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European Centre of Tort and Insurance Law Reichsratsstraße 17/2 A-1010 Vienna Tel.: +43 1 4277 29650 Fax: +43 1 4277 29670 E-Mail: [email protected]

Austrian Academy of Sciences Institute for European Tort Law Reichsratsstraße 17/2 A-1010 Vienna Tel.: +43 1 4277 29651 Fax: +43 1 4277 29670 E-Mail: [email protected]

This work is published with the financial support of the Austrian Ministry of Science and Research, the Kulturabteilung der Stadt Wien, Wissenschafts- und Forschungsförderung and Freshfields Bruckhaus Deringer. Gedruckt mit Unterstützung des Bundesministeriums für Wissenschaft und Forschung in Wien. This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned, specifically those of translation, reprinting, re-use of illustrations, broadcasting, reproduction by photocopying machines or similar means, and storage in data banks. © 2008 Springer-Verlag/Wien Printed in Germany SpringerWienNewYork is part of Springer Science + Business Media springer.at Product Liability: The publisher can give no guarantee for the information contained in this book. This also refers to that on drug dosage and application thereof. In each individual case the respective user must check the accuracy of the information given by consulting other pharmaceutical literature. Library of Congress Control Number 2008938116 Typesetting: Composition & Design Services, Minsk, Belarus Printing and binding: Strauss GmbH, 69509 Mörlenbach, Germany Printed on acid-free and chlorine-free bleached paper SPIN: 12175284

ISSN 1616-8623 ISBN 978-3-211-77991-0 SpringerWienNewYork

This book is dedicated to Pierre Widmer on the occasion of his 70th birthday

Preface A harmonisation of European law presupposes sound mutual knowledge of the jurisdictions involved in the harmonisation process. However, partly due to language problems it is not always easy to obtain information about all these jurisdictions, especially as far as new developments are concerned. Against this background, the European Centre of Tort and Insurance Law and the Institute for European Tort Law decided to publish a Yearbook on European Tort Law containing reports on the most interesting new developments in the field of tort law in different European countries. The seventh Yearbook on European Tort law includes reports on most EU Member States, including the new Member States Bulgaria and Romania. Contributions from Switzerland and Norway as well as an overview of the developments in the field of EC law are also included. Furthermore, the Yearbook includes a comparative overview and several essays on key issues of tort law, most of which focus on questions of prescription. These essays, as well as the most important results of the country reports and the comparative overview, were presented and discussed at the 7th Annual Conference on European Tort Law in Vienna from 27 to 29 March 2008. The 8th Annual Conference on European Tort Law will again take place in Vienna from 16 to 18 April 2009. In publishing the Yearbook we pursue the idea of providing a comprehensive overview of the latest developments in the law of torts of many European countries thereby enabling scholars as well as practitioners from different national backgrounds to keep abreast of questions concerning tort law. Furthermore, we hope that the Yearbook will enhance and promote a greater understanding of the respective national legal and judicial systems which is essential for a successful harmonisation of European tort law. At this point, we would like to express our gratitude for the support of this project by the Austrian Ministry of Science and Research; the Austrian Ministry of Justice; Freshfields Bruckhaus Deringer; the Kulturabteilung der Stadt Wien, Wissenschafts- und Forschungsförderung and Munich Re. Without their support this project could never have been realised. Moreover, we would like to thank the staff of the Institute for European Tort Law and the European Centre of Tort and Insurance Law. Special thanks go to Mag. Lisa Zeiler for making the Conference such a success and Donna Stockenhuber M.A. for once again taking on the delicate and time-consuming task of proof-reading the entire manuscript. Moreover, we would like to thank Thomas Thiede LL.B., LL.M. for technical support, Dr. Nora Wallner for her assistance in managing

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the publication process, JUDr. Petra Pipková for her help with the formatting and for preparing the Index and Mag. Kathrin Karner-Strobach for unifying the style of the footnotes. Helmut Koziol and Barbara C. Steininger Vienna, July 2008

Table of Contents Opening Lecture............................................................................................. 1 The Development of Tort Law (John Bell)........................................................................................................ 2 A. B. C. D. E.

Introduction........................................................................................... 2 What is the Nature of Tort Development? ............................................. 3 The Function of Tort Law ..................................................................... 5 Is Law Dependent or Independent in its Development? ....................... 9 Factors in the Development of Tort Law ............................................ 13

Essays ............................................................................................................ 25 I. Prescription: General Framework and Special Problems Concerning Damages Claims (Reinhard Zimmermann and Jens Kleinschmidt)........................................... 26 A. B. C. D. E. F.

The General Framework..................................................................... 27 Commencement of Prescription Concerning Damages Claims.......... 33 First Damage and Further Consequences .......................................... 38 The Latent Damage Problem .............................................................. 48 The Relationship between Regular Period and Long-Stop ................. 61 Prescription Problems in Cases of Sexual Abuse ............................... 64

II. Commencement of the Prescription Period in Case of Damage Caused due to Omissions (Federico Fusco) ............................................................................................ 79 A. Introduction......................................................................................... 79 B. The Problematic Nature of Omissions ................................................ 79 C. Commencement of the Prescription Period: Current Law in Europe ....................................................................... 88 III. Plurality of Liable Persons and Prescription of Recourse Actions (Bjarte Askeland) ........................................................................................... 94 A. Introduction......................................................................................... 94 B. Tort Law Structures, Rational Arguments and Policy Considerations ......................................................................... 95

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C. Prescription of the Recourse Action ................................................. 102 D. An Idealized Solution to the Puzzle (a “Core Regime”)................... 110 IV. Economic Analysis of Prescription in Tort Law (Israel Gilead).............................................................................................. 112 A. Introduction....................................................................................... 112 B. Aspects of Efficiency Affected by Tort Law ....................................... 114 C. Errors and Uncertainty: Time-Related Factors Affecting Tort Law’s Efficiency ......................................................... 115 D. Time Limits and Deterrence .............................................................. 117 E. Time Limits and Loss-Spreading ....................................................... 118 F. Time Limits and Perceptions of Fairness.......................................... 121 G. Litigation Costs, Costs of Preserving Evidence and Financial Reserves and Other Costs of Uncertainty ........................ 122 H. An Overview of the Efficiency of Time Limits ................................... 123 I. An Overview of the Efficiency of Rules of Prescription .................... 124 J. Application of the Analysis: The Discovery Rule ............................. 126 K. Conclusions and Notes on the Literature.......................................... 129 Reports ........................................................................................................ 133 I. Austria (Barbara C. Steininger) ............................................................................... 134 A. Legislation ........................................................................................ 134 B. Cases ................................................................................................. 139 C. Literature .......................................................................................... 152 Appendix: Revised Working Group Draft ............................................... 158 II. Belgium (Isabelle C. Durant) ..................................................................................... 173 A. Legislation ........................................................................................ 173 B. Cases ................................................................................................. 194 C. Literature .......................................................................................... 198 III. Bulgaria (Christian Takoff) ......................................................................................... 206 A. Legislation ........................................................................................ 206 B. Judicial Practice ............................................................................... 206 C. Doctrine ............................................................................................ 210 IV. Czech Republic (Jiří Hrádek) ................................................................................................ 211 A. Legislation ........................................................................................ 211 B. Cases ................................................................................................. 213 C. Literature .......................................................................................... 229

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V. Denmark (Vibe Ulfbeck and Søren Bergenser) ............................................................ 232 A. Legislation ........................................................................................ 232 B. Cases ................................................................................................. 232 C. Literature .......................................................................................... 236 VI. England and Wales (Ken Oliphant) ............................................................................................. 237 A. Legislative Proposals ........................................................................ 237 B. Cases ................................................................................................. 239 C. Literature .......................................................................................... 249 VII. Estonia (Janno Lahe and Irene Kull) ........................................................................ 255 A. Legislation ........................................................................................ 255 B. Cases ................................................................................................. 258 C. Literature .......................................................................................... 265 VIII. Finland (Suvianna Hakalehto-Wainio) ...................................................................... 269 A. Legislation ........................................................................................ 269 B. Cases ................................................................................................. 269 C. Literature .......................................................................................... 269 IX. France (Olivier Moréteau) ....................................................................................... 274 A. Introduction....................................................................................... 274 B. Cases ................................................................................................. 275 C. Literature .......................................................................................... 286 X. Germany (Jörg Fedtke) ................................................................................................ 288 A. Legislation ........................................................................................ 288 B. Cases ................................................................................................. 290 C. Literature .......................................................................................... 303 XI. Greece (Eugenia Dacoronia) ................................................................................... 309 A. Legislation ........................................................................................ 309 B. Cases ................................................................................................. 311 C. Literature .......................................................................................... 335

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XII. Hungary (Attila Menyhárd) ......................................................................................... 339 A. Legislation ........................................................................................ 339 B. Cases ................................................................................................. 341 C. Literature .......................................................................................... 349 XIII. Ireland (Eoin Quill) .................................................................................................. 352 A. Legislation ........................................................................................ 352 B. Cases ................................................................................................. 354 C. Literature .......................................................................................... 371 XIV. Italy (Emanuela Navarretta and Elena Bargelli) ................................................. 373 A. Legislation ........................................................................................ 373 B. Cases ................................................................................................. 374 C. Literature .......................................................................................... 385 XV. Latvia (Agris Bitāns) ............................................................................................... 389 A. Legislation ........................................................................................ 389 B. Cases ................................................................................................. 393 C. Literature .......................................................................................... 397 XVI. Lithuania (Herkus Gabartas and Greta Bžozeckaitė) .................................................. 400 A. Legislation ........................................................................................ 400 B. Cases ................................................................................................. 402 C. Literature .......................................................................................... 410 XVII. The Netherlands (Michael G. Faure and Ton Hartlief) ........................................................... 416 A. B. C. D. E.

Introduction....................................................................................... 416 Legislation and Evolutions at Policy Level ...................................... 416 Case Law........................................................................................... 419 Doctrine ............................................................................................ 432 Concluding Remarks ......................................................................... 438

XVIII. Norway (Bjarte Askeland) ......................................................................................... 440 A. Legislation ........................................................................................ 440 B. Cases ................................................................................................. 441 C. Literature .......................................................................................... 445

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XIX. Poland (Ewa Bagińska) ............................................................................................ 451 A. Legislation ........................................................................................ 451 B. Cases ................................................................................................. 453 C. Literature .......................................................................................... 472 XX. Portugal (André G. Dias Pereira)............................................................................... 476 A. Legislation ........................................................................................ 476 B. Cases ................................................................................................. 480 C. Literature .......................................................................................... 490 XXI. Romania (Christian Alunaru and Lucian Bojin) ......................................................... 497 A. Legislation ........................................................................................ 497 B. Cases ................................................................................................. 499 C. Literature .......................................................................................... 506 XXII. Slovakia (Anton Dulak)............................................................................................... 521 A. Legislation ........................................................................................ 521 B. Case Law........................................................................................... 523 C. Literature .......................................................................................... 525 XXIII. Slovenia (Rok Lampe) ................................................................................................. 526 A. Legislation ........................................................................................ 526 B. Cases ................................................................................................. 528 XXIV. Spain (Jordi Ribot and Albert Ruda)...................................................................... 541 A. Legislation ........................................................................................ 541 B. Cases ................................................................................................. 553 C. Literature .......................................................................................... 568 XXV. Sweden (Håkan Andersson) ...................................................................................... 572 A. B. C. D.

Introduction....................................................................................... 572 Legislation ........................................................................................ 572 Cases ................................................................................................. 572 Literature .......................................................................................... 584

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XXVI. Switzerland (Peter Loser) ................................................................................................ 586 A. Legislation ........................................................................................ 586 B. Cases ................................................................................................. 587 C. Literature .......................................................................................... 596 XXVII. European Union (Bernhard A. Koch) ...................................................................................... 598 A. Legislation ........................................................................................ 598 B. Cases ................................................................................................. 606 XXVIII. Comparative Remarks (Ken Oliphant) ............................................................................................. 617 A. B. C. D. E. F. G.

Introduction....................................................................................... 617 EC Tort Law ...................................................................................... 617 ECHR Tort Law................................................................................. 618 Principles of European Tort Law ...................................................... 619 The Common Core ............................................................................ 620 Literature .......................................................................................... 629 Conclusions....................................................................................... 631

Contributors ............................................................................................... 632 Index ............................................................................................................ 649 Publications ................................................................................................ 657

Opening Lecture

The Development of Tort Law John Bell

A. INTRODUCTION 1

This chapter reports some of the conclusions that have been drawn from a research project on “European Legal Development” run by David Ibbetson and myself, and involving colleagues from a number of different European countries. The project looked at legal development in Europe 1850–2000 as its broad subject, but then used liability for fault as the illustrative area of work.

2

When we talk about “legal development”, it is important to distinguish three phenomena. First, there is the law as formulated in texts, typically of doctrinal writing. Secondly, there is the lived experience of those who use the law. Thirdly, there is the relationship between the law and other social activities that try to achieve similar results. The study reported in this chapter is focused predominantly on the first. There is limited evidence of the second, the way the law impacted on the lives of individuals, but we have tried to incorporate this as context, wherever it is available. The third phenomenon is included where possible, again as context. Nevertheless, the impact on rules and principles of law remains the principal object of research. The concern has been to investigate the extent to which changes in legal rules are driven primarily by external influences. Disentangling the different influences is not always easy and the results may be more impressionistic than fully demonstrated, but there is a value in trying to gain at least some broad indication of the factors that have shaped legal development.

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In order to deal with these questions, we chose liability for fault 1850 to 2000 as our major area of study. Around 1850, there were many similarities in approaches to liability for fault across the legal systems of Western Europe. But since then, there has been significant divergence. Our interest is first to chart the changes and then seek the explanations for what happened. Although there have been many changes in tort and delict laws over the period, the idea of liability for fault remains central to private law approaches to the compensation of victims of harms caused by the actions of others.

4

As a first stage, the project worked on six Case Studies which illustrate the general theme of liability for fault and its development within the period: (1)

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Legal Doctrine, (2) Medical Liability, (3) Product Liability, (4) Relations between Neighbours, (5) Technological Change, and (6) Traffic and Railways. Having studied these topics with a range of scholars from Western European countries, a second stage involved further groups examining a number of salient factors in legal development. The topics covered in this stage were: (1) Institutions and Professions, (2) Social and Political Ideas, and (3) The Economy (including the impact of insurance).

B. WHAT IS THE NATURE OF TORT DEVELOPMENT? Within the Case Studies, the pattern of legal development from 1850 to 2000 is broadly: a movement within the legal rules and their interpretation from fault to a stricter form of liability, usually through a reversal of the burden of proof, if not strict liability. This pattern applies in relation to traffic and products. In medical liability, there is a movement from standards of gross fault or even immunity for hospitals towards more ordinary standards of fault. In relation to neighbours, liability did move towards fault-based liability and away from reliance on liability simply for the infringement of strict property rights. These ideas are supported by the development of legal doctrine and ideas. As will be seen later, the interaction of the writers of legal doctrine with wider movements in thought and policy within society at large is important in order to understand the way in which the law develops.

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Ibbetson points to the way in which the French Civil Code was interpreted in the 1870s in a fault-oriented way. The Spanish Civil Code of 1889 also explicitly redefined liability in terms of liability for intention or careless fault. The same was true of English and German laws.1 By the end of our period of study, as the European Tort Law project has shown, there are a variety of areas of strict liability, either within tort itself or in branches of the law which have now replaced or complemented tort law. Two obvious examples are the treatment of industrial injuries through workmen’s compensation and road traffic accidents.

6

In brief 2, the project has identified, three main trends in the law relating to liability have become apparent from this study:

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1

2

Victims of accidents have gradually found it easier to obtain compensation, either because the burden of proof has shifted towards the person causing the injury or because liability no longer depended on proof of fault. Simpler and less expensive compensation systems have gradually been created outside private law (the law of relations between individuals). For example, although the victims of boiler and railway accidents tended to be employees, they rarely gained compensation through private law but inD. Ibbetson, Harmonisation of the Law of Tort and Delict: A Comparative and Historical Perspective, in: R. Zimmermann (ed.), Grundstrukturen des europäischen Deliktsrechts (2003) 83–102. For fuller details, see the project website: http://eld.law.cam.ac.uk.

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John Bell

stead through state-created insurance-based workmen’s compensation systems. In Germany, Sweden and France, such schemes have also replaced private law for most road accidents, and Sweden and France have now adopted similar schemes for medical injuries. Although private law has played a minimal role in incentivising accident prevention, other forms of regulation have had an impact. For instance, state regulation on the siting of boilers, buildings or crops alongside railway lines, as well as regulation related to determining who can practise as a doctor, has played a very important role in reducing the incidence of harm.

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It is thus important to distinguish changes in tort law from changes in the whole pattern of the way in which the law provides compensation and regulates conduct. For example, the problem of accidents caused by steam boilers gave rise to relatively little litigation in court, despite the large number of people injured by them when they exploded. Most of the people injured were employees. They obtained compensation eventually either through insurance arrangements put in place by their employer, through their own kinds of insurance, e.g. through mutual or friendly societies that protected members against the financial effects of illness and death, and eventually through state-established workmen’s compensation. In addition, the prevention of accidents occurred through systems of regulation, either created by the state or by associations of employers. The way in which this area of law and practice developed obviated the need for change in the rules of tort and their interpretation in many countries. All the same, the problem of the exploding boiler was the trigger for the development of strict liability rules in both French administrative and French civil law, just before the law on workmen’s compensation was enacted.3

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New legal developments often result from the application of established rules to new situations. For example, long-established rules governing the law between neighbours had to apply to urbanisation and the growth of industries that had much greater power to pollute or affect a surrounding neighbourhood than hitherto. All the same, even in that area of well established rules, one can detect changes in values. The law began to pay more attention to expectations to enjoy the land, rather than simply to punish interference with conventional property rights. In relation to these expectations of enjoyment, then standards akin to fault become applied. As a Scots judge stated, “in a comparatively rude and uncultivated state of society, direct damage to persons or property appears to have been necessary to constitute a nuisance; but in the progress of society to a higher degree of civilisation, the general comfort of individuals has come to be considered of greater importance; and to this general comfort, the power 3

See CE 21 July 1895, S. 1897.3.33, note Hauriou. In his conclusions to the case, Romieu bases his argument on the general principle of equality before public burdens and specifically on liability for public works, which is strict under the loi of 12 Pluviôse An VIII (1798). Private law followed suit in Cass. 16 June 1896, Grange, Dalloz (D.) 1897.1.433 note Salleiles, Sirey (S.) 1897.1.17 note Esmein, which was based on art. 1384, al. 1 of the Civil Code. This topic is discussed further in M. Martín-Casals (ed.), The Development of Liability in Relation to Technological Change (forthcoming).

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of the individual in the use of his property has been postponed.”4 Fault was applied more straightforwardly when the law moved to sanction omissions that harmed neighbours. In some systems, the availability of no-fault regimes for railway, car and product injuries typically have left the principles of fault liability intact, but have narrowed the scope of their application. For example, it remains possible in Sweden or Germany to sue the person causing harm in fault in order to gain extra damages. (EU product liability no longer leaves this possibility, but this was how national courts first interpreted it.5) So there is a space for fault liability that is more limited than it once was.

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All the same, fault remains the point of reference for deciding whether a person has to pay compensation for harm caused to another. In newer areas, such as medical liability, fault was the starting point. Although notions of gross fault were the first standard used, gradually ordinary fault has come to the fore as the basic standard of liability.

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C. THE FUNCTION OF TORT LAW Honoré argues that there are two general justifying aims of tort: to discourage undesirable behaviour and, therefore, to protect rights and award compensation when they have been violated.6 Tort may be less stigmatic than criminal law, but its function is to discourage behaviour.

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Tunc argued that “Society should ensure that harm is as infrequent as possible and, when it does occur, it should be put right or compensated. Does or can individual responsibility play an important role in preventing harm? In the past, it was thought that this was true. Today, its “disciplinary” power or “dissuasive force” are probably very limited.”7 It might apply in professional liability or in unfair competition, but not in relation to car accidents. In relation to compensation, delict has also a limited role, since insurance offers a more efficient way of compensating a victim than social security.

13

Three functions of delict might be identified: (1) setting standards; (2) assigning risks; (3) securing compensation.

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4

5

6 7

Charity v. Riddell (1805) cited by N.R. Whitty, Nuisance, in: Stair Memorial Encyclopaedia of the Laws of Scotland (2001) Reissue, par. 11 note 4. See ECJ C-52/00, Commission v. France [2002] I-3827; ECJ C-154/00, Commission v. Greece [2002] ECR I-3879; ECJ C-183/00, González Sanchez v. Medicina Asturiana SA [2002] ECR I-3901. T. Honoré, Responsibility and Luck (1999) 71. A. Tunc, Jalons, dits et écrits d’ André Tunc (1991) 150 f.

John Bell

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1. Setting Standards

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The setting of standards would help to identify undesirable conduct, either by proscribing an activity or defining when it has been undertaken unlawfully. This can involve one of two techniques: specific deterrence and general deterrence. Specific deterrence involves the identification of the requirements of a specific aspect of social life and setting in place a tailor-made regime. This is most suited to legislative intervention that establishes a set of standards and inspection to support it. The role of tort law is then typically to provide a generic compensation scheme where the standards have not been met.

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If we look at the various national reports, this is clearly happening. New phenomena (boilers, railways, motor vehicles) are met by legislative regimes or (in medical areas) by professional standards or by international standards (see road vehicles and, these days, products). Standards determine what the construction of a car should be like, how often boilers should be inspected, and how close to a railway line buildings should be sited. Fault liability in delict typically reflects these standards. It is usually considered to be fault if one fails to meet the legislative standard. In some areas, professional self-regulation or regulation by the terms of insurance policies also occurs. In France and in England, associations of boiler owners would provide standards and inspection that went beyond legislative requirements (and so obviated the need for them). Insurance companies also introduced their own requirements as to inspection. In this way, delict is not the principal mechanism by which standards are set, though a judicial decision could give support for a particular standard.

17

The way in which private law has tended to follow, rather than to lead in the area of standard setting can be found in medical liability. A typical test to determine the liability of a doctor is the English Bolam test of 1957, which actually dates from the 1830s.8 In the earlier period, in the absence of clear bodies of professional standards, the court had a clearer role in establishing (or more correctly reviewing) standards in actual use among bodies of emerging professions. This it was reluctant to do, and so typically it would only make a doctor liable for gross negligence (conduct that no body of respectable medical opinion would endorse). In the later period, the role of the courts became less significant, and they did not tend to arbitrate between bodies of professional opinion. They relied on the profession to provide expert evidence about what was a respectable body of opinion. It is only in the 1980s that this changed (and only really in the area of informed consent will the courts challenge medical practice). They will continue not to make a doctor liable for following a respectable line of medical opinion as the appropriate treatment of patients.

18

In some areas (notably Spain and Germany and French medical law), standard setting is undertaken by the criminal law. These rules are generic, but they tend to set higher standards of fault than would be needed for purely civil liability. 8

Lanphier v. Phipos (1838) 8 Carrington and Payne (C. & P.) 475, 479; Bolam v. Friern Hospital Management Committee [1957] 1 Weekly Law Reports (W.L.R.) 582, 587.

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Fault here would be typically a breach of legal regulation. The development of a generic idea of “want of care” is seen in 1930 in Spain, and in 1932 in England. This generic standard is described by the Dutch as a breach of a “social standard”, rather than a legislative standard. But courts are rarely developing standards of their own, rather they are acknowledging widely held social expectations. Delict law as a system of general deterrence therefore serves a fairly residual role in standard setting: at best a reviewing role when faced with professional or social standards. There is no evidence of an assessment of social or economic impact as part of any judicial standard setting. Rather, the solution reached in contested cases is about fairness in atypical situations, where there is no established reference point for standards; here, especially in England, the late 20th century saw an increasing use of (public) policy as a determinant.

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2. Assigning Risk The assignment of risk is undertaken in some countries by establishing duties of care or responsibility. In an agrarian society, the three established areas are liability for animals, liability for buildings and liability for others (typically servants). One such mechanism is responsibility for others. The period starts with limited recognised categories of responsibility. In Germany, this is only a presumption of liability and the 1900 Civil Code allows the employer to demonstrate that he is not at fault. In France, the Code has a series of specific categories of strict liability, which have proved inappropriate for industrial development. The difficulty of proving fault has led the English common law to establish a number of direct duties. In other words, the older rules (in code or common law) have had to be adapted by the courts to achieve either direct duties on the employer/supervisor towards the ultimate victim, or schemes of strict liability that go beyond the conventional employment situation.

20

Court assignment of risk in some situations seems to reflect social expectations about where insurance is typically taken out, certainly from the 1890s onwards. Sometimes this is articulated in the court, in other cases, it is a commonplace of the doctrinal literature. There is often an explicit awareness in court argument and doctrinal writing of the ease of obtaining insurance. This provides a background for court decisions, but these are principally argued in terms of the rightness of the solution in relation to legal principle, rather than as an explicit means for re-allocating risks.

21

The alternative mechanism for assigning risk is contract. This is particularly used by the courts in Germany, where delict is problematic. Similarly, from 1936 French medical law has used contract to avoid some of the difficulties that would result from using liability for things.9 One major problem in this area is the doctrine of privity, if the main beneficiaries are to be third parties,

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9

Cass. civ. 20 May 1936, Recueil périodique et critique Dalloz (DP) 1936, 1, 88, conclusions Matter, report Josserand.

John Bell

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e.g. the medically insured person for whom the insurance company agreed treatment with a hospital. Where the terms of the contract in relation to duties of care or security for personal injury or property are not express, then the assignment of risk is determined by concepts of “fairness” (France and Latin countries) or “good faith”, rather than any putative intention of the parties.

23

Contract was also used in the 19th century as a way of avoiding liability of employers towards employees, e.g. in relation to railway accidents. Positively, this allowed employers to operate their own insurance schemes for employees, which were, in practice, more effective than relying on delict law. But, on the negative side, it allowed those employers who did not provide insurance to escape liability altogether. The uncertainty of adequate cover provided voluntarily by the private sector led eventually to state-sponsored insurance based compensation. Private law’s preference for private sector solutions did not, in the end, deliver socially acceptable results for those whose bargaining position was not sufficiently strong. 3. Securing Compensation

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Securing compensation is the primary function of delict. Honoré describes the function of tort as “discouraging undesirable conduct” and giving compensation as part of this aim. The project would prefer to see the two ideas as separate and that the second aspect should be recharacterised as “providing compensation to the victims of undesired harms arising from socially desirable conduct”. We want people to run trains, cars and factories. Those who run them do not want to harm people, but it is often an unintended consequence. Put in this way, tort offers a generic compensation system. All the same, Honoré is right in saying that compensation is provided for harm that is caused without justification.10

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All the same, in novel areas alternative mechanisms of compensation were provided early in some systems. The primary victims of new technology (trains, boilers, products) were employees. An example would be the railways. In 1872–75, official British figures show that nearly 3000 railway employees were killed at work compared with 155 passengers.11 In 1875, 3 in every 1000 railway employees was killed at work.12 But there was no effective legal redress. As a railway employer stated to a parliamentary inquiry into railway accidents: “We treat [compensation paid to a railway employee] a case of charity; the man has no legal claim on us…[On death] A sum of £10 is given when there is no particular case of distress. When there is a case of a family, it comes to this, that we employ the children and put them in our service, and give them 10 11 12

Honoré (fn. 6) 74. P.S. Bagnall, The Transport Revolution (1974) 194. The position improved to 1 death in every 1006 by 1899, but this was largely due to the Railways Regulation Act 1893 which prevented excessive hours, rather than to liability: ibid., 197. Most did not get compensation through tort because 90% of accidents were attributed to the fault of the employee at a time when contributory negligence was treated as excluding, rather than reducing compensation.

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employment rather than a sum of money….” Here the movement for social insurance-based compensation made significant inroads into the application of delict around the turn of the 20th century. Delict often implemented this policy for a short while in the 1890s before this insurance-based policy movement achieved legislative results. The second group of victims were neighbours. By and large, there was a reluctance to create no-fault systems of liability through delict. Easier access of victims to compensation was more likely to be achieved through a reversal of the burden of proof. A similar issue arose in relation to road accidents. Until insurance schemes came into force, then delict provided a stop-gap. Among the countries we studied, only really in France (where compulsory insurance was late) did strict liability for motor accidents form part of delict. More recently, the way in which contributory negligence of children has been handled in the Netherlands demonstrates a way in which the failure of the legislature is resolved by the solutions adopted by the courts.13 Private insurance was also important as a way of providing compensation. The insurance of doctors was the vehicle by which patients first obtained compensation and later the insurance of hospitals. The early, widespread existence of insurance by drivers reduced the pressure in England for any form of legislative no-fault scheme. Insured tortfeasors were solvent defendants from whom the victim could actually recover compensation. In addition, voluntary arrangements between insurance companies and the government ensured that those injured by uninsured drivers were compensated.14 The extent to which reliance on private insurance is satisfactory depends in part on whether it is widespread. Whereas many good employers in the 19th century did establish insurance schemes to protect their employees, there were others who did not and the access of employees to compensation for injuries at work could only be secured by the enactment of legislation on workmen’s compensation.

26

The pressure within a particular legal system to alter the rules on delictual liability to ensure easier compensation for victims depends on a number of factors. Some of those relate to the existence and effectiveness of alternative sources of compensation either from the public or the private sector.

27

D. IS LAW DEPENDENT OR INDEPENDENT IN ITS DEVELOPMENT? 1. The Claimed Autonomy of Lawyers The literature on legal development contains a number of themes, but there is one broad question: how far is law autonomous in its development from economic, social and cultural cycles? Of course, it would be wrong to see a dichotomy between a theory that claims law is entirely determined by what lawyers think and 13

14

See paper by C. Van Dam and G. Van Maanen for the European Legal Development project (unpublished). For example the Motor Insurers Bureau scheme in England from 1946.

28

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a theory that claims that law is entirely determined by more general movements within society. All the same, it is worth examining these two areas distinctly to understand the broad tensions in the analysis of legal development.

29

Among comparative lawyers, Watson leads the theme of the relative autonomy of lawyers. He argues: Law, then, despite its practical impact, is very noticeably the culture of lawyers, and especially of the lawmakers – that is, of those lawyers who, whether as legislators, jurists or judges, have the control of the accepted mechanisms of legal change. Legal development is determined by their culture; and social, economic, and political factors impinge on legal development only through their consciousness. This consciousness results from the lawmakers being members of the society and sharing its values and experiences, though they are members with a particular standing. Sometimes this consciousness is heightened by extreme pressures from other members of the society, but always the lawmakers’ response is conditioned by the legal tradition, by their learning, expertise, and knowledge of law, domestic and foreign… law is largely autonomous and not shaped by societal needs.15

30

For Watson, the legal community should be the focus of attention when considering legal change, especially those that control lawmaking in the legislature and in the courts. They are the key actors in legal change and the intermediaries through which social and economic influences are mediated. His thesis suggests that law can be both ahead of social and economic change, as well as lagging behind it.

31

Watson’s thesis has been subjected to refinements. Ewald rightly suspects that the argument is really that law is sometimes insulated from social and economic change, rather than that law does not reflect some of the forces external to the law.16 Ewald suspects the latter is true. Certainly, it would seem to be a little extreme to separate law from economic forces.

32

Watson’s argument is evidenced by the importance of legal transplants. There are a number of rules imported successfully from one system to another. But Dupré argues that one has to be more sophisticated about “importing”. Creation of new law on the basis of foreign legal materials can neither be simply the reception nor the adoption of foreign law without reasons, but rather part of a deliberate choice to follow another system as part of a strategy for legal development.17 For her, the key determinants of such a process of positive adoption are both internal to a particular society – social context, the need for radical change, and institutional optimism − and external – the reputation of imported legal system. 15 16

17

A. Watson, The Evolution of Western Private Law (2001) 263 f. W. Ewald, Comparative Jurisprudence (II): The Logic of Legal Transplants (1995) 43 American Journal of Comparative Law (Am J Comp L) 489, 496. C. Dupré, Importing the Law in Post-Communist Transitions (2003).

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This more sophisticated analysis is borne out by some of our materials. It is clear that there is extensive reading of the legal materials of other countries. The area of product liability, for example, demonstrates wide reading, particularly by academics, of the developments in other countries.18 The development of legal rules often reflects ideas that were prominent among jurists. Gorla’s critique of Italian law on liability for products was then taken up by the courts. More specifically, one can see reference to ideas of jurists being used by judges to justify their decisions.19 Opinions of the legal community are often an influence on the development of the law. The legal community refines and develops the interpretation of the law and reflects on how it is working. It is not surprising that opinions within that community determine the content and shape of the legal rules to a significant extent.

33

Alongside these comparative lawyers, there are the systems theorists. The Luhmann and Teubner-style approach is to see law as a social system in its own right. It is self-generating (autopoeitic) in Teubner’s sense20. The relationship between legal development and social development is contingent, rather than being ineluctably determined. Teubner would argue that social differentiation is a consequence of the complexity of society. The social sub-systems co-evolve without a necessary direct relationship between them. Of course there are links, structural couplings that are introduced that connect one social order to another. But there is no inevitability. For Luhmann,21 whereas much sociology of law is interested in the influences on the content of the law, systems theory assumes that its unity can only be programmed or reproduced by the system itself, not by factors in the external environment.22 In this sense, the system is (operatively) closed. Such a conception tells us nothing directly about the connection between law and its environment. It merely points out that change in one does not necessarily lead to change in the other.23 The plausibility of this analysis of law depends on how law is assumed to function. The stabilising of expectations through a series of distinct social systems makes social life manageable. But the legal system in its own terms cannot ensure social stability. The law thus operates as part of the way in which society deals with problems.

34

18

19 20 21 22 23

For example, G. Gorla, Considerazioni in tema di garanzie per i vizi redibitori, Rivista Trimestrale di Diritto e Procedura Civile (Riv. trim. dir. proc. civ.) 1957, 1272 and id., Considerazioni sulla giurisprudenza francese in tema di garanzia per i vizi redibitori, in: Studi in onore di Francesco Messineo (1959) 231 examined French solutions, as well as English and American solutions, even if he did not recommend their wholesale adoption in Italy. The reversal of the burden of proof in Spanish car accident cases came in 1943, after there had been much pressure in the literature to create no-fault liability, influenced by discussion of French, German and Italian laws. See the conclusions in the Mercier decision, above fn. 9. G. Teubner, Law as an Autopoeitic System (1993) esp. chap. 3. N. Luhmann, Law as a Social System (2004). Ibid., 73. Ibid., 121 ff.

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2. The Relationship to the Economy

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Now this lawyer-focused comparative law theory or systems theory can be contrasted with the traditional Marxist focus on the economy. Marxist writers focused on law as the superstructure which was determined by the force of the means of production. For the sophisticated theorists of this tradition, the question arose how the content of the law could remain static despite changes in the mode of production, especially the move from a capitalist to a socialist economy. For Karl Renner, writing in the 1920s, it was possible that the content of law could remain the same, despite changes in the economic structure.24 The legal order derives its significance from the substratum of economic order, but economic change does not necessarily bring about legal change. This was then developed to suggest a kind of “relative autonomy of law”, that lawyers were not directly influenced by the impact of the economy.25

36

Economic analysis of the law would also suggest that the economy provides a dominant determinant. There are two ways of conceiving the claim. The first is that the state of the law is determined by changes in the economy. The second is that the law is best modelled as if it followed the economy. Both amount to saying that the economy is a significant determinant, if not the significant determinant of the way the law develops.

37

Another group that have similar concerns are those whose emphasis on law is how it is used in society. For Friedman, law is best seen as one social phenomenon among many. The key actors in law are not the lawyers, but the users of the law.26 The interesting question is how far the law influences what they do, and how their ideas influence the law. Friedman is interested in the good citizen – a person who wants to make use of the law properly. This person has a number of reasons for action and Friedman is concerned to identify how far the law has an impact on that person’s decisions and how it responds to his or her concerns. In that sense, law responds to social forces. 3. Social Culture

38

A final group are the culturalists. Starting with Montesquieu and carrying through a French tradition to Legrand27, law is seen as the product of a society’s culture. Law is the product of a particular cultural environment and resonates with it. It is here that Watson’s focus on lawyers’ culture has its impact. Whereas Legrand and others focus on social culture and the embeddedness of law within it, Watson argues that there is a distinct and potentially disconnected culture among lawyers. This allows the law to develop by introducing ideas that are not rooted in existing social culture, but may well come to determine it. (Having originated in Scotland, he would be familiar with the way in 24

25

26 27

K. Renner, Institutions of Private Law and their Social Functions (ed. Kahn-Freund, trans Schwarzschild 1949) chap. 9, esp. 253 f. See e.g. I.D. Balbus, Commodity Form and Legal Form: An Essay on the “Relative Autonomy” of the Law, 11 Law & Society Review 1977, 517. L. Friedman, Law and Society. An Introduction (1977) chap. 7. P. Legrand, Fragments on Law-as-Culture (1999).

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which Roman law was imported in the 15th century to be superimposed on the existing Scots legal and social arrangements, and is now fiercely defended as integral to Scots culture!!). 4. Summary In brief, there are a range of theories which see law as driven by one or other particular feature of social life. On the other hand, each of these determinations is contested by theories which suggest that law is semi- or even mainly autonomous.

39

It is clear that liability in tort expanded over the period. It is clear that the victims found it easier to prove the conditions for liability. But it is more difficult to discern the reasons. Economic arguments were present sometimes in English and Italian judgments, but less so in German and Spanish. Loss-spreading was discussed by a few authors very early. In Germany, Victor Mataja published in 1888 a book suggesting that loss-spreading was a major role for delict.28 But, as our German doctrine report29 makes clear, these ideas were never taken up at the time. That report states that in Germany, ideas on loss-spreading and insurance were much more common currency of doctrinal debate in the 1970s and 1980s, and the same would be true of England, and they were acknowledged in France even later. In order to attribute influence to particular factors, it is therefore necessary to engage in rational reconstruction, rather than just to rely on the reasons given by individuals at the time.

40

E. FACTORS IN THE DEVELOPMENT OF TORT LAW From what has just been presented, it is clear that some general trends can be discerned in the development of tort law. Some of these relate to the rules and doctrines of the law, and some relate to the social function that tort law is playing. Not all developments in the law happen through tort law, and in many ways tort law has become more restricted in application of the period, even if it remains an important residual framework for dealing with new problems as they arise.

41

1. Case Study: Products I want to take one case study which shows both the difficulty and the interest of analysing legal change.

42

Historians have noted that the roots of the consumer revolution can be traced back before 1800.30 Two features can be traced in this period – the availability of goods beyond necessaries for life, and commercialisation of the goods and

43

28 29 30

V. Mataja, Das Recht des Schadenersatzes vom Standpunkt der Nationalökonomie (1888). N. Jansen, Report for the European Legal Development project (unpublished). N. McKendrick/J. Brewer/J.H. Plumb, The Birth of a Consumer Society: The Commercialisation of Eighteenth-Century England (1983).

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services available. The development of an industrial economy enabled goods to be produced in quantities and at low unit costs such that they became available to a wider section of society. The goods were no longer “luxuries”, but became available to be included in more ordinary lifestyles.

44

Consumerism is, however, identified with the 20th century in a more particular way. As a social and economic phenomenon, the consumer became an actor whose activity shaped society in significant ways. In politics, the consumer interest became a significant focus for policy choices. The identity of the voter as consumer became often more important than their identity as a worker or a member of a religious or other association. In this sense, “the history of consumption is…not a separate field so much as a prism through which many aspects of social and political life can be viewed.”31 It is the central importance of consumer activity that makes the difference between the 20th century and earlier periods.

45

Consumerism gave rise to changes in the relationships between people, the things that they owned and the businesses that made and sold products: Fordist production aimed to produce products at a high volume, in a standard form and, as a result, at a low unit cost. Marketing was undertaken by producers, such as Coca-Cola, rather than just by the retailer.

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The producer controlled the marketing and packaging to gain consumer identification with the product and brand loyalty. In such a situation, the distributor played a less distinctive and skilled role as in his dealings with the consumer. Instead a depersonalised relationship arose between the producer and the consumer. For instance, whereas there were only 1200 self-service stores in western Europe in 1950, there were 45,500 in 1960, including 600 supermarkets.32

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For her part, the consumer is more likely to exercise choice on price and quality, and is less likely to be committed to repeat dealings with a single producer or distributor. Her choice of product became different. In the first ten years after the War, UK expenditure on durable household goods rose from £189m to £1268m. German writers saw the late 1950s as the period in which this growth of consumer products beyond food and necessaries took place.33 The disposable income of German households practically trebled between 1950 and 1963, and spending on food fell from 46% to 36% of household expenditure.34 It is 31

32

33

34

S. Strasser/Ch. McGovern/M. Judt (eds.), Getting and Spending: American and European Consumer Society in the Twentieth Century (1998) 4. V. de Grazia, Changing consumption regimes in Europe, 1930–1970: Comparative Perspectives on the Distribution Problem, in: S. Strasser/Ch. McGovern/M. Judt, Getting and Spending (1998) 59, 79. In Germany, the growth was very rapid between 1955 and 1960: 39 self-service stores in 1951, 203 in 1955, but 17,132 by 1960 and 53,000 by 1965: ibid. U. Wyrwa, Consumption and Consumer Society: a Contribution to the History of Ideas, 431, at 445. More generally, M. Wildt, Changes in Consumption as Social Practice in West Germany During the 1950s, both in: S. Strasser/Ch. McGovern/M. Judt, Getting and Spending (1998) 301. Wildt (fn. 33) 305.

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in this period that the term “our consumer society” was used to describe the German miracle.35 The key dates of social and economic change are between 1955 and 1965 in the UK, France and Germany, compared with probably the late 1930s in the USA. The legal issues focused then on how to deal with the relationships. 2. Legal Development The legal development that occurred focused on three areas: • • •

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the liability of the manufacturer directly to the consumer, in a way that reflected the manufacturer’s increasingly important role in the chain of distribution; the standard of fault and the burden of proof that would be required to establish the liability of the manufacturer; the balance between specific regulation of products and the free market constrained by tort liability.

In particular, there was the question of whether products required a distinctive form of delict regulation. The pattern seems to be of some cases coming to the courts in 1932 (France, Italy, Scotland and the Netherlands), all based around the idea of the fault of the manufacturer. The second wave of reversing the burden of proof happened in the 1960s (France, Italy and Germany). In addition, non-delictual, food safety standards dated from an earlier period (1902 in the US, followed by 1905 in France and 1907 in the UK). Now these developments could be subjected to different explanations.

49

The economic thesis would essentially map the legal development onto the development of the business market. The new business model of mass production and distribution of goods leads to a change in the legal system. If the economic historians can date the modern consumer market to 1955–65, with some earlier developments in England ahead of the more protectionist economies of France and Germany, then the economist thesis would focus on the dates of legal change.

50

Most national reports date the characterisation of the problem as “product liability” to the 1960s, a term invented in the United States. The economic activity generated the cases, e.g. the question of the timing of contract formation in supermarket sales. Likewise, the economy generated the social crises, such as thalidomide, which provoked legislation in countries such as Germany.

51

But the temporal sequence is not, in itself, sufficient to demonstrate a link. Is the economy part of the background conditions within which legal development takes place, or is it a significant driver of legal change in particular directions? For the most part the second analysis is not sustained in the research that was undertaken in the various first stage project groups.

52

35

Heinz-Dietrich Orlieb (1959) cited by Wyrwa (fn. 33) 441.

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53

The social thesis would focus on the development of social practices and values. Of course these are influenced by the economy, but the major forces are the social groups and forces.

54

Institutionally, one would point to the development of organised consumer interests. The creation of bodies such as the Consumers Association in England (1956) followed the American model of testing products and spreading information. The Union fédérale de la consommation had been formed in France in 1951, the Nederlandse Consumentenbond in 1953, the Belgian Association des consommateurs in 1957 and the Swedish Statens Konsumentenråd in 1957.36 An EC-wide grouping was formed in 1962. These offered a political voice and a market voice to individuals constituted as “consumers”, rather than “workers”. These national bodies fitted well into the impersonal relations of consumers, distributors and producers, rather than the personal relationship of the housewife and the corner shop. These bodies had an influence on legal development, particularly on legislation. These could orchestrate pressure that could make an impact. It is easy to see how commission reports such as the Crowther Report on Consumer Credit (1961–63), leading to the Consumer Credit Act 1965, can be seen as responses to this. Giesen argues in relation to the Netherlands that, “Politicians, as always, only take an interest in product liability in those cases where exposure to publicity is high, trying to reap some political benefits. Consumer groups tend to be more and more permanently interested and are rather alert to signs of mishaps. Their active involvement in dangers arising from defective products is probably one of the reasons why product recall has gained so much importance over the years.”37

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The regulation of products would also seem to respond to social developments. This is the “orderly” theory of legal development: A problem is perceived by a social interest, there is a rational debate about the need for change, and political and legal changes are effected. Social interests have broader concerns than their economic position. Consumer magazines from the 1950s have been concerned with a wider range of ethical and lifestyle issues. As a result, the consumer interest can extend quite far beyond the issues of the price and quality of the goods.

56

But, the social thesis could also spawn what I call the “crisis” theory of legislation – as Prime Minister Macmillan put it, political action is determined by “events, dear boy, events”. The crisis hypothesis is that changes in the law are triggered as a response to events (either an incident calling for legislative response, or a case requiring judicial action). Kennedy’s famous 1962 speech on consumerism that is seen as a defining moment in the development of the consumer society introduced the Consumer Bill in wake of thalidomide being kept out of the US. The Spanish report focuses on Colza in 1981, the Dutch and 36 37

M. Hilton, Consumerism in Twentieth-Century Britain (2003) 301. I. Giesen, Report for the European Legal Development project (unpublished).

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Germans on thalidomide in the 1960s. Public concern arising from high profile crises of confidence provoke legislation in consumer safety, but not necessarily in the area of tort, which might not provide the remedy in any case. Even if this crisis view is right, the key is how options are arrived at or perceived in such a crisis situation. A “crisis” is defined by social and economic events, but solutions are based on preparatory work in ideas that have typically gone on before. The legislator needs to act fast, and so the solutions prepared by doctrinal writers or at least identified by them will often provide the source for legislation. This is clear in products. Most countries identify a crisis for legislative change. (And such crises provide the opportunity for enacting proposals that have been developed quietly in the background by academics and law reformers.) To this one might add that judges operate casuistically, rather than on the basis of grand principle, and this applied not only to the common law.

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The cultural hypothesis argues that legal change is really connected to a deepseated change in society and its values, not just in the organisation of the law. The culture might be said to have changed in three periods. From about 1880 to 1914, there was a period of globalisation, of markets expanding through international trade and through the international exchange of ideas. After the First World War, there was a divergence. There were two outlooks:

58

“One, the Americanized or Fordist vision, foresaw a whole new nexus of institutions revolving around the rationalized distribution networks of major corporations. This outlook emphasised low unit costs, standardized goods, high turnover and consumer choice…The other outlook can be described as neomercantilist. This advocated protected markets within which government and the corporatist organisations of wholesalers and retailers would revamp distribution. This outlook claimed to reconnect craft and consumers by improving the quality and range of services established to sell them.”38 Whereas the US and, to a lesser extent, the UK represent the first outlook, much of continental Europe represented the second. For instance, protectionism was driven to protect the small retailer against the developing mass distributors. In the mid 1930s, small retailers accounted for 79% of annual retailing in Germany, 91% in Italy, but only 57% in the USA. Large department stores accounted 10% of retailing in the US, but only 5% in Europe.39 Planning legislation prevented large distribution outlets being set up in France until the 1960s.

59

Of course, post-1945, things change. The European recovery plan involved increasing goods, including US imports and, especially from the 1960s, US investment. The creation of the European Community in 1957 represented an emphasis on a less protectionist approach, based on a free and common market

60

38 39

Hilton (fn. 36) 73. See de Grazia (fn. 32) at 69.

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in goods and services. At the same time, there is also a protective approach to the consumer, which develops after the Treaty of Rome. 3. The Legal Hypothesis

61

The argument in favour of at least the “relative” autonomy of law is shown by the way in which solutions are found to crises. Here, one draws on the importance of academic authors as the chief conceptualisers of problems and people who provide ideas. Typically, they work comparatively and the influence of the legal ideas that they generate provides the basis for the more opportunistic responses of judges and legislators to crisis.

62

The autonomy of the legal community is • • • •

Institutional, in the sense that it has distinct mechanisms for handling legal solutions, e.g. tort law or regulatory law; Conceptual: as Renner pointed out,40 lawyers control concepts that may not be directly related to contemporary conditions of the economy and society; Procedural: the law has distinctive processes by which change is effectuated, and Temporal: the timing of change may have as much to do with trends within the legal community as with changes in the economy or society.

The distinct contribution of law, like any administration, is in establishing procedure and implementing legislation. These are concerns that may not interest the legislators and so provide a framework for action for lawyers.

63

An illustration of institutional autonomy would be the choice of a regulatory regime, rather than delict. A good example is the Spanish Colza oil scandal of 1981. This led to consumer safety legislation in 1984, but not to change in the delict law when the litigation eventually came to the courts in 1992. Miquel Martín-Casals and Josep Solé Feliu41 argue “[In relation to] Colza Oil (1981), it cannot be sustained either that the reasoning used in these judgments gives rise to any substantial change in Spanish case-law or that in the wake of them Spanish courts have developed a characteristic doctrine to deal with product liability cases. Moreover, these judgments have not had any doctrinal impact on the works of the Spanish legislature. This is basically because, although it is true that the case contributed decisively to bringing about the first comprehensive Spanish consumer protection legislation embodied in the 1984 [Consumer Protection Law] LGDCU, the judgments were issued much later, the first one in 1992, i.e. when the LGDCU had already been in force for 8 years, and the second one in 1997, i.e. almost 17 years after the facts that gave rise to the case took place and a few years after the LPRD 1994 implementing the Directive had come into force. Moreover, when 40 41

Renner (fn. 24). Unpublished paper for the European Legal Development project.

