In what scenario might compensatory damages not be awarded?

Compensatory damages are intended to reimburse a plaintiff for losses they have incurred due to the defendant's wrongful actions. They are awarded only if the defendant is found liable, meaning that they are legally responsible for the harm caused. In this scenario, if the defendant is not found liable, it stands to reason that compensatory damages would not be awarded because there is no legal basis to hold the defendant accountable for the claimant's losses.

Each other scenario presented involves different legal dynamics but does not inherently eliminate the possibility of compensatory damages in the way that a finding of no liability does. For example, if a pretrial settlement is reached, it often results in compensation being paid to the plaintiff, but does not negate the principle of liability as the parties come to an agreement on the terms. Similarly, a plaintiff's choice not to pursue legal action or the pursuit of excessive damages pertains more to procedural and practical issues rather than the core question of liability itself. Therefore, the connection between liability and the awarding of compensatory damages is crucial in determining when these damages are not granted.