New Mexico Punitive Damages Laws: Standards, Caps and Rules (2026)

New Mexico allows punitive damages as a common-law remedy, applied through Uniform Jury Instruction (UJI) 13-1827: if the jury finds the claimant should recover compensatory or nominal damages, it may award punitive damages against a party whose conduct was "malicious, willful, reckless, wanton, fraudulent or in bad faith." New Mexico has no general cap on punitive damages, but for medical malpractice claims arising on or after May 20, 2026, NMSA 41-5-7.1 (added by HB 99, Laws 2026, ch. 44) requires clear and convincing evidence and caps the award.

The wrongful death statute expressly allows exemplary damages (NMSA 41-2-3), the Tort Claims Act bars them against governmental entities and public employees (41-4-19(D)), and the New Mexico Supreme Court has held that insuring against them is not against public policy. For how other states compare, see punitive damages laws by state.

Information last verified on 2026-10-19. This article has not been reviewed by a licensed lawyer.

Jurisdiction scope: This article covers New Mexico state law on punitive damages in civil cases: UJI 13-1827 and UJI 13-304, NMSA 41-5-7.1 and the other New Mexico statutes and decisions named below. It does not cover compensatory damages or the medical malpractice damages limits in detail (see New Mexico medical malpractice law), wrongful-death procedure, deadlines and beneficiaries (see New Mexico wrongful death law), federal claims, or every statute that authorizes punitive or multiplied damages for a particular claim beyond those named here.

Does New Mexico allow punitive damages?

Yes. New Mexico has no general punitive damages statute. The rules a jury applies come from UJI 13-1827, the New Mexico Supreme Court's uniform jury instruction, which begins:

"You may consider punitive damages only if you find that [the party making the claim] should recover compensatory [or nominal] damages. ... If you find that the conduct of [the party against whom direct liability for punitive damages is asserted] was [malicious], [willful], [reckless], [wanton], [fraudulent] [or] [in bad faith], then you may award punitive damages against that party."

Under the instruction, punitive damages depend on a finding that the claimant should recover compensatory or nominal damages. The committee commentary adds that "In a negligence action, punitive damages cannot be awarded without recovery of compensatory damages"; nominal damages are enough only "where the cause of action does not require proof of actual damages." The current version of UJI 13-1827 was amended by Supreme Court Order No. S-1-RCR-2025-00126, for cases pending or filed on or after December 31, 2025, and older copies of the instruction may read differently.

Statutes address punitive damages for particular situations: medical malpractice, wrongful death, claims against governmental entities, arbitration and a number of specific causes of action, all described below.

What must be proven

The culpable mental states. UJI 13-1827 defines four of the listed terms:

"Malicious conduct is the intentional doing of a wrongful act with knowledge that the act was wrongful. Willful conduct is the intentional doing of an act with knowledge that harm may result. Reckless conduct is the intentional doing of an act with utter indifference to the consequences. When there is a high risk of danger, conduct that breaches the duty of care is more likely to demonstrate recklessness. Wanton conduct is the doing of an act with utter indifference to or conscious disregard for a person's [rights] [safety]."

Fraudulent conduct and conduct in bad faith are the other two grounds the instruction lists. Gross negligence is not among the listed terms.

Burden of proof. UJI 13-1827 does not set a special burden for punitive damages. The general civil burden instruction, UJI 13-304, provides: "A party seeking a recovery [or a party relying upon a defense] has the burden of proving every essential element of the claim [or defense] by the greater weight of the evidence. To prove by the greater weight of the evidence means to establish that something is more likely true than not true." Where the claim itself is fraud, the New Mexico Supreme Court requires that "each element of fraud must be shown by clear and convincing evidence" (Golden Cone Concepts, Inc. v. Villa Linda Mall, Ltd., 113 N.M. 9, 820 P.2d 1323 (1991)). Medical malpractice is the statutory exception: for claims arising on or after May 20, 2026, the standard is clear and convincing evidence (NMSA 41-5-7.1(A)).

How the jury decides the amount

UJI 13-1827 tells the jury what the award is for and how to size it:

"Punitive damages are awarded for the limited purposes of punishment and to deter others from the commission of like offenses. The amount of punitive damages must be based on reason and justice taking into account all the circumstances, including the nature and enormity of the wrong and such aggravating and mitigating circumstances as may be shown. The property or wealth of the defendant is a legitimate factor for your consideration. The amount awarded, if any, must be reasonably related to the injury and to any damages given as compensation and not disproportionate to the circumstances."

