Compensatory damages are awarded for which of the following reasons?

Compensatory damages are specifically intended to cover economic losses that a plaintiff has incurred due to the defendant's actions. These damages aim to make the injured party "whole" again, essentially restoring them to the financial position they would have been in had the harmful event not occurred. This includes reimbursement for tangible losses such as medical expenses, lost wages, and property damage.

In the context of legal claims, the focus of compensatory damages is on actual losses rather than punitive measures or other forms of compensation. For example, if a person was injured in an accident caused by another party's negligence, compensatory damages would be awarded to cover medical bills and lost income due to their inability to work.

In contrast, punitive damages serve to punish wrongful behavior, and funding for legal fees usually falls under separate arrangements or claims. Compensatory damages also do not specifically address criminal activities, as they are primarily associated with civil suits rather than criminal charges. Therefore, the focus of compensatory damages aligns perfectly with covering economic losses resulting from the defendant's conduct.