What is the Difference Between Compensation and Restitution?

The main difference between compensation and restitution lies in their purpose and the way they are awarded:

• Compensation is a payment provided to a person or party for a loss or injury suffered as a result of another party's actions. In the context of a legal case, compensation is awarded by a jury when the defendant is determined to have acted negligently or violated a criminal law. Compensation can cover various types of damages, including economic damages, pain and suffering, mental anguish, and loss of consortium.
• Restitution is a court action that requires the perpetrator to make financial payments to the victim, usually as a condition of probation or leniency in sentencing. Restitution is ordered by a judge and is generally considered part of the sentence. It focuses on the amount the defendant gained at the expense of the victim and aims to ensure fair distribution of those gains. Restitution can cover costs such as medical bills, hospital costs, property damage, and returning stolen property or an equivalent dollar amount.

In summary, compensation is awarded to a victim for damages suffered due to another party's actions, while restitution is a court-ordered payment by the perpetrator to the victim as a part of their sentence.

Comparative Table: Compensation vs Restitution

The main difference between compensation and restitution lies in the way the financial award is calculated and the purpose it serves. Here is a table highlighting the differences:

In summary, compensation is a monetary payment provided to make up for damages or losses incurred, while restitution aims to restore what was taken or return things to their previous state. Compensation is calculated based on the plaintiff's financial loss, whereas restitution is calculated based on the defendant's financial gain from the transgression.