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

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

Charlene Rhinehart is a CPA , CFE, chair of an Illinois CPA Society committee, and has a degree in accounting and finance from DePaul University.

Michael Logan is an experienced writer, producer, and editorial leader. As a journalist, he has extensively covered business and tech news in the U.S. and Asia. He has produced multimedia content that has garnered billions of views worldwide.

that determined punitive damages in a misrepresentation case." width="7866" height="4714" />

What Are Treble Damages?

Treble damages is a term that indicates 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 traditional punitive damages in that treble damages are designed to provide additional compensation to the aggrieved party,
• Unlike traditional punitive damages, treble damages are capped at three times the compensatory.
• Treble damages are meant to deter others from committing the same offense.
• They are often invoked for willful violations of state or federal statues.

Understanding Treble Damages

Treble damages are a type of civil damages awarded in civil 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 intended to be punitive in order to deter others from committing the same offense and are three times the compensatory damages awarded.

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

Treble Damages in Context

Like treble damages, punitive damages go beyond compensating the aggrieved party and are specifically 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, in that they are intended to set an example to 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 with regard to 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.

The term liquidated damages also refers to financial compensation due to an aggrieved party. They differ in that they are typically specified in a contract for a particular offense.

Typically, a court will award either treble damages or punitive damages, and not both, as it is considered "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.