Under which circumstance can punitive damages be awarded?

Punitive damages are designed to serve as a punishment for particularly egregious behavior and to deter similar conduct in the future. Therefore, the correct situation for awarding punitive damages is when the defendant has exhibited recklessness. Recklessness indicates a conscious disregard for a substantial risk of harm, which is a higher degree of culpability than negligence. This heightened level of fault justifies imposing punitive damages as they are intended only for cases involving serious misconduct, such as intentional torts or gross negligence.

The other options do not accurately reflect the circumstances under which punitive damages can be awarded. For instance, punitive damages are not universally applicable to all tort cases, as they are only warranted in cases involving particularly malicious or reckless acts. Additionally, the notion that they could be awarded only when compensatory damages are not applicable misrepresents their purpose; punitive damages can accompany compensatory damages, as they are distinct in nature. Finally, failing to prove economic damage does not provide grounds for punitive damages, as they are concerned with the level of the defendant's misconduct rather than the plaintiff's economic losses.