The U.S. Supreme Court's due-process limits on the size of punitive awards also apply to New Mexico verdicts; the punitive damages hub explains them. In Aken v. Plains Electric Generation & Transmission Cooperative, Inc., 2002-NMSC-021, the New Mexico Supreme Court reviewed whether a punitive award was constitutionally excessive de novo and reduced the award on one claim.

Punitive damages against an employer or company

UJI 13-1827 lets a jury award punitive damages against a principal or employer if the agent or employee was acting within the scope of employment "and had sufficient discretionary or policy-making authority to speak and act for" the employer "with regard to the conduct at issue, independently of higher authority," or if the employer "in some [other] way [authorized,] [participated in] [or] [ratified] the conduct."

A company's mental state can also be built from what many employees did. In Clay v. Ferrellgas, Inc., 118 N.M. 266, 881 P.2d 11 (1994), the New Mexico Supreme Court held that the Court of Appeals "incorrectly compartmentalized the conduct of the Ferrellgas employees. It should have viewed the actions of the employees in the aggregate to determine whether Ferrellgas had the requisite culpable mental state because of the cumulative conduct of the employees."

Is there a cap on punitive damages in New Mexico?

New Mexico has no general cap or multiplier on punitive damages. The main statutory cap is the 2026 medical malpractice rule in the next section. Some statutes for particular claims also set their own limits:

• Emergency petroleum supply. Under the Emergency Petroleum Products Supply Act, "the court or jury may award punitive damages not to exceed three times the actual damages, if the violation is found to be willful" (NMSA 12-12-16).
• Motor vehicle dealer franchising. For injury to business or property from conduct forbidden by the motor vehicle dealers franchising article, "the court or jury may award punitive damages not to exceed three times the actual damages, if the defendant acted maliciously" (NMSA 57-16-13).
• Shoplifting. An adult convicted of shoplifting under Section 30-16-20 "may be civilly liable for the retail value of the merchandise, punitive damages of not less than one hundred dollars ($100) nor more than two hundred fifty dollars ($250), costs of the suit and reasonable attorney's fees" (NMSA 30-16-21).
• Uniform Trade Secrets Act. "If willful and malicious misappropriation exists, the court may award exemplary damages in an amount not to exceed twice any award made under Subsection A of this section" (NMSA 57-3A-4(B)).
• Mortgage Foreclosure Consultant Fraud Prevention Act. A court may award "exemplary damages up to three times the compensation charged by the foreclosure consultant" if the consultant violated Section 5 of the Act and the conduct was willful or in bad faith (NMSA 47-15-7(D)).
• NMSA 74-9-34(D): a responsible party liable for a release or threatened release that fails without sufficient cause to provide removal or remedial action on the director's order is liable to the state or the appropriate political subdivision "for punitive damages in an amount at least equal to, and not more than three times the amount of, any costs incurred as a result of the failure to take proper action."

Medical malpractice: the 2026 rules (HB 99)

HB 99, enacted as Laws 2026, chapter 44, added NMSA 41-5-7.1 to the Medical Malpractice Act. Section 8 of the act provides: "The provisions of this act apply to all claims for medical malpractice that arise on or after the effective date of this act." The act took effect May 20, 2026. As amended, the Act's definition of "malpractice claim" "includes but is not limited to actions based on battery or wrongful death."

Standard. "Punitive damages may only be awarded in a malpractice claim if the prevailing party provides clear and convincing evidence demonstrating that the acts of the health care provider were malicious, willful, wanton, reckless, fraudulent or in bad faith" (41-5-7.1(A)).

Cap for independent providers and listed facilities. Under 41-5-7.1(B), a punitive judgment "shall not be in an amount greater than the applicable limitation on monetary damages provided in Section 41-5-6 NMSA 1978" against: "(1) an independent provider; (2) an independent outpatient health care facility and the facility's employees, locum tenens providers and agency nurses; (3) a hospital operated by a New Mexico resident or domestic corporation that is not part of a hospital system and the hospital's employees, locum tenens providers and agency nurses; and (4) employees, locum tenens providers and agency nurses of a hospital or a hospital-controlled outpatient health care facility."

Cap for other hospitals. "Except as provided in Subsection B of this section, a judgment of punitive damages against a hospital or hospital-controlled outpatient health care facility shall not be in an amount greater than two and one-half times the applicable limitation on monetary damages provided in Section 41-5-6 NMSA 1978" (41-5-7.1(C)).

