Which of the following is a key characteristic of compensatory damages?

Compensatory damages are designed to provide financial compensation to a plaintiff for actual losses incurred as a result of the defendant's actions. This type of damage is aimed at making the injured party "whole" again by covering the cost of economic losses, such as medical expenses, lost wages, and property damage, as well as non-economic losses like pain and suffering. Specifically, they reflect the real and measurable harm the plaintiff has experienced, thereby ensuring that the damages are tailored to the circumstances of the case.

The focus of compensatory damages is on restoring the plaintiff to their pre-injury state as much as possible, rather than serving punitive purposes or being predefined amounts. This characteristic distinguishes them from punitive damages, which aim to deter future wrongful conduct by imposing additional financial penalties on the defendant. The variability in actual losses further emphasizes why compensatory damages cannot be fixed amounts, as they must be calculated based on individualized circumstances and evidence presented in each case.