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implementing the Directive, the LRPD 1994 follows it very closely and in its wording does not show any influence of the reasoning or of any of the legal grounds set out in the first judgment. Besides that, both “Colza judgments” were decided by criminal courts and focused on reasoning within criminal law. However, it is likely that the Colza or Rape Oil case has had some influence on the rejection of the development risk defence with regard to “foods and food products for human consumption” (cf. Art. 6.1.e and 6.3 LRPD).” In other words, whereas French law might have responded by creating strict liability in tort, Spanish law at this period responded by creating regulatory law.

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Conceptual autonomy can be demonstrated by the fact that lawyers have choices about how to categorise problems. Any legal change has to fit within the established concept map, and generally fit by analogy with what has already been decided. England and Spain adhered to fault. But Borghetti notes that, in France, the arrival of injuries caused by products to workers and to other nonpurchasers led to departures from fault by creating species of no-fault liability in delict (in 1895–1897) and an obligation of result in favour of the customers of professional sellers (1925). The specific character of the conceptual structure of each system provides a framework of solutions. These structures were able to cope with the growth of the consumer society.

65

What counts as a procedural change? Firstly access to the courts matters. If you cannot get cases to court or get funding to support them, then the legal process will have a limited impact. The creation of small claims courts and consumer arbitration was a major consequence of the growth of the consumer society in Germany and England.42 Only small amounts of this involve product liability, but it was of some significance. Secondly, there may be procedural devices. Ways of proving fault may be significant. For example, the French regulatory law on accidents caused by exploding boilers set out in a decree of 1865 provided that the debris could not be cleared away until the inspector had a chance to view it and make a report. As a result, victims of these accidents were in a better position to have evidence than other accident victims.

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The timing of legal change is much more in the hands of lawyers advising decision-makers than determined simply by events. As in Colza Oil, although politicians may choose to react to events, they depend on good preparation of the legal ground to give them options. Adjudication is very much dependent on the way in which social problems present themselves as arising from an economic context. Judges can decide not to deal with problems by change, but they have an impact by that refusal. Borghetti shows how “[p]ublished case-law shows that it was during the 1950s that consumer goods started to account for a significant number of court decisions. These products were

67

42

C. Whelan (ed.), Small Claims Courts (1990).

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mainly pharmaceuticals,43 household appliances44 or body-care products.45” In the earlier period, cars were the only significant consumer durables, and food and drink were the main consumer products. But the overall impact on delict was less significant. Despite a seminal article by Mazeaud in 195546, “until the 1970s, most French lawyers remained ignorant of the developments of product liability abroad. They usually had no idea of what was happening in the United States, or even in Germany, England or Italy. This explains why French authors kept writing about “manufacturers’ and sellers’ liability” until the 1970s.47 It was only when the various European institutions started to work on the subject of “product liability”, from the 1970s onwards, that French authors started to discover what was going on abroad and picked up the term “responsabilité du fait des produits””.48 This is in marked contrast to Germany, Spain and Italy that were developing in the light of foreign developments. Changes in the economy led to very different timings of legal development. Legal developments are affected internally by perceived problems with established conceptual structures (often missing in theses cases) and by international models.

68

This one example from within the project shows the complexity of trying to provide explanations of legal development.

69

I think I am drawn to the hypothesis of the relative autonomy of law. I think that there are leading individuals within each legal community who are open to a range of ideas, often drawn from other countries at a “more advanced” stage of economic and social development in a particular area. These people examine the foreign legal models, refine them and have available solutions in advance of the legal need. Now, as has been suggested above, the legal need is determined classically by social crisis, and this social crisis takes place against a background of economic and consequent social change.

43

44

45

46 47 48

Trib. civ. Clermont-Ferrand, 18 October 1950, Gazette du Palais (Gaz. Pal.) 1950, 2, jur. 396; Cass. civ., 22 December 1952, Doc. pharma. n° 738; CA Grenoble, 3 mars 1954, Doc. pharma. n° 1070; Trib. civ. Seine, 28 June 1955, Recueil Dalloz (D.) 1955, jur. 640 note F. Golléty, Juris Classeur Périodique (JCP) 1955.II.8825, note J. Bernays and C. Hauser; CA Paris, 30 April 1957, D. 1957, jur. 550, note F. Golléty, JCP 1957.II.10088, conclusions Lindon comment J. B. and C. H.; Trib. corr. Seine, 19 December 1957, D. 1958, jur. 257, S. 1958, jur. 137, note J.-D. Bredin; CA Pau, 12 March 1958, Gaz. Pal. 1958.1, jur. 322. CA Douai, 4 June 1954, D. 1954, jur. 708; Revue trimestrielle de droit civil (RTD civ.) 1955, 110, obs. H. and L. Mazeaud (vegetable mixer); Trib. civ. Seine, 21 January 1955, Gaz. Pal. Tables 1951–1955, v° vente, n° 310 (pressure cooker); Trib. civ. Sousse, 12 December 1956, JCP 1957.II.9752, note R. Rodière (water boiler); Cass. crim., 18 November 1959, D. 1960, somm. 10 (washing machine). CA Paris, 13 December 1954, D. 1955, jur. 96; RTD civ. 1955, 305, obs. H. and L. Mazeaud (hair dye); CA Paris, 8 January 1957, D. 1957, jur. 241 (hair dye); CA Paris, 18 February 1957, JCP 1957.II.9944, note P. Esmein (hair lotion); Cass. 2e civ., 5 May 1959, JCP éd. G. 1959. II.11159 (hair lotion). H. Mazeaud, La responsabilité civile du vendeur-fabricant, RTD civ. 1955, 611–621. J.-S. Borghetti, La responsabilité du fait des produits (2004) no. 5. Id., unpublished paper for the European Legal Development project. “Liability for products” would be the exact translation of “responsabilité du fait des produits”.

The Development of Tort Law

21

This working hypothesis starts with a recognition that the development of the economy creates conditions in which lawmaking decisions and interpretations happen. Until there are changes in the economy you will not get cases arising for the courts to decide. It will be unusual for the legislator to be bothered to intervene and legislate unless an issue has become imperative. So the sequencing places economic change ahead of adjudication and lawmaking.

70

But the economy does not dictate change, it creates the conditions making some change necessary. It is here that the social change comes into play. The social forces of social and political actors will have an impact on the character of any change. I have noted that there was a choice of direction after the First World War, between an open economy and a closed, autarchic economy. Social policy, not the state of the economy dictated the option chosen. In that set of social conditions, the law has to operate.

71

But the distinctive role of legal authors may be to identify and anticipate possible changes. For example the Spanish Report for our project writes:

72

“From a historical point of view, it was in the decade of the 1970’s when public authorities and private companies started to worry about the possibility of taking liability insurance for defective products. It is arguable that the legal change followed changes in the social practice of insurance. As a result of this concern, in October 1970, a seminar dealing with tort liability of companies, professional liability and product liability was organised in Madrid under the auspices of Swiss Re.49 According to Professor Rojo Fernández del Rio, the Spanish experience in this area is parallel to the experience in other countries, something which is shown by the fact that in 1970 the European Insurance Committee (CEA) also expressed, in its plenary assembly, the concern of European insurance companies regarding coverage, as a new risk, of product liability of producers.50 In Spain one of the first doctrinal studies on product liability insurance policies was published in 1972, at a time when these policies were not yet sold in Spain.51 The author of this study, the lawyer Jesús Rodríguez Buján, explains that in his study he follows the works of the two well-known German experts, Werner Lorenz and Willi Schürpf.” It seems to me that the doctrinal writing is the part of the legal system that is most out of phase with the economy. On the whole, case-law is functionally re-active. The legislator will on the whole want specific solutions to be seen to have been dealing with the public concerns. Delict law is usually too general. The key feature of doctrinal writing is its willingness to look outside the legal system for solutions. For example, Wagner writes that in Germany, comparative learning was helped by German emigration: 49

50 51

See the review in Seminario de Responsabilidad Civil Organizado por la Compañía Suiza de Reaseguros, Seguros, Revista Trimestral del Sindicato Nacional del Seguro 1970, 243–276. A. Rojo y Fernández-Río, La responsabilidad civil del fabricante (1974) 177–178, fn. 89. See J. Rodríguez Buján, Problemática Jurídica de los daños de producto, 232 Revista General de Legislación y Jurisprudencia (RGLJ) 1972, 593–621.

73

22

John Bell

“Throughout the 1960s, a relatively high number of German-born professors continued to teach at leading American law schools, and they were happy to introduce scholars from post-war Germany to American legal thought. In addition, the German and the US governments facilitated scholarly exchange across the Atlantic, both financially and politically, in order to help re-educate German lawyers. Finally, throughout the 1950s and the early 1960s, the United States was extremely popular among the young generation of Germans. The memory of American occupation was positive, as the occupants were both humane and rich. The US was seen as a strong nation with the right values, a successful history and affluent economic means….The spark which ignited the scholarly fire was an article by the comparatist Werner Lorenz, published in a Festschrift in 1961.52 Thereafter, an explosion of monographs and articles were published, with most of the monographs including long sections on foreign law.”53

74

The influence of France on Italy and Spain is also clear. The dynamics of such exchanges are not determined by economics, society or culture, but are patterns related to the nature and dynamics of the legal community and even to mere chance, as in the importance of the American link with emigrés and the American interests of Winfield, one of the people feeding into Donoghue v. Stevenson in 1932.

75

This part of the legal community, in which judges and legislators may well participate, provides an extra range of possibilities to the decision-makers. Here lawyers are talking among themselves. In addition, there are consumer groups, among other lobbies, who can also proffer ideas, often drawn from comparison with other systems. These groups may often meet internationally, like the insurers in Europe in 1970, as mentioned above.

76

The dynamics of different legal actors provides some kind of insight into the complexity of relationships between internal legal forces and the external forces for change. It is probably best to consider the economy as a background condition which will often generate problems to be resolved by the law. Social situations then arise from the economic developments, but they may have a life of their own and a range of ethical and non-economic concerns. Many of these concerns are demonstrated within regulatory law, rather than in private law. If such groups have standing in the judicial or legislative process, they can be influential in shaping the way law responds to economic change. The diversity of approaches in Europe suggests that the particular way in which a 52

53

K. Lorenz in: P. Mikat (ed.), Festschrift der Rechts- und Staatswissenschaftlichen Fakultät der Julius-Maximilians-Universität Würzburg zum 75. Geburtstag von Hermann Nottarp (1961) 59 ff.; see also P. von Caemmerer, Product liability, in: E. von Caemmerer/S. Mentschikoff/K. Zweigert, Jus Privatum Gentium, Festschrift für Max Rheinstein (1969) vol. II, 659 ff.; K. Simitis, Grundfragen der Produzentenhaftung (1965). For example, A. Biolek, Die Schadensersatzpflicht des Verkäufers und des Herstellers mangelhafter Waren nach englischem Recht, Dissertation Freiburg (1962); H. Ficker, Die Schadensersatzpflicht des Verkäufers und seiner Vormänner bei Sachmängeln in der französischen Rechtsprechung (1962).

The Development of Tort Law

23

legal system responds to economic change is determined as much by the social system, as by the economic system itself. The position of the legal community as a sub-set of the social system mirrors that latter point. The different parts of the legal community have their own dynamics. But the most reflective parts (doctrinal writing and lobby groups) will have available ideas and solutions (often based on comparative law) upon which the more short-term interests of those who plead in court or who advise legislators can draw. So the conclusion I would offer is that the legal community stands as the major and quasi-independent intermediary between economic, social and political forces and the production of legal rules. Its role is not merely in translation of economic and other needs into legal forms, it is also selecting and shaping the external needs that the law will meet and the concepts with which it will do so. The legal community, like the social and political communities, reflect on the impact of the law and assess the need for change. Of course there are key and influential individuals in particular law reforms, but legal change is influenced by the legal community as a body, its interests and concerns over time.

77

Essays

I. Prescription: General Framework and Special Problems Concerning Damages Claims Reinhard Zimmermann and Jens Kleinschmidt* A. THE GENERAL FRAMEWORK 1. National Reforms 2. The Supranational Level 3. Characteristic Trends 4. Policy Considerations 5. Renewal, Suspension, Postponement of Expiry 6. Effects; Modification by Agreement B. COMMENCEMENT OF PRESCRIPTION CONCERNING DAMAGES CLAIMS 1. Agere non valenti non currit praescriptio and the Occurrence of Damage 2. Occurrence of Damage and Discoverability C. FIRST DAMAGE AND FURTHER CONSEQUENCES 1. The “Unitary-Damage” Concept I a) German and Austrian Law b) The Necessity of Obtaining a Declaratory Judgment c) Problems d) Other Jurisdictions 2. The “Unitary-Damage” Concept II 3. New Prescription Periods for Each Aggravation 4. The Principles of European Contract Law D. THE LATENT DAMAGE PROBLEM 1. “No Matter for Pride” 2. Asbestos Related Diseases and Other Problem Situations 3. Different Long-Stops for Personal Injury Claims and Other Claims 4. No Long-Stop for Personal Injury Claims 5. No Long-Stop At All 6. Some Preliminary Conclusions 7. “Secondary Claims”? 8. Social Security Model and the Creation of Special Funds E. THE RELATIONSHIP BETWEEN REGULAR PERIOD AND LONG-STOP 1. The Two Ways of Implementing the “Subjective” Model of Prescription 2. Commencement of Prescription F. PRESCRIPTION PROBLEMS IN CASES OF SEXUAL ABUSE 1. The Problems Stated 2. Dutch Law: Legislative Reform and Judicial Discretion 3. English Law: Discoverability and Judicial Discretion 4. Irish Law: Suspension of Prescription I 5. German Law: Suspension of Prescription II *

This contribution reflects the law as of March 2008. In the meantime (June 2008), the French loi no. 2008-561 du 17 juin 2008 portant réforme de la prescription en matière civile (Prescription Act, see fn. 19) has entered into force.

Prescription: Framework and Problems Concerning Damages Claims 6. 7. 8. 9.

27

French Law: Suspension of Prescription III Developments in the United States Canada: Discoverability – or No Prescription? Some Conclusions

A. THE GENERAL FRAMEWORK 1. National Reforms In spite of its enormous practical significance, the law of (“extinctive”) prescription (or: limitation periods)1 has for a long time led a backyard existence: It has failed to catch the attention of legal writers or of law reformers. That has changed dramatically in the course of the last three decades. The first comprehensive modern treatise appeared in 1975.2 Since then, the law of prescription has become, in many national legal systems, the object of in-depth examination;3 in August 1994 it was one of the topics canvassed at a congress of the International Academy of Comparative Law.4 At the same time, it became increasingly apparent that just about everywhere the law of prescription was in a very bad shape. The pertinent rules, reflecting the somewhat haphazard history of the subject, often frustrated 1

2

3

4

The present essay deals with what is often referred to as “extinctive” prescription (as opposed to acquisitive prescription: the acquisition of a right, especially the right of ownership, as a result of the lapse of time). The term “extinctive prescription”, however, is misleading in view of the fact that in most legal systems today the right to claim is not extinguished; see infra no. 9. Use of the English term “limitation of actions” is also inadvisable because it refers to an institution which is procedural in nature: limitation, according to English law, does not affect the right (i.e. the substantive cause of action), but merely the creditor’s ability to pursue that right in court. Characteristically, therefore we find it discussed as part of the chapter on civil procedure in books such as P. Birks (ed.), English Private Law, vol. II (2000) no. 19.94 ff. That would not, however, correctly reflect the position prevailing in most continental systems today and being increasingly recognized internationally: both the Principles of European Contract Law (PECL) and the Unidroit Principles of International Commercial Contracts (PICC) consider prescription/ limitation to be a matter of substantive law, even if they differ in terminology. Chapter 14 PECL refers to “prescription”, Chapter 10 PICC (following, in this regard, the International Convention on Limitation Periods in the International Sale of Goods 1974, as amended by the Protocol of 11 April 1980, see infra no. 3) to “limitation periods”. The draftsmen of PICC thereby attempt to modify the English term in order to remove its procedural connotation. But “limitation periods” is imprecise, for Chapter 10 PICC does not only deal with the periods of prescription but also covers all the other rules of which a prescription regime is normally made up. The present essay, in line with PECL (and the more modern codifications of the “Romanistic” legal family) refers to “prescription” (even if that may sound odd to English ears: A. McGee, England, in: E. Hondius (ed.), Extinctive Prescription: On the Limitation of Actions (1995) 135). K. Spiro, Die Begrenzung privater Rechte durch Verjährungs-, Verwirkungs- und Fatalfristen, 2 vol. (1975). For Germany, see F. Peters/R. Zimmermann, Verjährungsfristen: Der Einfluß von Fristen auf Schuldverhältnisse; Möglichkeiten der Vereinheitlichung von Verjährungsfristen, in: Bundesminister der Justiz (ed.), Gutachten und Vorschläge zur Überarbeitung des Schuldrechts, vol. I (1981) 77 ff.; R. Zimmermann, “… ut sit finis litium”: Grundlinien eines modernen Verjährungsrechts auf rechtsvergleichender Grundlage, Juristenzeitung (JZ) 2000, 853 ff.; H.-G. Hermann, §§ 194–225. Verjährung, in: M. Schmoeckel/J. Rückert/R. Zimmermann (eds.), Historisch-kritischer Kommentar zum BGB (HKK), vol. I (2003); A. Piekenbrock, Befristung, Verjährung, Verschweigung und Verwirkung: Eine rechtsvergleichende Grundlagenstudie zu Rechtsänderungen durch Zeitablauf (2006). E. Hondius (ed.), Extinctive Prescription: On the Limitation of Actions (1995).

1

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the very policy reasons which they were intended to serve, and sometimes even caused doctrinal havoc. Rather than constituting a source of peace and legal certainty, they were an effervescent source of litigation.5 Thus, for example, the Law Commission described the situation in English law as being incoherent, complex, outdated, uncertain, unfair and inefficient (“wastes costs”).6 Similarly devastating comments can be found in the legal literature of the 1980s and 1990s for Germany and France.7 It is hardly surprising, therefore, that the law of prescription soon moved to a central position on the law reform agenda. Some states, among them the Netherlands,8 Russia9 and Québec,10 fundamentally reviewed their law of prescription in the process of a comprehensive recodification. Others, such as Belgium,11 Scotland12 and South Africa13 enacted specific legislation amending their code, or reforming previous individual statutes. The English Law Commission issued a Consultation Paper in 1998;14 after completion of the consultation process, a revised draft was laid before Parliament and is still waiting to be debated and implemented.15 In Germany, prescription was one of the key issues covered by the so-called Modernization of the Law of Obligations Act of 26 November 2001 which brought about the most sweeping individual reform ever to have affected the German Civil Code since it entered into force on 1 January 1900.16 France, too, has recently launched a major reform initiative: an “Avant-projet de réforme du droit des obligations (Articles 1101 à 1386 du Code civil) et du droit de la prescription (Articles 2234 à 2281 du Code civil)” was submitted to the French Minister 5

6 7

8

9 10

11

12

13 14 15 16

P. Malaurie, Exposé des motifs, in: Avant-projet de réforme du droit des obligations (Articles 1101 à 1386 du Code civil) et du droit de la prescription (Articles 2234 à 2281 du Code civil), Rapport à Monsieur Pascal Clément Garde des Sceaux, Ministre de la Justice, 22 septembre 2005, 172. Consultation Paper No. 151 (Limitation of Actions) (1998) 241. See R. Zimmermann, Die Verjährung, Juristische Schulung (JuS) 1984, 409 ff.; A. Bénabent, Le chaos du droit de la prescription extinctive, in: Mélanges dédiés à Louis Boyer (1996) 123 ff. Art. 3:306 ff. BW; see A.S. Hartkamp, Mr. C. Asser’s Handleiding tot de Beoefening van het Nederlands Burgerlijk Recht, Verbintenissenrecht, vol. I (12th ed. 2004) no. 648 ff. Art. 195 ff. ZGB; see H. Oda, Russian Commercial Law (2nd ed. 2007) 101 ff. Art. 2875 ff. Code Civil du Québec; see P. Deslauriers, Québec, in: E. Hondius (ed.), Extinctive Prescription: On the Limitation of Actions (1995) 287 ff. Wet van 10 juni 1998 tot wijziging van sommige bepalingen betreffende de verjaring; this law has amended or introduced Art. 2262, 2262bis and 2263 of the Belgian Civil Code; see I. Claeys, De nieuwe verjaringswet: een inleidende verkenning, Rechtskundig Weekblad (RW) 1998–99, 377 ff. Prescription and Limitation (Scotland) Act 1973; see D. Johnston, Prescription and Limitation (1999). See also, most recently, the report by the Scottish Law Commission on Personal Injury Actions: Limitation and Prescribed Claims, Scot Law Com No. 207 (2007). Prescription Act 68/1969; see M.M. Loubser, Extinctive Prescription (1996). See fn. 6. The Law Commission, Limitation of Actions, Law Com No. 270 (2001). For details, see R. Zimmermann, The New German Law of Obligations: Historical and Comparative Perspectives (2005) 122 ff. (with further references). The reform process in Germany was set in motion by the Peters/Zimmermann Draft (fn. 3), submitted in 1981 at the request of the then Minister of Justice. In 1992, a Reform Commission that had been set up in order to revise the German law of obligations tabled its report in: Bundesminister der Justiz (ed.), Abschlußbericht der Kommission zur Überarbeitung des Schuldrechts (1992). For details of the history of the reform process, see R. Zimmermann/D. Leenen/H.-P. Mansel/W. Ernst, Finis litium? Zum Verjährungsrecht nach dem Regierungsentwurf eines Schuldrechtsmodernisierungsgesetzes, JZ 2001, 684 ff.

Prescription: Framework and Problems Concerning Damages Claims

29

of Justice in September 2005.17 It is highly significant that, just as in Germany, the law of prescription is the only topic to be covered by the reform that does not constitute a part of the law of obligations. Another country that envisages a fundamental reform of its law of prescription is Israel.18 It was, originally, supposed to be brought about as part of the Israeli effort to codify that country’s private law. But there are now indications that, because of its practical importance, prescription will be detached from the wider reform endeavour and will receive preferential treatment. The same holds true for France where a draft “loi portant réforme de la prescription en matière civile” (Reform Prescription Act) has already passed the Senate and currently awaits deliberation in the French National Assembly.19 In view of these developments, it is easily comprehensible that the law of prescription has been identified at two previous Conferences on European Tort Law as a field of research that is both important and rewarding.20

2

2. The Supranational Level On the international front we have a United Nations Convention on the Limitation Period in the International Sale of Goods21 which came into effect in 1988 but has not been able to emulate the great success of the Convention on Contracts for the International Sale of Goods to which it refers. One of its drawbacks is that it refers to a specific type of claim and has not been tailored as a general prescription regime.22 That does not apply to a set of model rules for Europe: Chapter 14 of the Principles of European Contract Law which is supposed to cover claims within the field of the law of obligations in general.23 Chapter 10 of the Unidroit Principles of International Commercial Contracts24 17

18

19

20

21

22 23

24

See fn. 5. For comment on the French reform proposals, see R. Zimmermann, “Extinctive” Prescription under the Avant-projet de réforme du droit des obligations, European Review of Private Law (ERPL) 15 (2007) 805 ff.; P. Jourdain, Présentation des dispositions de l’Avantprojet sur les effets de la responsabilité, Revue des contrats (RDC) 2007, 141 ff. For comment, see I. Gilead, Limitation of Civil Actions, and R. Zimmermann, Limitation of Actions under the Draft Civil Code for Israel, both in: K. Siehr/R. Zimmermann (eds.), The Draft Civil Code for Israel in Comparative Perspective (2008) 191 ff., 221 ff. Document Sénat 2007–2008, Texte adopté (TA) no. 24 (adopted on 21 November 2007); document Sénat 2006–2007, no. 432 (original draft). The draft is inspired by expert hearings conducted by a Senate commission (rapport Sénat 2006–2007, no. 338) as well as by the abovementioned Avant-projet, but also contains considerable differences to the Avant-projet. For first comments see P. Malaurie, La réforme de la prescription civile, Defrénois 2007, 1659 ff.; id., La réforme de la prescription civile (suite), Petites Affiches 22 February 2008 (no. 39) 3 ff.; A. Ballot-Léna, Les multiples points de départ de la prescription extinctive, Petites Affiches 7 December 2007 (no. 245) 5 ff. The various reform drafts, accompanied by the “exposés des motifs”, are compiled in Revue de Jurisprudence Commerciale 51 (2007) hors-série. B.A. Koch, Comparative Remarks, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2002 (2003) 512, 526; K. Oliphant, Comparative Remarks, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2006 (2008) 499, 512. Easily accessible in O. Radley-Gardner/H. Beale/R. Schulze/R. Zimmermann, Fundamental Texts on European Private Law (2003) 269 ff. Zimmermann (fn. 16) 126. O. Lando/E. Clive/A. Prüm/R. Zimmermann (eds.), Principles of European Contract Law, Part III (2003). For background discussion, see R. Zimmermann, Comparative Foundations of a European Law of Set-Off and Prescription (2002) 62 ff. Unidroit (ed.), Principles of International Commercial Contracts (2004).

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does not go quite as far, but still covers all contractual claims. Though displaying a number of differences in detail, these two instruments are characterized by a far-reaching correspondence in matters of principle and therefore carry considerable persuasive authority.25 And indeed, Chapter 14 PECL has exercised some influence on the reform process both in Germany and in France.26 3. Characteristic Trends

4

The development of the law of prescription over the past hundred years has been marked by a number of characteristic trends. All of them are reflected in the new German law, in the French Avant-projet and the Israeli Draft and, particularly clearly, in both PECL and PICC. In the first place, there is a distinct tendency towards uniformity of the prescription regime including, in particular, the period of prescription.27 Secondly, such uniform period must neither be particularly short (six months), nor excessively long (thirty years); it has to be fixed somewhere between two and five years. A period of three years appears to be regarded, internationally, as most appropriate.28 In the third place, it is generally acknowledged that the running of a general period of three years cannot be tied to an objective criterion, such as due date, accrual of the claim, delivery, acceptance, completion (of a building), etc.; it has to depend on whether the creditor knew (or ought reasonably to have known) of the identity of his debtor and of the facts giving rise to his claim.29 Fourthly, prescription must not be deferred indefinitely; at some stage, the parties have to be able to treat an incident as indubitably closed. That is why a relative period (the running of which depends on the discoverability criterion) has to be supplemented by a maximum period (“long-stop”), tied to an objective criterion, at the expiry of which a claim must be barred regardless of the creditor’s knowledge. For that long-stop a period of between ten and thirty years may be chosen; increasingly, however, choice of the upper end of this range is regarded as reasonable only for personal injury claims.30 Finally, it is internationally widely recognized that prescription does not extinguish the creditor’s right. The debtor is merely granted a right to refuse performance. Prescription, in other words, constitutes a defence which the debtor may or may not choose to raise.31 25

26

27 28

29 30 31

For details, see R. Zimmermann, Die Unidroit-Grundregeln der internationalen Handelsverträge 2004 in vergleichender Perspektive, Zeitschrift für Europäisches Privatrecht (ZEuP) 13 (2005) 264, 268 ff. See Zimmermann (fn. 16) 123 and Zimmermann, ERPL 15 (2007) 820. For the reform of Swiss law the same has been demanded by P. Loser-Krogh, Kritische Überlegungen zur Reform des privaten Haftpflichtrechts – Haftung aus Treu und Glauben, Verursachung und Verjährung, Zeitschrift für schweizerisches Recht (ZSR) II (2003) 197 ff. For details, see Comparative Foundations (fn. 23) 89 ff. For details, see Comparative Foundations (fn. 23) 86 ff. The more recent history of the law of prescription is, essentially, the history of a shortening of the periods of prescription. On the phenomenon of an “acceleration” of time see, in this context, HKK/Hermann (fn. 3) no. 41. Surprisingly, recent proposals deviate from this trend and suggest a somewhat longer five-year period, Art. 2224 French draft Prescription Act; Scottish Law Commission (fn. 12) 27 ff. (concerning personal injury actions). For details, see Comparative Foundations (fn. 23) 92 ff. For details, see Comparative Foundations (fn. 23) 99 ff. For details, see Comparative Foundations (fn. 23) 72 ff.; for historical background, see HKK/ Hermann (fn. 3) no. 21 ff.

Prescription: Framework and Problems Concerning Damages Claims

31

4. Policy Considerations A prescription regime along these lines reflects the following policy considerations:32 (i) Protection must be granted to a debtor who, in view of the “obfuscating power of time”,33 finds it increasingly difficult to defend a claim. (ii) Lapse of time suggests a certain indifference on the part of the creditor and thus engenders a reasonable reliance, on the part of the debtor, to treat an incident that may have given rise to a claim as closed, and to adjust his behaviour accordingly. (iii) It is in the public interest that legal disputes are resolved swiftly so as not to create a source of uncertainty, unfairness, and increased cost of litigation. (iv) The rules on prescription should prevent rather than engender litigation. In devising a prescription regime, special attention therefore has to be given to the need for clarity, certainty and predictability. Any unnecessary complexity should be avoided. (v) At the same time, however, the reasonable interests of the creditor must also be kept in mind. By enabling him to invoke prescription, the law provides the debtor with a very simple tool to defeat claims that may be unfounded. The price that has to be paid is that, at least occasionally, also well-founded claims may be thwarted. Prescription can, therefore, effectively deprive a creditor of this claim. It resembles an act of expropriation.34 That is justifiable only if, as a rule, the creditor has had a fair chance of pursuing that claim.

5

Thus, it is obvious that the law of prescription is based on a delicate balancing of conflicting interests.35 If that balancing today usually induces legal writers as well as legislators to opt for uniformity,36 this is also based on the decidedly bad experiences that have been gathered in the past with differentiated prescription regimes. They inevitably lead to problems of delimitation, doctrinal fault lines, and conceptual distortions.37 Criteria which would be both sufficiently clear and convincing to provide a basis for differentiated prescription periods do not appear to exist.38 Neither the professional position, or otherwise, of debtor and/or creditor, nor whether we are dealing with claims arising from everyday transactions, or being of a petty nature, are suitable points of reference. Nor is the legal nature of the claim. Whether prescription has occurred is a question that often has to be determined at a time when the legal position between the parties is unclear. Thus, it may be doubtful, whether a contract is valid. The creditor, there-

6

32

33 34

35 36

37 38

See Spiro (fn. 2) vol. I, 8 ff. (§§ 3 ff.); Comparative Foundations (fn. 23) 62 ff.; H.-P. Mansel, Die Reform des Verjährungsrechts, in: W. Ernst/R. Zimmermann (eds.), Zivilrechtswissenschaft und Schuldrechtsreform (2001) 333, 342 ff.; HKK/Hermann (fn. 3) no. 12 ff.; Lando/ Clive/Prüm/Zimmermann (fn. 23) 159 f. (and the references at 161, sub. 5). B. Windscheid/T. Kipp, Lehrbuch des Pandektenrechts (9th ed. 1906) 544 (§ 105). See, e.g., W. Ernst, Zum Fortgang der Schuldrechtsreform, in: W. Ernst/R. Zimmermann (eds.), Zivilrechtswissenschaft und Schuldrechtsreform (2001) 559, 581 and the references in Zimmermann/Leenen/Mansel/Ernst, JZ 2001, 685, fn. 11. Comparative Foundations (fn. 23) 76 ff. Contra: W. Zöllner, Das neue Verjährungsrecht im deutschen BGB – Kritik eines verfehlten Regelungssystems, in: Besonderes Vertragsrecht – aktuelle Probleme: Festschrift für Heinrich Honsell zum 60. Geburtstag (2002) 153 ff. For Germany, see Peters/Zimmermann (fn. 3) 186 ff. As to what follows, see Peters/Zimmermann (fn. 3) 290 ff.; Comparative Foundations (fn. 23) 81 ff.

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Reinhard Zimmermann and Jens Kleinschmidt

fore, does not know whether he has a claim for specific performance, or for damages, or a claim based on unjustified enrichment, or even negotiorum gestio. Or the creditor’s claim may be based on contract or delict. Hardly any claim within the field of the law of obligations can be dealt with in isolation; in some way or other all claims are, or can be, interconnected with each other. 5. Renewal, Suspension, Postponement of Expiry

7

In certain situations a period of prescription begins to run afresh. Traditionally, this used to be referred to as “interruption” of prescription (term derived from the interruptio temporis of the Roman sources); today the more descriptive term “renewal” begins to gain ground.39 Obviously, renewal is the most radical interference with the running of a period of prescription. It is justified only in two cases: acknowledgement of the claim by the debtor vis-à-vis the creditor, and acts of execution effected by, or at the application of, the creditor.40 Prescription can also, however, be extended rather than renewed. Two different devices are available in order to extend a period of prescription: suspension and postponement of expiry.41 Prescription is suspended as long as the creditor does not know of, and could not reasonably know of, the identity of the debtor or the facts giving rise to the claim42 (unless a legal system decides to tie commencement of the regular [three-year] period to the criterion of reasonable discoverability),43 while judicial or arbitration proceedings are pending on the claim,44 and as long as the creditor is prevented from pursuing his claim by an impediment beyond his control (though this applies only if that impediment arises, or subsists, within the last six months of the prescription period).45 Postponement of expiry of a period can occur as a result of negotiations by the parties about the claim, or about circumstances from which a claim might arise,46 furthermore lack of capacity and death of either the debtor or the creditor.47 The policy reason for extending prescription in most of these cases is succinctly summed up by the maxim agere non valenti non currit praescriptio: prescription does not run against a person who is unable to bring an action.48

8

Generally it may be said that the law should interfere with the running of a period of prescription only to the extent that this is absolutely necessary for the 39 40 41

42 43 44 45 46

47

48

See Comparative Foundations (fn. 23) 124 f.; Lando/Clive/Prüm/Zimmermann (fn. 23) 198. For background, see Comparative Foundations (fn. 23) 124 ff.; and see Art. 14:401 f. PECL. For the terminology, and a definition of these devices, see Comparative Foundations (fn. 23) 138 f.; Lando/Clive/Prüm/Zimmermann (fn. 23) 174; Zimmermann (fn. 16) 147 f. Art. 14:301 PECL. See, for instance, Art. 10.2 PICC; and see infra no. 57. Art. 14:302 PECL; Art. 10.5 ff. PICC; Comparative Foundations (fn. 23) 117 ff. Art. 14:303 PECL; Comparative Foundations (fn. 23) 129 ff.; cf. also Art. 10.8 PICC. Art. 14:304 PECL; Comparative Foundations (fn. 23) 142 ff.; and see, as far as PICC are concerned, Zimmermann, ZEuP 13 (2005) 277. Art. 14:305 f. PECL; Comparative Foundations (fn. 23) 134 ff., 141 ff.; and see, as far as PICC are concerned, Zimmermann, ZEuP 13 (2005) 278 f. K. Spiro, Zur neueren Geschichte des Satzes “Agere non valenti non currit praescriptio”, in: Festschrift für Hans Lewald (1953) 585 ff.; and see, most recently, M. Tescaro, Decorrenza della prescrizione e autoresponsabilità: La rilevanza civilistica del principio contra non valentem agere non currit praescriptio (2006).

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protection of the creditor. That is why in Germany judicial and arbitration proceedings have been downgraded to a ground for suspending rather than interrupting prescription;49 and that is also why postponement of expiry is gaining ground, internationally, as an even milder form of interference than suspension.50 Another general observation is that whenever a legal system recognizes a relatively short general period of prescription, the practical importance of the rules on the extension of prescription is considerably increased. 6. Effects; Modification by Agreement After expiry of the period of prescription the debtor is entitled to refuse performance.51 The creditor’s claim, in other words, is not extinguished. There is no reason for a legal system to foist its protection on a debtor who is willing to pay and who can thus be taken to acknowledge the obligation to do so. For the same reason, whatever has been performed in order to discharge a claim may not be reclaimed merely because the period of prescription had expired.

9

It is increasingly recognized today that the parties are free by agreement to facilitate prescription and to render prescription more difficult.52 In particular, they may agree on shorter or longer prescription periods. Party autonomy, to some extent, counterbalances the relatively short general prescription period and the uniformity of the prescription regime in general. Usually, however, a mandatory maximum period (ten,53 fifteen,54 thirty years55) is recognized, sometimes also a mandatory minimum period (one year).56

10

B. COMMENCEMENT OF PRESCRIPTION CONCERNING DAMAGES CLAIMS So much for the general background. We will now turn our attention to specific problems arising with regard to damages claims. First, it has to be determined when prescription begins to run. The damage for which compensation is sought can occur some time after the act giving rise to liability has been committed. Which of these two events, as a general rule, is relevant as far as commencement of prescription is concerned? Second, there is the problem that the damage may only materialize successively: the defendant’s act first gives rise to damage A and, at some later stage, also to another unexpected consequence B. Does that matter, as far as the period of prescription for the 49

50

51 52 53 54 55 56

See § 204 BGB, as opposed to § 209 BGB old version; see Peters/Zimmermann (fn. 3) 260 ff., 308; Zimmermann (fn. 16) 144. See, in particular, Art. 3:320 f. BW; on which see Asser/Hartkamp (fn. 8) no. 682 f.; § 210 f. BGB; Art. 14:304 ff. PECL; sec. 822–826 of the Israeli Draft Civil Code. Art. 14:501 PECL; Art. 10.9 PICC; Comparative Foundations (fn. 23) 72 ff. Art. 14:601 PECL; Art. 10.3 PICC; Comparative Foundations (fn. 23) 162 ff. Art. 2235 (2) Avant-projet; Art. 2254 (1) draft Prescription Act. Art. 10.3 (2) (c) PICC. Art. 14:601 (2) PECL; § 202 II BGB. Art. 14:601 (2) PECL; Art. 10.3 (2) (a) PICC. For criticism, see Zimmermann (fn. 16) 154 f.

11

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Reinhard Zimmermann and Jens Kleinschmidt

victim’s damages claim is concerned? These two questions mainly concern the regular (three-year) period of prescription. In the third place, certain types of cases will have to be examined, where there is a very long latency period between the act giving rise to liability and the damage and where, therefore, the existence of the maximum period (long-stop) has been at the centre of attention. And, finally, it has to be asked whether the general prescription regime can adequately deal with cases where certain psychological processes prevent a person from pursuing his or her claim; the sexual abuse of minors provides the most prominent example. 1. Agere non valenti non currit praescriptio and the Occurrence of Damage

12

As a rule, prescription should run only against a creditor who has the possibility of enforcing his claim in court.57 A claim can, however, only be pursued in court when the debtor has to effect performance, i.e. from the moment when it has become enforceable.58 A damages claim can, however, only be enforced when all the requirements of the rule imposing liability have been met. One of them will typically59 be the occurrence of damage. That is why nearly all legal systems focus, as far as the prescription of damages claims are concerned, on the occurrence of the damage rather than on the damaging event.60 It is true that the relevant rule in the German Code, even after its “modernization”, refers to the moment when the claim “comes into being”;61 but it is generally recognized,62 and also conforms to the intention of the draftsmen of both the BGB of 190063 and that of 2002,64 that this really means the moment when the claim becomes enforceable.65 According to Art. 60 I OR, the aggrieved party has to have knowledge, inter alia, of the damage which, therefore, must have 57 58

59

60

61 62 63

64 65

Lando/Clive/Prüm/Zimmermann (fn. 23) 168. See, generally, Art. 14:203 (1) PECL; Lando/Clive/Prüm/Zimmermann (fn. 23) 168; Comparative Foundations (fn. 23) 105; cf. also, e.g., § 1478 ABGB; Art. 130 I OR; § 199 I no. 1 BGB; Art. 2935 Codice civile; Spiro (fn. 2) vol. I, 36 ff. (§ 26 ff.); Peters/Zimmermann (fn. 3) 302; F. Terré/P. Simler/Y. Lequette, Droit civil: Les obligations (9th ed. 2005) no. 1490. See F. Peters in: J. von Staudingers Kommentar zum Bürgerlichen Gesetzbuch (Neubearbeitung 2004) § 199, no. 22 ff.; Loubser (fn. 13) 79 ff.; Comparative Foundations (fn. 23) 109. Many legal systems do not, as far as commencement of prescription is concerned, regard the day, but “the day after the day” (Art. 10.2 PICC) on which a particular event occurs as relevant (for comment, see Zimmermann, ZEuP 13 (2005) 273); German law even focuses on the end of that particular year: § 199 I BGB (for comment, see Spiro (fn. 2) vol. I, 279 f. (§ 125); Peters/ Zimmermann (fn. 3) 247; Zimmermann (fn. 16) 142 f.). In what follows, these details of calculating the period of prescription will be left out of consideration. § 199 I no. 1 BGB (“… der Anspruch entstanden ist …”). See, e.g., Staudinger/Peters (fn. 59) § 199, no. 3 ff.; Zimmermann (fn. 16) 141 f. Motive zu dem Entwurfe eines Bürgerlichen Gesetzbuches für das Deutsche Reich, in: B. Mugdan (ed.), Die gesammten Materialien zum Bürgerlichen Gesetzbuch für das Deutsche Reich, vol. I (1899) 521 f.; Protokolle der Kommission für die Zweite Lesung des Entwurfs des Bürgerlichen Gesetzbuchs, in: B. Mugdan (ed.), Die gesammten Materialien zum Bürgerlichen Gesetzbuch für das Deutsche Reich, vol. I (1899) 779 ff. Bundestags-Drucksache (BT-Drucks) 14/6040, 108; BT-Drucks 14/7052, 180. Apart from that, the creditor has to be aware of the circumstances giving rise to the claim and of the identity of the debtor, or ought to be aware of those matters but for his gross negligence: § 199 I no. 2 BGB.

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occurred. Knowledge of the damaging event is not sufficient because it does not place the aggrieved party in a position to appreciate the significance of his claim.66 The relevant rule of the French Code civil, Art. 2270-1, also ties the commencement of prescription to “la manifestation du dommage ou de son aggravation” and, therefore, also does not regard the damaging event as relevant.67 Courts68 and legal writers69 even go further and require, in addition to the occurrence of damage, the creditor’s knowledge of that fact. According to Dutch law (Art. 3:310 [1] BW), commencement of the (five-year) period of prescription requires that the aggrieved party knows of the damage; the damage must, therefore, have occurred.70 That is in line with the approach adopted by the Italian courts71 (in spite of the fact that Art. 2947 Codice civile refers to the 66

67

68

69

70

71

R. Brehm in: Berner Kommentar zum Schweizerischen Privatrecht, vol. VI/1/3/1 (Art. 41–61 OR) (3rd ed. 2006) Art. 60, no. 27. See J.-J. Taisne in: JurisClasseur Civil, Art. 2270 à 2278, Fasc. 100, no. 177; M. Bruschi, La prescription en droit de la responsabilité civile (1997) no. 225; and see, e.g., Cass. civ. 2e 11 July 2002, Bulletin des arrêts de la Cour de cassation, chambres civiles (Bull. civ.) II, no. 177; Cass. civ. 2e 4 May 2000, Bull. civ. II, no. 75. – Art. 2270-1 was introduced into the code in 1985 in the course of the reform of the liability concerning road traffic accidents. But the occurrence of damage had also been a requirement for the running of prescription before that date; see M. Bandrac, France, in: E. Hondius (ed.), Extinctive Prescription: On the Limitation of Actions (1995) 145, 158, fn. 47. The “Salines du Dax” (Cass. civ. 2e 13 July 1966, Bull. civ. II, no. 791) provide an excellent illustration: In 1866 (!) the competent public authority enjoined the defendant from continuing to exploit a rock-salt mine. The defendant thereupon filled up the pit but, in doing so, did not comply with certain requirements. A public place was opened up by the city over the former pit. However, in 1924, 1928, 1950 and 1956 that place successively sank. In 1957 the city brought an action for damages. The Cour de cassation did not regard that claim as being barred by prescription, as far as it related to damage that had arisen subsequent to 1927 (at that time the relevant period of prescription was thirty years). P. Sargos, Les points de départ de la prescription dans la jurisprudence de la Cour de cassation, in: P. Courbe (ed.), Les désordres de la prescription (2000) 23, 29 explains that decision as follows: Each damage sets a new period of prescription in motion because before its occurrence the aggrieved party has no reason to believe that he has become the victim of an unlawful act. Moreover, without a quantifiable damage he would not be able to sue successfully. For example Cass. soc. 18 December 1991, Bull. civ. V, no. 598: “La prescription d’une action en responsabilité ne court qu’à compter de la réalisation de dommage ou de la date à laquelle il est révélé à la victime si celle-ci établit qu’elle n’en avait pas eu précédemment connaissance”. H. Mazeaud/L. Mazeaud/J. Mazeaud/F. Chabas, Leçons de droit civil: Obligations (9th ed. 1998) no. 1174; Terré/Simler/Lequette (fn. 58) no. 1493 with further references; Bandrac (fn. 67) 158 is in agreement, though she regards this as being contra legem. The real reason for this piece of judicial development appears to lie in the maxim agere non valenti non currit praescriptio: Bruschi (fn. 67) no. 229; Bandrac (fn. 67) 158, fn. 50; Ballot-Léna, Petites Affiches 7 December 2007 (no. 245) 5 ff. See Hoge Raad (HR) 10 October 2003, Nederlandse Jurisprudentie (NJ) 2003, 680; Asser/ Hartkamp (fn. 8) no. 674 (with reference also to the general rule of Art. 3:313 BW: prescription normally begins when performance can be claimed). For criticism, see C.H. van Dijk, Bevrijdende verjaring: Een mislukt onderdeel van het BW, Nederlands Juristenblad (NJB) 2007, 1044, 1048. See the recent decision to that effect by the Sezioni unite of the Corte di cassazione of 11 January 2008, no. 581. For earlier references see A. Thiene in: G. Cian/A. Trabucchi (eds.), Commentario breve al Codice Civile (8th ed. 2007) Art. 2947, no. II/1; further A. Iannaccone in: P. Vitucci (ed.), Il Codice civile – Commentario (diretto da Piero Schlesinger), La prescrizione, vol. II (1999) 172 ff.; M. Tescaro, Decorrenza della prescrizione e autoresponsabilità (2006) 186 ff.; contra P.G. Monateri, Le Fonti delle Obbligazioni, vol. III: La Responsabilità Civile,

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day “in cui il fatto si è verificato”).72 The relevant rules in England and Ireland focus – in the parlance suitable to legal systems which adopt a procedural approach to prescription – on “the date on which the cause of action accrued”.73 “Accrual of the cause of action” implies the occurrence of damage.74

13

A remarkable development has occurred in Austria. For a long time the Austrian Supreme Court had taken the view that the three-year period for damages claims laid down in § 1489, 1 ABGB commences when, as a result of the damaging event, the occurrence of damage is foreseeable; the aggrieved party, it was argued, could safeguard his position by means of a declaratory judgment.75 It was only in the middle of the 1990s that a different view, forcefully propounded by Helmut Koziol,76 began to gain the upper hand: for prescription to run, damage must have occurred (of which the aggrieved party has to be aware).77 That change was based on considerations which are relevant not only for Austrian law. From § 1478 ABGB it may be deduced that a claim must not prescribe unless it can be enforced. In cases of damages claims, however, that requires the existence of damage. Focusing on knowledge of the damaging act rather than the damage would not even have advantages on the level of procedural economy in view of the fact that the aggrieved party would effectively be forced to obtain a declaratory judgment concerning the other party’s liability, even though such liability may never be relevant. Nobody should feel

72 73

74

75

76

77

in: R. Sacco (dir.), Trattato di Diritto Civile (1998) 373 ff., who regards the act giving rise to liability as the relevant moment not only because of the wording of the pertinent provision of the code, but also in order to heed to the legislator’s intention of shortening the prescription for extra-contractual liability. Earlier decisions in support of the prevailing view include Corte di cassazione (III sezione civile) 21 February 2003, no. 2645, Giurisprudenza italiana (Giur. it.) 2004, 285. But see, on the other hand, Corte di cassazione (II sezione civile) 28 January 2004, no. 1547, Giur. it. 2004, 1581 (obiter). For comprehensive discussion, see M. Bona, Prescrizione e danno alla persona: il nuovo leading case della Cassazione sposta il dies a quo dalla manifestazione del danno all’addebitabilità del pregiudizio al responsabile, Giur. it. 2004, 286; I. Righetti, Ancora un revirement della Cassazione sul dies a quo della prescrizione dell’azione risarcitoria nel danno lungolatente: un segnale per le Sezioni unite?, Giur. it. 2004, 1584. That is, the day on which the relevant event took place. England: sec. 2, 11 (4) (a), 14A (4) (a) Limitation Act 1980; Ireland: sec. 11 (2) (a) Statute of Limitations 1957 (as amended by Statute of Limitations (Amendment) Act 1991). England: Pirelli General Cable Works Ltd. v. Oscar Faber & Partners [1983] 2 Law Reports, Appeal Cases (AC) 1, 16 (HL); A. McGee, Limitation Periods (5th ed. 2006) no. 5.006 (see also no. 6.010: the Latent Damage Act 1986 has only widened this principle); Ireland: B. McMahon/W. Binchy, Law of Torts (3rd ed. 2000) no. 46.04; J.C. Brady/A. Kerr, The Limitation of Actions (2nd ed. 1994) 59 ff. – “Torts actionable per se” constitute an exception: McGee, no. 5.003; McMahon/Binchy, no. 46.04. See the references in F. Bydlinski, Schadensentstehung und Verjährungsbeginn im österreichischen Recht, in: Der Schadensersatz und seine Deckung. Festschrift für Erich Steffen zum 65. Geburtstag (1995) 65, 68 ff. H. Koziol, Österreichisches Haftpflichtrecht, vol. I (1973) 253; for a summary with references, see F. Bydlinski (fn. 75) 71 ff.; B.A. Koch, Verjährung im österreichischen Schadenersatzrecht de lege lata und de lege ferenda, in: H. Koziol/J. Spier (eds.), Liber Amicorum Pierre Widmer (2003) 173 ff. The leading case is OGH 19 December 1995, Juristische Blätter (JBl) 1996, 311 (enlarged panel); and earlier OGH 16 February 1994, JBl 1994, 753. See M. Bydlinski in: P. Rummel (ed.), Kommentar zum Allgemeinen bürgerlichen Gesetzbuch (3rd ed. 2002) § 1489, no. 3; P. Mader/S. Janisch in: M. Schwimann (ed.), ABGB-Praxiskommentar (3rd ed. 2006) § 1489, no. 10.

