. Instead, they serve as a form of punishment aimed at deterring the wrongdoer and others from committing similar acts in the future. Courts typically award punitive damages in cases involving malicious, intentional, or particularly egregious conduct. This mechanism is intended to promote societal values and ensure that individuals or entities are held accountable for their actions when mere compensation is insufficient to address the severity or implications of the misconduct.

Compensation for direct loss, fees for legal representation, and reimbursement of medical expenses all relate to compensatory damages, which are designed to restore the injured party to the position they would have been in had the wrongdoing not occurred. These types of damages do not carry the punitive element associated with punitive damages.