What distinguishes compensatory damages from punitive damages?

The correct choice highlights that compensatory damages are specifically designed to make the injured party whole by repairing the losses they have suffered due to another party's wrongful conduct. These damages encompass both tangible losses, such as medical expenses and lost wages, as well as intangible losses, like pain and suffering.

Compensatory damages serve a primary function in civil litigation: to compensate the plaintiff for actual injuries or losses incurred, restoring them financially and emotionally to the position they were in before the harm occurred. In contrast, punitive damages are intended to punish the wrongdoer for particularly egregious behavior and deter similar conduct in the future. They are not directly related to the actual losses suffered by the plaintiff.

The other options do not accurately reflect the fundamental differences between these types of damages. While emotional distress can be a component of compensatory damages, it does not define them. Punitive damages are not necessarily awarded on appeal; they can be part of an initial verdict. Lastly, punitive damages may vary significantly in relation to compensatory damages, and there is no requirement that they always exceed compensatory damages.