Prescription: Framework and Problems Concerning Damages Claims

37

compelled to institute an action merely on the basis of a potentially damaging event; and nobody should thus at this stage be made to suffer any disadvantage, in terms of the law of prescription, for not having shown sufficient alacrity in pursuing his claim.78 This demonstrates that, apart from the somewhat formal considerations turning around the question when a damages claim becomes enforceable, substantive reasons can be advanced for the view that prescription should only run when damage has occurred. They may, essentially, be reduced to the maxim agere non valenti non currit praescriptio. It is the idea encapsulated in this maxim that has, for example, induced the Italian courts to disregard the apparently unequivocal wording of Art. 2947 Codice civile.

14

2. Occurrence of Damage and Discoverability Determination of exactly when damage has occurred is not always easy, and it cannot be the task of the present paper to go through all the situations that cause a problem. Suffice it to say that in the case of repeated injuries, prescription will have to start separately for each of them.79 Matters are different in the case of injurious acts extending over a period of time, such as unlawful detention. Here we only have one prescription period which is often held to commence at the moment when the injurious act ends, i.e. when the victim regains his liberty.80 But one merely has to think of instances of sexual abuse over a lengthy period of time in order to appreciate that the delimitation can be difficult.81 Difficulties can also arise in cases of pure economic loss. Here it is not sufficient that a breach of duty merely increases the likelihood of such loss; prescription begins only when the economic situation has in fact deteriorated.82

15

The problem of determining the moment when damage has occurred is attenuated, to some extent, because of the idea having gained ground that prescription should not run unless the creditor knew (or ought reasonably to have known) about his claim.83 More precisely, there has been a trend (i) towards applying this subjective criterion to a growing range of claims (up to the point where it determines the running of the general period of prescription)84 while

16

78 79

80

81

82

83 84

F. Bydlinski (fn. 75) 74. Staudinger/Peters (fn. 59) § 199, no. 20 with further references; H. Grothe in: Münchener Kommentar zum Bürgerlichen Gesetzbuch (5th ed. 2006) § 199, no. 13; C. von Bar, The Common European Law of Torts, vol. II (2000) no. 551 with further references. Staudinger/Peters (fn. 59) § 199, no. 21; MünchKomm/Grothe (fn. 79) § 199, no. 13; cf. BallotLéna, Petites Affiches 7 December 2007 (no. 245) 9. von Bar (fn. 79) vol. II, no. 551 regards this as a continuing act; according to HR 25 June 1999, NJ 2000, 16 every individual instance of abuse sets a new prescription period in motion. See, e.g., von Bar (fn. 79) vol. II, no. 551 (with references in fn. 516); BGH 15 October 1992, Neue Juristische Wochenschrift (NJW) 1993, 648; Piekenbrock (fn. 3) 418; and see the example provided by Staudinger/Peters (fn. 59) § 199, no. 22 ff. See fn. 29. Art. 14:203 in conjunction with 14:301 PECL; Art. 10.2 (1) PICC; sec. 12 (3) Prescription Act 68/1969 (South Africa); § 199 I BGB; Law Commission Consultation Paper (fn. 6) 40 ff. (England); Art. 2264 (2) Avant-projet; Art. 2224 draft Prescription Act (with the important exception for bodily injury claims); sec. 818 (1) Draft Civil Code for Israel.

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(ii) reducing its inherent potential to delay the commencement of prescription by moving from actual knowledge towards a test of reasonable discoverability.85 Knowledge of the damage (or reasonable discoverability), obviously, is only possible after the damage has occurred, or at the same time when it occurs, but never before that moment.86 The occurrence of damage will then, in other words, merely determine the earliest possible moment when prescription commences to run. Recognition of the subjective system is also, of course, based on the idea of agere non valenti non currit praescriptio.

C. FIRST DAMAGE AND FURTHER CONSEQUENCES 17

Particularly with regard to personal injuries it happens not rarely that the aggrieved party is aware, immediately, of one specific injury. Compensation for that injury is then paid, whether on the basis of out-of-court negotiations or as a result of a judicial decision, and both parties regard the matter as closed. Some years later, it turns out that there are further, unexpected consequences. Thus it can become apparent that the aggrieved party has picked up other injuries: A person who has been beaten up by a gang of hooligans may have suffered a laceration on his forehead, which is immediately apparent, but also internal injuries of which he only becomes aware much later.87 More often, the first injury itself may have unexpected consequences. Thus, the victim of a traffic accident suffers a fracture of his or her shinbone. The person responsible for the accident pays for the necessary operation. Seven years later, it appears that the healing process has gone wrong and that another complex operation is required.88 Or the traffic accident has led to a complex injury in the lower part of one leg; ten years later that injury leads to an arthrosis in the ankle joint.89 How are these further injuries to be dealt with from the point of view of the law of prescription? 1. The “Unitary-Damage” Concept I a) German and Austrian Law

18

One possible solution would be to regard all foreseeable damage as constituting one unit which is subject to one and the same prescription period. That is the position adopted by German law which, in this context, has coined the concept of “unitary damage” (Grundsatz der Schadenseinheit).90 One may also refer to a once-and-for-all rule. The prescription period, therefore, begins to 85

86 87 88 89 90

Christian von Bar regards discoverability as the emerging general standard in European Community legislation on prescription: C. von Bar, The Common European Law of Torts, vol. I (1998) no. 395; and see Art. 10 (1) Product Liability Directive. For the development, under the old law, in Germany, see Comparative Foundations (fn. 23) 92 f. von Bar (fn. 79) vol. II, no. 554. See illustration 2 in Lando/Clive/Prüm/Zimmermann (fn. 23) 176. See BGH 30 January 1973, NJW 1973, 702. See BGH 16 November 1999, NJW 2000, 861. On the historical development, see F. Peters, Die Kenntnis vom Schaden als Verjährungsvoraussetzung bei § 852 I BGB, JZ 1983, 121, 122.

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run when the first injury has occurred, and it applies, in principle, to all consequences resulting from the injurious act, whether they have, so far, materialized or not.91 An exception is made only for consequences which are not foreseeable.92 These are subject to their own prescription period that begins to run when these consequences have occurred and when the aggrieved party has, or ought to have, become aware of them. How the foreseeability issue has to be determined is disputed. The courts in Germany do not regard the point of view of the victim, or of the individual doctors treating that victim, as relevant but assess the matter on the basis of the medical knowledge available in general at the time of the first injury.93 This means that further consequences are nearly always foreseeable in cases of severe injuries,94 even if they are regarded as unlikely among experts.95 Serious consequences following from trivial injuries,96 or from merely momentary impairments of a person’s health,97 on the other hand, are usually unforeseeable. Courts and the majority of legal writers in Austria, following the leading case decided by the Austrian Supreme Court in 1995,98 apply what is termed a “moderate” unitary-damage concept. It leads to results that are similar to those reached in Germany. Prescription can only begin to run with the occurrence of a (first) injury, but it applies to all future injurious consequences, as far as they are foreseeable.99 Claims for unforeseeable consequences prescribe separately.100 However, contrary to the view adopted in Germany, foreseeability is determined from the (objective) point of view of the victim rather than an expert.101 91

92

93

94

95 96 97 98 99

100 101

H. Heinrichs in: O. Palandt, Kommentar zum Bürgerlichen Gesetzbuch (67th ed. 2008) § 199, no. 14, 31; W. Niedenführ in: Soergel Kommentar zum Bürgerlichen Gesetzbuch, vol. IIa (13th ed. 2002) § 199, no. 20; MünchKomm/Grothe (fn. 79) § 199, no. 9. The relevant case law goes back, at least, as far as RG 5 December 1927, RGZ 119, 204. The draftsmen of the new German law of prescription expressly wanted to retain the principle of “unitary damage”: BT-Drucks 14/6040, 108; BT-Drucks 14/7052, 180. Palandt/Heinrichs (fn. 91) § 199, no. 31; G. Spindler in: H.G. Bamberger/H. Roth, Kommentar zum Bürgerlichen Gesetzbuch (2003) § 199, no. 28; MünchKomm/Grothe (fn. 79) § 199, no. 9; for examples, see J. Moraht, Verjährungsrechtliche Probleme bei der Geltendmachung von Spätschäden im Deliktsrecht (1996) 106 ff. BGH 16 November 1999, NJW 2000, 861, 862; BGH 3 June 1997, NJW 1997, 2448, 2449; BGH 27 November 1990, NJW 1991, 973, 974; Palandt/Heinrichs (fn. 91) § 199, no. 31. For a somewhat less strict standard (the sensible, average observer is relevant who is familiar with the case), see Staudinger/Peters (fn. 59) § 199, no. 35; MünchKomm/Grothe (fn. 79) § 199, no. 11. According to Bamberger/Roth/Spindler (fn. 92) § 199, no. 29, the question has to be determined from the layperson’s perspective. BGH 30 January 1973, NJW 1973, 702; BGH 20 April 1982, Versicherungsrecht (VersR) 1982, 703 f. with further references. BGH 16 November 1999, NJW 2000, 861, 862. For example BGH 30 January 1973, NJW 1973, 702 (obiter). For example BGH 3 June 1997, NJW 1997, 2448, 2449 (obiter). OGH 19 December 1995, JBl 1996, 311; on this case, see supra no. 13. See the references in Koch (fn. 76) 185, no. 58; and see Rummel/M. Bydlinski (fn. 77) § 1489, no. 3 with further references; F. Bydlinski (fn. 75) 81 ff.; H. Koziol, Österreichisches Haftpflichtrecht, vol. I (3rd ed. 1997) no. 15/12 f. Koch (fn. 76) 180; F. Bydlinski (fn. 75) 66; Koziol (fn. 99) no. 15/13. OGH 8 May 2003, ecolex 2003, 835.

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40

b) The Necessity of Obtaining a Declaratory Judgment

20

The unitary-damage concept entails a significant inroad into the principle that damage must have occurred before it can begin to prescribe.102 That principle, as has been pointed out earlier, is supposed to protect the aggrieved party from effectively being deprived of a damages claim before that claim can be pursued in court. In order to avoid that consequence, the aggrieved party has to resort to another protective device, as soon as he has suffered a (first) damage and can anticipate further consequences: in connection with his lawsuit for the recovery of the damage that has already arisen he can institute an action for a declaratory judgment concerning the defendant’s liability for all future loss arising from the first injury. If that declaratory judgment obtains the effect of res judicata, a new prescription period begins to run which, as is internationally recognized,103 is much longer than the regular prescription period. In practice, the victim of an injury will often be well advised to bring such action anyway in order to avoid renewed dispute as to the basis of the defendant’s liability.

21

In view of this possibility available to the aggrieved party to safeguard his legal position by means of obtaining a declaratory judgment, the unitary-damage concept does not, in the view of its advocates, put him at an unreasonable disadvantage.104 At the same time, it provides an explanation for limiting that concept to foreseeable damage; for only if further damage is foreseeable, can the aggrieved party be expected to bring an action for a declaratory judgment and to obtain expert advice on the exact extent and nature of such damage.105 Proponents of the unitary-damage concept also point out that it is conducive to an efficient resolution of all the issues revolving around the damaging event106 and that it therefore also contributes to legal certainty.107 It avoids problems of proof that can arise when a long time has passed after that event.108 And it makes it easier for insurance companies to calculate their risk. c) Problems

22

At the same time, the very fact that it is necessary to bring an action for a declaratory judgment demonstrates that this solution is not without its problems. 102

103

104

105 106 107 108

That is, of course, the main argument of those who oppose the unitary-damage concept; see Peters, JZ 1983, 124; Staudinger/Peters (fn. 59) § 199, no. 37; Schwimann/Mader/Janisch (fn. 77) § 1489, no. 10; A. Riedler, Verstärkter Senat zum Verjährungsbeginn im Schadenersatz, ecolex 1996, 87, 89. Art. 14:202 PECL (ten years); § 197 I no. 3 BGB (thirty years); sec. 11 (a) (ii) Prescription Act 68/1969 (South Africa) (thirty years); Art. 3:324 BW (twenty years); Art. 137 II OR (ten years); Art. 2953 Codice civile (ten years); Art. 2275 no. 3 Avant-projet (ten years; the draft Prescription Act does not contain any specific provision, but seems to regard its general fiveyear period as sufficient); sec. 834 Draft Civil Code for Israel (seven years); cf. further Comparative Foundations (fn. 23) 112 ff.; Lando/Clive/Prüm/Zimmermann (fn. 23) 166 ff. MünchKomm/Grothe (fn. 79) § 199, no. 9; Piekenbrock (fn. 3) 417; compare also F. Bydlinski (fn. 75) 74; Koch (fn. 76) 187. Koziol (fn. 99) no. 15/13; BGH 16 November 1999, NJW 2000, 861, 862. MünchKomm/Grothe (fn. 79) § 199, no. 9; Bamberger/Roth/Spindler (fn. 92) § 199, no. 27. BGH 3 June 1997, NJW 1997, 2448, 2449. F. Bydlinski (fn. 75) 72.

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(i) If compensation for an injury that has been sustained, for instance in a traffic accident, has been paid out of court, the victim of the injury usually has no reason to go to court. Of course, the unconditional willingness, on the part of the tortfeasor, to regulate the damage that has occurred can be construed as an acknowledgement which resets the prescription clock.109 But it is, once again, the short period for damages claims that starts to run afresh.110 That is not always sufficient, and it can hardly be expected of the victim to extract from the other party new acknowledgments in regular intervals. Thus, effectively, he is still forced to bring an isolated action for a declaratory judgment.111 The courts in Germany and Austria112 accept this result. But does it not run counter to the precepts of procedural efficiency to accept a situation in which a victim is forced to bring an isolated action for a declaratory judgment even though it is, as yet, unclear whether there will be further damage?113 (ii) The unitarydamage concept induces every claimant in a damages suit to file an action for a declaratory judgment. If in fact there is no further damage, the cost and effort incurred with regard to that action have been wasted.114 If, on the other hand, there does turn out to be further damage, there still remains the difficulty for the creditor to prove a causal connection between the damaging event and the damage.115 (iii) In cases of subsequent damage which turns out to be extraordinarily grave and which threatens to ruin the aggrieved party, the German Supreme Court effectively disregards, or overrules, the consequences of the unitary-damage concept by not allowing the defendant to invoke prescription. This is based on § 242 BGB: raising the defence of prescription in such situation would contravene the precepts of good faith.116 (iv) Claims established by legal proceedings are also subject to prescription, though the relevant period is a fairly long one.117 But if that period does not only relate to the individual instances of damage but also to the declaratory effect as such, any claim for damages that has arisen after the lapse of that period could be met by the de109 110

111 112 113

114 115

116

117

Art. 14:401 PECL; Art. 10.4 PICC; Comparative Foundations (fn. 23) 126 ff. According to BGH 26 February 2002, NJW 2002, 1791, 1792 an acknowledgement that is supposed to substitute for a declaratory judgment can trigger the prescription period for claims established by legal proceedings; for criticism, see K. Schreiber, Die Verjährung titulierter Ansprüche, in: Festschrift für Dieter Medicus zum 70. Geburtstag (1999) 575, 580 f. with further references. Riedler, ecolex 1996, 90; cf. also Koch (fn. 76) 188 ff.; F. Bydlinski (fn. 75) 76 f. See, in particular, OGH 14 September 1999, ecolex 2000, 649. Riedler, ecolex 1996, 90; Koch (fn. 76) 182 ff.; cf. also Peters, JZ 1983, 122; P. Apathy, annotation to OGH of 19 December 1995, JBl 1996, 315. Peters, JZ 1983, 122. Peters regards this as the most frequent situation, by far. Staudinger/Peters (fn. 59) § 199, no. 37; cf. also F. Bydlinski (fn. 75) 73 (who regards these problems of proof as the “lesser evil”). BGH 27 November 1990, NJW 1991, 973. In a traffic injury caused by the defendant in 1974, the claimant had suffered as a three-and-a-half-year-old boy injuries to his skull and his cervical vertebrae. For half a year he was unconscious and, thereafter, had to be treated for another couple of months. Compensation for these costs appears to have been paid. The claimant did not institute an action for a declaratory judgment for he did not anticipate further damage. Ten years later, in the course of treating a sports injury, certain alterations of his cervical vertebrae were detected. The resulting operation led to the claimant suffering from paraplegia and having to be exposed to artificial respiration. See fn. 103.

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fence of prescription, even if these heads of damage had been foreseeable.118 The victim of an accident who is told that an arthrosis is likely to develop in his injured ankle after a period of 30–40 years would then be unable to prevent the prescription of the claim concerning that arthrosis. Unless the prescription period is regularly renewed by means of an acknowledgement or attempts at execution,119 that result can only be avoided by differentiating between the individual claim (which prescribes) and the establishment of the facts as such (which does not prescribe).120 But then one would arrive exactly at what the unitary-damage concept and the institution of prescription in general want to prevent: litigation about damage arising decades after the damaging event. (v) On the other hand, however, it has also been pointed out that the prescription period for claims established by legal proceedings is too long and runs counter to the idea of a speedy settlement of damages claims, envisaged by the relatively short prescription period for these claims.121 d) Other Jurisdictions

23

The unitary-damage concept has been discussed with special reference to German and Austrian law because it has been the subject of particularly lively debates in both countries. But it is also relied upon in other jurisdictions. Greece provides an example.122 Dutch law distinguishes between subsequent damage that has been and that has not been foreseen: the prescription period relating to the first damage only applies in the first scenario.123 In Italy the prescription period for the original damage also applies to any aggravation;124 insofar, it 118 119

120

121

122

123 124

This is pointed out by Koch (fn. 76) 187. Soergel/Niedenführ (fn. 91) § 197, no. 41. For an example see BGH 3 October 1967, VersR 1967, 1182 (acknowledgement by compensatory payments at regular intervals). Whether a second action for a declaratory judgment can be brought with the aim of preventing the existing judgment from prescribing is subject to debate; OLG Celle 22 August 2007, NJW 2008, 1088; see Soergel/Niedenführ (fn. 91) § 197, no. 42. See, for Austria, OGH 14 September 2000, JBl 2001, 386, 387 and the annotation by Riedler; OGH 29 April 1992, JBl 1993, 726, 727; F. Bydlinski (fn. 75) 69, no. 7. In Germany, OLG Düsseldorf 23 June 1994, Monatsschrift für Deutsches Recht (MDR) 1995, 160 regards the thirty-year prescription period for a declaratory judgment as absolute; damage arising after lapse of this period cannot be compensated. Peters, JZ 1983, 125: a subsequent damage occurs one month after the declaratory judgment has obtained the effect of res judicata; the aggrieved party can now wait for 29 years before claiming compensation. von Bar (fn. 79) vol. II, no. 557 with further references; see the decisions of the Areios Pagos cited by E. Dacoronia, Greece, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2003 (2004) 212, 220 f.; eadem, Greece, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2002 (2003) 231, 247 f. (new prescription period only for unforeseeable consequences). Asser/Hartkamp (fn. 8) no. 674a with further references. Iannaccone (fn. 71) 174 f. with further references. Corte di cassazione (Sezione lavoro) 19 December 1997, no. 12891, Repertorio generale della giurisprudenza italiana 1997, sub “prescrizione e decadenza civile”, no. 67; Corte di cassazione (Sezione III) 24 October 1983, no. 6259, Massimario della giurisprudenza italiana 1983, col. 1616 f.; Corte di cassazione (Sezione III) 19 August 1983, no. 5412, Il foro italiano (foro it.) 1984, col. 500 ff. (denying a new prescription period for damage arising from a further reduction of the claimant’s mobility that could, however, still be attributed to the original leg fracture). The maxim in many decisions reads as follows: “Ai sensi dell’art. 2947 c.c., qualora lo stesso fatto doloso o colposo determini, dopo un primo evento lesivo, ulteriori conseguenze pregiudizievoli, la prescrizione

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may be said that Italy subscribes to the unitary-damage concept. A new prescription period applies to “lesione nuova ed autonoma”.125 However, when damage has to be regarded as new and autonomous is not entirely clear from the case law; at least one decision seems to subscribe to a foreseeability criterion in order to relate an aggravation of the claimant’s physical condition to the original injury.126 English law has traditionally subscribed to a particularly strict unitary-damage concept, for a damages claim is, in principle, awarded “once and for all”.127 Thus, where a judgment has been rendered and the subsequent damage relates to the same cause of action, there can be no prescription problem because the matter is res judicata.128 For personal injury claims, however, the “once and for all” principle (or: single action rule) has recently been relaxed in order to avoid over- or undercompensatory awards. If there are indications for a future deterioration of the injured party’s condition,129 a “provisional award” can be made which relates to the damage that has occurred so far. Alternatively, the wrongdoer may be made to pay an annuity rather than a lump sum.130 2. The “Unitary-Damage” Concept II The notion of unitary damage can, however, also be used to arrive at an entirely different solution. All the damage arising from one event can be regarded as a unit but prescription is taken to commence only when the last foreseeable

125

126

127

128

129

130

dell’azione risarcitoria, per il danno inerente a queste ultime, decorre dalla loro verificazione solo nel caso in cui le stesse non constituiscano un mero sviluppo ed aggravamento del danno già insorto, ma integrino nuove ed autonome lesioni”. Iannaccone (fn. 71) 175 f. with further references; Cian/Trabucchi/Thiene (fn. 71) Art. 2947, no. II/4. Corte di cassazione (sezione III) 2 April 2004, no. 6515, Repertorio generale della giurisprudenza italiana 2004, sub “prescrizione e decadenza civile”, no. 35; Corte di cassazione (sezione III) 7 November 2005, Repertorio generale della giurisprudenza italiana 2005, sub “prescrizione e decadenza civile”, no. 26. Corte di cassazione (Sezione III) 19 August 1983, no. 5412, foro it. 1984, col. 500; according to Monateri (fn. 71) 380, the usual maxim leaves enough discretion to the courts to reach equitable results on a case-by-case basis. W.V.H. Rogers, Winfield & Jolowicz on Tort (17th ed. 2006) no. 22.2. For the reasons of the rule, see no. 22.23. On the application of the once-and-for-all rule in South Africa, see the discussion by Loubser (fn. 13) 81 ff. See Fitter v. Veal (1701) 12 Modern 542, 88 The English Reports (E.R.) 1506, which is also reported as Fetter v. Beale in (1701) 1 Lord Raymond 339, 91 E.R. 1122, in Holt 12, 90 E.R. 905 and in 1 Salkeld 11, 91 E.R. 11: The claimant had received a damages award of £ 11 for a physical injury. When, subsequently, a skull operation became necessary, he was not allowed an additional award, even though that operation had originally been unforeseeable; for a recent statement of the rule, see Johnston v. NEI International Combustion Ltd. [2007] United Kingdom House of Lords (UKHL) 39 (par. 13 ff.), linking the “single action rule” to the maxim “interest rei publicae ut sit finis litium”, which is, incidentally, also among the policy considerations for prescription in general (see supra no. 5); see Rogers (fn. 127) no. 22.2, 22.23 (in general on unforeseeable deterioration); Moraht (fn. 92) 81 ff., 145. – Cf. also Scottish Law Commission (fn. 12) 13 ff., proposing a clarification of Scots law to the effect that subsequently emerging damage should not give rise to a further limitation period. Section 32A Supreme Court Act 1981; see Rogers (fn. 127) no. 22.23. The deterioration has to be “clear and severable”; arthrosis resulting from a physical injury does not satisfy that criterion. Section 2 Damages Act 1996, as amended by sec. 100 Courts Act 2003; see T. Weir, An Introduction to Tort Law (2nd ed. 2006) 204.

24

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damage has arisen or when, at least, it can be realistically assessed. That is the solution adopted in Switzerland.131

25

Every individual item in a damages claim, according to Swiss law, can be sued for, as soon as it is quantifiable.132 Thus, there are as many claims as there are items of damage. For all these claims the prescription period for delictual claims begins to run only when the entire damage can be assessed with a sufficient degree of certainty.133 If, therefore, it is not clear, after an operation, whether the victim of an injury will be subject to permanent impairments, the prescription period does not begin to run.134 This is based on the fact that the creditor of the damages claim (= the victim of the injury) does not yet know about the damage.135 Only very remote consequences are subject to their own prescription period.136 This way of approaching the problem has to be seen in the light of the unusually short (knowledge-based) prescription period of one year laid down in Art. 60 I OR.137 Attention must, however, be paid to the longstop of ten years which may have lapsed before the one-year period has even started to run.138

26

French law is also, concerning bodily injuries claims, familiar with the idea that the damage resulting from one damaging event constitutes a unit and starts to prescribe only when the entire damage has arisen.139 The relevant moment for the commencement of the ten-year period for extra-contractual damages claims is, as we have seen, “la manifestation du dommage ou de son aggravation” (Art. 2270-1 Code civil).140 According to the Cour de cassation, the damage is sufficiently manifest only, in cases of bodily injury, at the moment of its “consolidation”,141 i.e. when a point has been reached where the victim’s condition no longer develops detrimentally.142 This way of interpreting Art. 2270-1 Code civil is based on the consideration that before consolidation 131

132 133

134 135 136

137 138 139

140 141

142

Spiro (fn. 2) vol. I, 139 (§ 65) (referring to “Einheit des Schadens”); R.K. Däppen in: Basler Kommentar, Obligationenrecht I (4th ed. 2007) Art. 60, no. 7 (referring to “Gesamtschaden”). Art. 42 II OR; Spiro (fn. 2) vol. I, 138 (§ 65). Berner Kommentar/Brehm (fn. 66) Art. 60, no. 29 with many references to case law; F. Werro in: Commentaire Romand. Code des Obligations I (2003) Art. 60, no. 19; Spiro (fn. 2) vol. I, 138 (§ 65). Berner Kommentar/Brehm (fn. 66) Art. 60, no. 29. Berner Kommentar/Brehm (fn. 66) Art. 60, no. 29 ff.; Werro (fn. 133) Art. 60, no. 19. Basler Kommentar/Däppen (fn. 131) Art. 60, no. 7 with references to case law; Spiro (fn. 2) vol. I, 138 f. (§ 65). For criticism, see Berner Kommentar/Brehm (fn. 66) Art. 60, no. 48. Spiro (fn. 2) vol. I, 139 (§ 65). Werro (fn. 133) Art. 60, no. 23. Spanish law, as may be deduced from the discussion by von Bar (fn. 79) vol. II, no. 553, appears to take a similar approach. Supra text to fn. 67 ff. Cass. civ. 2e 4 May 2000, Bull. civ. II, no. 75 (“en cas de préjudice corporel, la date de la consolidation fait courir le délai de la prescription prévue à l’article 2270-1 du code civil”); confirmed in: Cass. civ. 2e 11 July 2002, Bull. civ. II, no. 177. This is the definition provided by P. Jourdain, Observations, Revue trimestrielle de droit civil (RTD civ.) 2000, 851, 852 (“le moment où l’état de la victime ne doit plus en principe évoluer”). See also the definition of “consolidation du dommage corporel” provided in the Senate’s report (fn. 19) 139: “Etat d’un dommage corporel, constaté après l’arrêt des soins, permettant de déterminer l’étendue de l’incapacité définitive liée à ce dommage”.

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the victim does not know to what extent he can claim compensation from the wrongdoer.143 The Cour de cassation’s approach has been criticized for unreasonably deferring the commencement of prescription.144 In many situations (e.g. asbestos-related diseases, HIV-infection) the prescription regime would effectively be set aside.145 The victim, it is argued, often knows or senses the damage before consolidation.146 Commencement of prescription should only be deferred for consequences which cannot conclusively be assessed before the time of consolidation.147 The Avant-projet takes up that criticism and proposes to abandon the Cour de cassation’s position; for in the proposed Art. 1384 the text of the present Art. 2270-1 Code civil is supplemented in the following way: “Les actions en responsabilité civile se prescrivent par dix ans à compter de la manifestation du dommage ou de son aggravation, sans égard, en cas de dommage corporel, à la date de la consolidation.”148 It is not clear, however, how this provision can be reconciled with the proposed new prescription regime for damages claims in Art. 2274 and, specifically, for bodily injuries claims in Art. 2275 no. 1 Avant-projet.149 Interestingly enough, the most recent French draft Prescription Act, which is currently under parliamentary scrutiny, expressly retains the consolidation criterion. Its Art. 2226 (1) reads: “L’action en responsabilité née à raison d’un événement ayant entraîné un dommage corporel, engagée par la victime directe ou indirecte des préjudices qui en résultent, se prescrit par dix ans à compter de la date de la consolidation du dommage.” There is an important difference between the apparently very similar approaches in Swiss and French law. The French law of prescription does not recognize a long-stop for extra-contractual damages claims. While in Switzerland damages claims can no longer be brought ten years after the event causing the damage, the requirement of consolidation in France can indeed lead to a situation where a damages claim can be brought nearly indefinitely. A long-stop was only envisaged by the Avant-projet.150 That the reasons for the amendment proposed in Art. 1384, quoted above, are thereby weakened does not appear to have been noticed. The draft Prescription Act, on the other hand, exempts bodily injury claims from the general 20-year long-stop and is therefore likely to attract criticism for holding on to the consolidation requirement. 143

144 145

146 147 148

149

150

Jourdain, RTD civ. 2000, 852 (referring to the maxims, often mentioned in French law, of contra non valentem agere non currit praescriptio and actioni non natae non praescribitur). Jourdain, RDC 2007, 148. Y. Lambert-Faivre, Les effets de la responsabilité (Les articles 1367 à 1383 nouveaux du code civil), RDC 2007, 163, 170. Jourdain, RTD civ. 2000, 852; in agreement, however Taisne (fn. 67) no. 177. Jourdain, RTD civ. 2000, 852 f.; id., RDC 2007, 148. Emphasis added. For comment on that provision, see Jourdain, RDC 2007, 147 f.; LambertFaivre, RDC 2007, 170. R. Wintgen, La mise en œuvre de la technique du double délai de prescription extinctive, RDC 2007, 907, 909. Both draft provisions have been prepared by different working groups. A compromise proposal is submitted by Jourdain, RDC 2007, 148. According to Art. 2278 (1) Avant-projet, all claims prescribe ten years after “le fait générateur de l’obligation”; for personal injury claims, the period is extended to thirty years; for comment, see Zimmermann, ERPL 15 (2007) 813.

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3. New Prescription Periods for Each Aggravation

28

Apart from this peculiarity concerning claims for bodily injury, French law is representative of a third approach towards the subsequent damage problem: each aggravation of the damage sets in motion its own period of prescription. The Cour de cassation, therefore, in a fairly recent decision did not uphold the defence of prescription concerning a claim brought in 1995 by the victim of a traffic accident that had happened in 1961, i.e. more than 30 years before, because of an aggravation that had occurred in 1992/93.151 The Court, in its usual way, did not provide any information concerning the aggravation.

29

What, then, constitutes an aggravation? Courts and legal writers are not very clear on that point.152 They seem to think that a new type of damage must have arisen.153 Indications in that direction can be gained from the way in which a related problem is dealt with, i.e. whether a subsequent claim is barred by the res judicata effect of an earlier judgment rather than by prescription. Here the Cour de cassation has recently held that an aggravation of the damage does not necessarily require a deterioration of the condition of the victim; nor does it have to have been unforeseeable.154 This approach probably entails that for each item of damage that is, in some or other way, novel a new and independent period of prescription begins to run from the time of knowledge. That is brought out particularly clearly in the case mentioned above,155 where a public place had repeatedly sunk because a shaft, situated underneath, had not been properly filled up. According to the unitary-damage concept, as applied in Germany and Austria, the first such incident would probably have triggered the prescription period also for all further incidents of sinking because they would have been foreseeable.

151

152 153

154

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Cass. civ. 2e 15 November 2001, Bull. civ. II, no. 167. Logically, regarding personal injury claims, the problem can only arise in cases where consolidation had already occurred: prescription would then have started to run. Consequential damage subsequent to consolidation is then subject to its own prescription. That view is shared by P. Delebecque, Recueil Dalloz (D.) 2004, 1341. This is hinted at by Delebecque, D. 2004, 1341, discussing Cass. civ. 2e 11 December 2003, Bull. civ. II, no. 380. In that case, the owner of a piece of property had sued his neighbour for decline in value of his property, resulting from the erection of an ugly building (“bâtiment important et inesthétique”) on the neighbouring property and very close to the common border of the two properties. That had happened in 1970. The action that was brought in 1999 was, nonetheless, not taken to be barred by prescription in view of the fact that the damage had been aggravated in February 1998 when it had been decided by the relevant public authorities to redesignate the claimant’s property as building development land. Cass. civ. 2e 19 February 2004, RTD civ. 2005, 147 with commentary by P. Jourdain: An eighteen-year old woman was injured so severely that she was permanently dependent upon domestic help. She was successful in her claim to recover the costs required for such domestic help. Some years later her requirements for assistance increased as a result of two children having been born. The Cour de cassation granted the claim for the additional costs in spite of the fact that they had been foreseeable at the time of the first judgment, and that the condition of the woman herself had not deteriorated. Along the same lines Cass. civ. 2e 30 June 2005, RTD civ. 2006, 130 with commentary by P. Jourdain. See fn. 67.

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The approach just described is also advocated by authors outside of France who wish to avoid the hardship associated with the unitary-damage concept.156 The arguments in favour of this approach, of course, largely coincide with those advanced against the unitary-damage concept.157

30

4. The Principles of European Contract Law Which position do the Principles of European Contract Law adopt? In Art. 14:301 (b) they state that the period of prescription is suspended as long as the creditor “does not know of, and could not know of, … the facts giving rise to the claim including, in the case of a right to damages, the type of damage”.158 This, as the Commentary explains,159 is designed to prevent an apparently trivial injury triggering the prescription period for unexpected, serious consequences arising from the injury at a later stage. The Principles thus appear to accept the distinction between foreseeable and unforeseeable consequences of a damaging event; and they appear to subscribe to the view that discoverability of the (first) damage triggers the prescription period also for further damage, even if it is relatively more serious. That would seem to correspond to the solution adopted in Germany and Austria.

31

It should, however, be noted that the Principles tackle the problem in connection with the discoverability criterion. That approach is also adopted elsewhere.160 In the Principles, it has to be seen in the context of Art. 14:203 (1) on the commencement of prescription, for the purposes of which the damages question is irrelevant.

32

As in prescription matters generally, there is no ideal solution. But if the policy considerations underlying the law of prescription and the need for legal certainty are taken seriously, one will have to endorse, in some form or other, the unitary-damage concept. That is what the Principles of European Contract Law do, and they thereby follow the majority view among the European legal systems. Foreseeability provides a sufficiently flexible criterion to avoid unreasonable hardship. By integrating the test into the question of discoverability, the Principles appear to point towards the unitary-damage concept in its Austrian rather than German variety:161 for it will have to be assessed from the point of view of the creditor (i.e. the victim of the injury) whether he could reasonably have known of the type of damage that has in fact materialized. That, too, appears to be plausible, particularly if it is taken into account that the test is modified by the addition of the word “reasonably”: whether prescription

33

156

157 158 159 160

161

See, for Germany, Peters, JZ 1983, 121; Staudinger/Peters (fn. 59) § 199, no. 37 ff.; Moraht (fn. 92) 228 ff.; for Austria cf. Koch (fn. 76) 187; Riedler, ecolex 1996, 89. Supra no. 22. Emphasis added. Lando/Clive/Prüm/Zimmermann (fn. 23) 176. For Austria, see Rummel/M. Bydlinski (fn. 77) § 1489, no. 3; Koziol (fn. 99) no. 15/12; for Germany, see Bamberger/Roth/Spindler (fn. 92) § 199, no. 27; apparently also BGH 27 November 1990, NJW 1991, 973; for Switzerland, see Berner Kommentar/Brehm (fn. 66) Art. 60, no. 29 ff. Supra no. 18 f.

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is suspended has to be assessed not by what this specific creditor could anticipate, but by what a creditor in his position could reasonably anticipate.

D. THE LATENT DAMAGE PROBLEM 1. “No Matter for Pride”

34

The possibility that even the first damage sometimes only occurs a considerable period after the damaging event is an important argument in favour of subscribing to a “subjective” prescription regime: prescription does not run unless the creditor knows, or could reasonably have known, of his claim including, with regard to damages claims, the type of damage that has in fact occurred. This is illustrated by the development in England. The Limitation Act 1939 had laid down for all actions in contract and in tort a six-year period running from accrual of the cause of action, i.e. usually the occurrence of the damage; the essential features of that regime can be traced back to the Limitation Act 1623. For personal injury claims the limitation period was reduced in 1954 to three years from the accrual of the cause of action.162 In the early 1960s, first the Court of Appeal and then the House of Lords had to deal with an action by a number of steel dressers against their employer.163 They had all contracted a lung disease by the inhalation over many years of noxious dust particles in the course of their employment; that, however, was unknown to anyone. Both courts found that the actions were barred, even though their existence had neither been known nor been reasonably discoverable; but both courts also expressed their dissatisfaction with this state of the law. As a result, Parliament intervened and introduced a subjective criterion determining the commencement of the limitation period for personal injury claims. This eventually led to the provision of sec. 11 Limitation Act 1980, according to which the limitation period is three years from the date on which the cause of action accrued or the date of knowledge (if later) of the person injured. Knowledge is defined in sec. 14 Limitation Act 1980 and includes, in particular, reasonable discoverability. Outside the area of personal injuries the problems inherent in latent damage situations become particularly apparent in the case of Pirelli General Cable Works Ltd. v. Oscar Faber & Partners from 1982.164 Here, the damages claim concerning defects in a building was held to be barred, even though the defect had not been discoverable for a number of years. For Lord Scarman such a result was no matter for pride. “It must be … unjustifiable in principle”, he stated,165 “that a cause of action should be held to accrue before it is possible to discover any injury (or damage). A law which produces such a result … is harsh and absurd”. Once again, this led to legislative reform: the Limitation Act 1980 was amended by a provision according to which the six-year period running from the date of accrual of the cause of action was supplemented by 162 163

164 165

See the historical overview in Law Commission Consultation Paper (fn. 6) 5 ff. Cartledge v. E. Jopling & Sons Ltd. [1962] 1 Law Reports, Queen’s Bench Division (QB) 189 (CA); Cartledge v. E. Jopling & Sons Ltd. [1963] AC 758 (HL). [1983] 2 AC 1 (HL). Pirelli General Cable Works Ltd. v. Oscar Faber & Partners [1983] 2 AC 1 (HL) at 19.

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a three-year period running from the claimant’s date of knowledge.166 In addition, however, an “overriding time-limit” of fifteen years was introduced, running from the damaging event, in order to counterbalance the move towards a three-year period linked to discoverability.167 Such long-stops can be found in just about all legal systems embracing, either partially or completely, what has been termed the “subjective” prescription regime. They are in fact one of the defining features of a modern prescription regime.168 2. Asbestos Related Diseases and Other Problem Situations Even the long-stop period, however, can occasionally have lapsed before the damage has become reasonably discoverable. This type of situation has received increasing attention in a number of jurisdictions in recent years. It is characterized by a very long latency period (also dicussed as “long-tail risks”). Cases such as Cartledge v. E. Jopling & Sons Ltd., where a number of persons have been exposed, for a long time, to certain noxious substances, provide a prominent example. Dutch courts, in particular, have had to deal with claims against employers who had exposed their employees in the course of their employment to asbestos dust. Asbestos can lead to various severe diseases of the lung and the respiratory system with latency periods of sometimes well over 20 years;169 the latency period in the case of mesothelioma, a type of lung cancer that can only be caused by asbestos, with the inhalation of a single asbestos fibre sometimes being sufficient, is supposed to be twenty to forty years.170 In a case decided by the Hoge Raad,171 the claimant had worked between 1959 and 1963 in the defendant’s ship yard where he had been exposed to asbestos. In 1996 he was diagnosed to be suffering from mesothelioma and died soon after filing an action. As long as the long-stop begins with the damaging event (= the act which gives rise to the claim: Art. 14:203 [1] PECL), i.e. not later than 1963,172 even a 166 167

168 169

170

171

172

See sec. 14A Limitation Act 1980, based on the Latent Damage Act 1986. Section 14B Limitation Act 1980. This “overriding time-limit” (= long-stop) is confined to negligence actions not involving personal injuries; see infra no. 42. Supra no. 4. Hauptverband der gewerblichen Berufsgenossenschaften (ed.), Asbestverursachte Berufskrankheiten in Deutschland – Entstehung und Prognose (2003) (reporting latency periods of 15 to 20 years for asbestosis, of at least 25 years for lung cancer and single cases with latency periods of over 50 years); U.S. Agency for Toxic Substances and Disease Registry, (last visited on 2 April 2008) (15 years or more for asbestosis, 30 years or more for mesothelioma). Pschyrembel Klinisches Wörterbuch (258th ed. 1998) 1258; G. Wagner, Asbestschäden – Bismarck was right, ZEuP 15 (2007) 1122, 1124. HR 28 April 2000, NJ 2000, 430. – English law, at present, does not know any maximum period for actions involving personal injuries. A thirty-year long-stop would have ruled out the claims brought in the English asbestos cases of Arnold v. Central Electricity Generating Board [1980] 1 AC 228 (HL) (mesothelioma discovered in 1981, the asbestos dust having been inhaled by the claimant between 1938 and 1941) and Keenan v. Miller Insulation and Engineering Ltd. (unreported, 8 December 1987; cited in Law Commission Consultation Paper (fn. 6) 290, fn. 157). On the possibilities, in such cases, to determine the moment of the damaging event, see E. de Kezel, Problematiek van verborgen letselschade en verjaring: Reflectie over een speziale vergoedingsregeling n.a.v. zgn. “asbestschadevorderingen”, Tijdschrift voor privaatrecht (TPR) 2004, 107, 120 ff. (on Belgian law), 130 ff. (on Dutch law).

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thirty-year long-stop period would have elapsed at the moment when the injured person was first in a position to file his action.173 The practical relevance of this type of situation is highlighted by an estimate according to which in the Netherlands alone in the period until 2030 up to 10,000 claims based on mesothelioma are expected, of which about 15% would founder on the rock established by the long-stop.174

36

Exposure to radioactive175 or ionizing176 rays can also lead to damage that only materializes after a considerable time. Further, practically important case-scenarios can be found in the field of liability for pharmaceutical products. Thus, the medication DES that creates an increased risk of carcinoma of the uterus in daughters, provided it has been taken during the mother’s pregnancy, also has a long latency period.177 A long-stop of ten or twenty years will often have elapsed by the time that risk has materialized.178

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Outside the area of personal injuries one may think of defects in a building which originate at the time when the building is constructed but only become apparent many years later. In the French case concerning the rock-salt pit that has been mentioned above179 a long-stop commencing with the act giving rise to liability (i.e. the filling up of the pit in an inappropriate way) would have prevented the enforcement of damages claims ninety years later. One may also think of noxious substances hidden in a piece of property.

38

Purely economic damage with a long latency period can result from wrong advice that has been given, for instance, in the course of concluding a partnership agreement.180 The effect of a long-stop is also illustrated in the (albeit contrac173

174

175 176

177

178

179 180

With growing awareness of the consequences of exposure to asbestos, workers may know about their increased risk of developing cancer in the future. This raises the difficult question whether a worker who knows that he has been exposed to asbestos but has not yet developed any disease (and possibly never will) can bring a “preventive” action in order to suspend or renew the running of the long-stop period. For Switzerland, P. Pichonnaz, La prescription de l’action en dommages-intérêts: un besoin de réforme, in: F. Werro (ed.), Le temps dans la responsabilité civile (2007) 71, 89 submits that such an action is not possible. In Johnston v. NEI International Combustion Ltd. [2007] UKHL 39 the House of Lords held that pleural plaques in the claimants’ lungs which showed prior asbestos exposure and hence a risk of developing cancer in the future were in themselves too trivial to constitute actionable damage and therefore did not trigger the (short) prescription period. W.H. van Boom, Verjaring mesothelioomclaims doorbroken, Aansprakelijkheid en verzekering (A&V) 2000, 55, 64 with further references. Palandt/Heinrichs (fn. 91) § 199, no. 42. Bundesgericht 3 June 1980, Entscheidungen des Schweizerischen Bundesgerichts (BGE) 106 II 134, 136. This example is also mentioned by Asser/Hartkamp (fn. 8) no. 674b; Sargos (fn. 67) 23; and see Wetherill v. Eli Lilly & Co., 678 North-Eastern Reporter 2d series (N.E.2d) 474 (New York 1997) (turning around the issue of discoverability). In the case of damage caused by pathogenic organisms, § 59c II of the Swiss Umweltschutzgesetz (Environmental Protection Act) provides an extended maximum period of thirty years instead of the ten-year period. See fn. 67. Palandt/Heinrichs (fn. 91) § 199, no. 44; cf. also the example discussed by K.-O. Knops, Verjährungsbeginn durch Anspruchsentstehung bei Schadensersatzansprüchen, Archiv für die ci-

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tual) scenario where an employer fails to make social security payments on behalf of the claimant and this omission is only discovered when the claimant reaches the age of retirement more than 30 years later.181 The law of succession may provide further examples: A solicitor’s negligence in performing his (contractual) duty may lead to an incorrect expression of the testator’s last will which is only discovered many years later,182 or a will may surface long after the deceased’s estate has been distributed among his heirs.183 A review of the pertinent case law and legal literature demonstrates that the long-stop is regarded as particularly problematic with regard to personal injury cases. This is not so much due to the fact that long latency periods would be much less frequent in other situations but rather that life, health and bodily integrity are particularly valuable objects of legal protection:184 personal injuries are generally regarded as more serious than property damage or economic harm, and to subject the respective damages claim to a mere “technicality” such as prescription may seem to be excessively harsh.

39

3. Different Long-Stops for Personal Injury Claims and Other Claims Frequently, therefore, we find long-stops being proposed, or enacted for personal injury claims that are considerably longer than for other damages claims.185 The English Law Commission had originally proposed such differentiated regime revolving around periods of thirty (for personal injuries) and ten years (for all other claims).186 The same distinction (thirty/ten years) is

181

182 183

184

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vilistische Praxis (AcP) 205 (2005) 821, 839 ff. – For examples of typical situations where damage only occurs after a long latency period, cf. also the general report by E. Hondius in: E. Hondius (ed.), Extinctive Prescription: On the Limitation of Actions (1995) 1, 6 ff.; Loser-Krogh, ZSR 2003, II, 204 (environmental damage); Law Commission Consultation Paper (fn. 6) 285 f. with further references (medical liability). See OGH 15 September 1981, JBl 1982, 389 (claim because of failure to make payments in 1947 prescribed for claimant who retired in 1978 and sued in 1980, i.e. more than thirty years later); Cass. soc. 26 April 2006, Bull. civ. V, no. 146 (prescription of claim because of failure to make payments in 1964–68 denied even though proceedings brought only in 2001) and Cass. soc. 1 April 1997, Bull. civ. V, no. 130 (failure to make payments in 1954–59 was not realised until 1990 – prescription denied). Austrian law has a long-stop, whereas French law does not. See, e.g., Piekenbrock (fn. 3) 419. A draft for the reform of the prescription rules for claims arising under the law of successions (Entwurf eines Gesetzes zur Änderung des Erb- und Verjährungsrechts) therefore suggests a special long-stop of thirty years for claims that are based on a succession on death or that require knowledge of the content of a will, see Bundesrats-Drucksache 96/08. See F. Peters, Die Verjährung im Familien- und Erbrecht, AcP 208 (2008) 37 ff.; A. Roland, Zur geplanten Änderung der Verjährungsregeln im Erbrecht durch den Entwurf eines Gesetzes zur Änderung des Erb- und Verjährungsrechts, Zeitschrift für die Steuer- und Erbrechtspraxis (ZErb) 2007, 429 ff. Lando/Clive/Prüm/Zimmermann (fn. 23) 193; Comparative Foundations (fn. 23) 99 ff.; Loser-Krogh, ZSR 2003, II, 204; Mansel (fn. 32) 384; van Dijk, NJB 2007, 1050. See also Art. 2:102 (2) Principles of European Tort Law (PETL). Cf. also Wintgen, RDC 2007, 913 f.: “Il est généralement admis que les actions en réparation d’une atteinte à l’intégrité corporelle doivent bénéficier d’un régime de prescription plus protecteur que le double délai de droit commun.” Law Commission Consultation Paper (fn. 6) 284 ff.

