(b) Damages. In any action brought under subdivision (a) of this section, upon a finding of liability on the part of the defendant, the defendant shall be liable to the plaintiff in an amount equal to the lesser of one hundred thousand dollars or the sum of (1) the actual, direct economic damages sustained by the plaintiff as a proximate result of the reckless or intentional actions of the officer or employee, and (2) the costs of the action.

(c) Limitations. (1) Exhaustion of administrative remedies. The amount of damages awarded under subdivision (b) of this section may be reduced if the court determines that the plaintiff has not exhausted the administrative remedies available to such plaintiff within the department which have been established pursuant to the commissioner's authority to compromise civil liability provided in subdivision eighteenth-a of section one hundred seventy-one of this chapter. In establishing administrative review procedures regarding claims for damages under this section, the commissioner is authorized to enter into contracts with private dispute resolution entities for the purpose of providing review of such claims and suggested compromises by independent third parties.

(2) Mitigation of damages. The amount of damages awarded under paragraph one of subdivision (b) of this section shall be reduced by the amount of such damages which could have reasonably been mitigated by the plaintiff.