Of interest.

Compensation for non-pecuniary harm and compensation for the death of close people

The Supreme Court of the Czech Republic, in its recent decision dated September 19, 2018, file no. 25 Cdo 894/2018, dealt with the issue of compensation for non-pecuniary harm (within the meaning of compensation for the death of close people), including the definition of the essential circumstances which have to be taken into account for the purpose of the quantification of the specific compensation. Although the appellants’ petition for an appellate review to was rejected because there was no discrepancy with the established practice of the Supreme Court of the Czech Republic, several substantive conclusions have been formulated in that judgment.

Circumstances essential for determining the amount of non-pecuniary harm compensation

The judicature and literature generally accept the upper limit of compensation in the given case in the amount of CZK 500,000. However, it should always be taken into consideration that the compensation shall not have a destructive effect on the tortfeasor. The court must then, when considering the proportionality of the proposed satisfaction, take account of the overall nature of the loss event, of the individual circumstances of its occurrence, as well as of the amount of compensation awarded in similar cases. It is therefore necessary to establish objective standards in order to determine the amount of compensation for non-pecuniary harm for the survivors – i.e. such a fundamental criteria which will be decisive in determining the specific amount of non-pecuniary harm compensation awarded. The stepping stones are the circumstances mentioned in Section 2957 of the Civil Code, containing a demonstrative list of circumstances deserving special consideration (e.g. intention to cause harm, abuse of the victim’s dependence on the tortfeasor, multiplying the effects of the interference or victim’s concerns of loss of life or serious damage to health). In addition, other circumstances must be taken into account, both on the part of the tortfeasor and on the part of the survivor. 

On the survivor’s side, these circumstances are, in particular: (a) the intensity and quality of his relationship with the decedent; (b) the age of the decedent and survivors; (c) possible existential dependence on the decedent; (d) possible provide of another satisfaction (where appropriate); or (e) if the survivor was an eyewitness to the loss event or the fact of how he found out about the loss event.

On the tortfeasor’s side, these circumstances are, in particular: (i) the tortfeasor’s attitude to the loss event; (ii) the impact of the incident on his mental sphere; (iii) the form and degree of fault; (iv) the participation of the decedent on an accident resulted in his death; (v) to a limited extent, even the tortfeasor’s property situation, including the perspective for its future development. Since the last criterion – property situation of the tortfeasor – is not a factor relevant to the survivor’s suffering, there is no direct proportion between the size of the tortfeasor’s property and the amount of non-pecuniary harm compensation awarded. Property conditions are de facto some kind of corrective used to eliminate disproportionately high claims for the non-pecuniary harm compensation, when such an amount of the compensation shall not cause a liquidation consequences for tortfeasors.

Functions of the compensation for non-pecuniary harm

The primary function of compensation for non-pecuniary harm is the satisfaction function, what means that the all harmful consequences of the loss event shall be, proportionally and with the respect to all circumstances, effectively balanced and mitigated.

At the same time, the penalty function of the compensation of harm is generally ruled out for the purpose of the protection of tortfeasor, i.e. in the case of compensation awarded to prevent its possible leading to the destructive effects for a tortfeasor. If it is even admissible to talk about the penalty function at all, then it is absorbed within the satisfaction function. Perhaps a sanctioning function (in the sense of true repression) could be only admitted exceptionally – in cases of interference with the rights to honour, dignity or privacy by the information media. In these cases, high compensation for non-pecuniary harm is permissible in order to be able to effectively discourage similar interventions in personality rights and in order to be such interventions, likely made with the intention of economic benefit, not worth it at all – it is more likely to be a preventive-penalty function. For this reason it cannot be without any further said that compensation for survivors of the close person should be always higher than compensation for interference with the other personality rights.

Conclusion

At the same time, it can be concluded that, as part of the amendment to civil law, the legislature’s primary intention was to eliminate the lump sums of compensation of harm, but not to cast doubt upon the actual judicatory practise of the courts. Nevertheless, literature and case law are starting to determine a certain range corresponding to basic amount for awarding the compensation for non-pecuniary harm (in the amount of CZK 240,000 to CZK 500,000), which will be corner stone for courts, which will take into account also the relevant circumstances of the specific case. According to our opinion it is essential that these boundaries shall over time reflect the economic development of society or inflation itself.

From the commented decision also follows the existence of ban of arbitrariness for general courts, therefore, the courts shall not rely entirely on their own discretion when considering the amount of compensation, but the decision must be based on certain objective standards as outlined above. In addition, the nature of compensation for non-pecuniary harm must be taken into account, since compensation for the death of close people is not harm to the life or health of the victim himself, but is harm to the private and family life of the survivors.

Therefore, according to our opinion, all aspects and circumstances of the case should be always carefully considered in the judicatory practice of the courts, which must take into account all corrections and criteria arising out of laws, case-law and interpretations as stated in the commented decision. Courts shall not tend to admit unreasonably high flat-rate compensation for non-pecuniary harm to survivors (which would give the impression of serving more as penalty sanction than satisfactory sanction). On the other hand, compensation of non-pecuniary harm to survivors shall, however, reflect all the circumstances of the case, including the specific effects on survivors.

 

Mgr. Ondřej Čala, junior lawyer – cala@plegal.cz

Mgr. Jakub Málek, partner – malek@plegal.cz

www.peytonlegal.cz

 

18. 03. 2019

 

 

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