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drawn in Art. 2278 Avant-projet (proposing, for the first time, to introduce general long-stop periods in France)187 and in Art. 14:307 PECL. The unnecessarily complex rule of § 199 BGB recognizes, in principle, a uniform long-stop of thirty years for damages claims. However, for all damages claims not based on the infringement of life, bodily integrity, health, or liberty an additional long-stop of ten years counting from the moment when the damage occurred has been laid down which may, but does not have to, elapse before the thirtyyear period. According to § 199 III 2 BGB, the period which ends first is decisive.188

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A number of arguments have been advanced against this type of differentiation, and in favour of a uniform long-stop as we find it, for example, in Switzerland (ten years),189 Belgium and the Netherlands (twenty years),190 or in Austria (thirty years),191 or as it has been proposed in the course of the deliberations of the Principles of European Contract Law (fifteen years).192 (i) A long maximum period for personal injury claims may cover many of the problematic cases. But even a thirty-year period will not solve all difficulties because there will still be situations where the creditor did not know about his claim.193 (ii) It is easy to imagine that an incident causes both personal injury and damage to property.194 A defective machine explodes and damages the purchaser’s health and property. Or asbestos is used in the process of renovating a house; after some years, the owner contracts asbestosis and has to undergo expensive treatment; at the same time the house has to be pulled down. If it is possible, after all those years, to prove who was responsible for using asbestos, and that the presence of asbestos in the house has caused the owner’s disease, it is hard to see why the owner should be able to pursue the claims arising from the infringement of his health but not those based on damage to his property: if the 187

188

189 190

191 192 193

194

See Wintgen, RDC 2007, 907 ff.; Zimmermann, ERPL 15 (2007) 811; A. Bénabent, Sept clefs pour une réforme de la prescription extinctive, D. 2007, 1800, 1803 (suggesting to provide a uniform period of ten years that also includes claims based on bodily injury). The draft Prescription Act, on the other hand, contains a long-stop of twenty years which, however, does not apply to claims for bodily injury, see infra no. 46. On § 199 II and III, see Palandt/Heinrichs (fn. 91) § 199, no. 39 ff.; Zimmermann (fn. 16) 142. Art. 60 I OR; cf. also Peters/Zimmermann (fn. 3) 322. Art. 2262bis § 1 (2) (Belgian) Code civil. For the Netherlands, see Art. 3:310 BW (but a long-stop of thirty years in cases of environmental damage or of the impact of a “dangerous substance”). § 1489 ABGB. This also used to be the rule under § 852 I BGB old version. Comparative Foundations (fn. 23) 103 f. This argument, and the ones that follow, have been advanced in Comparative Foundations (fn. 23) 99 ff.; Lando/Clive/Prüm/Zimmermann (fn. 23) 193 ff.; for criticism of differentiated long-stops cf. also H. Haug, Die Neuregelung des Verjährungsrechts (1999) 39 ff. with further references. In Germany it had therefore (unsuccessfully) been proposed also to subject claims not involving personal injuries to the long-stop of thirty years, as long as they had been brought about intentionally or grossly negligently: BT-Drucks 14/7052, 172. – Another complication arises from the fact that it can be difficult to distinguish between personal injuries and injury to property (e.g. the destruction of stored samples of a person’s sperm): A. Piekenbrock, Reform des allgemeinen Verjährungsrechts: Ausweg oder Irrweg?, in: T. Helms et al. (eds.), Das neue Schuldrecht (2001) 309, 321.

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one is established, so is the other. (iii) It is as difficult for the debtor to defend himself after twenty or thirty years in a personal injury action as it is in an action concerning damage to property. The “obfuscating power of time”195 does not distinguish between different types of claims. Witnesses die, the debtor’s memory fades, vital documents are lost, etc. The long-stop, after all, does not only constitute a hardship for a creditor who may lose a well-founded claim but also a vital protection of debtors who may be confronted with unjustified claims. (iv) Defective products are an important source of personal injury claims. Here we have a long-stop (for personal injuries and damage to property) in our national legal systems as a result of the Product Liability Directive; and it was the relatively short period of ten years that was regarded as sufficient in this situation.196 4. No Long-Stop for Personal Injury Claims Another, more radical approach consists in abandoning a maximum period for personal injury claims. That is what was proposed by the English Law Commission in 2001, and it is in line with English law as it stands at the moment.197 In its Consultation Paper of 1997, as has just been mentioned, the Law Commission had recommended a differentiated regime (ten/thirty years).198 But it was only the long-stop for claims other than personal injury claims that was retained. The standard arguments in favour of a long-stop are advanced in this context.199 For personal injury claims, however, these arguments are no longer regarded as convincing. Even a long-stop of thirty years could unjustifiably bar claims for asbestos-related diseases as well as claims brought by victims of sexual abuse. That, according to the Law Commission, would be “unjust”.200 Discarding the idea of a long-stop for personal injury claims would be preferable to a further increase of the period, for the latter option would still not guarantee that all claimants with latent-disease claims are covered, while making the long-stop too long to serve any useful purpose.201

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Of considerable interest is also the development in the Netherlands. After five years of deliberation, the Dutch Civil Code has, with effect from 1 February 2004, been amended by a rule according to which the normal maximum period of twenty years (or thirty years in cases of environmental damage or of the impact of a “dangerous substance”)202 does not apply, as far as damages claims

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195 196 197

198 199

200 201 202

See fn. 33. See Art. 11 Product Liability Directive. Law Commission (fn. 15) 65 ff. Cf. also sec. 17 Prescription and Limitation (Scotland) Act 1973, providing a three-year knowledge-based period, but no long-stop for personal injury claims. In its report (see fn. 12), the Scottish Law Commission recommends an extension of the knowledge-based period to five years, but does not deal with reintroducing a long-stop. See fn. 186. Law Commission (fn. 15) 66; cf. also already Law Commission Consultation Paper (fn. 6) 284 ff. Law Commission (fn. 15) 66. Ibid., 67. For the thirty-year period, see Art. 3:310 (2) BW. “Dangerous substances” are defined in Art. 6:175 BW; according to the prevailing opinion, they include asbestos: De Kezel, TPR 2004, 132 with further references.

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for death or the infringement of a person’s bodily integrity are concerned; these are only governed by the normal five-year period predicated upon the subjective system.203 Contrary to the basic rule of Art. 3:310 (1) BW, however, reasonable discoverability is equated to knowledge in this respect.204 A draft for this new rule had been submitted in September 1999, under the impression of a number of decisions where the long-stop had cut off claims, particularly, by asbestos victims at a time when their injuries had not yet been discoverable.205 The proceedings before Parliament dragged on mainly because of a dispute whether in view of the proposed new rule personal injury claims were still insurable, particularly in employment situations.206

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The new Art. 3:310 (5) BW does not have retroactive effect; it only applies to damage caused after the time of its coming into effect.207 It does not, therefore, cover the asbestos-related diseases that were caused in the latter part of the 20th century and that stimulated its enactment. It rather aims at substances with a risk potential that is not yet known today.208 Probably the importance of determining the moment when the normal, five-year period commences will increase as a result of the reform.209

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Asbestos victims today are not, however, without protection in the Netherlands. For, while the Hoge Raad has refused to tamper with the date of commencement of the long-stop,210 it is prepared to resort to the precepts of good faith (redelijkheid en billijkheid: Art. 6:2 [2] BW) governing the entire law 203

204 205

206

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208 209 210

Art. 3:310 (5) BW; for comment, see Asser/Hartkamp (fn. 8) no. 674c; De Kezel, TPR 2004, 135 ff.; J.H. Wansink, Is er nog verzekeringsdekking bij de nieuwe verruimde verjaringstermijnen? Aansprakelijkheid, verzekering en schade (AV&S) 2003, 88 ff.; M.G. Faure/T. Hartlief, The Netherlands, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2004 (2005) 420, 422 f.; J.M. Smits, The Principles of European Contract Law and the Harmonisation of Private Law in Europe, in: A. Vaquer (ed.), La tercera parte de los principios de derecho contractual europeo (2005) 589 f. regards such statutes based on “national morality” as an obstacle to European harmonisation. This is criticized by Asser/Hartkamp (fn. 8) no. 674c. See also the decision of the HR 3 November 1995, NJ 1998, 380: Because of a mistake made by the defendant, the claimant had received a blood-transfusion with the wrong rhesus factor; as a result of that, when she became an adult, she could not give birth to children. When she gained knowledge of this, the long-stop had already elapsed. For the details of the legislative process, see Wansink, AV&S 2003, 88 ff.; M.G. Faure/T. Hartlief, The Netherlands, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2002 (2003) 305, 308 with further references; M.G. Faure/T. Hartlief, The Netherlands, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2003 (2004) 278, 280 f. with further references. For a comparable discussion in Switzerland and Belgium, see Spiro (fn. 2) vol. I, 80, fn. 24 (§ 42); and on the reform of Belgian prescription law, see De Kezel, TPR 2004, 127 and the sources there cited. Faure/Hartlief, in: Koziol/Steininger (eds.), European Tort Law 2003 (fn. 206) 281, fn. 15; De Kezel, TPR 2004, 143; for criticism, see Asser/Hartkamp (fn. 8) no. 674c; A. Akkermans, Rechtvaardigt een collectieve ‘stuiting’ door maatschappelijke commotie een bijzonder verjaringsregime voor asbestclaims? in: E. Hondius (ed.), Verjaring van asbestclaims (2001) 67 ff. – In the case of damage caused by dangerous substances, the legislator intends the relevant point in time to be the end of the period of exposure (Wansink, AV&S 2003, 88, fn. 2). Wansink, AV&S 2003, 88 and the sources there cited. Faure/Hartlief (fn. 203) 423. See HR 3 November 1995, NJ 1998, 380; HR 28 April 2000, NJ 2000, 430.

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of obligations and to disregard the fact that the long-stop has expired.211 The Court has established a non-conclusive list of factors which may justify this way of proceeding.212 That list shows that the decision is based on a balancing of the debtor’s and creditor’s interests in each individual case.213 Effectively, therefore, some claims have been exempted from prescription, though this has been effected by the courts rather than the legislature. Most recently, the new French draft Prescription Act provides a general longstop of twenty years but expressly exempts bodily injury claims for which no long-stop exists (Art. 2232). As indicated earlier,214 these claims prescribe in a period of ten years (in some cases twenty years) beginning with consolidation (Art. 2226). Unfortunately, the draftsmen of the statute, who wished to subscribe to a “subjective” model of prescription, provided for a discoverability criterion in their general rule on prescription, but not in the special rule for bodily injury: despite consolidation of his physical condition, the victim may be unable to sue because he does not know the tortfeasor. If this is not rectified, it will be for the courts to import the criterion into the statute based on the maxim agere non valenti non currit praescriptio.

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5. No Long-Stop At All Current French law, however, as well as some other legal systems even go further and do not recognize any long-stop at all. Damages claims are, therefore, just subject to a knowledge-based prescription period. Apart from France, Italy provides the most prominent example.215 It is not surprising, under these circumstances, that the problem of latent damage has received much less attention in these countries under the auspices of the law of prescription. 211

212

213

214 215

HR 28 April 2000, NJ 2000, 430 and 431 (mesothelioma); HR 20 October 2000, NJ 2001, 268; HR 25 November 2005 Rechtspraak van de Week (RvdW) 2005, 130 (claim directed not against the employer but against a producer of concrete slabs used in the course of building the house where the claimant grew up; in this case the Hoge Raad refused to disregard prescription because the producer was not insured against the type of damage that had occurred). For the development, see De Kezel, TPR 2004, 137 ff.; van Dijk, NJB 2007, 1049 f.; van Boom, A&V 2000, 55 ff.; Asser/Hartkamp (fn. 8) no. 674b, with further references. See HR 28 April 2000, NJ 2000, 430: (i) What type of damage has been caused, and will compensation benefit the victim himself, his dependants, or a third party? (ii) Do the victim or his dependants also have claims for a different reason? (iii) To what extent can the defendant be blamed for what has happened? (iv) Has the defendant, before the end of the prescription period, taken account of the possibility that he might be exposed to a damages claim; or should he have taken account of that possibility? (v) Does the defendant still have a reasonable possibility to defend himself against the damages claim? (vi) Does the defendant enjoy insurance coverage? (vii) Is the claim brought within a reasonable period after the damage has become apparent? In its decision of 28 April 2000, NJ 2000, 431, the Hoge Raad has therefore refused to disregard the lapse of the long-stop in view of the fact that the claimant had still had a period of one year available after the mesothelioma had been diagnosed and before the long-stop had lapsed. Supra no. 26 in fine. The same solution is proposed for Dutch law by Asser/Hartkamp (fn. 8) no. 674c; C.J.H. Brunner, Verjaringsrecht in de knoop, Rechtsgeleerd magazijn Themis (RM Themis) 2001, 243, 246; van Dijk, NJB 2007, 1050.

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A proposal effectively moving the law in the same direction is the one submitted in Austria: the long-stop runs independent of knowledge but (only) from the time when damage occurs.216 The Austrian reform draft, in this respect, specifically wants to cater for personal injury claims and the modern risks associated with the technical progress which often only become apparent in the long run and with considerable delay.217 Such rule will very largely remain practically irrelevant because usually the damage will become apparent relatively soon after its occurrence. Thus, it does not take long, after mesothelioma has been diagnosed, before such diagnosis can be traced to an exposure to asbestos in the course of a person’s employment history. The Austrian proposal can lead to prescription periods that are extremely long; if the latency period is 25 years, prescription will only occur after 55 years, i.e. nearly two generations after the damaging event! The draftsmen are prepared to take these consequences into account in order to be able “to retain the familiar prescription periods”.218 But while indeed the short subjective period begins with the occurrence of damage,219 the long-stop period with which the Austrian people are familiar is one which commences with the damaging event220 and is therefore, as a rule, much shorter. The difference between the solution proposed for Austria and a complete rejection of a long-stop is minimal. For those very few cases, however, where the difference matters, the hardship associated with the fact that a claim may have prescribed before the victim of the injury has been aware of it remains. 6. Some Preliminary Conclusions

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Whether a long-stop is justified, how long it should last, and from when it should run, requires an act of balancing. On the one side, there is the quest for justice in the individual case which may induce a legal system to enable the victim of an injury under all circumstances to assert his claim. On the other side, there are the general policy reasons on which the institution of prescription is based including, in particular, the need for legal certainty.221 In general, the reasonable interests of the creditor are taken into account by the recognition of the discoverability criterion for determining the running of the regular 216

217

218

219 220 221

According to Koziol (fn. 99) no. 15/19, F. Bydlinski (fn. 75) 74, fn. 15, and Koch (fn. 76) 190 f. this is already the current approach of Austrian law; see, however, Rummel/M. Bydlinski (fn. 77) § 1489, no. 6 and the references cited therein. (The discussion in Austrian law focuses on the correct interpretation of a recent Supreme Court judgment.) This solution is also advocated de lege ferenda in Switzerland by Berner Kommentar/Brehm (fn. 66) Art. 60, no. 64 f. and Werro (fn. 133) Art. 60, no. 25, and it has been discussed in the Netherlands in the course of the reform of the Dutch Civil Code, see van Boom, A&V 2000, 62 f. It has also been adopted by Art. 10.2 (2) PICC. E. Karner, Geldersatz für ideelle Schäden, Minderung der Ersatzpflicht, Beweislast, Verjährung, in: I. Griss/G. Kathrein/H. Koziol (eds.), Entwurf eines neuen österreichischen Schadenersatzrechts (2006) 93 (emphasizing the asbestos cases). Karner (fn. 217) 93. See also B.C. Steininger, Austria, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2005 (2006) 118, 126 (draft rule on prescription is “largely corresponding to the present legal situation”). Supra no. 13. This is not uncontroversial, see fn. 216. Supra no. 5 f.

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period of prescription. The long-stop essentially serves as a counterbalance which is supposed to make sure that at some stage the debtor has to be able to treat past affairs as closed. That balance today appears to be jeopardized as a result, in particular, of the asbestos-cases, for there is an increasing tendency to let substantive justice in the individual case prevail over the formal device of prescription by extending long-stops or dispensing with them altogether. The manner in which Art. 6 of the European Convention on Human Rights (right to a fair trial) is introduced into the debate, is characteristic of this tendency. While Ewoud Hondius in 1995 regarded a very long prescription period – in his example: 28 years – as exceptionable for effectively depriving the debtor of a fair chance to defend himself against the claim asserted against him,222 Evelien de Kezel in 2004 suggested on the basis of the same Art. 6 to disregard the lapse of the Belgian long-stop of twenty years in exceptional situations because its application could amount to a denial of justice vis-à-vis the creditor.223 Attention can also be drawn to the reform proposals in Austria and England, and especially to the development in the Netherlands, where the Hoge Raad has arrogated to itself the power to overrule the long-stop and where, for personal injury claims based on damaging events occurring after 1 February 2004, a long-stop no longer exists.

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These developments should not, probably, be rejected as objectionable out of hand. They constitute responses to perceived shortcomings of the law. But not all of these responses are equally convincing. Merely deferring the date when the long-stop commences to run does not constitute a satisfactory solution. Nor does it appear to be adequate to dodge the issue by leaving everything to judicial discretion: judicial discretion produces uncertainty which is in direct conflict with the policy considerations underlying the law of prescription.224 That is particularly true with regard to a long-stop. The most straightforward solution consists in the abandonment of a long-stop either for all claims or just for personal injury claims.225 But it has to be taken into account that, as the years pass by, it does not only become increasingly difficult to determine what exactly happened but that the reasons for attributing a specific damage to a particular event can be more and more attenuated.226 After all, prescription constitutes an essential means to defeat claims that may be unfounded. That, occasionally, also well-founded claims may be affected is the necessary price

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222 223 224

225

226

Hondius (fn. 180) 7. De Kezel, TPR 2004, 127 ff. This criticism has also been made in the course of the Dutch discussion: van Dijk, NJB 2007, 1050 with further references; on the Belgian perspective, see De Kezel, TPR 2004, 127; compare also von Bar (fn. 79) vol. II, no. 561. Cf. also Law Commission (fn. 15) 90 where it is argued that the arguments against judicial discretion are less compelling in a system that does not recognize a long-stop. Spiro (fn. 2) vol. I, 80 f. (§ 24); Loser-Krogh, ZSR 2003, II, 204; Bénabent, D. 2007, 1803; for criticism B. Ruers, Verjaring van asbestvorderingen in de praktijk, in: E. Hondius (ed.), Verjaring van asbestclaims (2001) 15, 17 ff.

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a legal system has to pay.227 But are we dealing here with situations where well-founded claims are only “occasionally” affected and where, therefore, the price the legal system has to pay can still be regarded as reasonable? That is the crucial issue; and if the developments reported above are anything to go by there is an increasing inclination to provide a negative answer. Still, however, it may be possible to retain the rules on prescription if other solutions are available. 7. “Secondary Claims”?

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One way of dealing with the undesirable consequences of a prescription regime would be the establishment of secondary claims. That has traditionally been done in Germany with regard to claims directed against lawyers and tax advisers:228 they were taken to be subject to a duty to inform their clients about the impending prescription of these claims. If they failed to comply with that duty, their clients could claim, on the basis of a (secondary) damages claim for breach of duty, to be treated as if their claim had not prescribed.229 A decision of the Greek Areios Pagos is based on a similar construction.230 In 1979, a civil engineer had constructed a factory, but he had done so in contravention of security regulations. When the factory collapsed in 1999, the twenty-year prescription period had elapsed. The Court took the civil engineer to be under a continuing duty to avert the dangers arising from the construction of the building; and the claim based on the failure to comply with that duty had not prescribed. It is easy to see how this type of argument could be applied to the latent damage cases presently under investigation. But it merely shifts the problem without solving it and is, moreover, based on an artificial and unconvincing construction.231 8. Social Security Model and the Creation of Special Funds

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It is noticeable that the latent damage problem has generated a great deal of case law and discussion in some legal systems but not in others. England and the Netherlands provide examples for the former group of countries, Germany and Belgium for the latter. Of course, also in Germany and Belgium a personal injury claim may have prescribed after twenty or thirty years without the creditor having become aware of the damage. But the relevant cases are usually

227 228

229

230 231

Supra no. 5. After the reform of the prescription of damages claims against members of these professions (15 December 2004), this no longer applies; see H.-P. Mansel/C. Budzikiewicz, Verjährungsanpassungsgesetz: Neue Verjährungsfristen, insbesondere für die Anwaltshaftung und im Gesellschaftsrecht, NJW 2005, 321, 322 f.; H. Zugehör, Die neue Rechtsprechung des Bundesgerichtshofs zur zivilrechtlichen Haftung der Rechtsanwälte und steuerlichen Berater, Zeitschrift für Wirtschafts- und Bankrecht (WM) Sonderbeilage 3/2006, 1, 38. See MünchKomm/Grothe (fn. 79) § 199, no. 55 f.; Palandt/Heinrichs (fn. 91) Überbl v § 194, no. 21 ff.; Zugehör, WM Sonderbeilage 3/2006, 31 ff., with further references. Compare Dacoronia (fn. 122) 311 ff. For criticism of the German case law, see R. Zimmermann, “Sekundäre” und “tertiäre” Schadensersatzansprüche gegen den Rechtsanwalt, NJW 1985, 720 f.; the Greek decision is criticized by Dacoronia (fn. 122) 313.

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dealt with by means other than the law of delict.232 This is true, particularly, of the asbestos cases.233 If a person contracts asbestosis or mesothelioma in the course of his employment, he suffers from an occupational disease.234 According to German law, he cannot bring a damages claim against his employer on account of such occupational disease.235 Its consequences are covered by the social security system created in the late 19th century by Bismarck.236 It is based on a collective compulsory insurance scheme replacing, for occupational accidents and occupational diseases, the normal rules of German liability law.237 All employers – subdivided into different risk-groups – finance that scheme and thus effectively distribute the risk among themselves. Since the employers finance the insurance scheme, an insurer is not allowed to take recourse for the payments he has made.238 This scheme does not only cover the necessary therapeutic treatment and the reintegration into the working life, but also grants a pension of up to two thirds of the injured person’s annual earnings as well as payments to dependants. There are no time limits for the recognition of occupational diseases.239 In England and in the Netherlands, on the other hand, the social security payments in cases of occupational diseases do not provide adequate compensation. In the Netherlands the employers’ immunity from claims based on occupational diseases was lifted in 1967;240 and with the lowering of the level of 232

233

234

235

236

237 238

239

240

The following discussion focuses on German law. For Belgium, see De Kezel, TPR 2004, 109 ff. De Kezel points out that in spite of the “immunity” of the employer, in principle, against damages claims there remain a few situations where the prescription issue can potentially become relevant. These concern claims by third parties who have suffered a loss, claims by selfemployed persons, claims by relatives, as long as they do not have their own claim under the social insurance scheme, and claims based on intentional wrongdoing on the part of the employer. So far, however, they have not yet occupied the attention of the courts. I. Durant, Belgium, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2006 (2008) 93, 99 reports that the Belgian legislator set up a special compensation fund for asbestos victims in December 2006. For an overview of the various compensation schemes, see C. Lahnstein, Asbestos and Other Emerging Liability Risks – Including Some Critical Remarks on Risk Debates and Perceptions, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2002 (2003) 530 ff.; A. Huysman-Hartkamp, Verjaring van asbestclaims: een rechtsverglijkende verkenning, in: E. Hondius (ed.), Verjaring van asbestclaims (2001) 53 ff. See no. 4103-4105 (Appendix to the Regulation on Occupational Diseases) of 31 October 1997 (Bundesgesetzblatt I, 2623). § 104 I Sozialgesetzbuch (SGB) VII. There are exceptions for cases of intentional wrongdoing and for certain accidents en route to work. For details, see J. Fedtke/U. Magnus, The Impact of Social Security Law on Tort Law in Germany, in: U. Magnus (ed.), The Impact of Social Security Law on Tort Law (2003) 86, 98. See H. Kötz/G. Wagner, Deliktsrecht (10th ed. 2006) no. 575; Zimmermann (fn. 16) 163. Occupational diseases were integrated into the accident insurance scheme in 1925. See Kötz/Wagner (fn. 236) no. 572. § 104 I 2 SGB VII. There are exceptions for intention and gross negligence on the part of the employer. For the definition of occupational diseases, see B. Koch in: H. Lauterbach/F. Watermann/J. Breuer, Unfallversicherung. Sozialgesetzbuch VII (loose leaf, as of August 2005), vor § 9, no. 8. Of decisive importance is the causal link, and diseases with a long latency period are thus covered: ibid., § 9, no. 70. E. du Perron/W.H. van Boom, The Impact of Social Security Law on Tort Law in the Netherlands, in: U. Magnus (ed.), The Impact of Social Security Law on Tort Law (2003) 149, 155.

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social security payments241 asbestos victims are increasingly forced to resort to delictual claims against their (former) employers.242 The English model of compensation for occupational diseases essentially dates from the time after the Second World War and also envisages a combination of social security benefits and claims in tort law.243 The social security benefits in cases of occupational diseases appear to be comparatively modest,244 and that is an important reason for employees to sue their (former) employers in tort.245 Contrary to a social security model such as the German one, the victims of an occupational disease are therefore confronted with the problem of the temporal limitation of their claim in tort law.

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Comparable to the social security model is the creation of special funds, financed by the State or by certain branches of industry, to deal with mass damage caused, e.g., by pharmaceutical products.246 Normally with the creation of such funds the availability of a direct action against the individual tortfeasor is excluded. On the other hand, the victim of the injury no longer has to fear that his claim may be defeated by the defence of prescription.247

241 242

243 244

245

246

247

On the development, see R.I.R. Hoop, Shifts in Work-Related Injuries: An Explanatory Analysis, in: S. Klosse/T. Hartlief (eds.), Shifts in Compensating Work-Related Injuries and Diseases (2007) 83, 95 ff. See du Perron/van Boom (fn. 240) 149, 162; Hoop (fn. 240) 108 ff. De Kezel, TPR 2004, 109, fn. 3, and 130 f.; du Perron/van Boom (fn. 240) 162 with further references; for discussion P. Kottenhagen-Edzes, Vergoeding van asbestschade door middel van privaatrechtlijke aansprakelijkheid of met behulp van het stelsel van sociale zekerheid, in: E. Hondius (ed.), Verjaring van asbestclaims (2001) 27 ff. On the development, see Hoop (fn. 240) 112 ff.; Rogers (fn. 127) no. 8.1 ff. On the details, see Wagner, ZEuP 15 (2007) 1126 with further references. See also N.J. Philipsen, Industrial Accidents and Occupational Diseases: Some Empirical Findings for The Netherlands, Belgium, Germany and Great Britain, in: S. Klosse/T. Hartlief (eds.), Shifts in Compensating Work-Related Injuries and Diseases (2007) 159, 191 ff. Rogers (fn. 127) no. 8.1, reports that considerable incentives exist to bring an additional tort action against the employer, and that actions brought by employees against their employers are among the most frequent causes of litigation. – A “mixed solution” can be found in France. In principle, employers enjoy immunity from claims concerning occupational diseases. But there is an exception for cases of “faute inexcusable”. In several important decisions, the Cour de cassation (Cass. soc. 28 February 2002, La semaine juridique (JCP) 2002, II, 10053) has resorted to that exception where employees had been exposed to asbestos in the course of their employment; see F. Endrös, Millionenforderungen gegen Versicherer nach Asbestklagen in Frankreich befürchtet, Produkthaftpflicht international (PHi) 2002, 108 with further references; D. Asquinazi-Bailleux in: JurisClasseur Sécurité Sociale, Régime général: Accidents du travail et maladies professionelles, Fasc. 339, no. 22 ff. In general, claimants have two years from the recognition of their condition as an occupational disease to bring an action. In December 2000, France also established a fund-based compensation scheme for asbestos victims, the so-called “Fonds d’indemnisation des victimes de l’amiante”; compare Asquinazi-Bailleux, Fasc. 304, no. 129 ff. Moreover, there can also be an action against the State; see F. Endrös, Staatshaftung für Asbest in Frankreich, PHi 2004, 118. For a comprehensive overview, see A. Guégan-Lécuyer, Dommages de masse et responsabilité civile (2006) 159 ff. Such fund also, in the meantime, has been created in the Netherlands for asbestos victims: De Kezel, TPR 2004, 137; Kottenhagen-Edzes (fn. 242) 32 f.; van Boom, A&V 2000, 65 f. with illustrative figures. On the Irish Residential Institutions Redress Act 2002, in this context, see E. Quill, Ireland, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2002 (2003) 263, 264.

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Alternative models are thus available to deal with typical situations that are regarded as particularly problematic. They can also help to overcome other difficulties arising as a result of the time intervening between the event giving rise to liability and the occurrence of damage: it may have become difficult to establish causation,248 the tortfeasor may have become insolvent, or he may have disappeared. There may be certain detrimental effects, as far as incentives to prevent the damage or the critical public discussion and assessment of the problem are concerned.249 But they cannot tip the balance. For public discussion is usually sparked much more dramatically when a special fund is created to deal with the consequences of certain types of damaging events; and the compulsory insurance scheme also, at least to some extent, contains incentives to prevent the damage in the form of special regulations for the prevention of accidents, the adjustment of insurance rates according to the risks involved in an activity, the possibility, on the part of the insurer, to take recourse in cases of gross negligence and intention, etc.250 A relaxation of the temporal limits concerning damages claims that have been established for valid reasons, is therefore not required.

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E. THE RELATIONSHIP BETWEEN REGULAR PERIOD AND LONG-STOP 1. The Two Ways of Implementing the “Subjective” Model of Prescription It remains to be discussed how the regular prescription period and the long-stop relate to each other. This raises a number of issues that are closely connected with each other. It has been said, so far, that the regular period of prescription (three years, according to the emerging European standard) should not run as long as the creditor does not know, and could not reasonably know, of the facts giving rise to his claim, including, in the case of a right to damages, the type of damage (discoverability criterion, or “subjective” model of prescription). There are two different ways of implementing the subjective model. One is that discoverability determines the commencement of prescription. This is the path followed by German law251 and by Art. 10.2 PICC. The other is that ignorance (i.e. lack of discoverability) constitutes a ground for suspending the running of the period of prescription. This is the solution proposed in Art. 14.301 PECL, in Art. 2264 (2) of the French Avant-projet252 and also, most recently, in the Is248

249 250 251 252

Characteristic for these difficulties are the well-known cases of Fairchild v. Glenhaven Funeral Services Ltd. & Others [2002] UKHL 22 und Barker v. Corus (UK) Plc. [2006] UKHL 20 in England. See also sec. 3 Compensation Act 2006; Wagner, ZEuP 15 (2007) 1122 ff. See Kötz/Wagner (fn. 236) no. 576. See Kötz/Wagner (fn. 236) no. 599. § 199 BGB. Although the provision is formulated in an awkwardly ambiguous way: Zimmermann, ERPL 15 (2007) 811. The draft Prescription Act, on the other hand, follows the first path where it applies a discoverability criterion (Art. 2224).

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raeli Draft Civil Code.253 It is preferable for a number of reasons that have been advanced elsewhere.254 A central issue is the distribution of the onus of proof. In the words of the English Law Commission: “The date of discoverability is concerned with the knowledge of the [claimant] rather than the defendant. … In consequence it will commonly be more difficult and expensive for the defendant to provide evidence of the knowledge of the plaintiff at a particular date, than for the plaintiff to provide such evidence.”255 One can put that more pointedly: if the onus of proof were on the debtor (as it would be, if discoverability were to determine commencement of prescription), he would face an unreasonably difficult task. That prescription is suspended, on the other hand, must normally be proved by the creditor. That is the case with all the other suspension grounds that can be regarded as emanations of the idea of agere non valenti non currit praescriptio, and it should also be the case as far as ignorance is concerned. 2. Commencement of Prescription

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The suspension ground of ignorance clearly does not apply to the long-stop.256 It is the very purpose of the long-stop to serve as a counterbalance to the discoverability criterion determining the running of the general period of prescription.257 Also, it will have become clear by now that, as far as damages claims are concerned, a legal system cannot sensibly operate with a long-stop running from the moment when the damage occurs.258 Occurrence of the damage and discoverability are closely related in that the damage will usually become apparent either with, or relatively soon after its occurrence. Practical problems do not arise because many years may pass between occurrence and discoverability of the damage, but because an event only brings about damage after a long period of time. That is why the long-stop has to be counted from the time of the act which gives rise to the claim. That is widely recognized today259 and, if account is taken of Art. 11 of the Product Liability Directive and of Art. 14:203 (1) PECL, it also appears to emerge as the European standard. It is clearly desirable also from a policy perspective, for the time of the act which gives rise to the claim can usually be determined fairly easily while it may be difficult, particularly in cases of patrimonial loss, to establish the date when damage has occurred.260 253 254

255 256 257 258 259

260

Section 818 (1) Draft Civil Code for Israel. Comparative Foundations (fn. 23) 105 ff.; Zimmermann (fn. 16) 138 ff.; Lando/Clive/Prüm/ Zimmermann (fn. 23) 177 f. Law Commission Consultation Paper (fn. 6) 398. See Art. 14:307 PECL. Supra no. 4. Supra no. 48. § 199 II, III BGB; Art. 60 I OR; Art. 2262bis § 1 (Belgian) Code civil; Art. 3:310 BW; sec. 14B Limitation Act 1980; sec. 827 (b) Draft Civil Code for Israel; for Austria, see OGH 15 September 1981, JBl 1982, 389; Rummel/M. Bydlinski (fn. 77) § 1489, no. 6; and supra fn. 216. Italy and France do not have a long-stop; but see now for France Art. 2278 Avant-projet; Art. 2232 (1) draft Prescription Act. That this approach towards commencement of the longstop also makes it easier to obtain insurance coverage, is pointed out by Wintgen, RDC 2007, 909; Sargos (fn. 67) 32; De Kezel, TPR 2004, 118, fn. 16. See fn. 82.

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This, incidentally, is also a consideration that should prompt the draftsmen of a modern prescription regime to fix commencement of the running also of the regular period of prescription to the time of the act which gives rise to the claim.261 That would not be in contravention to the principle, spelt out above,262 that prescription should not begin to run against a creditor who does not have the possibility of enforcing his claim in court, i.e. due date. For, as a result of the suspension ground of ignorance, prescription of a damages claim does not in fact begin to run before damage has occurred and has also become discoverable. At the same time, this coincidence of commencement dates would have a considerable advantage for the structure of a prescription regime. Conventionally, the long-stop is conceived of as a normal prescription period which is subject to the general rules concerning suspension, renewal, and postponement of expiry.263 As a result, it does not really constitute a “maximum” period: prescription can take much longer than the ten or thirty years envisaged by the long-stop rule.264 The Principles of European Contract Law, on the other hand, as a result of tying commencement of prescription for damages claims generally to the time of the act which gives rise to the claim and of conceptualizing ignorance as a ground of suspension, do not have to operate with two separate periods of prescription running from different dates and subject to their own fate. The three-year period can simply be regarded as the one and only period of prescription for damages claims which cannot be extended, by suspension of its running or postponement of expiry, to more than ten or thirty years.265 The long-stop thus effectively provides a limit for extending the regular period of prescription. There is only one exception: suspension in case of judicial proceedings. One cannot expect more of the creditor than to attempt to establish the claim by judicial proceedings. How long these proceedings take is very largely a matter the creditor cannot control. Everything is now under way to remove the existing uncertainty, and it would clearly be inequitable if the creditor were trapped by prescription in that situation.266 261 262 263

264 265

266

Comparative Foundations (fn. 23) 110; Lando/Clive/Prüm/Zimmermann (fn. 23) 169. Supra no. 12. For Germany, see MünchKomm/Grothe (fn. 79) § 199, no. 43; Palandt/Heinrichs (fn. 91) § 199, no. 39; R. Zimmermann, The New German Law of Prescription and Chapter 14 of the Principles of European Contract Law, in: A. Vaquer (ed.), La tercera parte de los principios de derecho contractual europeo (2005) 451, 473; BT-Drucks 14/7052, 180 labels the longstop periods as “besondere Verjährungsfristen” (special prescription periods); for Switzerland: Werro (fn. 133) Art. 60, no. 22 with further references; for Belgium: A. van Oevelen, Recente ontwikkelingen inzake de bevrijdende verjaring in het burgerlijk recht, RW 2000–2001, 1433, 1438; for the Netherlands: Asser/Hartkamp (fn. 8) no. 679 ff.; for England: Law Commission Consultation Paper (fn. 6) 301 ff., 304 ff., 314 ff. It is not clear how the proposal in Art. 2278 Avant-projet has to be understood; see, on the one hand, Zimmermann, ERPL 15 (2007) 811; Bénabent, D. 2007, 1803 and, on the other hand (grounds of suspension and renewal not applicable), Wintgen, RDC 2007, 912 f. The long-stop provided for in Art. 2232 of the French draft Prescription Act expressly excludes an extension of the long-stop, except by the institution of judicial proceedings or execution measures. As far as Art. 10.2 (2) PICC is concerned, see Zimmermann, ZEuP 13 (2005) 274. For an example, see Zimmermann (fn. 16) 151, fn. 176. Art. 14:307 PECL; see Comparative Foundations (fn. 23) 108 f.; Lando/Clive/Prüm/Zimmermann (fn. 23) 194; Pichonnaz (fn. 173) 91 ff. Comparative Foundations (fn. 23) 147 f.; Lando/Clive/Prüm/Zimmermann (fn. 23) 195.

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F. PRESCRIPTION PROBLEMS IN CASES OF SEXUAL ABUSE 1. The Problems Stated

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Attention must finally be given to damages claims brought by persons who have been sexually abused while under the age of majority.267 Such claims can be directed against the perpetrator himself or against the institution in which the incident occurred. In many of these actions prescription issues play a prominent role.268 A number of legal systems have either enacted, or are planning to enact, special rules, and the European Court of Human Rights also stated, already in 1996, that “[t]here has been a developing awareness in recent years of the range of problems caused by child abuse and its psychological effects on victims, and it is possible that the rules on limitation of actions applying in Member States of the Council of Europe may have to be amended to make special provision for this group of claimants in the near future”.269

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Even though, of course, there are similarities to the latent damage situations,270 this type of case merits special consideration. For we are dealing here both with damage that can occur soon after the incident of sexual abuse and that may only occur after many years.271 And we are dealing with situations characterized by two aspects. On the one hand, the victims often repress their traumatic experiences and therefore are either, at least for some time, entirely unaware of them or, if they do remember them, are still unable to establish a causal link between these experiences and certain physical or psychological problems experienced during their adulthood.272 Moreover, victims of sexual abuse often 267

268

269

270 271

272

In Germany, material loss is partly covered by the Crime Victims Compensation Act; the victims’ claims are transferred to the body responsible for crime victims’ compensation. England also has a Criminal Injuries Compensation Scheme. W.V.H. Rogers, Tort Law and Child Abuse: An Interim View from England, Torts Law Journal 2 (1994) 257 reports that the benefits paid under that scheme have been reduced in 1994, and he therefore expects an increase in tort claims. See, generally, Directive 2004/80/EC of the Council of 29 April 2004 relating to compensation to crime victims, OJ L 261, 6.8.2004, 15–18, ensuring that all Member States have a scheme on compensation to victims of violent intentional crimes. See C. Brennan, ‘An instrument of injustice’? Child abuse and the reform of limitation law, Child and Family Law Quarterly (CFLQ) 18 (2006) 67. ECHR 22 October 1996, Stubbings and Others v. United Kingdom (1997) 23 European Human Rights Reports (EHRR) 213, 234. Brennan, CFLQ 18 (2006) 67; Law Commission (fn. 15) 103. K. Oliphant, Children as Victims under the Law of England and Wales, in: M. Martín-Casals (ed.), Children in Tort Law, Part II: Children as Victims (2007) 65, 75 f. For a comprehensive account from both a psychological and legal perspective, see E. Beduhn, Schadensersatz wegen sexuellen Kindesmissbrauchs (2004) 72 ff. For the United States, see the contribution by P. Gerstenblith, United States, in: E. Hondius (ed.), Extinctive Prescription: On the Limitation of Actions (1995) 357, 362 f.; for England, see A.C.L. Mullis, Compounding the Abuse? The House of Lords, Childhood Sexual Abuse and Limitation Periods, Medical Law Review (Med L Rev) 5 (1997) 22, 24–29; J. Werren, Civil litigation and repressed memory syndrome: How does forgetting impact on child sexual abuse cases?, Tort Law Review (Tort L Rev) 15 (2007) 43 ff., with further references; and see HR 23 October 1998, NJ 2000, 15, conclusie, sub 4. – Particularly in the US-American discussion two groups of cases are distinguished, depending on whether the victim has completely repressed the experiences or whether he or she does not rec-

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need considerable time, even if they are aware of the events and of the causal link, to overcome the psychological barriers preventing them from bringing an action.273 The problem thus relates to the issue of discoverability as well as to the question when and under which circumstances it can be expected of the victim of the injury to suspend prescription by bringing an action. On the other hand, the courts are confronted with cases where minors have been abused by one of their parents or by another family member with whom the parent connives. Here the parents who are usually expected to take whatever action is necessary to prevent prescription of their children’s claims are hardly the most suitable champions of their children’s interests. Thus it may be necessary to introduce a special provision suspending prescription. At the same time it has to be asked whether for the running of prescription the knowledge of the parents or of the minor him- or herself is relevant. An overview of the more recent developments in a number of legal systems will show the wide range of possible solutions. 2. Dutch Law: Legislative Reform and Judicial Discretion In the Netherlands the courts as well as Parliament have taken care of the problem. Art. 3:310 BW, which provides for a five-year prescription period dependent on knowledge, was amended in 1994 by a fourth sub-paragraph.274 That new rule links the prescription of damages claims arising from sexual offences committed against minors to the prescription of the respective crimes. The civil action may, in any event, not be barred at an earlier date than the public prosecution.275 As a result, prescription only commences when the minor reaches the age of majority, and it then lasts up to twenty years.276

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But even in cases where the new rule is not yet applicable,277 the Dutch courts are not unable to help the victim of the sexual offence. In a number of decisions

63

273 274 275

276 277

ognize the causal link; see E.A. Wilson, Child Sexual Abuse, the Delayed Discovery Rule, and the Problem of Finding Justice for Adult-Survivors of Child Abuse, UCLA Women’s Law Journal 12 (2003) 145, 171 ff. – McDonell v. Congregation of Christian Brothers Trustees and Others [2003] UKHL 63 provides an example for the amount of time that may have passed: the action, based on physical and sexual abuse in two schools between 1941 and 1951, was brought in August 2000, after the claimant had realized in October 1997, having read a newspaper article, that he might have a claim. Cf. also the decision referred to by E. Quill, Ireland, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2001 (2002) 293, 320 concerning an action brought more than fifty years after the damaging act had happened, when the claimant was living in an orphanage. Mullis, Med L Rev 5 (1997) 22; Law Commission (fn. 15) 67. Staatsblad 1994, 529; Asser/Hartkamp (fn. 8) no. 674c in fine. Such rule is generally recognized in Belgium for claims based on a delict which, at the same time, constitutes a crime: see van Oevelen, RW 2000–2001, 1436. – A specific rule concerning the prescription of delictual claims which also constitute crimes that can only be committed intentionally is also laid down in § 1489, 2 ABGB: the period of prescription is thirty years, in order to prevent the damages claim from prescribing before public prosecution is time-barred; see Koch (fn. 76) 177, fn. 18. The establishment of a connection between prescription in private law and criminal law is criticized by Spiro (fn. 2) vol. I, 81 (§ 42). On the relationship between prescription in criminal law and in private law in general, see Piekenbrock (fn. 3) 137 f., 401, 499. See Art. 70 ff. Wetboek van Strafrecht. Art. 3:310 (4) BW does not have the effect of “reviving” claims that had already been time-barred; cf. HR 23 October 1998, NJ 2000, 15, conclusie, sub 8; HR 8 September 2000, NJ 2001, 2.

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the Hoge Raad has maintained that the period of prescription does not run as long as the victim was not in a position to institute an action.278 In one of these cases this was due to the “psychological superiority” (psychische overmacht) of the person who had committed the sexual abuse; he was the brother-in-law as well as the employer of the victim.279 The Court, in this case, argued as follows: Generally speaking, the five-year period of Art. 3:310 (1) BW is sufficiently generous to the aggrieved party so that a deviation from the decisive moment for the running of that period, i.e. knowledge, is not required. However, what Art. 3:310 (1) BW intends to do is to prevent the prescription of claims while the creditor is not in a position to assert them. If the reasons why the creditor is not in a position to assert his claim (the psychological consequences of the abuse as well as the overmacht) are attributable to the debtor, the latter should not be allowed to invoke the defence of prescription. By declaring the commencement date laid down in Art. 3:310 (2) BW inapplicable for reasons of “reasonableness and fairness” (redelijkheid en billijkheid), the Court, without explicitly mentioning that provision, alluded to Art. 6:2 (2) BW: a statutory rule does not have to be applied as far as this is unacceptable, under the prevailing circumstances, according to the standard of what is fair and reasonable. As a result, the period of prescription is to be counted only from the moment when the reasons preventing the creditor from bringing an action have fallen away.280 In a decision from 2003 concerning a case where the parents of a disabled child had claimed damages for medical negligence more than five years after the damaging act of the doctor, the Hoge Raad has stated, in general terms, that the five-year period of prescription only begins to run when the aggrieved party is in fact in a position to institute an action.281 It is widely thought that it is no longer relevant, as a result of this decision, whether the circumstances preventing the aggrieved party from instituting an action are attributable to the other party (for example, because of the overmacht of the latter) or not.282

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Technically, we are dealing here with a postponement of the date of commencement of the regular, five-year prescription period.283 It does not rigidly focus on the aggrieved party attaining the age of majority. Rather, the Court 278

279 280 281

282

HR 23 October 1998, NJ 2000, 15; HR 25 June 1999, NJ 2000, 16; HR 8 September 2000, NJ 2001, 2. See also Hof ’s-Hertogenbosch of 8 January 1996, NJ 1996, 719. HR 23 October 1998, NJ 2000, 15. Similarly HR 25 June 1999, NJ 2000, 16; HR 11 October 2002, NJ 2002, 558. HR 31 October 2003, NJ 2006, 112; HR 27 May 2005, NJ 2006, 114. See Faure/Hartlief, in: Koziol/Steininger, European Tort Law 2003 (fn. 206) 305 f. and Faure/Hartlief (fn. 203) 443 f. with further references. Asser/Hartkamp (fn. 8) no. 664; van Dijk, NJB 2007, 1049 with further references; Faure/ Hartlief (fn. 203) 444. See also the conclusie of De Vries Lentsch-Kostense in HR 17 Sep-

tember 2004 – C03/134HR (www.rechtspraak.nl, LJN AP0436). 283

Concerning the long-stop, on the other hand, redelijkheid en billijkheid do not affect the commencement of the period but only the question whether the period can be seen to have expired: see van Boom, A&V 2000, 62; HR 25 June 1999, NJ 2000, 16; and see fn. 210. That difference appears to be due to the fact that the long-stop is seen to serve legal certainty to an even greater extent than the regular period of prescription: van Dijk, NJB 2007, 1045; cf. also generally R. Rebhahn, Zur neuen Regelung der Verjährung im BGB und zur langen Verjährung von Schadensersatzansprüchen, in: Festschrift für Rudolf Welser zum 65. Geburtstag (2004) 849, 869; Wintgen, RDC 2007, 909.

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flexibly attempts to determine the moment when the circumstances allow the plaintiff to assert his claim. 3. English Law: Discoverability and Judicial Discretion The rules prevailing in England on the limitation of damages claims for sexual abuse have for a long time been considered to be unsatisfactory and in need of reform. In particular, they have prompted the Law Commission to submit various reform proposals to tackle the problem. However, a recent decision by the House of Lords in A v. Hoare284 has arguably improved the state of the law in this area and the position of victims of childhood sexual abuse considerably. To understand both the reform proposals and the recent House of Lords decision, one has to look back at the time before A v. Hoare.