The 41-5-6 limits. The caps borrow their dollar amounts from 41-5-6, which sets different limits for different kinds of providers. For independent providers, 41-5-6(B) sets $750,000 per occurrence, adjusted annually by the consumer price index for all urban consumers beginning January 1, 2023, and that limit itself applies "Except for punitive damages and past and future medical care and related benefits." For claims against a hospital or a hospital-controlled outpatient health care facility, 41-5-6(E) sets $6,000,000 per occurrence "for an injury or death that occurred in calendar year 2026," adjusted by the consumer price index for all urban consumers from 2027. For an independent outpatient health care facility, 41-5-6(D) sets $1,000,000 per occurrence for a 2024 injury or death, adjusted from 2025 by the prior three-year average consumer price index for all urban consumers. The New Mexico medical malpractice page covers those limits.

Not paid from the fund. "A judgment of punitive damages against a health care provider shall not be paid from the fund" (41-5-7.1(D)), meaning the Patient's Compensation Fund.

Pleading only after discovery. Under 41-5-7.1(E), "The initial claim for relief in a malpractice claim shall not include punitive damages. A claim for punitive damages may be asserted by amendment to the pleadings only after the plaintiff has presented sufficient evidence to the court that it is more likely than not that the claim has a triable issue after substantial completion of discovery." If the court allows the amendment, it may permit additional discovery on punitive damages.

Malpractice claims that arose before May 20, 2026 are outside HB 99 under its section 8.

Does New Mexico take a share of the award?

No general New Mexico statute sends any part of a punitive award to the State or a fund. In medical malpractice, 41-5-7.1(D) works in the other direction: it keeps punitive judgments from being paid out of the Patient's Compensation Fund. Under 74-9-34(D), above, the state or political subdivision is itself the party owed the punitive damages.

Punitive damages in New Mexico wrongful death cases

New Mexico's wrongful death statute expressly allows them. Under NMSA 41-2-3, "the jury in every such action may give such damages, compensatory and exemplary, as they deem fair and just, taking into consideration the pecuniary injury resulting from the death to the surviving party entitled to the judgment, or any interest in the judgment, recovered in such action and also having regard to the mitigating or aggravating circumstances attending the wrongful act, neglect or default."

Two limits apply. A wrongful death action against a health care provider is a "malpractice claim," so the 41-5-7.1 standard, caps and pleading rule govern such claims arising on or after May 20, 2026. And when the wrongdoer has died, punitive damages are not available from the estate: in Jaramillo v. Providence Washington Insurance Co., 117 N.M. 337, 871 P.2d 1343 (1994), the New Mexico Supreme Court held that "the purposes of punishment and deterrence are not accomplished by enabling recovery of punitive damages from the estate of deceased tortfeasors."

Who brings the action, how proceeds are distributed and the deadlines are on the New Mexico wrongful death page.

Car accidents and drunk driving

In Svejcara v. Whitman, 82 N.M. 739, 487 P.2d 167 (Ct. App. 1971), the driver had pleaded guilty to driving under the influence of intoxicating liquor and reckless driving. The New Mexico Court of Appeals held that "The guilty plea supports a finding of wilful and wanton misconduct which is a prerequisite to an award of punitive damage."

Whether a jury may award punitive damages in a particular crash case still turns on the UJI 13-1827 conduct standard. For the rest of a crash claim, see New Mexico car accident law.

Government defendants

Tort Claims Act bar. "No judgment against a governmental entity or public employee for any tort for which immunity has been waived under the Tort Claims Act shall include an award for exemplary or punitive damages or for interest prior to judgment" (NMSA 41-4-19(D)).

Awards under other law. "A governmental entity shall pay any award for punitive or exemplary damages awarded against a public employee under the substantive law of a jurisdiction other than New Mexico, including other states, territories and possessions and the United States of America, if the public employee was acting within the scope of his duty" (NMSA 41-4-4(C)).

Other statutes that address punitive damages

Continuing care communities. "Residents, as a class or otherwise, may bring an action in a court of competent jurisdiction to recover actual and punitive damages for injury resulting from a violation of the Continuing Care Act" (NMSA 24-17-15(A)).

Arbitration. "An arbitrator may award punitive damages or other exemplary relief if such an award is authorized by law in a civil action involving the same claim and the evidence produced at the hearing justifies the award under the legal standards otherwise applicable to the claim" (NMSA 44-7A-22(a)).

Does insurance pay punitive damages in New Mexico?

Insurance against punitive damages is not barred by public policy. In Baker v. Armstrong, 106 N.M. 395 (1987), the New Mexico Supreme Court stated: "This state has never announced a public policy which would render unenforceable contracts insuring against liability for punitive damages." The court also held "that punitive damages liability coverage is not an asset which can be used to measure true punishment and that, therefore, it should not be considered by the jury in assessing a defendant's financial standing."

