Treble damages
Encyclopedia
Treble damages, in law
, is a term that indicates that a statute
permits a court
to triple the amount of the actual/compensatory damages
to be awarded to a prevailing plaintiff
, generally in order to punish the losing party for willful conduct. Treble damages are a multiple of, and not an addition to, actual damages. Thus, where a person received an award of $100 for an injury, a court applying treble damages would raise the award to $300. The ability to award treble damages is a typical feature in legislation that recognizes the potentially willful nature of the prohibited acts. For example, such damages may be awarded by a court in the United States for willful violation
of the antitrust
laws, for willful patent infringement
, for trademark
counterfeiting, and under the RICO
statute. The idea behind the creation of such damages, also called exemplary damages, is that they will encourage citizens to sue for violations that are harmful to society in general.
The United States Supreme Court determined in Commissioner v. Glenshaw Glass Co.
that, unlike merely compensatory damages, which are exempt from federal income tax
, such taxes must be paid on the excess amount (the amount that exceeds the actual damages) of treble damages. Furthermore, some foreign governments will assist U.S. citizens in collecting damages, but not treble damage awards, which are considered penal.
Law
Law is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...
, is a term that indicates that a statute
Statute
A statute is a formal written enactment of a legislative authority that governs a state, city, or county. Typically, statutes command or prohibit something, or declare policy. The word is often used to distinguish law made by legislative bodies from case law, decided by courts, and regulations...
permits a court
Court
A court is a form of tribunal, often a governmental institution, with the authority to adjudicate legal disputes between parties and carry out the administration of justice in civil, criminal, and administrative matters in accordance with the rule of law...
to triple the amount of the actual/compensatory damages
Damages
In law, damages is an award, typically of money, to be paid to a person as compensation for loss or injury; grammatically, it is a singular noun, not plural.- Compensatory damages :...
to be awarded to a prevailing plaintiff
Plaintiff
A plaintiff , also known as a claimant or complainant, is the term used in some jurisdictions for the party who initiates a lawsuit before a court...
, generally in order to punish the losing party for willful conduct. Treble damages are a multiple of, and not an addition to, actual damages. Thus, where a person received an award of $100 for an injury, a court applying treble damages would raise the award to $300. The ability to award treble damages is a typical feature in legislation that recognizes the potentially willful nature of the prohibited acts. For example, such damages may be awarded by a court in the United States for willful violation
Willful violation
In the North American legal justice system system and in US Occupational Safety and Health regulations,willful violation is an "act done voluntarily with either...
of the antitrust
Antitrust
The United States antitrust law is a body of laws that prohibits anti-competitive behavior and unfair business practices. Antitrust laws are intended to encourage competition in the marketplace. These competition laws make illegal certain practices deemed to hurt businesses or consumers or both,...
laws, for willful patent infringement
Patent infringement
Patent infringement is the commission of a prohibited act with respect to a patented invention without permission from the patent holder. Permission may typically be granted in the form of a license. The definition of patent infringement may vary by jurisdiction, but it typically includes using or...
, for trademark
Trademark
A trademark, trade mark, or trade-mark is a distinctive sign or indicator used by an individual, business organization, or other legal entity to identify that the products or services to consumers with which the trademark appears originate from a unique source, and to distinguish its products or...
counterfeiting, and under the RICO
Racketeer Influenced and Corrupt Organizations Act
The Racketeer Influenced and Corrupt Organizations Act, commonly referred to as the RICO Act or simply RICO, is a United States federal law that provides for extended criminal penalties and a civil cause of action for acts performed as part of an ongoing criminal organization...
statute. The idea behind the creation of such damages, also called exemplary damages, is that they will encourage citizens to sue for violations that are harmful to society in general.
The United States Supreme Court determined in Commissioner v. Glenshaw Glass Co.
Commissioner v. Glenshaw Glass Co.
Commissioner v. Glenshaw Glass Co., , was an important income tax case before the United States Supreme Court. The Court held as follows:...
that, unlike merely compensatory damages, which are exempt from federal income tax
Income tax
An income tax is a tax levied on the income of individuals or businesses . Various income tax systems exist, with varying degrees of tax incidence. Income taxation can be progressive, proportional, or regressive. When the tax is levied on the income of companies, it is often called a corporate...
, such taxes must be paid on the excess amount (the amount that exceeds the actual damages) of treble damages. Furthermore, some foreign governments will assist U.S. citizens in collecting damages, but not treble damage awards, which are considered penal.