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The difficulties were due, above all, to the fact that different causes of action were governed by different prescription regimes. These difficulties became particularly apparent in Stubbings v. Webb.285 In that decision, the House of Lords reversed a decision of the Court of Appeal286 which had, on the basis of the knowledge-based prescription in sec. 11 Limitation Act 1980, considered the claim of the claimant (who was, by now, thirty years old) against her adoptive father and her adoptive brother not to be barred by limitation. The case was of the kind where the claimant had been aware of what had happened without, however, having been able to appreciate that these events had been the cause of “subsequent mental disturbance”. The House of Lords took the view that, instead of sec. 11, the provision of sec. 2 Limitation Act 1980 had to be applied which, for actions for intentional trespass, lays down a six-year period, to be counted from when the cause of action accrues, i.e., in the present case, the age of majority of the claimant.287 The Court thus held the action to be barred and thereby also cut off the possibility of having recourse to the discretionary exclusion of the time limit fixed in sec. 11, as it is envisaged in sec. 33.288 Section 11 (which, somewhat paradoxically, is often more advantageous to the aggrieved party than sec. 2)289 applies to actions in respect of personal injuries based on negligence, nuisance, or breach of duty rather than to intentional torts.290

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285 286 287

288

289

290

A v. Hoare [2008] UKHL 6. This decision joined five cases of damages claims for intentional sexual assault. Mrs. A, an adult victim of attempted rape, brought an action sixteen years after the event when she heard that the offender had won seven million pounds in a lottery with a ticket bought while being on temporary leave from prison. The other cases concerned victims of childhood sexual abuse in schools and, in one case, in a detention centre. [1993] AC 498 (HL). See Mullis, Med L Rev 5 (1997) 22 ff. [1992] Q.B. 197 (CA). See sec. 28, 38 (2) Limitation Act 1980: extension of the limitation period in case of incapacity; the limitation period is to be counted from the time when the incapacity ended. On the discretionary exclusion rule of sec. 33 Limitation Act 1980, see McGee (fn. 74) no. 8.033 ff. Admittedly, the prescription period is only three rather than six years; but the running of those three years is dependent on the aggrieved party’s knowledge. In addition, there is the discretionary exclusion of the time limit just mentioned. In a subsequent case, the Court of Appeal has applied sec. 11 Limitation Act 1980 to the damages claim against the victim’s mother who had failed to intervene against the acts committed by the father; see S. v. W. [1995] Family Law 355 (CA). As a result, the delinquent himself is

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The decision by the House of Lords had been widely criticized as being quite unnecessary and deplorable,291 and the matter had also been brought before the European Court of Human Rights. That Court, however, held that the existence of different prescription regimes concerning intentional torts and negligence did not constitute an infringement of the European Convention on Human Rights.292 English courts have subsequently – without hiding their criticism293 – confirmed that distinction, and they have also held on to it after the enactment of the Human Rights Act 1998.294

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The Law Commission has consequently considered various ways to deal with the problem and, at the same time, to abolish the unsatisfactory distinctions.295 Eventually, it was decided not to introduce a special ground of suspension,296 or to exempt these cases from prescription.297 Rather, the problem is to be tackled by allowing the courts to disapply the knowledge-based three-year period and by dispensing with a long-stop for personal injuries.298 Victims who have completely repressed the events on which their claim is based may in addition be afforded some protection by the Law Commission’s recommendations in respect of “mental disability”, widely defined.299

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The situation outlined above changed in January 2008 when the House of Lords unanimously overruled Stubbings v. Webb in a ground-breaking decision300 and held that sec. 11 Limitation Act (along with its knowledge-requirement and the possibility of a discretional extension of the limitation period) could also apply to cases of intentional assault. This has eliminated many of the anomalies created by the earlier decision and also brings the law very much in line with the reform proposal advanced by the Law Commission. At the same time, A v. Hoare reveals the questions that courts (and legal writers) will have to deal with in future claims based on childhood sexual abuse. Applying the subjective prescription regime, courts will have to decide when, under the special

291

292

293

294

295 296 297 298 299 300

able to invoke limitation before the person who has failed to intervene against his acts can do so; this has been criticized as being surprising and anomalous: S. Cretney, Annotation to S. v. W. [1995] Family Law 356; McGee (fn. 74) no. 8.010 (“plainly absurd”); and see J. Conaghan, Tort Litigation in the Context of Intra-familial Abuse, Modern Law Review 61 (1998) 132, 142 (“random and capricious operation of the rules on limitation periods”). McGee (fn. 74) no. 8.009 ff.; McGee (fn. 1) 143; Brennan, CFLQ 18 (2006) 72. Extensive criticism in: Mullis, Med L Rev 5 (1997) 22. References to further discussions in Oliphant (fn. 271) 74, fn. 65. ECHR 22 October 1996, Stubbings and Others v. United Kingdom (1997) 23 EHRR 213. For general comments on the compatibility of prescription periods with the ECHR, see the opinion of the Commission, sub no. 52 ff. For example KR v. Bryn Alyn Community (Holdings) Ltd. [2003] England and Wales Court of Appeal (Civil Division) (EWCA Civ.) 85, par. 100. See, e.g., the Court of Appeal decision in A v. Iorworth Hoare [2006] EWCA Civ. 395; KR v. Bryn Alyn Community (Holdings) Ltd. [2003] EWCA Civ. 85. See Law Commission Consultation Paper (fn. 6) 328–336. Law Commission (fn. 15) 75. Law Commission (fn. 15) 104. Law Commission (fn. 15) 67 ff., 89 ff., 103 ff. Law Commission (fn. 15) 104. See Brennan, CFLQ 18 (2006) 79 f. A v. Hoare [2008] UKHL 6.

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circumstances of such cases, a claimant can be taken to have (constructive) knowledge of the fact that he has suffered significant injury and may be expected to realize that he is entitled to bring an action. Before A v. Hoare, a number of decisions concerning claims brought under sec. 11 had to deal with this question.301 It now seems that the House of Lords favours an objective approach,302 and prefers to take account of special psychological circumstances in the claimant when it comes to deciding whether the limitation period can be extended by judicial discretion. Future discussion of the problem will therefore most likely be centred on the exercise of this discretion and its limits, which leaves leeway for individual case-by-case decisions by the courts, but at the same time relaxes predictability in an area where legal certainty is paramount. 4. Irish Law: Suspension of Prescription I The English Law Commission’s additional suggestion to bring claimants who have completely repressed the events under a wider definition of “mental disability” can, of course, only be enacted by Parliament. However, this suggestion directs our attention to Irish law. There, a Statute of Limitations (Amendment) Act came into force in 2000 which extended the rules contained in the Statute of Limitations 1957 for claimants “under a disability”, i.e. minors and “persons of unsound mind”.303 Whoever bases a tort action on having been the victim of childhood sexual abuse can be seen to be “under a disability” while suffering from a psychological injury that has been caused, in whole or in part, by the act of sexual abuse, or any other act, of the person who committed the sexual abuse, and that is of such significance as substantially to impair the victim’s will, or its ability to take a reasoned decision to bring an action.304 Such “disability” leads, as far as personal injury claims are concerned, to a postponement of expiry of prescription for a period of three years.305 As a result, the victims of childhood sexual abuse still have three years, after their psychological impairment has ended, to bring the matter to court.306 By defining the 301

302 303

304 305

306

See KR v. Bryn Alyn Community (Holdings) Ltd. [2003] EWCA Civ. 85; for discussion, see Oliphant (fn. 271) 75 f.; P. Case, Limitation Periods and Sexual Abuse Claims, Professional Negligence 23 (2007) 32 ff. and sources there cited; P. Jefferson/C. Moore, Time for a change? New Law Journal 2007, 352 f. With some doubts expressed per Baroness Hale of Richmond, par. 56 ff. See C. Noctor, Statute of Limitations (Amendment) Act 2000 – Implications for Parties to Actions Regarding Child Sexual Abuse, Irish Law Times (ILT) 19 (2001) 126 ff.; McMahon/ Binchy (fn. 74) no. 46.97 ff. Section 48A (1) Statute of Limitations. Section 5 (1) Statute of Limitations (Amendment) Act 1991. The prescription for personal injuries claims, moreover, is based on the “subjective” system: sec. 3 Statute of Limitations (Amendment) Act 1991. For actions founded on intentional trespass, however, the Irish Supreme Court has followed the House of Lords ruling in Stubbings v. Webb, thereby applying an objective six-year period: Devlin v. Roche, the Min. for Justice, Ireland, the Attorney General and Sheehan [2002] Supreme Court of Ireland (IESC) 34; see E. Quill, Ireland, in: H. Koziol/ B.C. Steininger (eds.), European Tort Law 2006 (2008) 281, 291 f., who emphasizes that the 2000 amendment to the Irish Statute of Limitations Act also overrides the consequences of this (unfortunate) decision. The Act has retroactive effect in that it is supposed to “revive” claims that had been time-barred before its enactment; see Noctor, ILT 19 (2001) 127 with further references.

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term “disability” for the victims of childhood sexual abuse in the way it does, the Irish statute also draws a distinction between such victims and “persons of unsound mind”, and thus avoids undesirable connotations.307 5. German Law: Suspension of Prescription II

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German law has also attempted to take care of the problems raised by childhood sexual abuse by introducing, in the course of modernizing the German law of obligations in 2002, a new ground of suspension. Contrary to its Irish counterpart, however, the German provision does not so much focus on the psychological injury in the individual case but on formal temporal limits: Prescription in respect of claims for the infringement of the right to sexual selfdetermination is suspended until the creditor has completed his or her 21st year. If, when the prescription period commences, the creditor with respect to claims for an infringement of the right to sexual self-determination is living with the debtor in a domestic community, prescription is suspended until the domestic community has been terminated.308

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There is another crucial difference between the German and the Irish rule. In Ireland (as well as in a number of other countries: England, Scotland, France, Belgium)309 prescription does not run against persons below the age of majority. In Germany, the suspension ground of § 208 BGB is of particular relevance because, according to German (as well as to Austrian, Italian, Greek and Portuguese) law,310 prescription of a claim held by a minor is not suspended, as long as the minor has a representative capable of bringing proceedings on his or her behalf. Only if there is no such representative, prescription does not expire before six months have passed after the age of majority has been reached.311 Basically, therefore, German law proceeds from the (reasonable) assumption that the representative looks after the interests of the minor. If he fails to act in the appropriate manner, this is a risk that has to be borne by the minor, subject to claims against the representative.312 The minor, in turn, is protected at least 307

308 309 310

311

312

This was the fear that prompted the Canadian Supreme Court in its leading case M. (K.) v. M. (H.) [1992] 3 Canada Supreme Court Reports (S.C.R.) 6 not to seek the solution to the problem in an extension of the limitation period on account of disability for “unsound mind”; see Brennan, CFLQ 18 (2006) 79 with further references. § 208 BGB. Comparative Foundations (fn. 23) 134; Lando/Clive/Prüm/Zimmermann (fn. 23) 191. See the references in Comparative Foundations (fn. 23) 134; Lando/Clive/Prüm/Zimmermann (fn. 23) 191. § 210 BGB; we are dealing here with an instance of postponement of expiry of the period of prescription. Cf. also Art. 14:305 (1) PECL. See Comparative Foundations (fn. 23) 134 f.; Lando/Clive/Prüm/Zimmermann (fn. 23) 189. – In the eyes of the English Law Commission these claims of the minor against the representative are a “poor substitute” for his or her original claim that is now barred by limitation as a result of the representative’s inactivity: see Law Commission Consultation Paper (fn. 6) 298; on the discussion in England, cf. also McGee (fn. 74) no. 19.018; A.M. Jones, Limitation Periods and Plaintiffs under a Disability – A Zealous Protection?, Civil Justice Quarterly 14 (1995) 258, 262 ff; for France, see Mazeaud/Mazeaud/Mazeaud/Chabas (fn. 69) no. 1182; Bénabent, D. 2007, 1803 (criticizing the suspension because of the very long prescription periods that can ensue).

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to the extent that prescription of the minor’s claim against the representative is suspended until the minor has reached the age of majority.313 In addition it has to be taken into account that, according to German law, the commencement of prescription is determined by the claimant’s knowledge, or grossly negligent ignorance;314 and during the time of minority it is the representative’s knowledge, or failure to know, that is relevant in this respect.315 That can raise problems. For if the representative consents to the sexual abuse of the minor, or if he connives with the person committing such abuse, prescription would normally (i.e. but for § 208 BGB) run in spite of the representative’s obvious breach of his duties vis-à-vis the minor. The problem is illustrated by two Regional Appeal Court decisions from the time before the enactment of the new § 208 BGB.316 In both cases the victim had told someone what had happened so that her mother as her sole statutory representative had been able to stop the abuse before the child had reached to age of majority. Nonetheless, both cases were dealt with differently. In the first case the mother had set in motion criminal proceedings against her partner in September 1994 for having sexually abused her daughter.317 The Court, therefore, took the knowledge-requirement for the commencement of prescription, as laid down in § 852 I BGB old version, to be satisfied. As a result, the damages claim brought only after September 1997 was barred by prescription. A suspension on the analogy of § 204 BGB old version (suspension of claims between parents and children) was rejected in view of the fact that in the interests of legal certainty the application of the rules on prescription has to be guided by their wording. The 313

314

315

316

317

§ 207 BGB; and see Art. 14:305 (2) PECL. According to the German rule, prescription is suspended; the PECL, on the other hand, once again operate with the device of postponement of expiry; see Zimmermann (fn. 16) 148. Rules similar to § 207 BGB can be found in Austria, Switzerland, Italy, Greece and Portugal; see Comparative Foundations (fn. 23) 137; Lando/ Clive/Prüm/Zimmermann (fn. 23) 191. – The German draft referred to in fn. 183 suggests to extend the suspension until the minor’s 21st birthday because even after reaching the age of majority a child is usually still emotionally and financially dependent on his parents. Usually, in cases of sexual abuse, the minor’s claim will be a delictual one; in fact, with effect from 1 August 2002 a new damages claim was inserted into the German law of delict concerning certain forms of infringement of the right to sexual self-determination: § 825 BGB. Apart from that, claims under family law may be available; see Beduhn (fn. 272) 98 ff. For these latter claims German law, so far, recognizes a thirty-year prescription period. In principle, of course, this is more favourable to the victim than a three-year period. But it also has to be kept in mind that the thirty-year period starts to run from the moment when the claim comes into being; § 197, no. 2, 200 BGB. The Minister of Justice has now, however, proposed to extend the regular prescription regime to these claims; see Entwurf eines Gesetzes zur Änderung des Erb- und Verjährungsrechts (fn. 183). See, e.g., BGH 20 January 1976, NJW 1976, 2344; Palandt/Heinrichs (fn. 91) § 199, no. 23; cf. also Beduhn (fn. 272) 317 ff. on whether the parents’ knowledge can be irrelevant in cases where one of the parents, his or her partner, or another relative has committed the abuse. – Belgium and the Netherlands only regard knowledge of the victim herself as relevant; see Claeys, RW 1998–99, 395; Hof ’s-Hertogenbosch 8 January 1996, NJ 1996, 719; M.W.E. Koopmann, Bevrijdende verjaring (1993) 88. OLG Hamm 28 March 2000, NJW 2000, 3219 (abuse by the step-father); OLG Köln 8 December 1998, VersR 2000, 332 (abuse by the partner of the victim’s mother); cf. also LG Mainz 12 July 1999, Streit 2000, 122 (abuse by the step-father). OLG Köln 8 December 1998, VersR 2000, 332.

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Court deciding the second case, on the other hand, did come down in favour of an analogous application of § 204 BGB old version.318 Admittedly, claims directed against the step-father were not covered by the wording of that rule. Still, however, in the Court’s opinion an extension was required in view of the harmony apparently still prevailing within the family: for the mother had kept up her marriage with the child’s step-father. The Court thereby anticipated a novelty that was to be introduced in 2002: according to the new § 207 BGB, the prescription also of claims between children and their step-parents is suspended during the children’s minority.

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The new § 208 BGB today protects the victim of childhood sexual abuse, no matter who has committed the abuse, from the respective prescription period ending before the victim’s 24th birthday.319 This rule, according to the travaux préparatoires, is included to prevent the representative’s failure to act in the appropriate manner from adversely affecting the victim’s position.320 It is not concerned with the problems, so vigorously discussed in other countries, of the victim having repressed the events on which his or her claim is based and with the consequences associated with that on the knowledge-requirement relevant for the commencement of prescription.321 Such cases, as far as we can see, have not yet been brought before a German court. One can only speculate about the reasons. One of them would seem to lie in the fact that, ultimately, it is not, or not merely, the knowledge, or grossly negligent ignorance, of the victim that matters. At the same time, this points to a disadvantage associated with the approach adopted by German law: § 208 BGB is supposed to enable the victim to pursue her claims herself, once she has attained the age of majority. Nonetheless, it is still accepted that the adult representative’s knowledge is relevant for the commencement of prescription. Prescription can, therefore, begin immediately after the act of sexual abuse has been committed; it is then suspended and continues to run for three years from the victim’s 21st birthday.322 If the victim has 318 319

320 321 322

OLG Hamm 28 March 2000, NJW 2000, 3219. If debtor and creditor are living in a domestic community, the period can end even later; see the wording of § 208, as quoted above (text to fn. 308). The domestic community must have existed at the time of commencement of prescription. The exclusion from the ambit of this rule of cases where such community has only been created at a later stage is unfortunate; for criticism, see MünchKomm/Grothe (fn. 79) § 208, no. 7; Beduhn (fn. 272) 364 f. Contra, e.g., Staudinger/Peters (fn. 59) § 208, no. 6; Palandt/Heinrichs (fn. 91) § 208, no. 4; H.-P. Mansel/C. Budzikiewicz, Das neue Verjährungsrecht (2002) § 8, no. 138 ff. BT-Drucks 14/6040, 119. Beduhn (fn. 272) 363 f. Since in Germany the long-stop is not a maximum period for the extension of the regular prescription period but a second period of prescription (fn. 263), it is also suspended until the victim’s 21st birthday (or, in the case of a domestic community, even longer); as a result, the prescription period can become extremely long. For criticism, see Zimmermann (fn. 16) 151; a different view is taken (without reasons being given) by Staudinger/Peters (fn. 59) § 208, no. 4. On the question which long-stop is applicable, see Mansel/Budzikiewicz (fn. 319) § 8, no. 133 with further references. The draftsmen of the new German law of prescription probably intended the thirty-year period laid down in § 199 II BGB for injury to body, health, or liberty to be applicable. But an infringement of the right to sexual self-determination is also imaginable without injury to body or health: see G. Wagner, Das Zweite Schadensersatzrechtsänderungsgesetz, NJW 2002, 2049, 2063 f.

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repressed the traumatic events during that period, the claim thus prescribes, contrary to the protective purpose of § 208 BGB, before the victim has been able to bring an action.323 It would be preferable, as in Dutch law, to operate with the device of a postponement of the date of commencement.324 6. French Law: Suspension of Prescription III French law appears to regard a special suspension rule as dispensable in view of the fact that prescription is suspended, anyway, as long as the aggrieved party has not yet reached the age of majority.325 In addition, Art. 2270-1 (2) Code civil (inserted into the Code in 1998),326 extends the ten-year period to twenty years if the act giving rise to the claim consists in “violences ou aggressions sexuelles contre un mineur”. This would also be the rule under the recent draft Prescription Act (Art. 2226 [2]). In the Avant-projet, on the other hand, this provision appears to have been absorbed by the prescription regime concerning personal injuries which is generally very favourable to the aggrieved party.327

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7. Developments in the United States The problems relating to claims based upon childhood sexual abuse have been particularly vigorously discussed in the United States.328 That may be due to the considerable importance which a damages claim has in American law over and above the criminal prosecution of the tortfeasor, as well as to the strongly developed awareness within American society of the problem of childhood sexual abuse. When the courts were confronted with this problem in the 1980s, most decisions revolved around the question whether, and in which way, a discoverability criterion can be applied to tort claims if the aggrieved party has completely repressed the events upon which his or her claim is founded.329 It was, however, very widely agreed that the legislature was called upon to 323 324 325 326 327 328

329

The problem has been pointed out also by Beduhn (fn. 272) 365, 368 f. Cf. also Beduhn (fn. 272) 407. Art. 2252 Code civil; supra text to fn. 309. Art. 43 loi no. 98-468 of 17 June 1998. Art. 2275, no. 1, 2278 (2) Avant-projet. See, e.g., American Law Reports (ALR) 5th 9 (1993) 321; Brennan, CFLQ 18 (2006) 85 ff.; Wilson, UCLA Women’s Law Journal 12 (2003) 145 ff.; D.F. Partlett/B. Nurcombe, Recovered Memories of Child Sexual Abuse and Liability: Society, Science and the Law in a Comparative Setting, Psychology, Public Policy and Law 4 (1998) 1253, 1274–1281 (with comparative references to England, Canada and Australia); Gerstenblith (fn. 272) 361–369; all with further references. Essentially, three different views were taken, with the following leading cases as their focal point: Tyson v. Tyson, 727 Pacific Reporter 2d series (P.2d) 226 (Washington 1986) (commencement of limitation period with the end of the last act of abuse); Hammer v. Hammer, 418 North-Western Reporter 2d series (N.W.2d) 23 (Wisconsin App. 1987) (lack of knowledge preventing the limitation period from running both in cases where the victim represses the events and where she is unaware of the causal connection between the abuse and psychological disorder suffered during adulthood); Johnson v. Johnson, 701 Federal Supplement (F.Supp.) 1363 (Northern District Illinois 1988) (lack of knowledge preventing the limitation period from running only in cases of repression). All three views were criticized; see Gerstenblith (fn. 272) 369.

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provide an appropriate solution. The legislatures of most States have in fact reacted and introduced a special limitation provision for cases of “childhood sexual abuse”. Frequently, these provisions follow the path mapped out by the courts in that they specify the relevant criteria of knowledge or discoverability for this type of situation; moreover, they sometimes also allow for longer limitation periods.330 The attainment of the age of majority is often laid down as an additional date, up to which the running of the limitation period must in any event be suspended.331 Some States have, however, followed other paths and have either introduced very long limitation periods332 or special suspension rules;333 or they have completely exempted these types of actions from prescription.334 8. Canada: Discoverability – or No Prescription?

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The discoverability criterion was also the crucial issue for the Canadian Supreme Court when it was faced in a widely noted and influential decision with a damages action for sexual abuse that would normally have been barred by 330

331

332

333

334

We can only reproduce here a number of examples: Washington Revised Code Annotated § 4.16.340 (“[1] All claims or causes of action based on intentional conduct brought by any person for recovery of damages for injury suffered as a result of childhood sexual abuse shall be commenced within the later of the following periods: [a] Within three years of the act alleged to have caused the injury or condition; [b] Within three years of the time the victim discovered or reasonably should have discovered that the injury or condition was caused by said act; or [c] Within three years of the time the victim discovered that the act caused the injury for which the claim is brought: Provided, That the time limit for commencement of an action under this section is tolled for a child until the child reaches the age of eighteen years. … [3] The knowledge of a custodial parent or guardian shall not be imputed to a person under the age of eighteen years”) (this has rendered the leading case Tyson v. Tyson referred to in the previous footnote obsolete); Virginia Code Annotated § 8.01-249 (“The cause of action in the actions herein listed shall be deemed to accrue as follows: … 6. In actions for injury to the person, whatever the theory of recovery, resulting from sexual abuse occurring during the infancy or incapacity of the person, upon removal of the disability of infancy or incapacity … or, if the fact of the injury and its causal connection to the sexual abuse is not then known, when the fact of the injury and its causal connection to the sexual abuse is first communicated to the person by a licensed physician, psychologist, or clinical psychologist”); Vernon’s Annotated Missouri Statutes § 537.046 (“2. Any action to recover damages from injury or illness caused by childhood sexual abuse in an action brought pursuant to this section shall be commenced within ten years of the plaintiff attaining the age of twenty-one or within three years of the date the plaintiff discovers, or reasonably should have discovered, that the injury or illness was caused by childhood sexual abuse, whichever later occurs”); for references to other provisions, see Gerstenblith (fn. 272) 363, fn. 38. In a number of States the period of limitation is always suspended until the attainment of the age of majority; see ALR 5th 9 (1993) 321, § 9. Connecticut General Statutes Annotated § 52-577d (“… no action to recover damages for personal injury to a minor, including emotional distress, caused by sexual abuse, sexual exploitation or sexual assault may be brought by such person later than thirty years from the date such person attains the age of majority”). 12 Vermont Statutes Annotated § 560 (“When a person entitled to bring an action for damages as a result of childhood sexual abuse is unable to commence the action as a direct result of the damages caused by the sexual abuse, the period during which the person is incapacitated shall not be taken as a part of the time limited for commencement of the action”). 14 Maine Revised Statutes Annotated § 752-C (“1. Actions based upon sexual acts towards minors may be commenced at any time”).

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limitation.335 The date of commencement for the running of the limitation period is deferred, no matter whether the victim has repressed the abuse or has failed to appreciate the causal nexus with his/her present condition. In addition, the Court has established a rebuttable presumption that the claimant only gained knowledge at the time when he or she started a therapy.336 In the course of the past years, also the legislatures of many Canadian provinces have laid down special provisions. Sometimes, claims based on sexual abuse have been removed from the range of application of the respective statute of limitation and have thus become imprescribable. The relevant provisions are often not confined to the protection of minors; at the same time, they normally require the aggrieved party to have been in a state of dependence vis-à-vis the tortfeasor.337 These provisions are intended to evade the uncertainties associated with the application of the discoverability criterion.338

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9. Some Conclusions Cases of sexual abuse of children cannot be adequately tackled by merely focusing on the law of prescription. This is the reason why the PECL have abstained from dealing with the issue.339 Still, however, a suitable prescription regime can constitute an essential element of an appropriate solution. A number of points should be kept in mind in that respect.

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(i) One of the chief aims of the law of prescription is to bring about, after the lapse of a certain period of time, a state of legal certainty. This is not only in the public interest but also in the interests of the debtor who may be faced with, and will thus have to defend himself against, a claim that is unfound-

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336

337

338

339

M. (K.) v. M. (H.) [1992] 3 S.C.R. 6; on that decision, see N. Des Rosiers, Canada, in: E. Hondius (ed.), Extinctive Prescription: On the Limitation of Actions (1995) 91, 103 f.; Law Commission Consultation Paper (fn. 6) 335; Comparative Foundations (fn. 23) 95. Two out of the seven Justices dissented on this point and regarded such presumption as unnecessary; for comment, see Des Rosiers (fn. 335) 104, fn. 48. British Columbia (§ 3 [4] Limitation Act: “The following actions are not governed by a statute of limitations and may be brought at any time: … [k] for a cause of action based on misconduct of sexual nature, including, without limitation, sexual assault, [i] where the misconduct occurred while the person was a minor, and [ii] whether or not the person’s right to bring the action was at any time governed by a limitation period; [l] for a cause of action based on sexual assault, whether or not the person’s right to bring the action was at any time governed by a limitation period”); Ontario (Limitations Act 2002 § 16 [1] [h]: “There is no limitation period in respect of, … a proceeding arising from a sexual assault if at the time of the assault one of the parties to it had charge of the person assaulted, was in a position of trust or authority in relation to the person or was someone on whom he or she was dependent, whether financially or otherwise”); Newfoundland (§ 8 [2] Limitations Act 1995: “… [W]here misconduct of a sexual nature has been committed against a person and that person was [a] under the care or authority of; [b] financially, emotionally, physically or otherwise dependant upon; or [c] a beneficiary of a fiduciary relationship with another person, organization or agency, there shall be no limitation period and an action arising from that sexual misconduct may be brought at any time”). Des Rosiers (fn. 335) 101. – For a general account of Canadian law concerning sexual abuse, see B. Feldthusen, The Canadian Experiment with the Civil Action for Sexual Battery, in: N.J. Mullany (ed.), Torts in the Nineties (1997) 274 ff. (289 ff. on prescription); Brennan, CFLQ 18 (2006) 81 ff. Lando/Clive/Prüm/Zimmermann (fn. 23) 189 f.

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ed.340 Completely to exempt a group of claims from prescription can, therefore, hardly be anything but an unsatisfactory emergency solution. After all, an allegation of sexual abuse may be as ill-founded as any other allegation on which a damages claim may be based.341 Investing the court with a discretion to disregard the fact that a claim is barred as a result of prescription, as now appears to be the position under English law, is also a solution that flatly contradicts the policy considerations underlying the law of prescription.342 The same is true with regard to prescription periods that are extremely long. In addition, the desirability of having uniform periods of prescription militates against that approach.

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(ii) It thus appears to be preferable to defer the date from which the prescription clock runs to the moment when the minor reaches the age of majority or, as in the case of § 208 BGB, to his or her 21st birthday. The law thus ensures that the victim herself is in a position to decide whether she wants to bring an action or not. That is necessary because the victim’s representatives cannot always be relied upon to take the appropriate steps on behalf of the victim.343 In addition, the law can thus steer clear of the problem that it is the representative’s rather than the victim’s knowledge that is relevant for the commencement of the regular prescription period.

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(iii) That solution constitutes a relatively minor deviation from the general prescription regime. Which cases exactly does it cover? The new German suspension rule relates to all “claims for infringement of the right to sexual selfdetermination”. The scope of application of that rule is extremely vague.344 In Ireland as well as in many US-American States the relevant limitation provision itself contains a definition of “sexual abuse”.345 Such definition, however, hardly appears to be necessary because reference can be made to the statutory definition of the respective crime.346 The new Dutch Art. 3:310 (4) BW provides an example. Of course, also below the level of criminal behaviour infringements of the right to sexual self-determination are imaginable which may give rise to a damages claim.347 In the cases brought before the courts, 340

341

342 343 344

345 346

347

Supra no. 5. But cf. also Werren, Tort L Rev 15 (2007) 46: “stale evidence … will generally be a problem anyway in child sexual assault cases as most cases of abuse happen before the child is 13 years old and limitation periods do not begin under the age of majority, 18 years”. Cf. also Scottish Law Commission, Discussion Paper on Personal Injury Actions: Limitation and Prescribed Claims, Discussion Paper No. 132 (2006) 43. See also McGee (fn. 1) 140. Comparative Foundations (fn. 23) 137 f. For criticism, see Zimmermann/Leenen/Mansel/Ernst, JZ 2001, 697; Zimmermann (fn. 16) 150. See, for example, sec. 48A (7) Statute of Limitations 1957 (Ireland). T. Henne, Schmerzensgeld nach Sexualtaten – Anmerkungen zu den geplanten Reformen im Gesetz zur Änderung schadensersatzrechtlicher Vorschriften, Zeitschrift für Rechtspolitik 2001, 493, 495; and see the authors, quoted in fn. 344. On the difficulties of defining the boundaries of a category of claims to which a special prescription rule might apply, see Scottish Law Commission (fn. 341) 59 f. See Beduhn (fn. 272) 32 ff.; H.-W. Strätz, Wundersame Entwicklung: § 825 BGB neuer Fassung, JZ 2003, 448, 454.

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however, the criminal nature of the defendant’s act348 is evident. The idea of coordinating the limitation provisions in criminal law and in private law for this type of case is rooted in this observation.349 (iv) The long-stop should also not be counted from the damaging event, i.e. the last act of abuse. Where that long-stop constitutes a separate prescription period,350 it will have to be made to start to run at the same time as the regular period of prescription. In those systems where the long-stop constitutes the maximum length for which the regular period may be extended,351 no specific regulation is necessary. If the long-stop were to be counted from the damaging event, it might be inadequate in situations where very young children are abused.

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(v) It does not appear to be necessary to make further adjustments to the prescription regime in order to cope with the traumatic consequences of the abuse. The subjective system of calculating the relevant periods is sufficiently flexible to enable the courts adequately to deal with cases where the childhood experiences are repressed, or where the victim fails to relate them to his or her present psychological condition. Considerable sensitivity is required for the facts of each individual situation; it would appear to be impossible for the legislature to lay down general guidelines.352

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(vi) It has remained unclear, so far, why a minor should be granted greater protection with regard to claims for the infringement of the right to sexual selfdetermination than in other cases of physical abuse and cruelty.353 The further development of the victim can be affected equally adversely by both forms of abuse; and the phenomenon of repressing traumatic childhood experiences is possibly also not confined to situations of sexual abuse.354 In Ireland the Law Reform Commission has therefore initiated a discussion about the introduction of a separate prescription provision for cases of “non-sexual abuse of children”.355 The Commission, however, draws attention to the fact that for

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348 349 350 351 352

353

354

355

Or the act of the person for whom the defendant is liable. See fn. 275. Supra no. 59. Supra no. 59. Often it will be necessary to call for expert evidence. On the relevance of the “false memory” syndrome, in this context, see Beduhn (fn. 272) 83 f.; Mullis, Med L Rev 5 (1997) 28 f.; Werren, Tort L Rev 15 (2007) 55 ff.; Law Commission Consultation Paper (fn. 6) 330 f. For a sceptical view on the great importance of expert testimonies, see the Irish Law Reform Commission, Consultation Paper on the Law of Limitation of Actions Arising from Non-Sexual Abuse of Children, LRC-CP16-2000, 56 ff. Brennan, CFLQ 18 (2006) 67; Wilson, UCLA Women’s Law Journal 12 (2003) 191; Zimmermann (fn. 16) 150. This was one of the reasons why the English Law Commission decided not to introduce a special provision concerning sexual abuse: Law Commission (fn. 15) 104. Beduhn (fn. 272) 407; the Irish Law Reform Commission Consultation Paper LRC-CP162000, 12 ff., 52 f., with further references, indicates a low number of long-term studies as well as some disagreement among psychologists and psychiatrists concerning the effects of nonsexual abuse. Consultation Paper LRC-CP16-2000, especially at 51 ff.; for comment, see McMahon/Binchy (fn. 74) no. 46.104 f.

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want of a broad consensus within society on the matter it will be more difficult to specify the exact boundaries of such rule than in the case of sexual abuse. Once again, it may be advisable to tie the rule to the relevant provisions in criminal law.

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(vii) Finally, it may be noted that some legislatures favour the idea of re-opening cases that have already been closed on account of prescription, by allowing the victim a short extra-period to bring an action.356 Most recently, the British Government has announced its intention to move in that direction.357 However, that would seem to run counter to the concept of prescription.

356

357

See sec. 48A (3) Statute of Limitations 1957 (Ireland). Similar attempts have been made in some US-States. In Scotland the idea of reviving personal injury claims which had been extinguished before 1984 (i.e., for incidents before 1964) has just been rejected by the Scottish Law Commission both for such claims in general and for personal injury resulting from institutional childhood abuse in particular: see Scottish Law Commission (fn. 12) 51 ff. The Scottish Law Commission wanted to avoid constitutionally doubtful retroactive legislation and an unequal treatment of potential litigants. See the announcement in the Home Office Report of July 2006 under the title “Criminal Justice System Review: Rebalancing the Criminal Justice System in Favour of the Law-Abiding Majority”, at 15: “We will … increase the compensation that offenders pay, requiring violent offenders to meet the medical expenses of victims and creating new powers to allow the court to reopen cases beyond current limitation periods allowing victims to sue, for example, if the offender later received a windfall” (available at , last visited on 2 April 2008). The background to this statement appears to be cases such as A v. Hoare [2008] UKHL 6.

II. Commencement of the Prescription Period in Case of Damage Caused due to Omissions Federico Fusco

A. INTRODUCTION The aim of this survey is to analyse the current European law of prescription from a comparative perspective, with a special focus on the commencement of the prescription period in case of damage due to omissions. In order to do so, the law of four major European legal systems will be examined, namely the law of Italy, England, France and Germany.

1

As far as torts committed by nonfeasance are concerned, the first and perhaps the most difficult task to accomplish is to define “omission”, which inevitably calls into play issues of culpability and causation. As it will be demonstrated, the legal rules on the commencement of prescription formulated by the legal systems under review try to overcome the difficulties posed by the very nature of omissions – as properly defined – by postponing the start of the limitation period, and by linking it with the occurrence or manifestation of the damage, rather than with the occurrence of the omission constituting the wrongful conduct.

2

B. THE PROBLEMATIC NATURE OF OMISSIONS 1. Omissions Defined a) The Terminological Issue

Law often ascribes liability for personal misconducts consisting in some kind of nonfeasance. This is certainly true in the field of criminal law, where punishment is provided for in some specific cases of wrongful omissions.1 But it is also true for private law and, in particular, for tort law, which in certain cases holds a wrongdoer liable for the consequences of his inaction. 1

The Italian Penal Code, for instance, provides for some specific crimes of omission, such as failure to assist (art. 593) and neglect of an official duty (art. 328).

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Of course, the law does not attach liability to any omissive conduct, as it tends to exclude the existence of a general “duty to save everybody else from all possible dangers”.2 In the realm of civil wrongs, in particular, there is usually only a limited class of omissions giving rise to liability. However, the range of relevant omissions may vary consistently depending on the meaning attributed to the term “omission” by the different legal formants of a given legal system.3 For example, an “omission” can be attributed to the bank robber’s girlfriend who contacted neither the banks nor the police despite knowing of the planned hold-ups.4 Similarly, an “omission” can be attributed to a car driver who ignores a red traffic light, actively using his car to cause a road accident. Even though we might use the same term “omission” to describe the conduct of the bank robber’s girlfriend and that of the car driver, it can be easily argued that these two cases are substantially different from both a factual and a legal point of view. As we shall discuss in more detail in the following paragraphs, it is one thing to commit a tort by performing an activity in violation of the prescribed rules or without taking the required precautions, but another to commit a tort by merely omitting to act. b) Omissions as Manifestation of Fault or Negligence in General

5

Broadly speaking, the idea of omission is inevitably intertwined with the concepts of fault (culpa) and negligence in general. Even though they are now almost synonyms, the Roman term “neglegentia”, from which the English term “negligence” derives, originally denoted a (negligent) failure to perform a specific duty, while the term “culpa” was referred to active misconduct. This is probably the reason why under ancient English law the term “negligence” was a synonym just for “neglect” or “omission”.5

6

Nowadays, the term “fault” is generally understood by lawyers in continental Europe to mean the violation of a pre-existing duty,6 the failure to exercise the demanded diligence,7 or the omission of due care.8 English lawyers, on their side, traditionally use the term “negligence” to describe “the omission to do 2 3

4

5 6

7

8

C. von Bar, The Common European Law of Torts, vol. I (1998) no. 195. For the definition of “legal formants” see R. Sacco, Legal Formants: A Dynamic Approach to Comparative Law, The American Journal of Comparative Law, vol. 39, no. 1. (Winter, 1991) 22. See von Bar (fn. 2) no. 196, citing to Hof Amsterdam 5 November 1992, Nederlandse Jurisprudentie (NedJur) 1994, no. 163, 697. D.J. Ibbetson, A Historical Introduction to the Law of Obligations (1999) 165, fn. 53. The definition of fault as the violation of a pre-existing duty (“la violation d’une obligation préexistante”) was first used by Planiol and is still widely referred to in France. See P. Widmer (ed.), Unification of Tort Law: Fault (2005) 92. See, for instance, art. 1104 of the Spanish Civil Code, according to which fault “consists in the failure to exercise the diligence demanded by the nature of the obligation and corresponding to the circumstances of the persons, time and place. When the obligation fails to stipulate the diligence that must be exercised in performing it, the diligence corresponding to a reasonable person will be required”. The German Civil Code (Bürgerliches Gesetzbuch, BGB) makes it clear that fault (“Verschulden”) is constituted by the two categories of intent (“Vorsatz”) and negligence (“Fahrlässigkeit”), which is defined in § 276 subpar. 2 as “omission of due care” (“Auβerachtlassen der im Verkehr erforderlichen Sorgfalt”).

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something which a reasonable man, guided upon those considerations which ordinarily regulate the conduct of human affairs, would do”.9 While being apt to cover both feasance and nonfeasance, all of these definitions clearly resort to the idea of omission, and reflect the fact that neglect often manifests itself in conducts which are a combination of actions and omissions.10 Based on the common understanding of fault as absence of diligence, carelessness, or omission of the required precautions, the term “omission” has come to be used, also by some courts, as a mere synonym for “fault” or “negligence”. This broad definition greatly expands the range of wrongful conducts to be called “omissions”. In truth, in some cases it is very difficult to draw a clear-cut distinction between the actions and the omissions composing the conduct of a negligent wrongdoer.11 Besides, in most cases the widespread practice of calling “omission” what is in fact a negligent action does not really affect the scope of tortious liability, as the negligent conduct is sanctioned anyway. However, the loose use of the term “omission” leads to the conclusion that whenever a conduct is negligent some omission must be there. Conversely, it fosters the misconception that “omission” actually equals “fault” or “negligence” in the legal terminology.

7

c) Mere Omissions

A more rigorous approach should allow to distinguish between torts by commission and torts by omission and, in particular, between fault by commission and fault by omission proper. In fact, most legal systems do acknowledge a narrower definition of “omission”, allowing for such distinctions.

8

(i) Italy The Italian Civil Code does not expressly define “omission”. Art. 2043, which is the basic norm on tortious liability, defines a civil wrong as “any intentional or negligent fact causing damage to others”. By using the term “fact”, the Civil Code does not distinguish between wrongful conducts causing damage by commission and wrongful conducts causing damage by omission. However, most courts adhere to the general principle according to which an individual is free not to act, unless he has a legal duty to do so. Accordingly, they adopt a narrow definition of “omission” and find liability for omission only when the wrongdoer’s nonfeasance violates an obligation to act specifically prescribed by the law.12 With this regard, it has been argued that art. 2043 of the Civil Code operates as a subsidiary norm, for the primary source of tortious liability is to be found 9 10 11

12

Blyth v. Birmingham Waterworks Co (1856) 11 Exchequer Reports (Ex) 781 at 784. G. Visintini, Trattato breve della responsabilità civile (3rd ed. 2005) 106. “What superficially looks like non-feasance is often, upon correct analysis, a case of misfeasance. A motorist’s failure to brake in time to prevent a collision is not an example of supine inaction: an omission is involved, but it is merely the element that makes his active conduct – driving – negligent”. J.G. Fleming, The Law of Torts (9th ed. 1998) 163. See, among others, Cass. 14 January 1971, no. 66, Giurisprudenza italiana (Giur. it.) 1971, I, 1, 501; Cass. 15 December 1976, no. 4643, Giur. it. 1977, I, 222; Cass. 30 October 1980, no. 5856, Responsabilità civile e previdenza (Resp.civ.prev.) 1981, 390; Cass. 9 March 1982, no. 1526, Massimario della Giuriprudenza Italiana (Mass. Giur. it.) 1982.

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in the norms positively requiring the omitted acts.13 In many cases, such norms are to be found in the Penal Code. Indeed, crimes of omission are considered to constitute also civil wrongs, whenever the punishable conduct causes a damage to someone.14

10

Italian scholars who have studied omissive torts have focused mainly on the issue of fault, elaborating on the distinction between “colpa commissiva” (fault by commission) and “colpa omissiva” (fault by omission).15 As many commentators have pointed out, there is some confusion in the case law as to these two distinct concepts, which are often mistaken.16 This confusion is due mainly to lack of terminological exactitude, but it does not seem to have affected the outcome of any case so far. Indeed, it entails a mere substitution of terms (“fault by omission” for “fault by commission”), while the negligent wrongdoer is held liable anyway.17

11

More or less explicitly, the theories on fault by omission draw on the wording of art. 40 of the Penal Code, which is interpreted to cover civil wrongs too. According to that provision, omissions are as causally relevant as actions are whenever the wrongdoer was under the obligation to prevent the occurred damage.18 In such cases, the breach of the obligation to prevent the damage forms a basis for both the determination of fault and the assessment of causation. As it is further clarified below, culpability and causality are indeed closely related issues with reference to omissive torts. (ii) England

12

English judges do not adopt one uniform definition of “omission”. As a result, it sometimes proves difficult to understand whether a court has found the wrongdoer liable in negligence for his misfeasance or for his nonfeasance. The traditional definition of “negligence”19 does not indicate any difference in the law’s approach towards actions and omissions: apparently both types of conducts should be measured against the standard of the reasonable man. However, it is “a well-known fact that the common law, first for historical reasons and later on philosophical grounds, has taken a hostile view towards imposing tortious liability for pure omissions”.20 13 14 15 16 17 18

19 20

G. Alpa, Colpa omissiva e principi di responsabilità civile, Giur. it. 1979, I, 1, 1370. Visintini (fn. 10) 111. Ibid. 108. Ibid. 104. Alpa, Giur. it. 1979, 1370. Art. 40 of the Italian Penal Code reads: “No one may be punished for a fact, specified in law as a crime, if the injurious or dangerous event, on which the existence of the crime depends, is not a consequence of his action or omission. Not to hinder an event which one is obliged by the law to hinder, is equivalent to causing it”. See fn. 7. B.S. Markesinis, Negligence, Nuisance and Affirmative Duties of Action, Law Quarterly Review (L.Q.R.) 105 (1989) 104. See also Smith v. Littlewoods [1987] Law Reports, Appeal Cases (AC) 241, 271. The reasons for the hostility of English common law towards mere omissions were well summarized by Lord Hoffman in Stovin v. Wise: “There are sound reasons why omissions require different treatment from positive conduct. (…) One can put the matter in political,

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Generally, an omission is considered to be something more than the mere failure to take the precautions reasonably required from a person who undertakes some activity.21 In particular, scholars use the term “pure omission” to indicate the type of inaction occurring outside the course of a positive conduct.22 As explained by Lord Hoffman in Stovin v. Wise, “[i]t is one thing for the law to say that a person who undertakes some activity shall take reasonable care not to cause damage to others” but “[i]t is another thing for the law to require that a person who is doing nothing in particular shall take steps to prevent another from suffering harm from the acts of third parties (...) or natural causes”.23

13

In sum, English law imposes liability only for those pure omissions by which a wrongdoer breaches a positive duty to act.24 Duties to act may exist when “one has undertaken to do so or induced a person to rely upon doing so”25 or in other special cases. For instance, “ownership or occupation of land may give rise to a duty to take positive steps for the benefit of those who come upon the land and sometimes for the benefit of neighbours.”26 In fact, the number of situations in which a positive duty to act arises under English law is relatively small. As a consequence “pure omissions”, as opposed to “omissions in action”, are not unlikely to be exempted from tortious liability in England.

14

(iii) France According to art. 1382 and 1383 of the French Civil Code, “any act whatever of man, which causes damage to another, obliges the one by whose fault it occurred, to compensate it” and “everyone is liable for the damage he causes not only by his intentional act, but also by his negligent conduct or by his imprudence”.27 This wording indicates no general distinction between acts and omissions, as far as tortious liability is concerned. However, French schol-

21 22 23 24 25 26 27

moral or economic terms. In political terms it is less of an invasion of an individual’s freedom for the law to require him to consider the safety of others in his actions than to impose upon him a duty to rescue or protect. A moral version of this point may be called the ‘Why pick on me?’ argument. A duty to prevent harm to others or to render assistance to a person in danger or distress may apply to a large and indeterminate class of people who happen to be able to do something. Why should one be held liable rather than the other? In economic terms, the efficient allocation of resources usually requires an activity should bear its own costs. If it benefits from being able to impose some of its costs on other people (what economists call ‘externalities’) the market is distorted because the activity appears cheaper than it really is. So liability to pay compensation for loss caused by negligent conduct acts as a deterrent against increasing the cost of the activity to the community and reduces externalities. But there is no similar justification for requiring a person who is not doing anything to spend money on behalf of someone else. Except in special cases (such as marine salvage) English law does not reward someone who voluntarily confers a benefit on another. So there must be some special reason why he should have to put his hand in his pocket.” Stovin v. Wise [1996] 3 All England Law Reports (All ER) 801, 406 f. Ibid. Markesinis, L.Q.R. 105 (1989) 104. Stovin v. Wise [1996] 3 All ER 801. F. Pollock, The Law of Torts (1887) 355. Stovin v. Wise [1996] 3 All ER 801, 406 f. Ibid. Code Civil, translated by G. Rouhette, updated 4 April 2006. Available at: http://195.83.177.9/ code/liste.phtml?lang=uk&c=22.

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ars draw a specific distinction between “faute de commission” (fault by commission) and “faute d’abstention” (fault by abstention).28 This distinction was implicitly admitted by the drafters of the Civil Code and the concept of fault by abstention was already known to Domat, who affirmed that “those who were able to prevent a damage they had the duty to prevent, and failed to do so, may be held liable depending on the circumstances.”29 In practice, it is often very difficult to distinguish between the two categories of fault and the term “faute d’abstention” happens to be misused by the courts. Legal theorists, however, have proposed a further distinction between “abstentions dans l’action” (abstentions within an action) and “abstentions pures et simples” (pure abstentions),30 which helps to capture the actual difference between fault in general and mere omissions.

16

Initially, French courts were quite reluctant to find someone liable in cases of pure abstentions. Liability would only be imposed where a statutory obligation to act was breached. There were two main reasons for that reluctance: first, the courts generally adhered to the principle of freedom not to act; second, they were doubtful that a causal link could exist between an omission and a given damage.31 The scope of liability for abstentions was then greatly expanded by a 1951 decision of the Cour de Cassation, affirming that “an abstention gives rise to liability of the person responsible – even if there was no malice and intention to harm – when the act that was omitted should have been done either by virtue of a legal, statutory or contractual obligation, or by virtue of the demand for objective information within a profession.”32 Even though that was a case of abstention within an action, the Cour de Cassation’s broad interpretation of liability for omissions has been applied in later case law also to pure abstentions, consisting either in a failure to fulfil a specific legal obligation to act or in a violation of the general duty of care.33

17

Also, it must be noted that under French law the commission of a criminal offence which causes harm to others amounts to fault for the purpose of art. 1382 and 1383 of the Civil Code. This concept of “unity of criminal and civil faults”34 is particularly relevant in light of art. 223-6 of the Penal Code, 28

29

30

31

32

33 34

See H. Mazeaud/L. Mazeaud/A. Tunc, Traité Théorique et Pratique de la Responsabilité Civile (1965) no. 524–525; P. le Tourneau/L. Cadiet, Droit de la Responsabilité (1996) 699. J. Domat, Les loix civiles dans leur ordre naturel (rev. edn 1745) Liv. II, Titre VIII, Sec. IV, § VIII. See le Tourneau/Cadiet (fn. 28) 699 ff.; G. Viney, La Responsabilité: Conditions, in: J. Ghestin (dir.), Traité de Droit Civil (1982) IV, Les Obligations, 544. P. Catala/J.A. Weir, Delict and Torts: a Study in Parallel (1962–1963) 37 Tulane Law Review 573, 615. Branly v. Turpain, Cour de Cassation 27 February 1951, Recueil Dalloz (D.) 1951, 329. In this famous case, Professor Turpain had written an article in which he had omitted to render a truthful account of the role played by Professor Branly in the development of wireless telegraphy. The Cour de Cassation held that there was a case for negligence and the lower court should have investigated whether the defendant’s behaviour was in accordance with what the law expected of a cautious and thoughtful person under similar circumstances. See W. van Gerven/J. Lever/P. Larouche, Tort Law (2000) 283. J. Bell/S. Boyron/S. Whittaker, Principles of French Law (1998) 361.

