Which of the following best describes "compensatory damages"?

Compensatory damages are specifically designed to reimburse the plaintiff for actual losses suffered as a result of the defendant's actions. This category of damages aims to make the injured party "whole" again financially by covering direct losses such as medical expenses, lost wages, property damage, and other measurable factors. The rationale is to restore the victim to the financial position they were in before the harm occurred.

The other options do not accurately capture the essence of compensatory damages. For instance, punitive damages focus on punishing the defendant and deterring future wrongdoing rather than compensating the injured party. Similarly, awarding damages solely for emotional distress does not encompass the broader definition of compensatory damages, which includes a wider range of losses. Lastly, damages set by statute typically refer to statutory damages rather than the compensatory damages that are calculated based on specific losses incurred by the plaintiff in a given case. Thus, the focus on reimbursement for losses accurately reflects the core principle underlying compensatory damages.