Damages attempt to measure in financial terms the extent of harm a plaintiff has suffered because of a defendant's actions. Damages are distinguishable from costs, which are the expenses incurred as a result of bringing a lawsuit and which the court may order the losing party to pay.
Damages also differ from the verdict, which is the final decision issued by a jury.
The purpose of damages is to restore an injured party to the position the party was in before being harmed. As a result, damages are generally regarded as remedial rather than preventive or punitive. However, punitive damages may be awarded for particular types of wrongful conduct. Before an individual can recover damages, the injury suffered must be one recognized by law as warranting redress and must have actually been sustained by the individual. With respect to compensatory damages, a defendant is liable to a plaintiff for all the natural and direct consequences of the defendant's wrongful act.