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which punishes (and consequently subjects to tortious liability) “anyone who, being able to prevent by immediate action a felony or a misdemeanour against the bodily integrity of a person, without risk to himself or to third parties, wilfully abstains from doing so” as well as “anyone who wilfully fails to offer assistance to a person in danger which he could himself provide without risk to himself or to third parties”.35 (iv) Germany The three heads of general tortious liability contained, respectively, in § 823(1), § 823(2) and § 82636 of the German Civil Code (BGB) do not seem to treat actions differently from omissions.37 According to case law, however, a difference does exist: if someone’s action causes harm to one of the legal interests specified in § 823(1) BGB, his action is presumed to be culpably unlawful; on the contrary, if one of the protected interests is infringed by omission, there is no presumption of unlawfulness. Omissions are considered to be unlawful, and therefore give rise to liability, only when they breach a “Pflicht zum Handeln” (duty to act).38 Over the years, this distinction has been heavily criticized by many commentators, affirming that “the omission to act in a way that would have prevented a result repugnant to the legal order is equivalent to a positive action to produce this result, as long as the person alleged to be liable was under an obligation to avoid this result and to act in consequence”.39 Nevertheless, the courts do not seem to have changed their approach. Moreover, they are generally more reluctant to recognise the existence of affirmative duties than of negative duties.40 Still, the scope of application of § 823(1) BGB has been considerably extended to cover omissions following the development of the concept of “Verkehrspflicht” (duty of protection). Such a duty of care may 35

36

37 38 39

40

Art. 223-6: Anyone who, being able to prevent by immediate action a felony or a misdemeanour against the bodily integrity of a person, without risk to himself or to third parties, wilfully abstains from doing so, is punished by five years’ imprisonment and a fine of € 75,000. The same penalties apply to anyone who wilfully fails to offer assistance to a person in danger which he could himself provide without risk to himself or to third parties, or by initiating rescue operations. Code Pénal, translated with the participation of J.R. Spencer, updated 12 October 2005. Available at: http://195.83.177.9/upl/pdf/code_33.pdf. See also van Gerven/Lever/Larouche (fn. 33) 281. § 823: (1) A person who, intentionally or negligently, unlawfully injures the life, body, health, freedom, property or another right of another person is liable to make compensation to the other party for the damage arising from this. (2) The same duty is held by a person who commits a breach of a statute that is intended to protect another person. If, according to the contents of the statute, it may also be breached without fault, then liability to compensation only exists in the case of fault. § 826: A person who, in a manner contrary to public policy, intentionally inflicts damage on another person is liable to the other person to make compensation for the damage. Bürgerliches Gesetzbuch, translated by the Langenscheidt Translation Service (2007). Available at: http://www.gesetze-im-internet.de/englisch_bgb/index.html. Von Bar (fn. 2) no. 125. B.S. Markesinis, The German Law of Obligations, vol. II (3rd ed. 1997) 74–75. K. Larenz, Lehrbuch des Schuldrechts, vol. I (14th ed. 1987) 457. See also K. Larenz/C.-W. Canaris, Lehrbuch des Schuldrechts, vol. II (13th ed. 1994) 364–370. R. Zimmermann, The Law of Obligations (1990) 1045.

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arise in various situations, where a person has created a source of potential risk for the rights or interests of others, so that he is required to take positive action to protect their safety.41

19

In case of breach of affirmative duties imposed by statutory provisions, the injured person may successfully claim compensation pursuant to § 823(2) BGB as long as the violated statute was intended to protect others. Interestingly enough, § 323c of the German Penal Code (StGB)42 providing for the crime of failure to render assistance has been interpreted by both courts and commentators43 as not intended to protect individual persons but only society as a whole. Finally, there seem to be relatively few decisions assigning liability for intentional omissions under § 826 BGB. (v) Summary

20

In brief, all the examined legal systems acknowledge (also) a strict definition of “omission”, describing a type of inaction that exceeds the mere failure to take adequate precautions within a given activity. These types of omissions, which one may refer to as “omissions proper” or “mere omissions” as opposed to “omissions within an action”, are generally deemed to give rise to liability only when the wrongdoer breached an affirmative duty to perform the omitted action. Affirmative duties to act may exist in different legal systems under a variety of circumstances, which are well summarized by the Principles of European Tort Law (PETL). According to art. 4:103 of the PETL, indeed, “a duty to act positively to protect others from damage may exist if law so provides, or if the actor creates or controls a dangerous situation, or when there is a special relationship between parties or when the seriousness of the harm on the one side and the ease of avoiding the damage on the other side point towards such a duty”.44 2. Theoretical Problems Raised by Omissions a) Causation, Duty, Culpability

21

The most peculiar and problematic aspect in cases of mere omissions is the absence of a tangible conduct to be causally linked to the damage. According to some theories45, mainly developed in the area of criminal law, actions and omissions are equally relevant from the point of view of natural causation, as 41 42

43 44

45

Larenz/Canaris (fn. 39) 400. See also van Gerven/Lever/Larouche (fn. 33) 286 ff. § 323c: Whoever does not render assistance during accidents or common danger or need, although it is required and can be expected of him under the circumstances and, especially, is possible without substantial danger to himself and without violation of other important duties, shall be punished with imprisonment for not more than one year or a fine. Strafgesetzbuch, translated by the Federal Ministry of Justice (1998). Available at: http://www. iuscomp.org/gla/statutes/StGB.htm#323c. See von Bar (fn. 2) no. 601. The Principles of European Tort Law were drafted by the European Group on Tort Law as an attempt to harmonise the entire field of tort law in a consistent manner. They are available at: http://www.egtl.org. See M. Donini, La causalità omissiva e l’imputazione per l’aumento del rischio, Rivista italiana di diritto e procedura penale (Riv. it. dir. e proc. pen.) 1999, 35; M. Maiwald, Causalità e diritto penale (1999) 84; H.L.A. Hart/T. Honoré, Causation in the law (1959) LX.

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they can all be preconditions (either positive or negative) to a certain event. Most authors, however, have concluded that natural causation is altogether absent in case of damage resulting from an omission. This argument is often borrowed by those private lawyers who suggest to exclude tortious liability in cases of mere omissions.46 Indeed, the operation of the “conditio sine qua non” or “but-for” test47 runs into a number of problems in cases of pure inaction,48 as the establishment of a causal link between a given damage and an intangible conduct implies hypothetical and counterfactual reasoning. The objective difficulties raised by mere nonfeasance led courts and scholars to adopt some normative approach to causation,49 moving the analysis from the level of natural causation to that of legal causation. In particular, in cases of omissions proper the establishment of a causal link requires an analysis of the relationship between the damaging event and the norms regulating the conduct of the wrongdoer: according to the normative theory, an omission may be deemed to have caused a given damage only when the wrongdoer breached a positive duty to prevent that specific type of damage.50 Inevitably, such an approach determines an overlap between issues of causation, on the one hand, and issues of duty and culpability, on the other hand. However, this seems to be the most suitable way – or at least the most common – to address the troublesome issues of causation raised by mere omissions.

22

b) Omissions and Prescription

At least in theory, the peculiarity of torts by mere omission – namely the fact that there is regularly no external event immediately and directly causing the damage – may be an issue also with regard to prescription. In particular, some problems may arise in determining the starting point of the limitation period.51

23

First, as it can be very difficult to determine the exact moment in time at which the omission takes place, there may be no certain basis on which to compute the limitation period. Second, in some cases the injured person is not aware of the omission until the damage occurs, which may happen much time after the omission itself takes place. In other cases, even if the damage has already occurred, the victim does not know it for some time or, even if he does, he is not able to attribute it to any specific wrongdoer. Thus, depending on the moment at which the limitation period begins, the time available for the victim of a wrongful omission to seek compensation may vary consistently.

24

46

47

48 49 50 51

See, for instance, R.A. Epstein, A Theory of Strict Liability (1973) 2 Journal of Legal Studies (J. Leg. Stud.) 201. All the examined legal systems approach causation from the starting point of the conditio sine qua non or “but-for” test: in order for an event or circumstance to be considered the cause of an injury, it must be proved that the injury would not have occurred but for that event or circumstance. See for more details van Gerven/Lever/Larouche (fn. 33) 452 ff. Ibid., 457 f. Ibid., 453; M. Capecchi, Il nesso di causalità (2005) 154 ff. M. Bona/P.G. Monateri et al., Il nesso di causa nel danno alla persona (2005) 15. On the contrary, no peculiar issue is likely to be raised, as far as prescription is concerned, by omissions within an action.

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Needless to say, these issues become prominent where the law sets the day on which the omission occurs as the start of the limitation period and, particularly, in those personal injury cases (as in cases of medical malpractice, or in claims concerning industrial diseases or contaminated blood transfusions) where a considerable period of time is likely to elapse between the occurrence of the omission and the manifestation of the damage.52 The next few pages will examine whether and how current European law on prescription copes with these potential problems raised by the very nature of omissions.

C. COMMENCEMENT OF THE PRESCRIPTION PERIOD: CURRENT LAW IN EUROPE 1. The Start of the Prescription Period in Four European Legal Systems a) Italy

26

The general rule on the start of the limitation period is laid down in art. 2935 of the Italian Civil Code, according to which the limitation period begins to run from the day on which the right can be enforced. With specific regard to claims in tort, however, art. 2947 of the Code provides that the right to compensation for damage arising from an unlawful fact is prescribed five years from the date on which the fact occurred. The term “fact” could be interpreted to mean just the damaging event, and to cover both acts and omissions. Accordingly, prescription would run from the moment at which the act or omission takes place, regardless of the actual occurrence of the damage. This was indeed the earlier interpretation given by Italian courts to art. 2947 of the Civil Code.53

27

Since the late 1960s, however, courts and scholars have developed the principle of “conoscibilità del danno” (knowability of the damage), according to which the limitation period begins to run only when the damage has fully manifested itself, which may be some time after the date of the unlawful act or omission. In one of the first decisions adopting the new principle the Court of Cassation stated that “the concept of ‘fact’ cannot be limited to the mere action or omission of the wrongdoer, but must be considered to cover the whole event: not only the intentional or negligent conduct of the actor but also the damaging consequences so that, where the wrongful conduct and the occurrence of the damage do not take place at the same time, prescription of the right to compensation for damage starts to run from the occurrence of the damage and not from the moment at which the act causing the damage took place”.54

52 53

54

C. von Bar, The Common European Law of Torts, vol. II (2000) no. 552. See Cass. 12 January 1940, no. 73; Cass. 4 April 1949, no. 779; Cass. 30 December 1959, no. 3218; Cass. 24 November 1966, no. 2797. Cass. 6 March 1970, no. 569, Giustizia civile (Giust. civ.) 1970, I, 674. See also M. Ottolenghi, Prescrizione dell’azione per danni (1975) 86 ff., cited by M. Bona, I nuovi confini della causalità giuridica: la conoscibilità del nesso di causa ai fini del decorso della prescrizione, in: P.G. Monateri (ed.), Il nesso di causa nel danno alla persona (2005) 466.

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The rule of knowability, which is based upon a combined reading of art. 2947 with art. 2935 of the Civil Code, has been further elaborated by the courts over time. The Court of Cassation confirmed the principle on several occasions and clarified, in particular, that the moment of the occurrence of the damage is the moment at which the damaging effects of the wrongful conduct become apparent and can be recognized in all their fundamental aspects,55 including their legal significance.56

28

Even this flexible rule, however, turned out to be inadequate in some cases – as in case of damage due to mere omission – where the damage has fully manifested itself but the victim is not able to attribute it to any specific wrongful conduct.57 On account of this potential inadequacy some courts have drawn upon the concept of “conoscibilità del danno” to conclude that, in order for prescription to begin to run, the victim must have gained knowledge, or should have gained knowledge according to ordinary diligence, of both the existence and significance of the damage and its attributability to a specific wrongdoer.58

29

This new principle was affirmed in several personal injury cases,59 and was recently confirmed by the united sections of the Court of Cassation. In deciding a line of cases of contaminated blood transfusions, in which the Italian Ministry of Health was held liable for the omission to exercise the required control and supervision on blood products, the Court stated that prescription starts to run only from the moment at which the damage can be perceived by the victim as the consequence of someone’s conduct, taking into account ordinary diligence and available scientific knowledge.60

30

b) England

The English rules on limitation of actions are currently regulated by the Limitation Act of 1980, as amended by the Latent Damage Act of 1986 and by the Consumer Protection Act of 1987. According to the Limitation Act, the general limitation period applicable to a claim in tort is six years from the date on which the cause of action accrues.61 The cause of action normally accrues when the damage occurs, regardless of the plaintiff’s knowledge.62 In respect of torts actionable per se (such as battery or conversion), the cause of action accrues immediately when the tort is committed, for the simple reason that it 55 56 57 58

59

60 61 62

See Cass. 24 March 1979, no. 1716, Resp. civ. prev. 1980, 90. See Cass. 9 May 2000, no. 5913. Bona (fn. 54) 473. This principle was already affirmed in the early 1980s by the Court of Cassation. See Cass. 6 February 1982, no. 658. See Cass. 9 May 2000, no. 5913; Cass. 21 February 2003, no. 2645, on which M. Bona, Prescrizione e danno alla persona: il nuovo leading case della cassazione sposta il dies a quo dalla manifestazione del danno all’addebitabilità del pregiudizio al responsabile (la nuova regola a confronto con il modello inglese… idee per una riforma), Giur. it. 2004, 285 ff. Cass. S.U. 11 January 2008, no. 581 and 583. Limitation Act 1980, sec. 2. B.S. Markesinis/S.F. Deakin, Tort Law (4th ed. 1998) 674 f.

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is impossible for the wrongful conduct and the damage to occur at different times. In those cases, however, the wrongful conduct will always consist in an action which the claimant will rarely be unaware of.63

32

As many commentators have pointed out, the basic rule setting the accrual of the cause of action as the start of the limitation period is “capable of causing injustice in a case where the plaintiff’s cause of action has accrued without him being aware of it”.64 On account of this, the Limitation Act provides that with regard to claims in negligence, nuisance or breach of duty which consist of, or include, a claim for personal injuries, the limitation period is three years from the date on which the cause of action accrues or, if later, three years from the “date of knowledge” of the person injured.65 This provision enacts the socalled “discoverability test” for personal injury claims, which takes the knowledge of the victim as a reference for the start of the limitation period.

33

According to the Limitation Act,66 a person’s “date of knowledge” is the date on which he first understands that the injury in question is (i) significant and (ii) attributable in whole or in part to the act or omission constituting negligence, nuisance or breach of duty. Also, the date of knowledge is the date on which the plaintiff gains knowledge of (iii) the identity of the defendant. The Act then specifies that a person’s knowledge includes knowledge which he might reasonably have acquired from facts observable or ascertainable by him, or from facts ascertainable with the help of medical or other appropriate expert advice which it is reasonable for him to seek.67 However, a person is not to be fixed with knowledge of a fact ascertainable only with the help of expert advice so long as he has taken all reasonable steps to obtain and act on that advice. In brief, in order for the limitation period to start to run in personal injury cases, the victim must know that he has suffered a significant injury as a result of an identified person’s wrongful conduct.

34

Special rules are laid down by English law also for latent damage, other than personal injuries, caused by negligence.68 For that type of damage the applicable limitation period is six years from the date on which the cause of action accrues, or three years from the “starting date”, whichever is later. The “starting date” is the earliest date on which the claimant first had the right to bring the action and either actual or constructive knowledge of (i) such facts about the damage as would lead a reasonable person to consider it sufficiently serious to institute proceedings, (ii) the attributability of the damage in whole or in part to the act or omission allegedly constituting negligence, and (iii) the identity of the defendant. These provisions are subject to an overriding limita63

64 65 66 67 68

An exception was found in Stubbings v. Webb [1993] All ER 322. In that case the plaintiff brought an action for battery based on abuse suffered as a child, the memory of which she had unconsciously suppressed until early adulthood. Markesinis/Deakin (fn. 62) 674. Limitation Act 1980, sec. 11. Limitation Act 1980, sec. 14(1). Limitation Act 1980, sec. 14(3). Limitation Act 1980, sec. 14A.

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tion period of fifteen years, starting from the date on which the negligent act or omission occurred.69 It must be noted that, according to the Limitation Act, the courts have a discretionary power to disapply the limitation period if it is equitable to do so under the circumstances of the case.70

35

c) France

For decades, the courts in France had considered prescription of an action in tort to start at the moment when the victim gained knowledge of the damage. According to the principle “contra non valentem agere non currit prescriptio” (prescription does not run against him who is unable to bring an action)71 it was held, indeed, that even the thirty year limitation period should not start until the plaintiff was able to act (“la prescription trentenaire ne court contre une action que du jour où celle-ci peut être légalement exercée”).72 Then, in 1985, art. 2270-1 was introduced in the Civil Code, providing that the starting point of the limitation period with regard to claims in tort is the moment of the manifestation of the damage or its aggravation (“manifestation ou aggravation du dommage”).73 Even though the text of art. 2270-1 sets neither the date of the wrongful conduct nor, to use the English terminology, the “date of knowledge” as the start of the prescription period, in fact the courts still base the commencement of prescription upon the moment at which the victim of the wrongful conduct gains knowledge of the damage (“La prescription d’une action en responsabilité ne court qu’à compter de la réalisation de dommage ou de la date à laquelle il est révélé à la victime si celle-ci établit qu’elle n’en avait pas eu précédemment connaissance”).74

69

70 71

72 73

74

The overriding time limit for negligence actions not involving personal injuries is set forth in sec. 14B of the Limitation Act, which reads as follows: “(1) An action for damages for negligence, other than one to which section 11 of this Act applies, shall not be brought after the expiration of fifteen years from the date (or, if more than one, from the last of the dates) on which there occurred any act or omission (a) which is alleged to constitute negligence; and (b) to which the damage in respect of which damages are claimed is alleged to be attributable (in whole or in part). (2) This section bars the right of action in a case to which subsection (1) above applies notwithstanding that (a) the cause of action has not yet accrued; or (b) where section 14A of this Act applies to the action, the date which is for the purposes of that section the starting date for reckoning the period mentioned in subsection (4)(b) of that section has not yet occurred; before the end of the period of limitation prescribed by this section. Limitation Act 1980, sec. 33. See J. Carbonnier, La règle contra non valentem agere non currit praescriptio 57 (1937) Revue critique de législation et de jurisprudence (Rev. crit. lég. et jur.) 155. Cass. civ. 11 December 1918, 1921.1.161. See von Bar (fn. 52) no. 555. Art. 2270-1, as introduced by Act no. 85-677 of 5 July 1985, reads: “Claims for tort liability are barred after ten years from the manifestation of the injury or of its aggravation”. Code Civil, translated by G. Rouhette, updated 4 April 2006. Available at: http://195.83.177.9/code/liste. phtml?lang=uk&c=22. Cass. soc. 18 December 1991, Bulletin des Arrêts de la Chambre civile de la Cour de Cassation (Bull. civ.) 1991 V no. 598. See von Bar (fn. 52) no. 555; le Tourneau/Cadiet (fn. 28) 314 f; M. Bruschi, La prescription en droit de la responsabilité civile (1997) no. 224.

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d) Germany

37

Prescription of claims in tort used to be regulated by § 852 BGB, pursuant to which the claim was barred after three years from the time at which the victim had actual knowledge of the harm and the person liable.75 According to the courts’ interpretation, negligent lack of knowledge was not sufficient in order for prescription to begin to run.76

38

The 2002 reform of the BGB77 has sought to bring a greater degree of uniformity to the statutes of limitation, which are now contained in §§ 194–218 BGB. The normal limitation period under current German law is three years,78 which begins to run at the end of the year in which the claim has arisen and the creditor has gained knowledge, or should have gained knowledge in absence of gross negligence, of the circumstances giving rise to the claim and the identity of the obligor.79 The requisite of knowledge was maintained by the law reform, but grossly negligent lack thereof is now sufficient in order for the limitation period to commence.80

39

Moreover, the new rules on prescription set forth some maximum limitation periods that apply to claims in tort regardless of whether the victim gained knowledge of the relevant information: claims for compensation arising out of violations of life, bodily integrity, health, or liberty become time-barred thirty years after the commission of the act, the breach of duty, or any other event causing the damage;81 all other claims for damages become time-barred (i) ten years after they have arisen, regardless of the creditor’s knowledge, and (ii) thirty years after the commission of the act, breach of duty or the event causing the damage, regardless of the creditor’s knowledge, whichever is earlier.82 2. Conclusive Remarks

40

The legal rules applied in the jurisdictions under review have evolved in such a way as to overcome the problems posed by mere omissions. First of all, it seems to be a well established principle in Europe that a tort is committed when a damage has occurred, and only then does a claim in tort arise. Accordingly, the limitation period usually starts to run with the occurrence or manifestation of the damage and not with the act or omission which constitutes the breach of duty.83 75 76

77

78 79 80

81 82 83

§ 852(1) BGB. An exception could only be made if the victim failed to acknowledge “a blatantly obvious opportunity to perceive the damage”. BGH 9 July 1996, 2933–34, cited by von Bar (fn. 52) no. 556. The so-called Act on the Modernisation of the Law of Obligations came into force on 1 January 2002. § 195 BGB. § 199(1) BGB. See, in general, P. Kuhn, Personal injury compensation in the Federal Republic of Germany, in: M. Bona/P. Mead (eds.), Personal injury compensation in Europe (2003) 237 f. § 199(2) BGB. § 199(3) BGB. Von Bar (fn. 52) no. 550.

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Also, the rules on commencement of prescription seem to be predominantly inspired by the principle “contra non valentem agere non currit prescriptio” (prescription does not run against him who is unable to bring an action), in that they all take into some consideration whether the victim is (or should reasonably be) in a position to gain knowledge of (i) the damage he has suffered, (ii) the importance of the damage and (iii) the attributability of said damage to a specific wrongdoer.84

41

At the bottom of the scale, we find rules which set the occurrence of the damage as the start of the limitation period. On top of the scale, there are those rules which prevent prescription from running until the victim has gained actual knowledge of all the relevant circumstances giving rise to his claim. The moment at which the wrongful act or omission takes place forms the basis for the commencement of prescription only with regard to the longer and overriding limitation periods, set forth in some legal systems for prevailing reasons of legal certainty.85

42

In conclusion, all the examined rules on the commencement of prescription are so devised that they will rarely be affected by the peculiar nature of mere omissions. In particular, the absence of an external event immediately and directly causing the damage does not seem to compromise the interests of the victim in cases of torts by omission, as long as the limitation period is set to start, at the minimum, when the damage itself occurs.

43

84

85

It must be noted that these requirements for the commencement of prescription are in line with those provided for by art. 10(1) EU Product Liability Directive (85/374/EEC), which reads: “Member States shall provide in their legislation that a limitation period of three years shall apply to proceedings for the recovery of damages as provided for in this Directive. The limitation period shall begin to run from the day on which the plaintiff became aware, or should reasonably have become aware, of the damage, the defect and the identity of the producer”. Such long-stop prescription periods are quite plaintiff-friendly, anyway: in England, the fifteen year overriding limitation period does not apply to personal injury cases; in Germany, the longstop period for personal injuries is thirty years after the breach of duty. In particular, it must be considered that a damage will rarely occur or manifest itself so much time after the occurrence of the wrongful act or omission. In any event, the problems raised by latent damage in cases of industrial diseases or contaminated blood transfusions are more likely to depend upon the nature of the disease by which the victim is affected rather than on the type of wrongful conduct.

III. Plurality of Liable Persons and Prescription of Recourse Actions Bjarte Askeland

A. INTRODUCTION 1. Presentation of the subject

1

The subject of this article is the meeting of two common, profound structures within western tort law. The article concerns plurality of liable persons (which often leads to solidary liability) and prescription (or limitation, which is the common law term on the subject.) When we combine these two structures, certain problems emerge, and these are the subject of the following presentation.

2

There already exists a comparative survey on the subject in the ECTIL-initiated anthology on the liability of multiple tortfeasors.1 I have therefore chosen not to make a comprehensive comparative analysis. My ambition is rather to construct a sort of intellectual puzzle that has general cross-border interest. This puzzle will be explained in chapter 2 (no. 6 f.) below.

3

The context of our problem is that the victim V has a claim in tort against the tortfeasors A and B. He may, according to solidary liability, choose to sue both tortfeasors. V sues, however, only A, whereupon A pays V in full. Now A has a recourse action against B. Our main focus is on the rules of limitation governing this recourse claim.

4

The gallery of actors is therefore throughout this article: V – the victim A – the paying tortfeasor B – the other tortfeasor – subject to a recourse action.

5

The Nordic legal family has its own legal concepts and doctrines. In many aspects it features approaches that neither the common law nor the civil law 1

W.V.H. Rogers (ed.), Unification of Tort Law: Multiple Tortfeasors (2004). The sources that this anthology provides have been very useful to this analysis.

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does. This is certainly true for the concepts related to the presented puzzle. Admitting to find it hard to break free from the Nordic conceptual framework, I have chosen a compromise. The concepts and terms in this article will be a pragmatic mixture of the concepts within the said three categories within comparative law. For the concept of an action I will use the word “claim”, and the common law concept of “recourse action” will be named “claim for contribution” or “contribution claim”. The concept of joint and several liability will hereinafter be addressed by the expression “solidary liability”. This last piece of terminology now seems to have been legitimised by the European Group on Tort Law.2 2. The core of the problem Let us firstly have a look at the core of our problem: At the very centre of the analysis we find the following situation: Two tortfeasors − A and B − are solidarily liable to a victim V. The victim claims compensation from A towards the end of the limitation period for the main action. A pays the claim in full.

6

A subsequently wants to make a claim against B − his fellow tortfeasor − for a contribution. By the time A is ready to file a claim against B, the limitation period for the main action (between the victim V and B), has, however, expired. V’s claim against B is prescribed. We should particularly note that B at this point in time expects to be free of the danger of a claim from the victim. Can A still claim from B for a contribution even though the limitation period that applies to the victim’s claim against B has expired? In other words: Must B pay in a “second” limitation period despite the fact that the limitation period of the main action has expired? And we must add other questions: When does this “second” limitation period commence and how long does it last? This is the core of our analysis and what we should keep in mind for the following presentation.

7

B. TORT LAW STRUCTURES, RATIONAL ARGUMENTS AND POLICY CONSIDERATIONS 1. Introduction Before we analyse the questions raised above, it may be fruitful to investigate the rational arguments and the policy considerations of the puzzle. We may find that these arguments and considerations to some degree depend on the relevant tort law structures at play.

8

2. Arguments against a “second” limitation period An argument against establishing a second limitation period comes to the fore if we compare the contribution claim to ordinary claims. In general, one is 2

See, PETL, Text and commentary (2005) 138 ff., see also Principles of European Tort Law Art. 9:101,102.

9

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careful in establishing limitation clauses in order to avoid well-founded claims being defeated. One does not want to deprive the innocent claimant or victim of his rightful claim. This calls for caution and for long limitation periods.

10

The problem we address is, however, entirely different in this respect: Our starting point is that the victim − the main claimant − has already been paid. Prescription of a claim for contribution will only deprive a “guilty” or at least liable tortfeasor of his claim for contribution. The fact that one of the tortfeasors may be forced to pay his debt in full with no contribution from the other tortfeasor is not as bad as where a rightful claim is defeated by limitation. The outcome that a liable person must compensate the victim in full is generally an acceptable and even an often pursued solution within tort law. One may therefore hold that there are not so strong reasons for establishing a lenient limitation regime with a “second” limitation period.

11

This reasoning may be enforced by the fact that B has a legitimate expectation of being free after the first limitation period. He expects to no longer have to secure evidence and to be able to invest his money elsewhere. These traditional arguments behind prescription rules apply also to B.

12

Additionally one may emphasize the fact that the limitation period of the recourse claim may run only after the limitation period of the main claim has expired. The cumulation of limitation periods means that B potentially must wait rather a long time before he can be sure that he is free of claims. This fact also speaks against a second limitation period.

13

On the whole the mentioned factors suggest that the need for a second limitation period is perhaps not very strong. This suggestion points in the direction of strict rules on prescription and short limitation periods.

14

One may therefore hold that strong arguments should be produced if one wants to challenge B’s expectations of being free by the expiry of the limitation period of the main claim. One may, however, find such strong arguments if one looks closer into the relevant profound tort law structures at play. I now particularly hint at the demands of solidary liability as an effective legal institute. 3. Pro a second limitation period: The demands of effective solidary liability a) Introduction

15

Whenever there is a plurality of persons obligated to pay a sum to a creditor based on the same factual event, or at least closely connected factual events, one may speak of one claim. When V has a claim against several tortfeasors for the same event, he may choose to claim from only one of the tortfeasors for the full amount of loss following from the damage.3 He has a right to choose 3

Solidary liability of this kind has different names under the various jurisdictions in Europe. It is, however, a profound and common structure of European tort law; see among others C. von

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who shall pay the claim in full. This is “solidary liability” which is something different to “pro rata” liability. The title of this article may comprise pro rata liability, but this topic will not be addressed. That is of course because there is no recourse where debtors pay pro rata. As we will see later, the right of recourse or contribution presupposes solidary liability and not pro rata liability.

16

b) Constellations of liable persons

At the core of solidary liability you will find the two types of constituting acts that in German law are named “Nebentäterschaft” and “Mittäterschaft”. “Nebentäterschaft” means that two or more torfeasors produced the harmful event by each presenting a necessary cause, a conditio sine qua non. The combination of the causes produces the harmful event.4

17

“Mittäterschaft” means (roughly explained) that a set of tortfeasors form some kind of unit that produces the harm. For this type of plurality of liable persons we should note that not every involved action necessarily has to be a conditio sine qua non. An often used example is the situation where one thief is watching the street while the other robs a house. Even if the active thief would have done this also without any help from the other watching, both of them are liable. And in some jurisdictions there may be solidary liability for participants in demonstrations or strikes even though the single participant’s contributing factor was not a conditio sine qua non, only an unnecessary factor in a sufficient set of factors producing the harmful event.5

18

A third category of liable persons is where the damage is committed in connection with A’s work for B. In many countries an employee will be liable for negligence whereas the employer will be strictly liable. One may also find the same structure connected to independent contractors and their employers.

19

The rule of solidary liability will apply to the three mentioned categories. For the following intellectual puzzle it is first and foremost “Nebentäterschaft” that is the most relevant constellation.

20

One may find plurality of liable persons constituted also on the basis of a contract. For pedagogical reasons we will, in the following elaboration, keep matters simple by focusing on ordinary delictual solidary liability.

21

For the sake of clarification, something ought to be said about the situation where a first party insurer A pays the victim (V) on the basis of an insurance contract and subsequently claims a reimbursement from the tortfeasor B. This

22

4 5

Bar, The Common European Law of Torts: The Core Areas of Tort Law, Its Approximation in Europe, and Its Accommodation in the Legal System, Vol. 1 (1998) 69 no. 50; The European Group of Tort Law, Principles of European Tort Law, Text and commentary (2005) 138 ff. See for example H. Lange/G. Schiemann, Schadenersatzrecht (3rd ed. 2003) 629. Ibid.

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is not solidary liability in the narrow sense of the word and the claim from the insurance company is a not a claim for contribution, rather a claim for reimbursement. Already at this point we may suggest that there may be special concerns and a special solution regarding prescription of such claims and this solution does not necessarily correspond with prescription rules for contribution claims. Therefore we shall exclude these kinds of recourse claims from the following part of the article. c) Solidary liability and the interplay with contribution

23

Where there is “Nebentäterschaft”, “Mittäterschaft” or other kinds of plurality on the tortfeasor’s side, the liable persons will be liable in solidum, or as the common law expresses it: There is joint and several liability. The meaning of this is that if one pays a part of the claim, his payment will be deducted from the other liable person’s debt to the claimant. In the Nordic tradition one has expressed this by using the slogum of the three musketeers: “One for all, and all for one”.

24

The one for all approach is chosen in order to grant the claimant the benefit of choosing who to claim from. The point of this system is the possibility of finding a deep pocket among the tortfeasors. Very often only one of the tortfeasors has the means to pay or is insured. The right to choose one of the tortfeasors therefore means security for the claimant.6 It is also, as Carl Friedrich von Savigny emphasized, very convenient to be able to choose between tortfeasors and let one of them pay it all.7

25

Solidary liability is, as one can see, a wonderful institution in the eyes of the victim. But this structure and this normative figure can, however, not function without granting the tortfeasor who has paid a right of recourse − a right of contribution from the other tortfeasor. Otherwise, firstly, one would risk that the final allocation of the loss would be coincidental or haphazard.8 Secondly, the recourse claim is important to the efficiency of the entire institute of solidary liability: Only where the paying tortfeasor has the right of recourse for at least parts of the amount he has paid, will he be willing to pay it all. The principle of solidary liability is therefore in some connections said to presuppose the right of recourse. One has to see these two elements connected to plurality of liable persons as a comprehensive package.9

26

These observations lead to an important point: The mentioned comprehensiveness and the need to secure a right of recourse for the individual debtors who actually pay the money that the plaintiff claims has to prevail also where limi6 7 8

9

See for example C.F. von Savigny, Obligationenrecht, Vol. I (1851) 217. Ibid. Again; already Savigny emphasized that one should avoid allowing the final allocation of loss to be coincidental or based on “Glücksspiel”, Savigny (fn. 6) 229. The same rationale has been voiced in the Nordic doctrines, see profoundly F. Stang, Erstatningsansvar (1919) 107 and for a more modern work, B. Askeland, Tapsfordeling og regress ved erstatningsoppgjør (2006) 190 ff. On the integration between solidary liability (“Gesamtschuld”) and the recourse action (“Regress”), see for example H. Ehmann, Die Gesamtschuld (1972) 201 ff. and Askeland (fn. 8) 167 ff.

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tation clauses comes into play. The prescription rules should not undermine the system of solidary liability. d) Two elements of the idea of corrective justice

When emphasizing the need for a right of recourse, we appeal to a sort of negative rationale: As mentioned, we do not want the final allocation of the loss between the defendants to be haphazard.10 And we do not want to have a system where the victim is in a position to decide who shall bear the final loss. Behind this way of thinking lies also the rationale of corrective justice, or at least, one element of it.

27

The notion of corrective justice has been developed through the ages from the times of Aristotle and onwards. In a nutshell the notion may be divided into two elements: Firstly, the victim shall have his damage restored, and secondly, the tortfeasor shall pay the victim according to his misdeed or the extent of his infliction on the sphere of the victim. In modern writing on the subject, Ernest Weinrib has emphasized the connection and the symmetry between the two sides of corrective justice by referring to the idea of correlativity:11 Once the tortfeasor has committed a harmful act to the victim, a sort of unbreakable bond is established between the two said actors. Now the victim has to be restored in full by the very same subject who caused the harmful event. The idea of correlativity emphasizes the symmetry between the victim’s restoration and the tortfeasor’s duty to pay.

28

An important observation is, however, that the institute of solidary liability actually divides the mentioned two sides (or elements) of corrective justice. When A pays the claim in full, the victim is granted the satisfaction of corrective justice. The other side of corrective justice is, however, not addressed properly. B should also pay for the part of the damage which he caused. And A should only pay for his part of the damage or bear a loss proportionate to his contribution to the infliction of the victim’s rights. This side of corrective justice may only be achieved by a recourse action or, in other words, a contribution claim. To enforce this side of the idea is also important in the light of preventive aims.

29

Against the background of this reasoning one can also see that it is important that the rules of prescription do not undermine the recourse action.

30

e) The triangle of legal positions

(i) Triangles in tort law in general A number of problems within tort law concern triangles of legal positions. We have already touched upon one: The two tortfeasors and the victim. Another triangle occurs, for example, in the mentioned interplay between the tortfeasor, the plaintiff and the insurance company (see supra no. 22). 10 11

See fn. 8. See E. Weinrib, Correlativity, personality and the Emerging Consensus on Corrective Justice, Theoretical Inquiries in Law, Vol. 2, 107 ff., included in the anthology E. Weinrib (ed.), Tort Law (2002) 513 ff.

31

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32

For all such triangles we may observe the following: If one corner of the triangle gains a benefit, another corner will suffer. It is often a determined amount of money we are dividing between the three parties. This is for instance the case when A pays the full amount to the victim, upon claiming a contribution from B. Here the victim is compensated for the damage he has suffered, whereas the other two parties are left with a battle as to who shall bear the loss or the greater part of the loss.

33

A similar effect occurs concerning the parties’ interests connected to prescription. If the plaintiff is granted a long limitation period, this is advantageous for him, whereas a shorter period satisfies the interest of the tortfeasors. In order to get a grip on our core problem it may be useful to investigate the interests of the three corners of our triangle of actors. (ii) The three corners of our triangle – The victim

34

It is in the victim’s interest to have a long limitation period for his claim against A, the main action. Moreover, the victim will probably prefer to have rules which do not make A or B reluctant to pay. As described above, one inseparable feature of solidary liability is the rules on contribution. Only where these rules are effective and not undermined by limitation clauses will the victim actually benefit from the solidary liability.

35

Indirectly the victim therefore will benefit from rules that ensure that the paying debtor, A will have a claim against his fellow debtor, B. In the interest of the victim, the limitation period of the recourse claim should be as long as possible. – A – the paying tortfeasor

36

A wants to pay to be rid of his debt and to avoid default interest. He does, however, not want to pay without being sure that he can make a claim for contribution against B. The rules must ensure that A may claim contribution also when he pays in the last period before the limitation period expires. A definitely wants an additional “second” limitation period designed for the recourse claim. – B – the subject of a recourse claim

37

B has a legitimate interest in being able to close his books, confident that he can no longer be sued because the limitation period has expired. If so, he no longer has to secure evidence and he can invest his money elsewhere. He must no longer ensure that he has the means to pay in case a claim is filed against him.12 B will generally want to walk away without paying at all.

12

On this point, see for example C. Huber, Die Verjährung von gesetzlichen Rückersatzansprüchen, Juristische Blätter (JBl) 1985, 395 ff., 467.

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B may be under the impression that he has a sort of “right” to not being sued from expiry of the limitation period of the main action and later. Why should he not have this right in cases where there is plurality of liable persons? This is in fact a crucial point in our subject.13 Should he be deprived of his initial protection by the limitation rules only because he is one of several tortfeasors? Should one single tortfeasor have greater protection than a tortfeasor who has acted in some sort of co-operation with others?

38

As suggested in theory on legal rules on prescription there is also a public interest in securing fair decisions.14 A prescription period is a forceful instrument in order to avoid cases being based on old and dubious evidence. This perspective may enforce B’s case for a strict prescription regime.

39

On the other hand the examination of the perspectives of the three parties in the triangle shows that B’s interests may not be as worthy of protection as the interests of V and A. The analysis suggests that V and A pursue the ideology of corrective justice, whereas B does not. He pursues actually (again generally) the plain interest of being granted an undeserved windfall.

40

f)

Policy, consistency and justice

Striking a balance between the interests of the three actors may turn on different policy considerations. At this point the academic challenge is somewhat similar to the question of striking the balance between debtor and creditor in ordinary questions of limitation.15

41

The elaboration above suggests that we should not have strict prescription rules that undermine the function of solidary liability. An important point is that securing A his recourse claim will actually benefit the victim V.

42

A part of the picture is also the consistency between different parts of the legal system. One may hold that the demands of solidary liability and corrective justice are so strong that B’s expectations of being free of claims after the ordinary limitation period do not have sufficient weight. In that case his expectations must give way to more important structures of tort law, such as solidary liability and corrective justice.

43

Additionally one may bring to the fore the question of justice and “moral solidarity” between tortfeasors. The reason that A has been chosen in the first place may be that he is a tortfeasor who is likely to pay without causing trouble. He will often have a “deep pocket”, and he is very likely to be financially stronger than B. Against this background it seems a bit unsatisfactory to let B steal away

44

13

14 15

Huber, JBl 1985, 473 ff. points at the debtor’s interest in being free of the danger of being sued at a certain point in time. Huber, JBl 1985, 467. See for example R. Zimmermann, Comparative Foundations of a European Law of Set-off and Prescription (2002) 76 ff.

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without paying. To put it rhetorically: No one should benefit from having a “shallow pocket”. Consequently the rules should secure that B must pay according to the recourse claim.

45

Hence, this preliminary analysis leads to the conclusion that 1) there is a need for especially designed rules to solve the problems of plurality and prescription and 2) these especially designed rules should favour V and A, not B.

C. PRESCRIPTION OF THE RECOURSE ACTION 1. Introduction

46

The task before us now is − in light of the presented reasoning − to design the best solution to the Puzzle of Plurality and Prescription. 2. Preliminary question: The character of the recourse claim a) Introduction

47

In order to take the best approach to the problem, we firstly have to scrutinize the character of the recourse claim.

48

The claim that tortfeasor A has against tortfeasor B may be a claim based on one of two constructions.16 The right of recourse may firstly be based on subrogation. This is the case in countries like France, Austria or Israel.17 The recourse claim may secondly, and alternatively, be regarded as an independent claim of contribution. This goes for England and the Scandinavian countries. The choice between these two constructions of a claim has an impact on the question of prescription. We must therefore make a short preliminary analysis of this subject. b) A subrogation claim (cessio legis)?

49

If the claim is based on subrogation, one bases the claim on the fact that A pays a sum of money to the victim that actually B is liable for. In other words, the victim’s claim against B is subrogated to A as a consequence of A paying in full. The rationale is that A, when paying in full, actually pays a share that rightfully should be paid by B.

50

One suggestion may be that tortfeasor A in this case bases his claim against tortfeasor B on cessio legis. If so, the natural solution would be that the limita16

17

W.V.H. Rogers, Comparative report on Multiple Tortfeasors, in: W.V.H. Rogers (ed.), Unification of Tort Law: Multiple Tortfeasors (2004) 271 ff., 301. The cognition of the two possible approaches is a point of departure also in a Danish elaboration of our problem, see B. von Eyben, Foreldelse af regreskrav indenfor erstatningsretten (translated: Prescription of recourse claims within tort law), in: T. Iversen/L. Hedegaard Kristensen/E. Werlauff (eds.), Hyldestskrift til Jørgen Nørgaard (2003) 653 ff., 654 f. See Rogers (fn. 16) 301.

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tion rules of the main claim apply to the recourse claim. That would in fact be the logical consequence of subrogation.18 A well known proponent of this view is Helmut Koziol:

51

“… jeder Solidarschuldner, der mehr als seinen internen Anteil an den Gläubiger zahlt, zum Teile eine bloss formell eigene, materiell aber fremde Schuld zahlt.”19 If one chooses this construction, there may clearly be constrains on the limitation regime. When V’s claim against B is subrogated to A, one may argue that also the prescription regime connected to the main claim should be subrogated.20 In this way one will have less room for designing an ideal solution to the puzzle.

52

At this point there is, however, a major collision between the Austrian (or more precisely the Koziolian) and the Nordic approaches. This needs further clarification.

53

c) An independent claim for contribution

In the Nordic discussions on tort law, the late professor Fredrik Stang had an almost as prominent position as Helmut Koziol has in Austria. Fredrik Stang was in fact very influential in the first half of the twentieth century. He imported the John Stuart Mills doctrine on causality into Nordic legal theory. Stang took Mills’ theories on conditio sine qua non and his theory of equivalence very seriously: All necessary causes, however small, are to be regarded as a cause of the whole of the damage.

54

Stang applied this logical theory as the rationale behind solidary liability, and the victim’s right to claim that one of the tortfeasors had to pay the claim in full. Each torfeasor whose acts were a conditio sine qua non for the damage in principle must also be held liable for the whole of the damage.21 Consequently: When tortfeasor A pays for the whole of the damage, he simply pays what he himself owes. According to Stang, the payment was not at all about “fremde Schuld”. Therefore the construction of subrogation, according to the Nordic view, does not fit the (ontological) event we are elaborating. The fact that A may claim a contribution from tortfeasor B makes no difference in this respect. A is therefore liable even for the share that eventually is to be paid by tortfeasor B. In fact, tortfeasor A is merely paying his own debt.

55

18

19 20 21

In Austrian theory this solution has been suggested, however, not approved by the courts, see B.A. Koch/P. Schwarzenegger, Multiple Tortfeasors under Austrian law, in: W.V.H. Rogers (ed.), Unification of Tort Law: Multiple Tortfeasors (2004) 21. H. Koziol, Österreichisches Haftpflichtrecht I. Allgemeiner Teil (3rd ed. 1997) 468. Von Eyben (fn. 16) 655. F. Stang, Skade voldt av flere (1918) 9. This viewpoint has also been expressed in H.L.A. Hart/ T. Honoré, Causation in the Law (2nd ed. 1985) 20–26.

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56

Following the suggested logic, the claim that A has against B is not really a claim that accrued when B harmed the plaintiff. The claim accrued at the point in time when A paid the claim for which A and B were subjects to solidary liability.

57

This last observation points in the direction that the claim A has against B is a new and independent claim with its special limitation period. As the claim in reality is constituted by events other than merely B’s tortious act against the plaintiff, there is no reason why the plaintiff’s original claim against B should have any bearing on the time limits connected to A’s claim against B. Therefore one is free to choose the best available solution to the questions of limitation, free from any constrains generated by the subrogation approach. This last implication of the Nordic approach has not been articulated clearly in the doctrine. The implication may, however, explain the fact that the Nordic countries have constructed special rules on limitation for the contribution claim.

58

For our further analysis we may choose to construct the recourse action as an independent claim of contribution. This way we will have our hands free to tailor the best solutions to the Puzzle of Plurality and Prescription. 3. Prescription of the contribution claim – three problems a) Introduction

59

We will now address the core problems connected to prescription of contribution claims.

60

Before we start, we have to recognize the context of our problem. There are in particular two factors that deserve attention. Firstly: Our problem emerges only after the commencement of the limitation period connected to the main claim and especially whenever A pays in full towards the end of this limitation period. For the purpose of simplification we may note that many of the countries in Europe have a three-year-period, and that this period commonly has a suspensive commencement.22 This means that the period starts running from the time when the claim has accrued and the claimant is aware of it or ought to be aware of the tortfeasor and his liability.

61

Secondly, many jurisdictions also have non-suspensive long-stop periods of at least ten years commencing from the time of the accrual of the main claim.

62

The commencement of the limitation period for the main claim may be suspended towards the end of the long-stop period. The main claim may therefore very well be paid as late as nine years after the accrual and even later if the long-stop is 20 or 30 years. Only then do the problems connected to the recourse claim and its special, “second”, limitation period emerge. 22

The word “suspensive” is an invention for the purpose of this article. The expression connotes that the period in question has “the ability to be suspended”. In Nordic legal literature the equivalent term “suspensiv” is commonly applied and provides a useful term when dealing with difficult questions on limitation.

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The answers to the questions of commencement and duration of the second limitation period build together an integrated and comprehensive solution to our problem.23 For pedagogical purposes I have, however, chosen to divide these two subjects. We will start with the duration of the “second” limitation period before we proceed to the question of commencement. Finally we will address the conflict between the second limitation period and the long-stop.

63

b) How long should the “second” limitation period be?

At this point we find a variety of solutions in Europe.

64

Some countries have designed a special limitation period and enacted particular statutory provisions for this kind of claim. This is the case in England, Norway, Sweden and Denmark. In all the Scandinavian countries the rule is that the limitation period cannot expire before one year after payment from A to V.24 The English rule prescribes a second limitation period of two years.25

65

One should note that this a two tracked system. The ordinary limitation period of three years runs independently of the one-year-period. This means that if A pays V before the ordinary period has been running for two years, the oneyear-period will have no effect at all. The one-year-period is a means of securing that A has time to present his claim for contribution also where he pays the victim near the end of the ordinary limitation period.26

66

Some countries apply the same regime for the recourse action as for the main claim. This goes inter alia for Germany, where the period for B may roughly be three plus three years – or six years.27 A similar doubling of the period may occur in Israel, where a contribution claim is regarded as a claim based on unjust enrichment. The claim accrues the day of the payment of the contribution. At this point in time an entirely new claim arises. This may theoretically lead to a doubling of the general limitation period of seven years. The factual limitation period may in other words amount to seven plus seven = fourteen years.28 Poland also apparently applies the same regulation as for the main action.29 A solution resembling the German system will be enacted if the proposal of the Law Commission of England and Wales is accepted in Parliament.30

67

23 24

25 26 27

28

29

30

Zimmermann (fn. 15) 76. Forældelsesloven 6 June 2007 no. 522 (Danish Limitation Act) § 11 no. 2, Preskriptionslagen (1981: 130) (Swedish Limitation Act) § 4, Lov om foreldelse av fordringer 18 May 1979 no. 18 (Norwegian Limitation Act) § 8. See the English Limitation Act 1980 s. 10 (3). See J. Hellner/M. Radetzki, Skadeståndsrätt (translated: Tort law) (2006) 435. One should note that Germany has suspensive commencement of both the limitation periods, § 199 (1) BGB (see below). This means that the factual limitation period may be much longer. I. Gilead, Multiple Tortfeasors under Israeli Law, in: W.V.H. Rogers (ed.), Unification of Tort Law: Multiple Tortfeasors (2004) 103 ff., 112. M. Nesterowicz/E. Bagińska, Multiple Tortfeasors under Polish Law, in: W.V.H. Rogers (ed.), Unification of tort law: Multiple Tortfeasors (2004) 151 ff., 161. Law Commission, Limitation of Actions (http://www.lawcom.gov.uk/limitation_actions.htm), Part XII Options for reform II: A new core limitation regime.

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68

A third solution emerges where the subrogation claim does not qualify for any special systems of prescription so that one has to resort to very general rules. In Austria the resort to general rules on limitation leads to a limitation period of as much as 30 years. This is of course not a preferable solution. It has been criticised by Helmut Koziol, who proposes a shorter limitation period by pointing to the construction of subrogation mentioned above.31 If one follows the solution recommended by Koziol for Austrian law to regard the contribution claim as cessio legis, the limitation period will be three years.32A similarly unsatisfactory solution based on general rules is to be found in the Netherlands, where the limitation period is 20 years.33

69

There are good reasons for choosing the solution that brings the shortest limitation period. In this way one secures A a right of recourse, yet at the same time meets B’s need to be able to walk away from the claim at one point in time. This must at least be the best solution where the second limitation period has a suspensive commencement (see infra no. 75).

70

The other presented solutions comprising a longer limitation period seem to be a result of the fact that the jurisdictions have not designed a special solution to the Puzzle of Plurality and Prescription. As long as we are free to design our solution, we should opt for the best possible balancing of the interests of V, A and B. c) When does the limitation period for the recourse claim commence?

(i) Various solutions in European jurisdictions

71

A common solution seems to be that the limitation period starts running from the date of A’s payment of the main claim. This is for example the solution in the Scandinavian countries. Hence the period starts running from the day A pays more than his share, so that he has the right to a recourse claim for contribution from B. At this time the claim A has against B is born.