New Mexico punitive damages at a glance

Recent changes

• HB 99 (Laws 2026, ch. 44). Added NMSA 41-5-7.1 for medical malpractice claims arising on or after May 20, 2026: clear and convincing evidence, caps tied to 41-5-6, pleading by amendment after discovery, and no payment of punitive judgments from the Patient's Compensation Fund.
• UJI 13-1827 amendment. Supreme Court Order No. S-1-RCR-2025-00126 amended the punitive damages instruction for cases pending or filed on or after December 31, 2025.

Related pages

• Punitive damages laws by state
• New Mexico medical malpractice law
• New Mexico wrongful death law
• New Mexico car accident law

This article provides general legal information about New Mexico punitive damages law as of 2026-10-19. It is not legal advice. For advice about a specific situation, contact a lawyer licensed in New Mexico.

Last updated: 2026-10-19.

Frequently Asked Questions

Does New Mexico allow punitive damages?

Yes. New Mexico courts allow punitive damages at common law, applied through UJI 13-1827: if the claimant should recover compensatory or nominal damages (in a negligence action, compensatory damages) and the conduct was malicious, willful, reckless, wanton, fraudulent or in bad faith, the jury may award punitive damages.

What is the burden of proof for punitive damages in New Mexico?

UJI 13-1827 does not set a special burden, and the general civil instruction, UJI 13-304, requires proof of every essential element by the greater weight of the evidence. Where the claim itself is fraud, each element of fraud must be shown by clear and convincing evidence (Golden Cone, 1991). For medical malpractice claims arising on or after May 20, 2026, NMSA 41-5-7.1(A) requires clear and convincing evidence.

Is there a cap on punitive damages in New Mexico?

There is no general cap. Medical malpractice claims arising on or after May 20, 2026 are capped at the applicable 41-5-6 limit, or two and one-half times it for hospitals and hospital-controlled outpatient facilities not listed in 41-5-7.1(B) (NMSA 41-5-7.1). Some statutes for particular claims also set limits, such as three times actual damages under the Emergency Petroleum Products Supply Act (12-12-16) and the motor vehicle dealers franchising article (57-16-13), $100 to $250 against an adult convicted of shoplifting (30-16-21), and twice the Subsection A award under the Uniform Trade Secrets Act (57-3A-4(B)).

Are punitive damages available in a New Mexico wrongful death case?

The wrongful death statute, NMSA 41-2-3, provides that the jury may give compensatory and exemplary damages, having regard to the mitigating or aggravating circumstances of the wrongful act. A wrongful death action against a health care provider is a malpractice claim under the Medical Malpractice Act as amended by HB 99, so the 41-5-7.1 rules apply to such claims arising on or after May 20, 2026. In Jaramillo (1994), the New Mexico Supreme Court held that punitive damages are not recoverable from the estate of a deceased tortfeasor.

Are punitive damages available in a New Mexico medical malpractice case?

Yes, with limits for claims arising on or after May 20, 2026: clear and convincing evidence of malicious, willful, wanton, reckless, fraudulent or bad-faith acts; a cap at the applicable 41-5-6 limit, or two and one-half times it for hospitals and hospital-controlled outpatient facilities not listed in 41-5-7.1(B); no punitive claim in the initial complaint; and no payment from the Patient's Compensation Fund (NMSA 41-5-7.1).

Are punitive damages available in a New Mexico drunk driving case?

In Svejcara v. Whitman (1971), the New Mexico Court of Appeals held that a driver's guilty plea to driving under the influence and reckless driving supported a finding of wilful and wanton misconduct, which is a prerequisite to an award of punitive damages. Whether a jury awards them in a particular case turns on the UJI 13-1827 conduct standard.

Are punitive damages available against the government in New Mexico?

Not under the Tort Claims Act. NMSA 41-4-19(D) provides that no judgment against a governmental entity or public employee for a tort for which immunity has been waived under the Act shall include exemplary or punitive damages. Under 41-4-4(C), a governmental entity pays punitive damages awarded against a public employee under another jurisdiction's law, including federal law, if the employee acted within the scope of duty.

Does insurance cover punitive damages in New Mexico?

Insurance against punitive damages is not barred by public policy. In Baker v. Armstrong (1987), the New Mexico Supreme Court said the state has never announced a public policy which would render such contracts unenforceable, and held that punitive damages coverage should not be considered by the jury in assessing a defendant's financial standing.

Are punitive damages available against an employer in New Mexico?

UJI 13-1827 allows punitive damages against an employer or principal if the employee had sufficient discretionary or policy-making authority to act for it on the conduct at issue, or if the employer authorized, participated in or ratified the conduct. In Clay v. Ferrellgas (1994), the New Mexico Supreme Court held that the employees' conduct may be viewed in the aggregate to decide whether the company had the required culpable mental state.