Treble Damages: What it is, How it Works, Examples

What Are Treble Damages?

Treble damages indicate a statute exists to award a prevailing plaintiff up to three times actual or compensatory damages.

For example, the False Claims Act allows the U.S. government to recover treble damages from defense contractors that knowingly submit false claims to defraud the government.

Key Takeaways

• Treble damages differ from punitive damages as they provide additional compensation to the aggrieved party.
• Treble damages are capped at three times the compensatory.
• Treble damages deter others from committing the same offense.
• Treble damages are often invoked for willful violations of state or federal statutes.

Understanding Treble Damages

Treble damages are civil damages awarded in court cases. These are monetary awards the losing defendant must pay to the winning plaintiff. Civil damages can be compensatory, general, punitive, or any combination thereof. Statutes exist to award treble damages in cases involving patent infringement, willful trademark counterfeiting, and antitrust violations.

Plaintiffs in personal injury cases may also receive treble damages if the violated statute supports them, if the plaintiff requests them, and if the defendant intended to harm the plaintiff. Treble damages are punitive, three times the compensatory damages awarded.

Treble Damages are based on actual damages and will not triple the value of other damages. Actual damages provide funds to replace what was lost. General compensatory damages awarded are more complex, as these damages do not represent a monetary expenditure. General damages are financial awards made by a court in a civil case in addition to compensatory damages. General damages typically fall under the heading of pain and suffering or mental anguish, for example.

Treble Damages in Context

Punitive damages go beyond compensating the aggrieved party and are designed to punish defendants whose conduct is considered grossly negligent or intentional. Punitive damages may be awarded at the discretion of the court when the offense is determined to be particularly harmful. They are also called exemplary damages to set an example and deter future violators.

The Supreme Court has ruled that punitive damages that are grossly excessive or imposed without sufficient procedural protections violate due process. However, states have broad discretion in setting rules for calculating punitive damages. Although there is no maximum sum, punitive damages typically do not exceed four times compensatory damages. Treble damages can only be awarded when a specific statute proscribes them.

Liquidated damages also refer to financial compensation due to an aggrieved party. They are typically specified in a contract for a particular offense.

Typically, a court will award either treble damages or punitive damages, not both, to avoid "double dipping."

Example of Treble Damages

The Telecommunications Consumer Protection Act of 1991 (TCPA) is a U.S. law passed in response to concerns about telemarketing. The act sets guidelines for telemarketing practices, places greater restrictions on the use of automated telephone equipment, and requires companies that make telephone solicitations to maintain do-not-call lists.

The TCPA prescribes penalties for violating such rules. For example, a subscriber may sue for $500 for each violation or recover damages, seek an injunction, or sue for both. In cases of a willful violation of the TCPA, subscribers can claim treble damages for each instance.