72

Under English law a similar system is adopted, with the modification that the contribution claim accrues at the time of judgment or settlement.34

73

It is very important to note that, unlike the regulation of the main claim in these jurisdictions, the limitation period starts running based on an objective criterion. Furthermore the starting point is not suspensive: The limitation period commences when A makes his payment (or by settlement under English law) regardless of whether or not A knows (or ought to know) about B and his liability.

31 32 33

34

Koziol (fn. 19) 468; see supra no. 49–51. Koch/Schwarzenegger (fn. 18) 21. W. van Boom, Multiple Tortfeasors under Dutch Law, in: W.V.H. Rogers (ed.), Unification of Tort Law: Multiple Tortfeasors (2004) 135 ff., 147. See the English Limitation Act 1980 sec. 10 (3).

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Also in countries which do not have especially designed rules for the limitation of the recourse claim, the starting point is based on an objective criterion. In Austria the general rule in ABGB § 1489 of a 30 year limitation period applies. For this rule the awareness of the claimant is irrelevant.35 This means that the limitation period starts running from the date of the accrual of the recourse claim. That would probably be the day of the payment. This means that the factual limitation period may be as long as nearly 60 years, a solution that is hard to defend on policy grounds. A similar system seems to be applied in Israel, where the claim – as mentioned – is based on unjust enrichment.36

74

Some jurisdictions, however, allow the starting point of the limitation period to be suspended. Suspension will for example occur in German law in cases where A does not know about the claim for contribution and has not been guilty of gross negligence in this respect.37 This structure of accrual plus suspension is similar to the regime of the main action in many countries.38 The Law Commission of England and Wales has suggested this solution for the future, whereas – as mentioned – the limitation period now starts running from the time of the settlement.39

75

(ii) Should the limitation period be suspensive? One may ask which is the better solution, suspension or not? One may hold that the payment of the main claim gives A the necessary incitement to investigate whether or not there are other tortfeasors involved and that one or two years should be sufficient for such an investigation.40

76

On the other hand: The concern for A as the willing payer who pursues corrective justice points in the direction of suspension. So does also the reasoning connected to the effectiveness of solidary liability. An objective criterion may very well deprive A of his recourse claim. In cases where A does not know about other tortfeasors, the limitation period may expire before he has had a chance to file a claim.

77

A claim should, in principle, never be prescribed before the claimant has had the chance to claim a contribution from the defendant. This principle has in some context been referred to as the discoverability criterion.41 Deprivation of the recourse claim may, however, occur if the limitation period of the contribu-

78

35 36

37 38

39 40

41

R. Dittrich/H. Tades (eds.), Das Allgemeine bürgerliche Gesetzbuch (2005) 578. I. Gilead, Multiple Tortfeasors under Israeli law, in: W.V.H. Rogers (ed.), Unification of Tort Law: Multiple Tortfeasors (2004) 103 ff., 112. § 199 (1) no. 2 BGB For the sake of order: In Germany the starting point of the limitation period only starts running from the end of the year when the requisites of accrual and awareness are met, see § 199 (1) BGB. Law Commission (fn. 30) no. 13.84–13.85. This reasoning is applied by the Law Commission in another context, as a reason for saying that the difference between settlement and a suspensive limitation period “may not have much impact in practice”, see Law Commission (fn. 30) no. 13.85. See for example Zimmermann (fn. 15) 92.

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tion claim is not suspensive. This outcome is not appealing and it suggests that the period should be suspensive.

79

An example illustrates that this may be a problem of practical importance: Suppose that the victim (V) has negligently been exposed to a damaging substance by his former employer A. The victim sues A, whereupon A pays in full. Five years later it is discovered that V would also have had a claim against his other former employer B for negligently being exposed to another damaging substance. Medical science has revealed that also the material B exposed the victim to contributed to his illness.

80

In this situation A is barred from a contribution from B in England as well as in Scandinavia. This is, in my opinion, not satisfying. A is in fact deprived of a contribution due to coincidence and bad luck.

81

In addition the solution contradicts the general policy on personal injuries, namely the tendency to establish extensive or no long-stop periods for this kind of damage. In jurisdictions with a suspensive main action these extensive long-stops means that B really has no expectation of walking away from the claim without paying. In fact, the only way B can be free of the claim is via his fellow tortfeasor A and the objective criterion for commencement of the second limitation period. The early commencement may lead to expiry of the recourse claim even before A knows about B’s existence. This effect of the rules is hard to defend. It seems to simply be a result of the fact that no one has scrutinized the consistency within the system when it comes to recourse claims for contribution.

82

In my opinion, a far better solution is that the second limitation period is suspensive. The solution under German law is at this point worth following.42 d) Conflict between long-stop and prescription of recourse actions

83

Now we have established the possible regulations concerning the ordinary periods of limitation starting from the point in time where the victim has a real possibility to claim from A. As we have seen, A’s recourse claim may be secured by an especially designed “second” limitation period.

84

However, most countries also have a long period of limitation which runs independently of the regular prescription rule, a so-called “long-stop”. This longer period is non-suspensive and commences at the point in time when the harmful event occurred or when a lasting harmful activity ended. The long-stops commonly vary from 10 to 30 years, and in many countries there are different lengths depending on whether the claim is based on material damage or personal injury. The latter will often constitute the longest period of 30 years.43 42

43

As mentioned above, under German law the commencement of the second limitation period is suspended as long as A does not know about B and has not been grossly negligent in this respect, see § 199 (1) no. 2 BGB See for example German law, § 199 (2) BGB.

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We have established that many countries operate with a limitation period of three years for the main action with a suspensive starting point; the period only starts running when the claimant is aware of or ought to be aware of the claim. Only by payment in the first suspensive limitation period will the second limitation period commence. This means that the second limitation period may commence towards the end of the long-stop. The suspension of the starting point of the limitation period for the main action may therefore lead to a conflict between the second limitation period and the long-stop.

85

Suppose that the long-stop period is ten years and that V claims from A only after nine years and ten months. A pays one month later, hence within the period of the long-stop. Now, suppose that A then files a claim against B for contribution ten years and six months after the main action accrued and the long limitation period started running. Should the long-stop period defeat the second limitation period?

86

This is a fairly unpractical question, and there are very few authors who address the question. One exception is A. McGee who holds that the long-stop defeats the suspensive limitation period.44

87

Personally I think that there must be some consistency between the ordinary regime and the regime of the contribution claim. If the long-stop defeats the innocent victim’s claim – which it does – it should also defeat the “guilty” liable tortfeasor’s claim for contribution. In other words: The liable tortfeasor’s claim for contribution should not have any better standing than the main claim against B. Both claims must be weighed against B’s “right” to eventually walk away without paying. The result that the liable A must bear the full loss is far easier to accept than the fact that an innocent claimant is deprived of his claim due to the long-stop. So my answer is in the affirmative: The long-stop should defeat the claim for contribution.

88

After I had presented this opinion of mine in a lecture at the Annual Conference of European Tort Law in Vienna, ultimo March 2008, Bernhard Koch ex auditoria objected that this solution presupposes that the recourse claim is not independent after all: If the claim really were independent there would be no reason to pay respect to the long-stop. I admit that Koch is making a good point. In terms of respecting a system, it seems somewhat inconsistent to firstly eliminate the constraints of the main claim and thereafter put weight on the long-stop connected to very same claim. The objection may, however, be met by looking at the problem from B’s perspective. His expectations of being free of claims is favoured by a long-stop that even defeats a claim from an innocent claimant. At this point in time, after the accrual of the main claim, the lawmaker has found sufficient grounds for letting B walk away without paying. Should this balancing of interests be altered to the disadvantage of B when confronted with the interests of a liable (“not innocent”) claimant? Should V really have a weaker position towards B than towards A? From many perspectives V is more worthy

89

44

A. McGee, Limitation Periods (5th ed. 2006) 322.

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of protection than A. A salient feature of Scandinavian (or typically Norwegian) pragmatism is to water down the importance of the system whenever necessary in order to reach a sound (or the best) solution. Consistency between various solutions may sometimes be more important than to strictly follow an established system. Based on Norwegian legal rationality, Koch’s objection therefore is not decisive. This exchange of opinions shows in an interesting way how continental approaches to law may sometimes collide with Northern pragmatism.

D. AN IDEALIZED SOLUTION TO THE PUZZLE (A “CORE REGIME”) 90

So, being an academic and enjoying the benefit of being able to engage in intellectual puzzles, I would like to end this article by putting forward a suggestion for the best solution. This may be a sort of proposal for a core regime like those suggested by Zimmermann in his book on off-set and prescription45 and by the Law Commission of England and Wales.46 These regimes comprise a suspensive limitation period of three years for the main action. This will be the point of departure for our construction of a further core regime designed for the contribution claim. My solution is actually (and maybe not surprisingly) a mixture of the English, German and Scandinavian solutions.

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In this respect I put substantial weight on the notion that the limitation rules should be consistent with the institute of solidary liability. As we have learned: Only if the solidary liability is supplemented by rules on contribution will the legal institute be effective and a real help to the victim V. A will be willing to pay in full without hesitation only because he expects a contribution from B. The limitation rules should not jeopardize this effect of the integration between the right to choose and the contribution claim. The rules should rather be designed to secure the effect. This reasoning strongly suggests that A must have a right of recourse against B even though the victim no longer has a claim against B due to prescription. This solution is also consistent with the element of corrective justice, which stresses that the defendant should pay proportional to his misdeed.

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Following this reasoning, A must be granted the right to claim for contribution in a “second” limitation period. However, A does not need an “ocean of time” to claim from B. No more than one year should be sufficient to fill his needs.

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The starting point of this limitation period should, however, be the time when A became aware of or when he ought to have become aware of B and his liability. The limitation period should in other words be suspensive. The reason for this is that A may otherwise be reluctant to pay the claim in full. As mentioned, we must not undermine the system of solidary liability and contribution. 45 46

Zimmermann (fn. 15) 96. Law Commission (fn. 30) Part XII Options for reform II: A new core limitation regime.

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There must, on the other hand, be an outer limit for this kind of claim. For the outer limit – the long-stop periods – the general rationale is that the liable person should be free of his claim at a certain point in time. The most logical and consistent consequence of this general view is that one respects the long-stop also when it comes to recourse claims. Hence the long-stop should defeat the limitation period of the recourse action.

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IV. Economic Analysis of Prescription in Tort Law Israel Gilead

A. INTRODUCTION 1

The economic analysis of law examines whether and to what extent legal rules contribute to the aggregate welfare, that is, to the total well-being of society. It examines, to use a popular idiom, whether and to what extent these rules, given their alternatives, enlarge or reduce the size of society’s pie of utility.1 A rule is considered efficient when it enlarges the utility pie and inefficient when it reduces it. So the subject matter of the economic analysis of law is well-being, and its normative aim, efficiency, is to use the law to increase well-being in society.

2

My purpose here is to focus on the economic analysis of prescription in tort law. My aim is not to engage in a detailed efficiency analysis of rules of prescription law, but rather to introduce the basic building-blocks and structure of such an analysis. A basic feature of this analysis is that it has two layers. The first layer is the economic analysis of tort law. The second layer is the economic analysis of prescription law which applies to tort actions. As prescription law imposes time limits on the ability to adjudicate tort actions, the efficiency of prescription is actually a derivative of the efficiency of tort actions. When tort actions are efficient, time limits that bar them are by their nature inefficient. When tort actions are inefficient, time limits that prevent this inefficiency are therefore efficient. Hence, time limits can either undermine the efficiency of tort law (by limiting efficient actions) or enhance it (by limiting inefficient actions). To examine their efficiency (the second layer), one has first to examine the efficiency of tort actions (the first layer). To that end Part B enumerates the different aspects in which tort law promotes economic efficiency or undermines it, and Part C highlights two time-related factors that affect the efficiency of tort law in its various aspects: the error factor and the uncertainty factor.

1

“Welfare”, “well-being” and “utility” are used here as synonyms.

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The three major time-related aspects in which tort law promotes efficiency are deterrence, loss-spreading and perceptions of fairness. However, it may also undermine efficiency in each of these aspects. Thus, the economic analysis of prescription law asks, with regard to each of these aspects, which time limit reduces the efficiency of tort law by barring efficient actions and which time limit contributes to it by barring inefficient actions, and to what extent. The challenge is to identify the optimal time limit which maximizes the contribution of tort law to efficiency in each aspect. Parts D, E and F tackle these questions with regard, respectively, to deterrence, loss-spreading and perceptions of fairness.

3

The other time-related aspects that bear on the efficiency of tort law are litigation costs, costs of preserving evidence and financial reserves, uncertainties regarding one’s financial situation and hanging-risk-of-liability aversion. These aspects differ from the former aspects. While the former are aspects in which tort law works two ways, both promoting efficiency and undermining it, in the latter aspects tort law works only one way, by producing costs that erode its efficiency. Time limits, by their nature, reduce the number of tort actions and “save” their costs, thereby contributing to the efficiency of tort law in these aspects. These other aspects, and the scope of cost saving, are discussed in Part G.

4

An overview of the multiplicity of aspects in which tort actions promote or undermine efficiency, and in which time limits reduce the efficiency of tort law or contribute to it, raises two issues. The first concerns the cross-effects between the different aspects of efficiency. How does the effect of time limits on one aspect of efficiency influence other aspects? The second issue is the extent to which the efficiency of a time limit depends on the kind of the activity to which it applies. These issues are discussed in Part H.

5

Time limits, it should be stressed, are products, constructions, of the combined output of four groups of rules of prescription: rules that determine when a cause of action accrues; rules that set the prescription periods; rules that suspend the running of a prescription period, renew it or postpone its expiry; and rules that set a “long-stop” (ceiling) time limit.2 The economic analysis of prescription law is therefore the economic analysis of these rules. As such, it should take into account the interrelation between these rules, and how a change in one rule might affect the products of the others. This additional complexity is discussed in Part I.

6

Given the complexities of the economic analysis of interrelated rules of prescription whose conjunction shapes the time limits that affect various and in-

7

2

For an instructive discussion of the different components of prescription law from a European comparative perspective, see R. Zimmermann, Comparative Foundations of European Law of Set-off and Prescription (2002). See also E.H. Hondius (ed.), Extinctive Prescription on the Limitation of Actions. Reports of the XIVth Congress, International Academy of Comparative Law (1995).

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terconnected aspects of efficiency in different ways, one may wonder whether such an analysis can come up with clear and reliable conclusions. An economic analysis of the discovery rule, the major rule that suspends the running of the prescription period, may provide better understanding of these complexities. An attempt to conduct such an initial analysis is made in Part J.

8

The conclusions are presented in Part K. The major conclusion is that due to the complexity of the economic analysis of prescription law, and the lack of relevant information, it is indeed doubtful whether substantiated arguments can be made about the efficiency of specific rules or time limits. Yet the discussion does lead to some hypotheses, enumerated in Part K, regarding the efficient length of the general prescription period and of the “long-stop” (ceiling) period, and regarding the factors affecting the efficiency of rules of suspension, postponement and renewal of the prescription period. Other conclusions are that the design of different time limits for different activities seems to be efficient, that prescription law is not necessarily bad for potential plaintiffs, that the number of those who stand to benefit from prescription law probably exceeds the number of those who may be negatively affected by it, and, finally, that the efficiency of prescription law may be undermined by broad discretionary powers in this regard. A short reference to the literature dealing with the economic analysis of prescription law concludes the discussion.

B. ASPECTS OF EFFICIENCY AFFECTED BY TORT LAW 9

Standard economic analysis, to recall, identifies three major aspects in which tort law, through tort actions, affects aggregate utility.3 The first and major one is deterrence. Tort law deters actors, potential defendants, from creating inefficient risks, namely, risks whose expected costs exceed the costs of their prevention. Without tort liability actors may create such risks because they externalize their costs. Tort liability, whether fault-based or strict, corrects this inefficiency by internalizing the costs of inefficient risks to their generators and thereby inducing them to avoid such risks through changes in levels of care and in volume of activities.4 The second aspect in which tort liability affects aggregate utility is loss-spreading. Loss-spreading is efficient when it secures sufficient resources for the repair and mitigation of losses, when it prevents the economic and social dislocation that the heavy burden of the loss may cause, and when it lowers the costs of risk aversion which would otherwise be incurred by those who would have to carry the burden of loss. Tort law affects loss-spreading by creating a loss-spreading mechanism that would not exist without tort liability – liability insurance. Liability insurance contributes to aggregate welfare when it efficiently spreads loss that would not be otherwise spread, when it spreads loss more efficiently than the alternative mechanisms of loss-spreading (first-party insurance and social insurance), and when it low3 4

G. Calabresi, The Costs of Accident: A Legal and Economic Analysis (1970). I. Gilead, Tort Law and Internalization: The Gap Between Private Loss and Social Cost, 17 International Review of Law & Economics (Int. Rev. Law & Econ.) 1997, 589.

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ers risk aversion and encourages actors to engage in efficient activities.5 The third aspect in which tort liability affects aggregate utility according to standard economic analysis is the cost of operating the tort system. This operation consumes resources – direct and indirect costs of litigation to the parties and to society – that could otherwise be used to enlarge the utility pie. The costs of the tort system depend on the one hand on the number of actions filed and on the other hand on the costs involved in each action. The welfare effects of tort actions, however, exceed those of deterrence, lossspreading and costs of litigation. On the positive side tort actions contribute significantly to the well-being of loss sufferers by providing them with tools to vindicate their rights when infringed by tortious activities. The feeling that one’s rights are recognized and protected by society is an important source of welfare. On the negative side, tort actions expose potential defendants to significant negative welfare effects. These include the costs of maintaining and preserving evidence to defend future claims, the costs of keeping substantial financial reserves to meet future claims, the costs of not knowing one’s financial situation due to unknown potential future liabilities, and the diminishment of one’s well-being when unknown legal risks hang over one’s head. As to actual defendants, tort actions may further diminish their well-being when they are found liable in tort, especially when they believe they have committed no wrong.

10

Before we examine the effect of time limits on each of these aspects it would be useful to introduce two time-related factors that have a general bearing on the efficiency of tort law in various aspects.

11

C. ERRORS AND UNCERTAINTY: TIME-RELATED FACTORS AFFECTING TORT LAW’S EFFICIENCY Tort actions promote efficiency in each of the aspects mentioned only to the extent that the judicial decisions in these actions are of sufficient quality in terms of efficiency. From the deterrence aspect this quality means that they should deter potential defendants from creating inefficient risks, while encouraging desirable activities that generate efficient risks. From the loss-spreading aspect this quality means that they should support rather than undermine liability insurance, which spreads losses efficiently and encourages efficient activities. From the aspect of perceptions of fairness this quality means making plaintiffs and defendants feel that infringed rights are vindicated while undeserved claims are denied. This desired quality, in all its aspects, depends to a great extent on the ability of courts to ascertain the relevant facts of each adjudicated case without errors. Efficient deterrence and loss-spreading depend upon the ability of courts to properly evaluate the costs of the risks on the one hand 5

See G.T. Schwartz, The Ethics and Economics of Tort Liability Insurance, 85 Cornell L. Rev. 1990, 313.

12

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and the costs of their prevention on the other hand. Usually, people will feel that justice has been done to them, either as plaintiffs or as defendants, where courts decide cases on the basis of what actually happened. So lack of error in judicial decisions has an important impact on the efficiency of these decisions. Higher quality (less errors) enables greater efficiency, and vice-versa.

13

The error factor, the quality of judgments in terms of errors, is clearly timerelated. The passage of time has contradicting effects on the error factor. It seems that initially, after the accrual of the cause of action, its effect on the quality of judgments is positive, but that after a certain period its effect becomes increasingly negative. The contribution of the passage of time to the quality of judgments tends to be positive at the outset because it usually takes some time before the relevant facts of a tort action can be ascertained, such as what loss has been caused by the actor’s activity and its actual and future scope. It may also take time to assemble the relevant facts regarding the parties’ risk-creating activities and to disclose the tortious aspects of these activities. In contrast, the effect of the passage of time on the quality of judgments may become increasingly negative after a certain period. It becomes increasingly difficult to ascertain the relevant facts because witnesses may not be available, memories fade, documents and other forms of data may be lost and so on. With time, the number of errors and their gravity tend to increase.

14

Another time-related factor that affects the efficiency of tort law in various aspects is the uncertainty factor. Some degree of uncertainty is an unavoidable characteristic of tort law. From the perspective of potential defendants, there is almost always some uncertainty regarding the numbers, the kind and the size of the actions that may be filed against them and the possible outcomes of these actions. Yet, these uncertainties tend to increase over time, as long as actions can be filed. The legal risks of the near future are easier to assess than the risks of the far future. The uncertainty regarding the outcome of future tort actions is increased further by two time-related elements. One element is the error factor discussed above, namely, the deteriorating quality of judgments after a certain time. It is most difficult to assess in advance which errors will be made in the far future. The other time-related element that adds to uncertainty regarding the outcome of future actions is that of changing perspectives. Standards and perceptions that determine what constitutes tortious activity change over long periods. Activities considered non-tortious when carried out may be considered tortious years after. It is hard to know in advance which perspectives are going to change and how. In sum, the uncertainties that potential defendants face regarding the scope of their future tort liability, and the negative effects this has on them and on their insurers, tend to increase proportionately with the length of the period of exposure to tort actions.

15

Bearing in mind the error factor and its time-related effect on the quality of judgments, and the uncertainty factor and its negative time-related effects on potential defendants and liability insurers, I will now examine each of the aspects in which prescription law, by setting time limits after which tort actions cannot be filed, can contribute to or reduce the efficiency of tort law.

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D. TIME LIMITS AND DETERRENCE A superficial economic analysis of the effects of time limits on the efficiency of tort law as a deterrent might disregard the error factor and the uncertainty factor, and might thereby conclude, erroneously, that prescription law is inefficient in this aspect. If tort law, through tort actions, deters potential defendants from creating inefficient risks, then any time limits placed on the ability to file tort actions would undermine this efficient deterrence and lead to inefficient under-deterrence. However, when the error factor and the uncertainty factor are taken into account, the analysis changes, because each of these time-related factors may lead, in the absence of appropriate time limits, to inefficient overdeterrence. To the extent that time limits prevent inefficient over-deterrence by restraining the over-deterring effect of the error factor and the uncertainty factor, these limits contribute to the efficiency of tort law as a deterrent.

16

But why and how might the time-related factors of errors and uncertainty lead to inefficient over-deterrence? As far as the error factor is concerned, this may occur when courts err in their evaluation of the costs of risks as well as of the costs of their prevention. When the costs of risks are overestimated or the costs of prevention underestimated, the result leads to over-deterrence, namely, inducing potential defendants to reduce the volume of efficient activities and to invest too much in precautions. This over-deterrence would become inefficient when causing loss of welfare that is greater than the loss caused by the weakening of deterrence by imposing time limits on tort actions.6 Assuming, as we do, that the passage of time initially reduces the prevalence of errors, but after a certain period increases their occurrence and gravity, and given that such errors may lead to inefficient over-deterrence, it is reasonable that appropriate time limits, by preventing errors, will contribute to the efficiency of tort law in its deterrent aspect. A similar analysis applies to the time-related uncertainty factor. This factor may also be the cause of inefficient over-deterrence because uncertainties and fears of the unknown may cause potential defendants to overestimate the legal risk to which their activities are exposed. This risk overestimation may again induce them to lower their exposure to liability by curbing efficient activities and by overinvestment in precautions. Since uncertainty increases with the length of the period in which tort actions are expected to be filed, time limits that lower this uncertainty thereby contribute to efficient deterrence by reducing the scope of this kind of inefficient over-deterrence.

17

Assuming that time limits contribute to the efficiency of tort law by reducing the scope of inefficient over-deterrence caused by errors and uncertainty, the question remains as to the length of time that would serve this aspect of efficiency most. Regarding the error factor, the question is, when does the quality of judgments, which first improves with the passage of time, deteriorate to such a degree that it leads to inefficient over-deterrence rather than to efficient

18

6

Courts may err in the opposite direction, namely by underestimating risks or overestimating their prevention costs. Such kind of error would lead to under-deterrence. When this happens, time limits would aggravate the problem of under-deterrence.

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deterrence? If we could identify this “turning point”, that is where the time limit should be set. Although it is hard to assess precisely how long it takes to reach this turning point, it stands to reason that the deteriorating quality of judgments leads to inefficient over-deterrence only after quite a long period. A similar prediction seems fitting with regard to the uncertainty factor. It appears that uncertainty may lead to inefficient over-deterrence only when tort actions can be filed many years after the tortious activities took place. So from this perspective as well it appears that time limits should be imposed after relatively long periods.

19

On the other hand it appears that the major contribution of tort law to efficient deterrence takes place under relatively short time limits. Presumably, potential defendants estimate that most plaintiffs who want to sue will do their best to file their actions within the existing time limits even when these are relatively short and even constraining. If indeed potential defendants predict that only few potential plaintiffs will fail to sue on time even under short time limits, then such limits may suffice to realize most of the deterrent effect of tort law. Moreover, even when potential defendants do estimate that a substantial number of potential plaintiffs will not file actions due to time limitations, they often have no idea which claims will be filed and which will not. Being unable to differentiate ex ante between the risks for which they will be sued ex post and the risks for which no action will be filed ex post, potential defendants are induced to prevent all inefficient risks.

20

Given the above analysis, it can be argued that most of the contribution of tort law to efficient deterrence can be achieved under relatively short time limits, and that this contribution will become negative due to inefficient overdeterrence, only after relatively long time limits. The efficient time limit from the deterrence perspective is accordingly the “turning point” after which the marginal contribution of longer time limits to efficiency becomes negative due to the introduction of errors and uncertainty that cause inefficient over-deterrence. One can only speculate whether this turning point is reached after six, nine or twelve years. Moreover, the length of the optimal time limit may differ with the relevant activity.7

E. TIME LIMITS AND LOSS-SPREADING 21

The economic analysis of the effects of prescription law on the efficiency of the loss-spreading aspect of tort law is more complex than the corresponding deterrence analysis, although the starting point may look simple. Tort law induces potential defendants to spread the costs of their expected liability by purchasing liability insurance. This insurance covers and spreads only those losses for which insured defendants are found liable. Time limits on tort actions reduce the number of losses for which insured defendants are found liable 7

See below, no. 36.

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and therefore such losses are not spread by liability insurance. The starting point, then, is that time limits reduce the number of losses that liability insurance spreads. But is this reduction in the number of losses spread by liability insurance an inefficient outcome of time limits? The answer depends on many factors, and here the complications begin.

22

A major factor which affects the efficiency of loss-spreading time limits is the availability and the efficiency of alternative mechanisms of loss-spreading. The major alternative mechanisms are first-party insurance and social insurance. To the extent that these mechanisms exist and can “step in” to spread losses that liability insurance does not spread because of the time limits, the effect of time limits would only be to change the mechanism by which “timebarred losses” are spread and not to prevent their spreading. Thus, the question is, which mechanism is a more efficient loss spreader? If, for example, firstparty insurance is more efficient than liability insurance in spreading the losses that time limits exclude from the scope of liability, then such time limits should be considered efficient from the aspect of loss-spreading. Unfortunately, it is very hard to tell to what extent, if at all, these alternatives could substitute for liability insurance in spreading “time-barred” losses, and it is difficult to evaluate their relative efficiency in doing so. Moreover, their availability and relative efficiency may differ from one kind of loss to another or from one kind of activity to another: first-party insurance is probably more available in cases of physical damage than in other kinds of losses; and the efficient loss-spreading mechanism may differ for medical malpractice and for road accidents.

23

Another factor which affects the loss-spreading efficiency of time limits is the error factor. The time-related deterioration of the quality of judgments in terms of errors may reduce the efficiency of tort law not only in its deterrent aspect but also in its loss-spreading aspect. Decisions are over-deterring when they impose excessive liability, and excessive liability bears negatively on the efficiency of loss-spreading. As concerns of excessive liability induce liability insurers to raise premiums in order to meet such risks, the more expensive liability insurance becomes less attractive to potential defendants, and as a result less liability insurance is purchased and the scope of coverage is reduced. This would weaken the loss-spreading effect of tort liability and reduce its efficiency in this regard unless other, more efficient loss-spreading mechanisms step in. Time limits that calm concerns as to excessive liability keep the costs of premiums in the more efficient range and may thus contribute to the efficiency of tort law as a loss spreader.

24

Yet another factor which affects the loss-spreading efficiency of time limits is the time-related uncertainty factor. Potential defendants and insurers usually face uncertainties regarding the number, kind and size of the actions that may be filed against them and regarding the outcomes of these actions. Although some degree of uncertainty is an unavoidable characteristic of tort law, this uncertainty, as we have seen, tends to increase with the length of the period in

25

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which actions can be filed. Longer time limits make it harder to evaluate, for example, what kind of judicial errors will be made in the far future and how conceptions of wrongfulness will change in the long run.8 As uncertainties often lead to higher premiums which may become too expensive for potential defendants, time limits that lessen time-related uncertainties may thereby contribute to the efficiency of tort law as a loss spreader by keeping premiums in the more efficient range.

26

A fourth factor which affects the loss-spreading efficiency of time limits is the phenomenon of adverse selection.9 Liability insurance premiums often reflect the average risk of the insured group rather than the individual risk of each insured individual. Such an average premium is set because tailoring individual premiums to individual risks requires information which is either unavailable or too costly to reveal. As a result, some insureds pay a premium higher than their individual risk while others pay a premium lower than their individual risk. But the low-risk insureds will agree to “subsidize” the high-risk insureds only as long as the average premium they pay, which includes this subsidy, is lower than their risk aversion. Time limits that keep the average premiums relatively low help, therefore, to keep these low risk insureds within the insurance pool. Longer time limits, that extend the scope of insurance coverage and increase the size of the subsidy, may raise the average premium to such an extent that low-risk insureds will be induced to leave the insurance pool. That may trigger a vicious circle: as low risk insureds leave the pool the average risk increases, the average premium is further raised, more low risk insureds leave, and so on. Since adverse selection is a phenomenon that reduces the contribution of tort liability to efficient loss-spreading through liability insurance, time limits that reduce the scope of this phenomenon may thereby contribute to the efficiency of tort law.

27

The liability insurance crisis of the mid-1980s in the United States and its aftermath testify that excessive liability, uncertainties and adverse selection may indeed weaken the ability of liability insurance to spread losses appropriately.10 Furthermore, in many states time limits were shortened in order to cope with the crisis, indicating that time limits are perceived as a means to improve the functioning of liability insurance.11

28

What does this analysis tell us about how long time limits should be in order to contribute to the efficiency of tort law as a loss spreader? The answer may 8 9

10

11

See above, Sec. C (no. 13–14). On this phenomenon in the tort context, see G.L. Priest, The Current Insurance Crisis and Modern Tort Law, 96 Yale L.J. 1987, 1521, 1540 ff. Priest, ibid.; K.S. Abraham, Making Sense of the Liability Insurance Crisis, 48 Ohio St. L.J. 1987, 399; K.S. Abraham, Essay: The Rise and Fall of Commercial Liability Insurance, 87 Virginia L. Rev. 2001, 85; K.S. Abraham, Twenty-First-Century Insurance and Loss Distribution in Tort Law, in: M. Stuart Madden (ed.), Exploring Tort Law (2005) 81. Yet the constitutionality of the shortened time limits has been questioned, see J.H. Hicks, The constitutionality of Statues of Repose – Federalism Reigns, 38 Vanderbilt Law Review (Vand. L. Rev.) 1985, 627.

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be similar to the one given in the deterrence context, namely, that most of the positive contribution of tort law to efficient loss-spreading can be achieved with relatively short time limits, although, on the other hand, its contribution becomes negative only after a relatively long time. The prediction that most losses will be spread, even under relatively short limitations, is based on the assumption that most plaintiffs are aware of time limits and will file claims on time even when the limit is short. On the other hand, the negative factors – errors, uncertainty and adverse selection – become significant in loss-spreading only after long periods of time. So here too there is a “turning point” which represents the optimal time limit after which the marginal contribution of longer time limits to the efficiency of loss-spreading becomes negative. Here as well one can only speculate whether this turning point, which may differ with the relevant activity,12 is reached after six, nine or twelve years. Despite the similarities between deterrence analysis and loss-spreading analysis, it does not follow that the optimal period for ex ante deterrence would also be optimal for ex post loss-spreading. The two may well diverge.13 For example, relatively short time limits may reduce the efficiency of ex post loss-spreading more than they lower the efficiency of ex ante deterrence. While short time limits may have a limited effect on deterrence (potential defendants cannot tell in advance which actions will be time-barred and are therefore induced to prevent all inefficient risks), their negative effect on loss-spreading may be more significant (losses of all barred actions are not spread). Another factor is that the contribution of time limits to the efficiency of loss-spreading depends on the availability and the relative efficiency of the alternative loss-spreading mechanisms that would replace liability insurance when liability is denied due to time limits.

29

F. TIME LIMITS AND PERCEPTIONS OF FAIRNESS We have seen that the ability to file tort actions contributes to the well-being of actual loss sufferers by allowing them to vindicate their rights when infringed by tortious activities. The feeling that one’s rights are recognized and protected in a fair and just manner is an important source of welfare. On the other hand, tort actions may reduce the well-being of those defendants who are found liable but believe they committed no wrong, and therefore feel they are being treated unfairly.

30

How do time limits affect these sorts of well-being? Those who consider themselves victims of tortious activities might feel that placing any time limits on

31

12 13

See below, no. 36. It should be noticed that deterrence and loss-spreading often deal with different losses. Deterrence deals with inefficient losses that should be prevented. To the extent that deterrence prevents inefficient losses, loss-spreading of these losses becomes unnecessary. In a world of optimal deterrence, inefficient losses will be prevented and only efficient losses will have to be spread. In reality, though, not all inefficient losses are prevented, and therefore both efficient and inefficient losses have to be spread.

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their ability to sue reduces their well-being. Yet it appears that this effect diminishes with the years, namely, that short time limits are more detrimental to well-being than long time limits. Feelings of unfairness are stronger when the infringement of right that cannot be vindicated is “fresh” and become weaker when it gets “old”. From the defendants’ point of view, however, it appears that the frustration of being held liable although believing oneself innocent tends to increase with the length of the time limits. Feeling that liability is unfair and based on errors and changing perspectives14 becomes more frequent and graver with the passage of time. Yet it takes quite a while for the passage of time to intensify such feelings. All in all, it appears that only under very long time limits would the reduction in the well-being of frustrated defendants outweigh the well-being that plaintiffs derive from the ability to vindicate their infringed rights.

G. LITIGATION COSTS, COSTS OF PRESERVING EVIDENCE AND FINANCIAL RESERVES AND OTHER COSTS OF UNCERTAINTY 32

The analysis so far shows that with regard to deterrence, loss-spreading, and perceptions of fairness, very short time limits on the one hand, and very long time limits on the other hand, would usually reduce the potential contribution of tort law to efficiency. The case is different with regard to the other aspects of tort law’s efficiency.15 Tort actions involve direct and indirect costs of litigation to the parties and to society at large, as well as the costs mentioned above incurred by all potential defendants of preserving evidence and financial reserves to meet potential tort actions. In addition, time-related uncertainties regarding the scope of one’s future liability generate costs not only because they lead to over-deterrence and undermine liability insurance, but also because they obscure the financial situation of potential defendants and subject them to concerns of unknown future liability that are detrimental to their well-being. These costs are all reduced by time limits. This kind of cost reduction has some important characteristics. First, the scope of cost reduction is directly related to the shortness of the time limit. The shorter the period, the greater the cost savings. Second, the scope of the reduced costs tends to be significant because the costs of preserving evidence and financial reserves, and those involved in unknown financial situations and overhanging legal risks, are incurred by very large groups. Indeed, any person who may be sued in tort incurs these costs.16 These costs are especially high for producers, service providers, employers, professionals and other large groups susceptible to tort liability, and for their liability insurers. Third, these kinds of cost reduction may benefit other parts of society and not just potential defendants. For example, reduced uncertainty 14 15 16

See above, Sec. C (no. 13–14). See above, Sec. B (no. 9–10). This means that the numbers of those who benefit from time limits is larger than the number of those who are negatively affected by them. See below, no. 55.

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regarding the financial state of businesses may benefit investors and contribute to the efficiency of the markets. The prediction, then, is that time limits contribute to the efficiency of tort law by reducing an array of costs, that such reduction is directly related to the shortness of the time limit and that it is most significant in scope. In these aspects the contribution of prescription law to the efficiency of tort law seems to be most significant.

33

H. AN OVERVIEW OF THE EFFICIENCY OF TIME LIMITS 1. An Interim Summary So far I have introduced the various aspects in which tort actions may affect the efficiency of tort law and examined how time limits imposed by prescription law contribute to the efficiency of tort law or reduce it. With regard to three aspects (deterrence, loss-spreading and perceptions of fairness) the general prediction is that the absence of time limits in the short and in the medium run contributes to the efficiency of tort law in these areas, but that this contribution may turn negative under relatively long limitation periods that trigger errors and uncertainty and thereby lead to a reduced quality of judgment, over-deterrence, excessive liability and adverse selection. The shift from the positive contribution to the negative occurs at “turning points” that represent the optimal time limits in each aspect. In contrast, there are other important aspects (costs of litigation, costs of preserving evidence and of maintaining financial reserves, and some negative effects of uncertainty) with regard to which it seems that limits in general, and short periods in particular, significantly and efficiently reduce the costs of tort actions for the vast group of potential defendants and for society at large.

34

2. Cross-Effects between the Various Aspects of Efficiency The above analysis, it should be emphasized, would be partial and incomplete as long as it examines each of the above aspects separately. In reality, the different aspects in which tort law promotes or undermines efficiency are often interrelated. A change in one aspect and in its effect on efficiency may lead to a change in another aspect and its efficiency effect. For example, the shortening of a long time limit may improve the efficiency of liability insurance as a loss spreader, but as a result it may also lead to inefficient under-deterrence where the improved insurance coverage weakens the deterrent effect of tort law (the moral-hazard phenomenon17). A full and proper analysis of the effects of time limits on the different aspects of tort law’s efficiency requires that the cross-effects between these different aspects be taken into account. The entire 17

See C.A. Heimer, Reactive Risk and Rational Action, Managing Moral Hazard in Insurance Contracts (1985); T. Baker, On the Genealogy of Moral Hazard, 75 Texas L. Rev. 237.

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efficiency picture should be examined. Obviously, this is a challenging task which adds to the complexity of the economic analysis of time limits.18 3. The Diverse Effects of Time Limits on Different Activities

36

Arguably, the contribution of a given time limit to the efficiency of tort law in its various aspects depends on and changes with the kind of tortious activities to which it is applied. As already noted, the length of the optimal time limits with regard to efficient deterrence and efficient loss-spreading may differ with the relevant activity.19 The same holds for all other aspects of efficiency. Different activities involve different kinds of risks, parties, litigation and so on, and these differences bear on all the aspects in which time limits affect the efficiency of tort law. The two major time-related factors, the error factor and the uncertainty factor, have different impacts on different activities. This means that a time limit which is optimal for one activity may not be optimal for another. Therefore, when jurisdictions apply general time limits rather than specializing time limits for specific activities,20 the economic analysis of such a general time limit should first examine the effects on the different activities to which it is applied, and then evaluate its overall effect on the efficiency of tort law. This overall effect would be a kind of a “weighted average” of the different effects on the different activities. Needless to say, the need to examine the effect of time limits on different activities further complicates the economic analysis of time limits. Moreover, without reliable data, and given the variety of relevant aspects, it is hard to determine the most suitable time limit for any specific activity. Although one may predict, for example, that uncertainty regarding future liability is probably greater for the drug industry than for the car industry, it is nearly impossible to evaluate whether the costs of preserving evidence are greater for medical malpractice than for product liability, or whether the quality of judgments deteriorates faster with regard to workplace injuries than with regard to road accidents.

I. AN OVERVIEW OF THE EFFICIENCY OF RULES OF PRESCRIPTION 37

The discussion so far has dealt with the effect of time limits on the efficiency of tort law in its various aspects. Time limits, however, whether general or activity-tailored, are constructions shaped by the different rules of prescription, being the products of the combined inputs of these rules. The rules of prescription that together compose the time limits can be classified into four major 18

19 20

It has been argued, for example, that improved deterrence lowers litigation costs by reducing the number of inefficient losses and therefore the number of successful tort actions; see T.J. Miceli, Deterrence, Litigation Costs, and the Statute of Limitations for Tort Suits, 20 Int. Rev. Law & Econ. 2000, 383. But does this prediction justify extended time limits for tort actions based on negligence as argued by the author? Long time limits, as we have seen, may lead to over-deterrence and increase a variety of costs. See above, fn. 7, 12 (20, 28). See Zimmermann (fn. 2) 79–85.

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groups:21 rules that determine when a cause of action accrues for the purposes of prescription;22 rules that set the prescription periods; rules that suspend the running of the prescription period, renew it or postpone its expiry; and “longstop” rules that set an overall ceiling on the ability to sue. Thus time limits of the same length may be the product of different compositions of prescription rules. For example, a time limit can be extended or shortened through changes in the prescription period, through changes in the rules of suspension, expiry or renewal, or through changes in the “long-stop” ceiling period. The specific composition of the prescription rules that together construct a time limit supposedly bears on its effect on the efficiency of tort law. A shortening of a time limit, for example, may reduce efficiency when effectuated by a shorter prescription period, but contribute to efficiency when effectuated by changes in rules of suspension, or vice-versa.

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The dependence of the contribution of time limits to the efficiency of tort law upon the specific composition of the prescription rules leads to the important inference that the efficiency of specific rules of prescription cannot be properly evaluated in isolation. They should be evaluated in their context, and this context is all the other rules that together construct the time limit. Thus for example the efficiency of a prescription period cannot be evaluated without taking into account the rules that suspend the period, postpone its expiry or renew its running. Likewise, the efficiency of a rule of suspension cannot be well assessed without taking into account the length of prescription period, the other rules of suspension, postponement and expiry, and the “long-stop” ceiling. An efficiency analysis of a rule of prescription which disregards the other rules that together compose the time limit is meaningless if not misleading. Questions such as “Is a prescription period of three years efficient?” can be answered properly only in context, not in isolation.

39

The need to examine each rule of prescription in its context, the different compositions of rules that construct a time limit, the multiplicity of aspects in which time limits affect the efficiency of tort, their cross-effects, and their changing effect on different activities, all raise a central question. Can economic analysis of this complexity reach meaningful and reliable conclusions? To have a better understanding of this challenge let us have a brief look at the efficiency of a major rule of prescription – the late discovery rule.

40

21 22

Ibid. When a cause of action accrues for the purposes of prescription, the prescription period, unless suspended, starts to run. In principle, the cause of action accrues when an action can be filed. For an extended discussion see I. Gilead, Limitation of Civil Actions, in: K. Siehr/R. Zimmermann (eds.), The Draft Civil Code for Israel in Comparative Perspective (2008) 192, 196–201.

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J. APPLICATION OF THE ANALYSIS: THE DISCOVERY RULE 41

The discovery rule is an important component of prescription law, and a major “constructor” of time limits. When applicable, it suspends the running of the prescription period until certain predetermined kinds of facts become knowable to the plaintiff. By governing the point in time at which the prescription period starts to run, the discovery rule controls the length of the time limit.23 Given its importance, how and to what extent does the discovery rule, according to the above analysis, contribute to the efficiency of tort law in its different aspects?

42

From the aspect of deterrence,24 the effect of the discovery rule on the efficiency of tort law seems to depend, first of all, on the ex ante prediction by potential defendants regarding the number and size of tort actions that will be “saved” from prescription through the operation of this rule. When they expect it to save only a relatively small number of actions, or actions of small size, they will not be significantly deterred by the extra cost that these actions may impose on their activities. In contrast, the deterrent effect of the discovery rule becomes significant when potential defendants expect that it will save a substantial number of actions or actions of considerable size, and thereby significantly increase the costs of their activities. Its deterrent effect would also be considerable when potential defendants are unable to predict ex ante which actions will be saved by it and which will not, and are therefore deterred by all potentially saved actions. However, the fact that the discovery rule has a significant deterrent effect does not necessarily mean that this effect is efficient. Tort actions, as we have seen, may lead to inefficient over-deterrence due to actual and expected errors and due to uncertainties. So the contribution of the discovery rule to efficient deterrence depends not only on the number and size of the actions saved by its operation but also on the quality of judgment later rendered in these “saved actions” and on the uncertainties involved. To the extent that the discovery rule saves or is expected to save over-deterring judgments and to increase uncertainties, it may impair the efficiency of tort law.

43

From the aspect of loss-spreading,25 the effect of the discovery rule on the efficiency of tort law seems to depend on the same factors that affect its deterrence efficiency: the actual and the expected numbers and sizes of the actions “saved” by the rule; the actual and the expected quality (in terms of errors) of the judgments in these saved actions; and the uncertainties that the rule generates. Yet the ways in which these factors affect the efficiency of loss-spreading through the discovery rule are complicated and diverse. On the one hand, by the actual or the expected “saving” of tort actions in significant numbers or sizes the discovery rule contributes to the efficiency of loss-spreading. Ex post, it enables tort law to spread more losses. Ex ante, it encourages potential defen23 24 25

Zimmermann (fn. 2) 92 ff. See above, Sec. D. See above, Sec. E.

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dants to extend their liability insurance to cover the expected “saved” actions. On the other hand, greater numbers and sizes of saved actions may reduce the efficiency of loss-spreading by increasing the risk of liability and thereby the costs of premiums. Rising premiums tend to reduce insurance coverage. This negative effect of the discovery rule is strengthened where the saved actions, due to their deteriorating, error-prone quality, impose or are expected to impose excessive liability, which might lead, as we have seen, to an inefficient reduction in the scope of coverage. The uncertainties that the discovery rule generates and its effects on premiums are another potential source of inefficient reduction in the scope of insurance. Moreover, the discovery rule, by raising insurance premiums, may trigger or enhance the adverse selection phenomenon with its negative effects on efficiency. The efficiency effect of the discovery rule is mixed also in the aspect of conceptions of fairness. On the one hand, the discovery rule contributes to the wellbeing of plaintiffs whose claims are saved by the rule. By allowing them to vindicate their infringed rights after a period longer than the prescription period, the discovery rule gives them the good feeling that society recognizes and protects their rights in a fair and just manner. On the other hand, defendants who are found liable because of the discovery rule, and believe that they have done no wrong, may feel that they were not given a fair chance to defend their cases and that it is unjust to make them pay the price of the plaintiffs’ ignorance.

44

The efficiency affects of the discovery rule are negative from all the other discussed aspects.26 It increases litigation costs because more actions are filed and litigated. It increases the costs of preserving evidence because potential defendants have to preserve evidence for periods longer than the prescription period to meet the saved actions. These costs may be extremely high, because defendants often do not know which actions will be saved by the rule and which will not, and therefore have to preserve evidence for all potentially saved actions. The discovery rule also increases the costs of preserving financial reserves because more of such reserves must be put aside in order to meet the expected saved claims. The rule also adds to the costs of the uncertainty concerning the financial state of potential defendants. Investors may find it difficult, for example, to evaluate the value of a drug company exposed to a “long tail” of future actions that would be saved by the rule. Obviously, the rule also impairs the well-being of potential defendants who are risk averse and are under the hanging sword of saved actions.

45

Given the diverse effects of the discovery rule on each of the different aspects of efficiency, the cross-effects between these different aspects should also be considered.27 For example, a discovery rule which reduces the scope of efficient loss-spreading by raising insurance premiums to a height that reduces coverage, may at the same time contribute to efficient deterrence by curbing the phenomenon of moral hazard.

46

26 27

See above, Sec. F. See above, no. 35.

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47

The analysis should also take into account, as emphasized earlier,28 that the efficiency of a given discovery rule in each of the above aspects tends to differ from one activity to another. The number of actions that a discovery rule saves is probably greater for activities which involve latent damage (like drug manufacture and exposure to toxics) than for activities where the damage is usually apparent (road accidents). The same applies to the size of the saved claims. It seems to be greater for activities that cause bodily injuries than for activities that cause property damage. Another relevant factor that may well change with activity is the degree to which the quality of the saved claims tends to deteriorate with the passage of time due to time-related errors. Because the number, size and quality of the saved actions are the major factors that affect the efficiency of the discovery rule in its various aspects, a given discovery rule may be more efficient with regard to one activity than with regard to another activity. Its overall efficiency, as noted, is a kind of “weighted average” of all its activity-related efficiencies.

48

The complexity of the analysis does not end here. As was argued above,29 the efficiency of any rule of prescription cannot be properly evaluated in isolation. It should be evaluated in its context, and this context is all the other rules that together construct the time limit.30 In the case of the discovery rule this context is rich and most significant. The effect of a given rule of discovery may be quite different under a short prescription period than under a long prescription period. It may differ also according to the lengths of the “long-stop” (ceiling) periods. Its effect also depends on the other rules of suspension, postponement and renewal. A rule of discovery that stands alone has a different effect than a rule of discovery surrounded by other such rules.

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Finally, the efficiency of a discovery rule depends not only on the composition of the rules that, together with it, construct the time limit, but also on the composition of the sub-rules that constitute the discovery rule itself. The discovery rule is actually “a composition within a composition”. Its composing sub-rules are those which determine the activities or losses to which it applies, the kind of facts whose non-discoverability triggers the rule, and when these facts are considered non-discoverable. The effect of a discovery rule on the number, size and quality of the saved actions, and through them on the efficiency of tort law, depends on this inner composition. The effect is more significant when the rule applies to a wide range of activities and losses; when it applies not just to the discoverability of the loss but also to that of the tortious activity and its contribution to the loss; and when only gross negligence on the plaintiff’s part renders a fact discoverable.31 Needless to say, the alternative compositions of the discovery rule and the interrelations between the sub-rules that compose the rule increase the complexity of its economic analysis. 28 29 30 31

See above, no. 36. See above, no. 39–40. Ibid. Compare § 199 Bürgerliches Gesetzbuch (BGB) (new version), under which a relevant fact is considered discoverable only when the plaintiff is grossly negligent in not discovering it, with Art. 14:301 of the Principles of European Contract Law, under which a relevant fact is considered discoverable when it was reasonably discoverable.

