Define ‘compensatory damages’ in legal terms in Arkansas.

Compensatory damages in legal terms refer to financial compensation that is awarded to a party in a lawsuit to reimburse them for actual losses incurred as a result of another party's actions. In Arkansas, as in many jurisdictions, these damages aim to restore the injured party to the position they were in prior to the harm or loss, making them "whole" again. This can encompass various types of losses, including but not limited to lost wages, medical expenses, property damage, and other measurable financial losses.

The concept of compensatory damages emphasizes the intention to compensate for real, quantifiable losses rather than serving as a punishment for the wrongdoer or covering costs unrelated to the actual harm suffered. This is why other options such as monetary compensation for punitive damages, payment for legal fees, and reimbursement for emotional distress do not accurately encapsulate the definition of compensatory damages, as they focus on different aspects of legal compensation. Punitive damages serve to punish and deter wrongful conduct rather than just cover losses, legal fees are separate costs incurred during litigation, and emotional distress claims may not fall under the definition of compensatory damages unless they can be tied to tangible financial losses.