Legal Definitions - statutory damages

Statutory damages refer to a specific amount of money that a court can award to a party who has been harmed, where the exact amount is already set by a law (a statute). Unlike actual damages, which require the injured party to prove the precise financial loss they suffered, statutory damages are established in advance by legislation.

This approach is often used in areas of law where it can be very difficult to calculate the exact financial harm caused by a violation, such as in cases involving privacy breaches, consumer rights infringements, or intellectual property violations. The law specifies a range or a fixed sum that can be awarded per violation, providing a clear remedy and a deterrent even when quantifiable financial loss is hard to demonstrate.

• Example 1: Unwanted Telemarketing Calls (Telephone Consumer Protection Act - TCPA)

  Imagine a telemarketing company uses an automated dialing system to call people's cell phones without their consent, violating the TCPA. It would be extremely difficult for an individual to prove the exact financial harm from one unwanted phone call – perhaps a few seconds of interrupted time or a negligible drain on their phone battery. To address this, the TCPA sets statutory damages at $500 per unsolicited call, and up to $1,500 per call if the violation was willful. This pre-determined amount provides a clear form of compensation for the intrusion and serves as a strong deterrent against illegal telemarketing practices, without requiring the victim to quantify an intangible loss.

• Example 2: Inaccurate Credit Reporting (Fair Credit Reporting Act - FCRA)

  Consider a scenario where a credit reporting agency mistakenly includes inaccurate information on someone's credit report and fails to correct it after being notified, thereby violating the FCRA. While the individual might eventually suffer actual financial harm (like being denied a loan or paying higher interest rates), proving the precise monetary impact of the inaccurate report can be complex and time-consuming. To ensure a remedy for the violation of privacy and the potential harm to one's financial reputation, the FCRA allows for statutory damages ranging from $100 to $1,000 for certain violations, even if the individual cannot prove a specific financial loss at the time of the lawsuit. This ensures accountability and compensation for the violation itself.