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Treble Damages Definition – Explanation – Example

What Are Treble Damages?

Treble DamagesTreble damages are punitive financial compensation awarded by a court to a plaintiff for up to three times the value of the original judgment.

Treble damages are provided for by law in certain types of lawsuits. In those circumstances, if the court rules in a plaintiff’s favor, it can go one step further and award three times the amount as a punitive measure. However, treble damages only apply in certain situations. To be awarded, a statute must exist to allow a prevailing plaintiff to receive up to three times actual or compensatory damages. The False Claims Act, for example, allows the United States government to obtain treble damages.  This Act is aimed at defense contractors that deliberately file false claims in order to defraud the government.  Treble damages are a multiple of, and not an addition to, actual damages in most instances.

Types of Civil Damages

There are two categories of damages a court can award.  They are compensatory and punitive. Within those two categories are different types of damages:

  • Compensatory: All damages that are a result of the harm by the wrongdoer.
    • Special: Those compensatory damages that are directly related to a loss and are measurable in dollar amounts.  For example, lost wages, medical bills, and property damage.
    • General: Compensatory damages for results of the harm that are more difficult to put a price on.  For example, pain, suffering, and loss of quality of life.
  • Punitive: Damages that are awarded to the plaintiff.  They are not meant to compensate for the loss.  Rather, they are meant to punish the wrongdoer so it will be less likely to happen in the future.
    • Treble: Punitive damages set forth in a statute that allows the court to triple compensatory damages. (Source: study.com)

Punitive Damages

Punitive damages are typically awarded in instances of very bad behavior. The goal is to penalize the perpetrator while discouraging others from doing the same. However, the wrongdoer must be found to have behaved deliberately and outrageously by the court.  In that case, the amount granted is at the discretion of the judge. For example, driving while intoxicated or driving while texting is considered to be negligent behavior.  In those instances, the court may impose both compensatory and punitive damages. Punitive damages can range from a few thousand dollars to millions of dollars.

The amount depends on what the judge feels is necessary to punish the perpetrator and discourage others. There is a strict maximum, or limit, on punitive damages in some states.  Other states evaluate the award to see if it is appropriate. The United States Supreme Court has determined that anything more than a tenfold increase in compensatory damages is excessive.

Treble Damages

Treble damages are punitive damages determined to be three times the amount of compensatory damages awarded. These, like other punitive damages, are based on the court’s determination that the perpetrator committed the act knowingly.  Also, that the behavior was so egregious that it needed to be punished harshly enough to prevent others. However, unlike punitive damages, they cannot be granted without a particular statute authorizing them.

Treble Damages – A Closer Look

Treble damages are a type of financial punishment that can be granted in civil court. These are monetary awards that the losing defendant is obligated to pay the winning plaintiff. Civil damages may be compensatory, general, punitive, or a mix of the three.

There are statutes that provide for treble damages in cases of patent infringement, willful trademark counterfeiting, and antitrust offenses. Plaintiffs in personal injury cases may also be awarded treble damages if the plaintiff requests that they be awarded.  Still, it must be proven that the statute was violated, and the defendant meant to harm the plaintiff. Treble damages are three times the compensatory damages granted.  They are designed to be punitive in order to dissuade others from committing the same conduct.

In addition to compensatory damages, a court may award general damages in a civil action. They are typically claimed in conjunction with compensatory damages, although they are more difficult to obtain. General damages are often classified as pain and suffering or mental distress.

Treble Damages Cannot be Unreasonable 

Punitive damages go beyond repaying the wronged party.  They are intended to penalize defendants whose actions are deemed highly negligent or malicious. Punitive damages may be issued at the court’s discretion if the offense is considered to be extremely detrimental. They are also known as exemplary damages since they are intended to serve as a deterrent to future violators.

The Supreme Court has found that punitive damages that are unreasonably disproportionate or imposed without adequate procedural safeguards violate due process at the Federal Level. States, on the other hand, have greater latitude in establishing guidelines for assessing punitive penalties.  Although there is no cap, punitive damages are often limited to four times compensatory damages. When a specific statute allows it, treble damages can be awarded. Financial recompense due to an aggrieved party is also referred to as liquidated damages. They differ in that they are usually stipulated in a contract for a specific offense.

Example of Treble Damages

For example, consider the Telecommunications Consumer Protection Act of 1991 (TCPA).  It is a U.S. law passed in response to concerns about telemarketing. The Act establishes criteria for telemarketing operations and tightens limitations on the use of automated telephone technology.  Additionally, it mandates businesses that make phone solicitations to maintain do-not-call lists. The TCPA imposes fines for breaking such requirements. A subscriber, for example, may sue for $500 for each infraction or demand damages, an injunction, or both. However, subscribers can seek treble damages in the event of a willful violation of the TCPA.

Up Next: What Are Nonparametric Statistics, Tests, and Data?

NonparametricNonparametric statistics, tests, and methods make statistical inferences without regard to prescribed models or any underlying distribution.

Nonparametric statistics are statistical methods in which data do not come from specified models determined by a small number of parameters.  For example, the normal distribution model and the linear regression model. Nonparametric statistics may use ordinal data.  This means it does not necessarily rely on numbers but rather on a ranking or hierarchy of order. An example of ordinal data would be a poll that revealed consumer preferences for use ranging from always to never.

Nonparametric statistics encompass descriptive statistics, statistical models, inference, and statistical tests. The structure of nonparametric models is determined by data rather than being established through direct observation. However, the word nonparametric does not indicate that such models are wholly devoid of parameters.  Rather, that the quantity and nature of the parameters are adjustable and not predetermined. For example, a nonparametric estimate of a probability distribution is a histogram. Nonparametric statistics make no assumptions regarding sample size or the nature of the observed data.

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