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K. CONCLUSIONS AND NOTES ON THE LITERATURE The above discussion highlights the complexity of economic analysis which examines whether, when and to what extent prescription law contributes to the efficiency of tort law or reduces it.32 This analysis is complex because of the many relevant aspects of efficiency: deterrence, loss-spreading, conceptions of fairness, litigation costs, costs of preserving evidence and financial reserves, clarity of financial situation and uncertainty aversion. It is further complicated by the cross-effects between these various aspects. Another difficulty is that the effect of a given time limit on the different aspects of efficiency tends to differ from one activity to another. Furthermore, the effect of a time limit depends on and changes with the composition of the specific rules that together constitute the limit. The task becomes even more challenging given that the economic analysis of a given rule is meaningful only in the context of the other rules that compose the time limit. Yet another intricacy is that prescription rules themselves are compositions of interrelated sub-rules. The brief treatment of the efficiency of the discovery rule testifies to and illustrates these complexities and difficulties.

50

Given this complexity, it is doubtful whether substantiated conclusions can be reached regarding the efficiency of a given time limit or rule of prescription. Such a conclusion requires complex analysis of information of a kind and scope which is unattainable, “the stuff that dreams are made of” as Ronald Coase once said with regard to complex economic analysis.33 When such dreams do not come true, one can only hypothesize about the efficiency of time limits and rules of prescription. The discussion above has done just that, making some initial steps in this direction. As such, it provides some support for the following general hypotheses regarding the efficiency of three major components of prescription law: the general prescription period, rules that suspend its running, renew it or postpone its expiry and the “long-stop” (ceiling) period.34

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As to the length of the general prescription period, there are good reasons to believe that relatively short prescription periods are efficient. This hypothesis is based on the combined weight of two assumptions. First, that the major contribution of tort law to efficiency in the aspects of deterrence, loss-spreading and perceptions of fairness can be attained under relatively short time limits, and that longer time limits contribute only marginally in these regards.35 The second assumption is that the costs of preserving evidence and financial reserves and other costs of uncertainty are significant, and thus even short time limits save

52

32

33 34

35

For this complexity see A. Ogus, Limitation of Actions: Justified or Unjustified Complexities (paper written for the December 2005 Seminar of the Amsterdam Center of Law and Economics). R. Coase, The Firm, the Market and the Law (1988) 185. Arguably, the fourth component of prescription law, the rules that determine when a cause of action accrues for prescription purposes, is more technical in nature. Usually a cause of action accrues when an action can be filed; see fn. 22. See above, Sec. D, E, F.

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substantial costs of this kind.36 Moreover, plaintiffs as well may benefit from time limits that encourage them and their representatives to file actions earlier, thereby improving their chances to win their case and reducing their litigation costs. Still, given the above complexities and in the absence reliable information, one can only speculate as to whether the optimal general period of prescription in a given jurisdiction is three or five years, or any other relatively short period.

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As to rules of suspension, postponement of expiry and renewal of the prescription period, the above discussion indicates that the overall efficiency of each rule depends, on the one hand, on the uncertainty that it generates, and, on the other hand, on the number, size and the quality of the actions which it “saves” or is expected to save from prescription. A rule like the discovery rule, which generates considerable and costly uncertainty, would nevertheless be efficient if the actions that it saves or is expected to save are of number, size and quality that contribute to deterrence, loss-spreading and perceptions of fairness more than its uncertainty costs. It would be reasonable to assume that a rule which generates considerable and costly uncertainty and yet saves only low-quality actions or a small number and size of actions would be inefficient. Yet, given the complexities of the analysis and the information problem, one can only hypothesize about the efficiency of these rules.

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The efficiency of the “long-stop” (ceiling) period seems also to depend on the number, the size and the quality of claims that such a long-stop period prescribes or is expected to prescribe. Presumably, shorter long-stop periods may prove to be inefficient because they limit or are expected to limit high-quality actions of considerable number and size, thereby impairing the efficiency of tort law in the aspects of deterrence, loss-spreading and conceptions of fairness, more than they save in terms of the other aspects. In contrast, relatively long ceiling periods may prove to be inefficient by failing to reduce the costs of preserving evidence and financial reserves and by allowing low-quality actions that lead to inefficient over-deterrence and undermine liability insurance. Unfortunately, here as well, it is hard to tell whether the optimal long-stop period is 12, 15 or 18 years or any other period.

55

Four conclusions seem to emerge from the above analysis. The first is that efficiency can be promoted by designing different time limits of different compositions for different activities. The differences between activities in their nature, the kind of risks, the parties involved, the deterrence effect, loss-spreading mechanisms and so on, call for such a differentiation when supported by sufficient information.37 For example, a “strong” discovery rule seems more 36

37

See above, Sec. G. For a parallel conclusion regarding relatively short time limits in criminal law see Y. Listokin, Efficient Time Bars: A New Rationale for the Existence of Statutes of Limitations in Criminal Law, 31 Journal of Legal Studies (JLS) 2002, 99. The author argues that because potential criminals tend to discount the future at higher rates than society, punishing crimes long after they are committed will be inefficient. Punishments after a long delay have only a nominal deterrent effect, while they may cost society substantial sums. This differentiation, however, should be avoided a) when its benefits are outweighed by the difficulty of deciding which time limit applies to which action and b) when a short time limit

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efficient for activities that cause latent damage than for activities that cause damage which is immediately manifested. The second conclusion is that the intuition which tells us that prescription law is “bad” for plaintiffs is misleading. Potential and actual plaintiffs may well benefit from time limits that improve deterrence and loss-spreading, increase their chances of winning and lower the costs they incur. The third conclusion is that the number of those who directly benefit from time limits is larger than the number of those who directly suffer from them. While the latter are actual plaintiffs and those who would have sued were there no time limits (“would-be” plaintiffs), the beneficiaries include not just actual and “would-be” defendants but also every person threatened by the risk of being sued. The fourth conclusion is that in general the efficiency of prescription law is inversely related to the scope of the discretional powers that it confers upon the courts.38 Judicial discretion leads to added uncertainty which, as we have seen, significantly diminishes the efficiency of tort law in its various aspects. While this added uncertainty has a negative effect on all potential defendants, it benefits only a relatively small number of actual plaintiffs whose actions are “saved” by the discretionary powers.39 Finally, a general look at the literature on the economic analysis of prescription law reveals that this topic has so far attracted relatively little interest, and that its discussion tends to be either very general or to focus on only some of the relevant aspects.40 In his seminal book on the economic analysis of law, Richard Posner refers briefly to the error factor, and notes that statutes of limitation reduce “the error costs that are caused by using stale evidence to decide a dispute.”41 Robert Cooter and Thomas Ulen, in the first 1998 edition of their book on law and economics, refer briefly to litigation costs, noting that statutes of limitation are designed to lower administration costs.42 In the 2000 edition even this reference is omitted. Mathew Baker’s and Thomas J. Miceli’s economic analysis formalizes the tradeoffs between three aspects – deterrence, errors and litigation costs.43 In another article Miceli further limits the analysis to

38

39

40 41

42

43

can be circumvented by relying on another base of liability with a longer time limit. On the arguments for uniformity, see Zimmermann (fn. 2) 79–85. Sec. 33 of the English Limitation Law of 1980, for example, gives the court discretion to allow a personal injury suit notwithstanding the expiry of the time limit, “if it appears to the court that it would be equitable” to do so, having regard to the degree to which the plaintiff is prejudiced by the time limit, and the degree by which the defendant will be prejudiced by the extension. The factors to be taken into account are the length of and reasons for the delay on the plaintiff’s part, the effect of the delay on the cogency of evidence, the defendant’s conduct after accrual, the plaintiff’s disability, and the plaintiff’s conduct after knowing that he has a cause of action. It has been argued in this regard that “uncertain justice is preferable to certain injustice” (Firman v. Ellis [1978] 3 Weekly Law Reports [W.L.R.] 1, 18). Yet uncertainty may also be considered a kind of injustice for those who have to pay its costs. For a broader view of the economic aspects of prescription law see Ogus (fn. 32). R.A. Posner, Economic Analysis of Law (5th ed. 1998) 90. See also W.M. Landes/R.A. Posner, The Economic Structure of Tort Law (1987) where the authors briefly describe the impact of limitation periods on the costs of production (at 307). R. Cooter/T. Ulen, Law and Economics (1st ed. 1988) 155 f. (the other role mentioned is to transfer rights to higher-value uses). M. Baker/T. Miceli, Statutes of Limitation for Accident Cases: Theory and Evidence, 19 Research in Law & Econ. 2000, 47.

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the tradeoffs between deterrence and loss-spreading.44 Ehud Guttel and Michael T. Novik focus on the error factor and on its effect on the efficiency of tort law as a deterrent. They argue that prescription law should be triggered only when it is established that the defendant’s evidence has indeed deteriorated due to the passage of time and damaged the ability to defend. Furthermore, they suggest that the present “all or nothing” approach, under which prescription law either bars or allows an action, should be replaced by a “price model” which reduces the plaintiff’s compensation in proportion to the evidential damage caused by the delay. The above analysis, however, indicates that the significant increase in the degree of uncertainty that such a price model is bound to generate may significantly reduce the efficiency of tort law in many of its aspects.

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Future discussions of these complex topics will, I hope, shed more light on the efficiency aspects of prescription law and contribute to its design, operation and reform. Efficiency, after all, means more well-being in society, and prescription law, as we have seen, may be a significant contributor to this worthy goal, alongside its contribution to fair and just distribution of well-being.

44

Miceli, 20 Int. Rev. Law & Econ. 2000, 383.

Reports

I. Austria Barbara C. Steininger*

A. LEGISLATION 1. New Austrian Tort Law Draft – Revised Version

1

As reported in previous Yearbooks, a working group called together by the Austrian Ministry of Justice prepared an unofficial draft for a new Austrian tort law, which was published in 20051. The draft was intensely discussed and, to some extent, met with quite fierce criticism2. On the basis of this discussion * 1

2

I would like to thank Donna Stockenhuber for proof-reading the text. For a description of the draft and an English translation see B.C. Steininger, Austria, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2005 (2006) 118 ff., 142 ff.; cf. also I. Griss/G. Kathrein/H. Koziol (eds.), Entwurf eines neuen österreichischen Schadenersatzrechts (2006). See C. Fischer-Czermak, Der Entwurf einer allgemeinen Gefährdungshaftung, Österreichische Notariatszeitung (NZ) 2006, 1 ff.; S. Grigg/B. Troiß, Die Reform des Schadenersatzrechts aus Sicht der Versicherungswirtschaft, Versicherungsrundschau (VR) 2006, 196; F. Harrer in: M. Schwimann (ed.), Praxiskommentar zum ABGB VI (3rd ed. 2006) Vor §§ 1293 ff. no. 7 ff.; id., Arbeitsunfall und Gehilfenhaftung, Zivilrecht aktuell (Zak) 2006, 170; id., Auskunft, Vertrauen und Haftung, Zak 2006, 403; F. Harrer/M. Neumayr, Die Haftung des Unternehmers für Gehilfen, Wirtschaftsrechtliche Blätter (wbl) 2006, 493; R. Haselberger, Grenzprobleme eines neuen Unternehmens-, Delikts- und allgemeinen Schadenersatzrechts, Der Gesellschafter (GesRZ) 2006, 67; Ch. Huber, Reform des österreichischen Schadenersatzrechts, Zeitschrift für Verkehrsrecht (ZVR) 2006, 469; M. Neumayr, Braucht Österreich ein neues Schadenersatzrecht? Zak 2006, 66; R. Reischauer, Reform des Schadenersatzrechts? Österreichische Juristen-Zeitung (ÖJZ) 2006, 391; B. Schilcher, Das bewegliche System wird Gesetz, in: Festschrift Canaris (2007) vol. II, 1299; M. Schmidt-Kessel/S.B. Müller, Reform des Schadenersatzrechts I. Europäische Vorgaben und Vorbilder (2006); K. Spielbüchler, Dankt der Gesetzgeber ab? Juristische Blätter (JBl) 2006, 348 ff.; M. Schauer, Entwurf eines neuen österreichischen Schadenersatzrechts – zugleich eine Besprechung des gleichnamigen Buchs, Journal für Rechtspolitik (JRP) 2006, 276; id., Die Reduktionsklausel im Entwurf des österreichischen Schadenersatzrechts, NZ 2007, 129; E. Wagner, Gehilfenhaftung im Deliktsbereich de lege lata und de lege ferenda, ÖJZ 2007, 755; G. Wagner, Reform des Schadenersatzrechts, JBl 2008, 2. See also R. Reischauer/K. Spielbüchler/R. Welser, Reform des Schadenersatzrechts II. Zum Entwurf einer Arbeitsgruppe (2006) – several of the essays in this volume have also been published in different journals and are mentioned above. On Austrian tort law reform cf. also the following contributions by members of the working group: P. Apathy, Die Reform des österreichischen Schadenersatzrechts, VR 2006, 187; id., Schadenersatzreform – Gefährdungshaftung und Unternehmerhaftung, JBl 2007, 205; I. Griss, Der Entwurf eines neuen österreichischen Schadenersatzrechts, JBl 2005, 273; id., Reform des Schadenersatzrechts (2007); K.-H. Danzl, Haftung für Verkehrsmittel. Überle-

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process the working group revised the draft and completed a preliminary final version in June 20073. An English translation is available in an annex to the present report4. In the following I will present the main changes to the draft’s general part, while the particular part will only be referred to briefly. As the main line of criticism concerned the draft being too open and leaving too much discretion to judges, thereby causing legal uncertainty, the revised version aimed at making rules as clear-cut as possible without losing the flexibility required for coping with the challenges of legal developments5. In this sense, the fundamental rule of the draft’s § 12926 is supplemented by a third section specifying that – in line with the current § 1311 ABGB (Allgemeines Bürgerliches Gesetzbuch, Austrian Civil Code) – the rule of casum sentit dominus will prevail, which means that damage can only be shifted to someone else if there are good reasons for doing so. Moreover, the new third paragraph of § 1293 of the draft on damage and protected interests now clearly sets out a ranking of interests while up to now § 1293 only described the factors to be taken into account when determining the rank of an interest: § 1293 para. 3 now makes clear that life, bodily integrity, rights in rem and intellectual property rights enjoy the highest protection, while, outside of contractual relationships, pure economic interests are only protected by way of exception. In the field of fault liability, § 1299 regulates defences and necessity in more detail than the original version of the draft. Moreover, the revised version of § 1300 includes the concept of current law that someone who violates a concrete norm demanding a certain conduct will be liable for the damage resulting from that breach even if the occurrence of that damage was not foreseeable for him (the concept is called “verkürzter Verschuldensbezug” – which could be translated as “shortened fault relation”). In addition, § 1300 of the revised draft provides an absolute age limit for fault: According to the last sentence of its para. 3, persons under seven years of age are under no circumstances capable of fault. Moreover, the amended para. 2 of the revised draft’s § 1301 foresees that a person who has voluntarily put himself in a condition of mental incapacity must compensate the damage another suffers as a result.

2

One of the most disputed aspects of the draft’s first version was its provision on enterprise liability (§ 1304 original draft). While this provision was in a special section in the draft’s original version, the revised draft now places the

3

3

4 5 6

gungen (Erläuterungen) zum Entwurf der Schadenersatzreformkommission, ZVR 2006, 40; H. Koziol, Die außervertragliche Unternehmerhaftung im Diskussionsentwurf eines neuen österreichischen Schadenersatzrechts, JBl 2006, 18; id., Schaden, Verursachung und Verschulden im Entwurf eines neuen österreichischen Schadenersatzrechts, JBl 2006, 768; id., Der österreichische Entwurf eines neuen Schadenersatzrechts, Essays on Tort, Insurance, Law and Society in Honour of Bill W. Dufwa II (2006) 645. The preliminary final version of the draft can be downloaded at . Changes are identified by the use of italics. Cf. ZVR 2008, 168. On this rule see Steininger (fn. 1) no. 5.

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provision in the section on fault liability (§ 1302 revised draft) to make it clear that enterprise liability is not a strict liability but a liability for violation of a standard of conduct: A person who operates an enterprise out of commercial or vocational interests is also liable for damage caused by a defect in the enterprise or its products or services. The entrepreneur is not liable if he proves that the care necessary to avert the damage was exercised. § 1302 now explicitly states that the burden of proof for the existence of a defect lies with the victim. Moreover, the new para. 3 specifies that pure economic loss is not compensable under this provision.

4

Another provision that was rephrased and rearranged into the section on fault liability is § 1303 (though the numbering remained unchanged). The provision was originally placed in the section on strict liability and called liability for increased danger. Although the concept behind this provision has not been changed, it is now called liability for faulty conduct in case of special danger. By these changes the working group wanted to clarify that it is not a strict liability but rather a liability based on the violation of the standard of conduct sharpened by a reversal of the burden of proof for this violation7.

5

The general clause on strict liability is now the only provision left in the section on strict liability. It is to be found in § 1304 of the revised draft8. In the course of the revision, its para. 3 on the exclusion of strict liability was changed. The original version had been criticized for being too imprecise and open when ruling that liability might be excluded or reduced in case of force majeure or an unavoidable event. The revised version now foresees that liability will be excluded in case of force majeure or an unavoidable event. In addition, the new version specifies under which circumstances a mere reduction of liability is also possible, namely in cases of especially high danger (e.g. nuclear facilities, dams, aeroplanes or ammunition factories) or if the unavoidable event substantially increases the danger posed by a thing in the concrete situation (exceptional operational risk)9. Finally, the new provision holds that liability can be excluded or reduced if the victim has knowingly accepted exposure to the danger of a special nature.

6

Some changes to the wording are to be found in the field of liability for auxiliaries, though it seems that these variations do not indicate changes to the underlying concept. A new para. 2 of the draft’s § 1305 e.g. expressly clarifies that a performance agent (“Erfüllungsgehilfe”) can also be someone who takes on an activity to carry it out independently but this seems to have been the underlying idea even before the amendment10.

7

A further elucidating modification of wording can be found in § 1310 on liability in case of alternative lawful behaviour, which should make clearer that the 7 8 9

10

See ZVR 2008, 168. In the original version it was § 1302. Thereby the draft refers to the concept of “außergewöhnliche Betriebsgefahr” now known in the area of traffic liability. See K. Hoffmann, Haftung für Dritte und für technische Hilfsmittel, in: I. Griss/G. Kathrein/H. Koziol (eds.), Entwurf eines neuen österreichischen Schadenersatzrechts (2006) 68, no. 3.

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draft decides for partial liability in such cases. The purpose of greater clarity can also be found behind the modification of § 1313, dealing with contributory conduct. The provision originally only indicated the criteria to be taken into account when apportioning liability between tortfeasor and victim but is now supplemented by the rule that damage is to be split evenly in case of doubt. The revised version also introduces a significant change concerning compensation for non-pecuniary loss: According to the newly added final sentence of § 1316 para. 2, insignificant non-pecuniary loss is not compensable. This means that there will be a minimum limit for compensation of such loss. Finally, the newly introduced § 1317 of the revised draft rules that continuing damage for the future should be compensated by periodical payments.

8

Changes to the particular part of the draft are quite limited. However, two provisions have been newly included: The first, § 1321, deals with compensation in case of unwanted birth of a child and the second, § 1325, with liability for providing incorrect advice and misinformation. Finally, the new version of the draft’s § 1489 on prescription reduces the period of limitation to 10 years in case of pure economic loss (as opposed to the normal period of 30 years).

9

The revised version has taken into account many of the arguments put forward in the course of the discussion process. Without abandoning the underlying flexible system approach providing the decisive factors and basic values, the new version to a considerable extent complements the original draft with clearcut basic rules for standard situations. It can therefore be qualified as a step forward into the – admittedly insecure – future of Austrian tort law reform. Although this preliminary final version of the draft was already completed in June 2007, the discussion process about it is yet to start due to its protracted publication and it will be most interesting to observe how the Austrian legal community will react to this new version11.

10

2. Verkehrsopfer-Entschädigungsgesetz – VOEG und Kraftfahrrechts-Änderungsgesetz 2007 (KrÄG 2007)12 With the present Act, the Austrian legislator implemented the fifth Motor Insurance Directive13 and, at the same time, took the opportunity to re-codify 11

12

13

Moreover, an alternative draft was published in early 2008 and comparison of this text with the revised draft just described will certainly enrich the discussion process on Austrian tort law reform. Bundesgesetzblatt (Federal Law Gazette, BGBl) I 37/2007, 29 June 2007. Available at . Austrian legislation is available at . On this Act see P. Baran, Umsetzung der 5. Kfz-Haftpflichtversicherungs-RL im Versicherungs- und Kraftfahrrecht, ZVR 2007, 250; G. Kathrein, Verkehrsopferschutz neu – Das Verkehrsopfer-Entschädigungsgesetz, ZVR 2007, 243. Cf. also G. Pürstl, ZVR 2007, 295; ÖJZ 2007, 517; Zak 2007, 149. Directive 2005/14/EC of the European Parliament and of the Council of 11 May 2005 amending Council Directives 72/166/EEC, 84/5/EEC, 88/357/EEC and 90/232/EEC and Directive 2000/26/EC of the European Parliament and of the Council relating to insurance against civil liability in respect of the use of motor vehicles, OJ L 149, 11.6.2005, 14–21.

11

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the law on the protection of traffic victims14. The KrÄG entered into force on 1 July 200715 and brought about several modifications, the most important of which will be described in the following:

12

One of the main changes based on the implementation of the Directive is the increase of minimum insurance sums for motor vehicles. For cars the new minimum insurance sum as provided by § 9 KHVG (Kraftfahrzeug-Haftpflichtversicherungsgesetz, Motor Vehicle Liability Insurance Act) amounts to € 6 million – as opposed to € 3 million before the amendment. According to the method chosen by the Austrian legislator, this limit applies per claim and covers both, personal injury and property damage. However, in accordance with the Directive, a minimum of € 5 million is available for personal injury and a minimum of € 1 million for property damage. This means that, in cases in which these minimum amounts are not exhausted in one category of damage, the rest remains available for the other category (even if the amount reserved for this latter category is exceeded)16. Moreover, § 9 para. 5 KHVG foresees an additional minimum insurance sum for pure economic loss amounting to € 60,000.

13

Simultaneously with this increase of minimum insurance sums, the Austrian legislator also raised the caps foreseen in the Eisenbahn- und Kraftfahrzeughaftpflichtgesetz (EKHG, Traffic Liability Act) and some other strict liability statutes17.

14

Another significant change brought about by the present Act is the re-codification of the law on the protection of traffic victims into what is now called the VOEG (Verkehrsopfer-Entschädigungsgesetz, Traffic Victim Compensation Act)18. This Act provides compensation for traffic victims who cannot or only under aggravated circumstances claim compensation from a liability insurer (e.g. due to the latter’s insolvency or because the motor vehicle in question was not insured). The new Act does not alter the previous regime substantially but aims to make this field of law clearer and more coherent. However, the implementation of Directive 2005/14/EC necessitated a few changes. Vehicles exempt from the insurance obligation will now be treated in the same way as vehicles for which the insurance obligation has not been satisfied. Moreover, there are a few ameliorations concerning compensation of property damage (§ 5 VOEG; changes relate to the question whether and to which extent there will be an excess). 14 15

16

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18

Apart from the changes required by the implementation of the Directive. Implementation of the Directive was therefore slightly belated as it would have been due by 11 June 2007. Erläuterungen zur Regierungsvorlage (annotations to the government bill, ErläutRV), 80 Beilagen zu den stenographischen Protokollen des Nationalrates (BlgNR) 23. Gesetzgebungsperiode (legislative period, GP) 9. According to the new § 15 EKHG, strict liability for personal injury and death is now limited to a maximum of € 1,600,000 (or instead to an annual rent of € 100,000) per person injured and to a total amount of € 5,000,000 per keeper of a motor vehicle and accident if more than one person was injured. The new cap for damage to property, as foreseen in § 16 EKHG, amounts to a total of € 1,000,000 (applicable even if more than one thing was damaged). On this Act see Kathrein, ZVR 2007, 243.

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B. CASES 1. Oberster Gerichtshof (Austrian Supreme Court, OGH)19 26 April 2007, 2 Ob 174/06m20: Traffic Liability a) Brief Summary of the Facts

The defendant enterprise was the keeper of a car which had been parked on the pavement in front of a pavement café by one of its employees. The wheels on the left hand side of the car were located on the road and the wheels on the right hand side were on the pavement. Between the car and the metal fence which enclosed the pavement café, there was a passage of 70 to 75 cm. Stakes of this fence extended into the pavement by another 30 to 40 cm. On these stakes there were devices to affix flower boxes. However, at that time, there were no flower boxes which meant that the sharp-edged fixtures lay open.

15

The plaintiff was walking on the pavement and wanted to pass the narrow space between the car and the pavement café. To do so, she had to go closer to the fence as would otherwise have been necessary. The plaintiff tripped over the last stake of the fence, fell and her head collided with one of the metal fixtures which caused her serious facial injury.

16

Deducting a contributory negligence of 25%, the plaintiff claims compensation amounting to 75% of her damage from the defendant, arguing that the car had been “in operation” in the sense of § 1 EKHG and that the defendant was therefore liable for the fault of its agent.

17

b) Judgment of the Court

The application of the EKHG presupposes an accident in the course of the operation of a motor vehicle. The OGH argues that prevailing opinion has a traffic related notion of “operation” (“verkehrstechnischer Betriebsbegriff”). Therefore, a motor vehicle will be considered to be “in operation” as long as it takes part in traffic and endangers other traffic participants, which means that an operational risk may even emanate from motor vehicles which are not moving and the motor of which is switched off. As the defendant’s car had been parked in violation of traffic regulations, the car, in the view of the OGH, has to be qualified as “in operation” in the sense of § 1 EKHG.

18

According to § 8 para. 4 Straßenverkehrsordnung (StVO, Road Traffic Act), the use of pavements by vehicles of all kinds is prohibited. The OGH qualifies § 8 para. 4 StVO as a norm with a protective purpose (“Schutznorm”) in the sense of § 1311 ABGB, which aims at avoiding any danger and impediment to pedestrians. The OGH argues that, in the case at hand, only the defendant’s car caused the plaintiff to go closer to the fence. Only thereby did she enter the danger area, where she fell and was injured. In the view of the OGH, the

19

19 20

Cases are available at http://www.ris2.bka.gv.at/jus. Zak 2007/520.

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consequences of the accident are therefore covered by the protective purpose of the violated norm.

20

The OGH holds the defendant, the keeper of the car in question, liable for the fault of its (authorized) driver. As parking regulations had been violated deliberately, while there was only a slight lack of attention on the side of the plaintiff, the OGH confirms that damage should be split at a ratio of 1:3 to the detriment of the defendant. c) Commentary

21

The EKHG provides a strict liability regime for railways and motor vehicles. In addition, § 19 para. 2 EKHG foresees an extended vicarious liability of vehicle keepers21 for the fault of persons involved in the vehicle’s operation in accordance with the keeper’s wishes if this person caused an accident in the course of the vehicle’s operation. It is therefore decisive for the applicability of this provision that the vehicle was “in operation” in the sense of § 1 EKHG22.

22

As stressed by the OGH, prevailing opinion considers motor vehicles to be “in operation” as soon as they participate in traffic, arguing that the danger of a motor vehicle decisive for the EKHG’s strict liability regime already arises from its participation in traffic23. Contrary to this, some authors deny liability based on the EKHG for parked motor vehicles, arguing that the danger inherent to motor vehicles lies in their speed24. In my view, prevailing opinion is not convincing. First of all speed is mentioned in the preparatory materials for the Act as the main factor for establishing strict liability. Moreover, motor vehicles with which the speed of 10 km/h cannot be exceeded are excluded from the EKHG’s scope of application. The only difference between these slow vehicles and the ones to which the EKHG is applicable is their speed, while they participate in traffic just like other vehicles. As – compared to normal motor vehicles – they are moving more slowly, one could even argue that their participation in traffic leads to an even higher danger. Still they are explicitly excluded from the EKHG’s scope of application. Therefore, mere participation in traffic cannot bring about dangerousness sufficient to justify strict liability25.

23

Stationary vehicles can – admittedly – cause dangers, but for lack of speed they are not dangerous in the sense of the EKHG. They are not more dangerous than any other obstacle. Exceptionally, the EKHG can in my view be applied to 21

22 23

24

25

This extension even covers vehicles which are otherwise excluded from the EKHG’s scope of application. Cf. P. Apathy, EKHG (1992) § 19 no. 2; K.-H. Danzl, EKHG (8th ed. 2007) 465. Apathy (fn. 22) § 1 no. 24; M. Schauer in: M. Schwimann, Praxiskommentar zum ABGB VII (3rd ed. 2005) § 1 EKHG no. 13 ff., 33 ff.; A. Kletečka, Tauerntunnelkatastrophe: Haftung nach dem EKHG, ZVR 2001, 221 f. OGH in ZVR 1975/170; ZVR 1976/232; ZVR 1978/63; ZVR 1980/75; ZVR 1980/162; ZVR 1984/241; ZVR 1993/120; ZVR 1996/78; ZVR 2000/62; different ZVR 1973/113; ZVR 2002/40; ZVR 2003/80. See especially H. Koziol, Der Begriff „beim Betrieb eines Kraftfahrzeugs“, Festschrift Hämmerle (1972) 195 ff.; id., Haftpflichtrecht II (2nd ed. 1984) 513 ff. Cf. B.C. Steininger, Verschärfung der Verschuldenshaftung (2007) 107.

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stationary vehicles by way of analogy if the danger they cause commensurates with the danger the EKHG refers to. This can be the case if the vehicle comes to a halt in an environment where other traffic participants are moving with high speed like e.g. on motorways26. However, for the case at hand even such an application by analogy is out of the question for lack of a special danger. Even if one follows prevailing opinion, it seems doubtful whether the defendant’s car has to be considered as “in operation” in the present case. Prevailing opinion assumes that danger can even emanate from a stationary car, which means that an increased danger compared to normal situations of fault liability is still required. In my view, no such increased danger emanates from the defendant’s car. It is not more dangerous than any other obstacle. Therefore the defendant’s car cannot be qualified as being “in operation”, which means that the extended vicarious liability of § 19 para. 2 EKHG does not apply.

24

2. OGH 26 June 2007, 10 Ob 50/07m27: Medical Liability; Disclosure Duties a) Brief Summary of the Facts

The plaintiff suffered from pain in his knee and a post-traumatic gonarthrosis was diagnosed in the defendant hospital. The attending doctor employed by the defendant suggested an arthroscopic surgery. Alternatives for this surgery were discussed but rejected for lack of success prospects. The plaintiff was informed about the surgery, possible complications and the fact that there could be no guarantee for the success of the operation.

25

When the surgery was finally performed under anaesthetic, it became clear that the original diagnosis had not been correct. The reason for the plaintiff’s pain was a defective position of his knee-cap. Before the surgery there had been no indications for such a defective position.

26

The attending doctor did not terminate the surgery to discuss the new situation with the plaintiff. Instead he performed a so-called lateral release, which was in his view necessary to reduce or correct the knee-cap’s defective position. As an alternative to the surgery it would have been possible to train a femoral muscle countering the knee-cap’s defective position in a physical therapy. However, this training would have had to be done on a permanent basis as without the training the pain would have returned. The plaintiff was informed of the extended surgery the day after the operation. Since the surgery he suffers from pain in the area where the lateral release was performed. He claims that he would not have given his consent to this surgery and argues that the attending doctor would have had to terminate the surgery to discuss the new situation and alternative treatment methods with him. He claims compensation for his non-pecuniary loss amounting to € 15,000.

27

26 27

Ibid., 109 f. Recht der Medizin (RdM) 2007, 188 = Zak 2007/612.

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The court of first instance denied the plaintiff’s claim while the Court of Appeal annulled this decision and referred it back to the court of first instance for further fact finding. b) Judgment of the Court

29

The OGH confirms the decision of the Court of Appeal. It argues that there had been extended surgery and that this extension was not covered by the plaintiff’s previous consent. According to the OGH, in case of surgery extensions, the patient should be informed of this possibility prophylactically before the surgery if there are indications for the necessity of such an extension. However, if a non-foreseeable change of the surgery arises in the course of the surgery of a fully anaesthetised patient, the operation may exceptionally be justified by the patient’s hypothetical consent based on the assessment of the hypothetical decision on the basis of an objective evaluation of the situation. The OGH stresses that, in such situations, the doctor has to weigh the danger to the patient’s life and health in case of a termination of the surgery against the patient’s right to self-determination: Thereby, the exigence of the surgery, the importance of the consequences of an omission of the surgery and the reasonableness of an interruption of the anaesthesia will be decisive.

30

If the surgery can be interrupted and continued later without problems, the surgery has to be terminated to perform the disclosure. The more urgent the surgery is and the more a termination of the surgery is contraindicated, the less offensive is an assumption of consent. On the other hand, the patient’s right to self-determination will be of higher importance the higher the additional risks and the more important the consequences for the patient are.

31

The OGH stresses that, in case of doubt, the patient’s right of self-determination prevails: If both, the termination of the surgery as well as its continuation bring about comparable dangers, the patient’s consent has to be acquired. The same applies if the result aimed at can be reached by different methods.

32

For the case at hand the OGH concludes that such an assessment is not possible on the basis of the fact finding of the court of first instance and refers the case back to this court for further fact finding on how a termination and continuation at a later time would have affected the plaintiff compared to the extension of the surgery on the surgeon’s own authority. c) Commentary

33

Based on existing doctrine28, the OGH in the present case develops criteria to be taken into account when deciding whether surgery extensions can be based on the patient’s hypothetical consent or whether the surgery has to be interrupted in order to acquire the patient’s consent. The OGH requires a weigh28

See D. Engeljähringer, Ärztliche Aufklärungspflicht vor medizinischen Eingriffen (1996) 164 ff.; T. Juen, Arzthaftung (2nd ed. 2005) 92, 133; K. Prutsch, Die ärztliche Aufklärung (2nd ed. 2004) 101 ff.

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ing of interests and, by naming the criteria to be taken into account in this weighing of interests, applies a flexible system approach. Although the OGH can – for lack of fact finding relating to these factors – not present a solution for the case at hand, the decision is very helpful as it provides guidelines for dealing with such cases. The rule that in case of doubt the patient’s right to selfdetermination will prevail is also very helpful for medical practice. However, I consider it important to take into account that surgeons will normally have to take quick decisions in such cases which means that it will be necessary to leave some scope for discretion. 3. OGH 26 June 2007, 1 Ob 88/07h29: Non-Pecuniary Loss a) Brief Summary of the Facts

On 16 August 2004, the plaintiff’s husband was arrested for suspected theft of items of considerable value on the basis of a judicial warrant of arrest. After the court hearing on 18 August he was released. The criminal proceedings were dismissed on 6 May 2005. The criminal court found that the plaintiff’s husband was entitled to compensation for illegal detainment on the basis of § 2 (1) a Strafrechtliches Entschädigungsgesetz (Criminal Law Compensation Act, StEG).

34

The plaintiff claims that the illegal arrest and the following criminal proceedings against her husband, which, in her view, were also illegal, caused her a mental shock. She argues that, ever since, she suffers from existential fears and depression which have to be qualified as “krankheitswertig”, i.e. as reaching the level of an injury to health. On the basis of the Amtshaftungsgesetz (Official Liability Act, AHG), the plaintiff claims compensation from the state for her non-pecuniary loss amounting to € 5,000.

35

b) Judgment of the Court

The OGH first analyses whether the plaintiff’s claim can be based on a violation of Art. 8 (1) of the ECHR. However, according to the OGH, Art 8 (1) ECHR cannot be qualified as a “Schutzgesetz”, i.e. a statute with protective purpose, in the sense of § 1311 ABGB as it does not precisely circumscribe a conduct commanded or prohibited by the law. Moreover, Art. 8 ECHR does not directly aim at the protection of a person’s physical and mental integrity, which means that these rights cannot be qualified as included in the protective purpose of Art. 8.

36

The OGH then examines whether there has been an illegal and faulty encroachment upon the plaintiff’s physical and mental integrity and therefore a violation of § 1325 ABGB. When doing so, the OGH refers to its practice in the so-called “shock-damage” cases. According to this practice, close relatives of a person killed or very severely injured are entitled to compensation for their

37

29

Evidenzblatt der Rechtsmittelentscheidungen (EvBl) in ÖJZ 2007/157 = JBl 2007, 794 = Zak 2007/522 = ZVR 2008/77 with cmt. by E. Karner.

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non-pecuniary loss if they suffer an injury to health30. The OGH stresses that compensation was only awarded if the close relative’s injury to health was caused by the primary victim’s death or severe injury, while in the present case the plaintiff’s harm was caused by her husband’s illicit arrest. The court further stresses that, in order to avoid an opening of the floodgates of liability, damage of secondary victims can only be compensated if there is a very strong reason for imputation on the part of the tortfeasor. Such a strong reason for imputation exists if the tortfeasor’s conduct was highly dangerous also in relation to the secondary victim, i.e. if this conduct was highly apt to cause the secondary victim’s injury to health.

38

While the OGH admits that her husband’s arrest and the following criminal proceeding were an emotional burden for the plaintiff, the court stresses that this situation and its aptitude to cause a close relative a mental shock is not comparable to a close relative’s death or most severe injury. The OGH therefore decides that its practice on compensation for close relatives suffering an emotional shock due to the primary victim’s death or most severe injury cannot be extended to other cases. Applying the practice to non-fatal cases which do not lead to most severe injuries of the direct victim would, in the eyes of the OGH, lead to an unacceptable widening of liability. Consequently, the OGH denies the plaintiff’s claim. c) Commentary

39

In this decision, the OGH was, once again31, confronted with a plaintiff’s attempt to reach a widening of its practice on compensation for secondary victims. The result reached by the OGH merits approval. In its reasoning, the OGH focuses on the decisive question in “shock-damage” cases, namely whether the act of the tortfeasor can be considered as highly dangerous in relation to the secondary victim. The OGH’s conclusion that the arrest of and the criminal proceedings against the plaintiff’s husband cannot be considered as highly dangerous for the plaintiff’s mental health is convincing. By denying the claim, the OGH sets sensible limits to its “shock-damage” practice. However, as Karner rightly stresses in his commentary to the present case32, generally limiting compensation for “shock damage” to cases of death or most severe injuries of the direct victim would go too far as there are cases in which e.g. a severe deprivation of liberty might indeed be highly dangerous for the secondary victim’s health as, for example, when the secondary victim’s child is kidnapped. 30

31

32

Compensation for the close relative’s bereavement, i.e. in cases in which there is no injury to the close relative’s health, will only be awarded if the tortfeasor acted with gross negligence or intent. On compensation for close relatives of the direct victim see E. Karner/H. Koziol, Der Ersatz ideellen Schadens im österreichischen Recht und seine Reform. 15. Österreichischer Juristentag vol. II/1 (2003) 74 ff.; K.-H. Danzl in: K.-H. Danzl/K. Gutiérrez-Lobos/O.F. Müller, Das Schmerzengeld (9th ed. 2008) 159 ff., 209 ff.; id. in: H. Koziol/P. Bydlinski/R. Bollenberger (eds.), Kurzkommentar zum ABGB (2nd ed. 2007) § 1325 no. 29. Cf. OGH 12.6.2006, 2 Ob 53/05s, see B.C. Steininger, Austria, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2006 (2008) no. 26 ff.; OGH 12.5.2005, 2 Ob 100/05g, see Steininger (fn. 1) no. 48 ff. ZVR 2008, 191.

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4. OGH 27 September 2007, 2 Ob 135/07b33: Non-Pecuniary Loss of Close Relatives; Quantum of Damages a) Brief Summary of the Facts

The plaintiff in this case is the estate of Stefan P. who committed suicide in November 2004. His mother had been killed in an accident in July 2002. Stefan P. had been mentally retarded since his birth in 1985. After his father’s premature death in 1986, he was fixated on his mother, whose only child he was. The death of his mother in an accident did not cause an acute crisis immediately. However, as of early 2003, Stefan P.’s mental condition deteriorated and he developed a depression which ultimately led to his suicide. Both, his depression and his suicide were consequences of the loss of his mother as attachment figure. Due to his lacking intellectual capacity, he was not able to cope with this loss like a healthy person.

40

In the proceedings before the OGH only the quantum of compensation for his non-pecuniary loss was still open. While € 35,000 had been claimed and awarded by the court of first instance, the Court of Appeal reduced this amount to € 20,000.

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b) Judgment of the Court

The OGH first gives an overview of its practice on quantum of damages for both groups of non-pecuniary loss of close relatives of the direct victim, namely mental shock cases on the one hand and cases of “mere” bereavement (without the close relative suffering a mental shock or injury to health) on the other hand34. Thereby, the OGH makes special reference to two of its previous decisions: In the first of these decisions, 2 Ob 111/03t35, the parents of the 14-year-old plaintiff were severely injured in an accident and therefore had to spend several weeks in hospital. As a consequence, the plaintiff developed anorexia nervosa combined with a life-threatening weight-loss and suicidal tendencies. Her parents continuously visited her during her in-patient treatment and supported her in her therapy. This plaintiff was awarded damages amounting to € 21,500. The second decision specifically referred to by the OGH in the present case, 2 Ob 186/03x36, concerned the award of € 65,000 to a 55-year-old man who lost his entire nuclear family – his wife and three minor children – in an accident. This led to severe and continuous mental harm, including incapacity to work and suicidal tendencies.

42

The OGH stresses that the first of these cases, 2 Ob 111/03t, cannot serve as an orientation guide for some kind of upper limit for the present case: First of all,

43

33 34

35

36

Zak 2007/715 = JBl 2008, 182 = ZVR 2008/59 with cmt. by Ch. Huber. In the latter group of cases compensation for the close relative’s non-pecuniary loss presupposes that the tortfeasor acted with gross negligence or intent. Cf. the references in fn. 30 above. OGH 12.6.2003, ecolex 2003, 835 = Österreichisches Recht der Wirtschaft (RdW) 2003, 633 = EvBl 2004/1 = JBl 2004, 111 = ZVR 2004/26 = case 5 in B.C. Steininger, Austria, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2003 (2004) no. 46 ff. OGH 30.10.2003, JBl 2004, 448 = ZVR 2004/6.

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that award was limited by the amount claimed in the case. More importantly, however, the plaintiff in this first case was not confronted with a permanent loss of her parents. In the present case however, Stefan P. lost his only attachment figure. Moreover, he did not have the necessary intellectual capacities to cope with this loss. Therefore, the OGH argues, the present case comes closer to the second decision referred to, 2 Ob 186/03x. Consequently, the OGH decides that an award of € 35,000 is not excessive in this case.

44

More generally, the OGH stresses the importance of the intensity of the family relation, the age of the accident victim and relative and the existence of a common household as factors for determining the quantum of damages. c) Commentary

45

As the quantum of damages is usually a question to be decided individually for every single case, quantum alone will regularly not justify an appeal to the OGH. This is, however, not valid in case of a striking assessment error, i.e. if the amount awarded falls out of the ordinary OGH practice. In the view of the OGH, the original award of € 20,000 in the present case was such a striking error and, therefore, the OGH accepted the appeal37. Both the OGH’s result of qualifying the amount claimed of € 35,000 as being not excessive as well as its reasoning can – in my view – be approved of. The OGH does not only provide an overview of its practice but also carefully outlines why an award of € 20,000 in the present case would have been too low compared to earlier decisions.

46

Even an award of € 35,000 may seem rather low compared to amounts awarded as compensation for non-pecuniary loss in other countries. However, when looking at the present award, one has to bear in mind that awards by Austrian courts are limited by the amount claimed38. Therefore, the OGH could not have awarded the plaintiff more than € 35,000 even if it might have considered a higher amount adequate39.

37

38

39

Quantum of damages for non-pecuniary loss of close relatives was also subject of another 2007 OGH decision. In 2 Ob 263/06z (Zak 2007/587 = ZVR 2007/239 with cmt. by K.-H. Danzl) the OGH upheld the award of bereavement damages amounting to a total of € 20,000 for each of the parents of a six-year-old girl killed in a car accident for their bereavement. In this case there was no injury to health on the side of the parents, but as the tortfeasor had acted with gross negligence, the parents were awarded compensation. Also in this case the OGH qualified the intensity of the family relation, the age of the accident victim and relatives as well as the existence of a common household as decisive factors for determining the quantum of damages. § 405 Zivilprozessordnung (Civil Procedure Code, ZPO). For the field of compensation for pain and suffering (“Schmerzengeld”) this situation is criticized by Ch. Huber in his cmt. on the present decision, ZVR 2008, 157. Moreover, there is a strong incentive for plaintiffs to keep their claims comparatively modest as the amount of the claim is decisive for the trial costs.

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5. OGH 27 September 2007, 2 Ob 283/06s40: Traffic Liability a) Brief Summary of the Facts

The plaintiff suffered serious brain damage as a front-seat passenger in a traffic accident. Before the accident the 17-year-old plaintiff and the 19-year-old driver of the car had drunk an excessive amount of alcohol and expressed that they wanted to commit suicide. They even drafted a suicide note, which they handed to someone else between midnight and one o’clock in the morning and then drove away. The driver drove at excessive speed into a right hand bend. However, the car was not turned at all to follow the bend and crashed frontally into the wall of a public house at a speed of between 85 and 110 km/h without the brakes having been applied. The plaintiff was not wearing a seat belt. He had boarded the car with the intention of committing suicide. However, it remains unclear whether the driver steered the car into the wall due to the common intention to commit suicide or whether the plaintiff grasped the steering wheel without the driver having suicidal intentions.

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The plaintiff claims compensation for his pain and suffering according to § 2 para. 1 no. 4 Verkehrsopferschutzgesetz (Traffic Victim Protection Act, VerkOG)41 from the Fachverband der Versicherungsunternehmen (Professional Association of Insurance Companies, FV).

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b) Judgment of the Court

The OGH first holds that, according to § 2 para. 1 no. 4 VerkOG, the defendant will have to compensate damage caused in traffic accidents if the liability insurer does not cover the damage because the tortfeasor acted intentionally. According to the OGH, it suffices for the FV’s standing to be sued that the liability insurer refuses compensation based on that reason. If insurance coverage did exist at the time of the accident, the FV can have recourse to the insurer.

49

Concerning the uncertain cause of the accident, the OGH refers to its practice, according to which there will be a reversal of the burden of proof to the detriment of the tortfeasor in case of a violation of a protective norm such as the speed limit in the case at hand. According to the OGH, the tortfeasor will have to prove that he cannot be blamed for this objective violation of the protective norm, e.g. because he was not at fault when violating the norm or because the damage would have occurred even if the norm had not been violated. The OGH further stresses that the damage was at least partly due to the driver’s violation of the speed limit. Therefore, the OGH argues, the defendant would have had to prove that, notwithstanding the excessive speed, it could not be held responsible for the accident because the plaintiff grasped the steering wheel. As such proof was not provided in the present case, the OGH holds that the remaining uncertainties are to the detriment of the defendant and that the

50

40 41

Zak 2008/94 = ZVR 2008/7. Now replaced by the Verkehrsopfer-Entschädigungsgesetz (Traffic Victim Compensation Act, VOEG). On this Act see above no. 11 ff.

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decision has to be based on the assumption that the driver steered the car into the wall deliberately.

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Furthermore, the OGH stresses that the voluntary assumption of risk by the plaintiff cannot exclude the wrongfulness of the driver’s acts. As the driver is under a duty to protect his passenger, the violation of the protective norm remains wrongful. However, the plaintiff’s voluntary assumption of risk will have to be taken into account as contributory negligence. The OGH comes to the conclusion that – due to the suicidal tendency of the plaintiff – the fault of the plaintiff and the driver are equal. Therefore the OGH decides that the plaintiff’s claim is justified to the extent of 50%. c) Commentary

52

The most interesting part in the present case is, in my view, how the OGH deals with the uncertainty as to why the car crashed into the wall. The OGH assumes that the damage was at least partly caused due to the excessive speed. However, this means that a causal link between the driver’s acts and the accident was in reality not doubted. Instead, the uncertainty was related to the contributory conduct of the plaintiff as it was not proven whether the plaintiff grasped the steering wheel or not. The OGH’s conclusion that, therefore, only the plaintiff’s voluntary assumption of risk remains to be taken into account as contributory negligence is convincing. However, I doubt whether the lack of proof that the plaintiff grasped the steering wheel justifies the second conclusion drawn by the OGH, namely that the driver steered the car into the wall deliberately: While the driver clearly set a conditio sine qua non for the accident by driving while intoxicated and at excessive speed, intent on his part was, after all, not proven either.

53

Although I therefore do not agree with all aspects of the OGH’s reasoning, the conclusion that the claim is justified to the extent of 50% seems convincing. 6. OGH 22 October 2007, 1 Ob 90/07b42: Public Liability in Relation to a Request for a Preliminary Ruling a) Brief Summary of the Facts

54

In the original lawsuit a plaintiff living in Austria claimed € 3,250 from a German enterprise on the basis of a prize promise which was made to her by that enterprise and which had not been linked to the order of goods. Both Austrian courts dealing with the case, a district court and a Court of Appeal, decided that they had jurisdiction on the basis of the Brussels I Regulation43.

55

The plaintiff in the present case is the liquidator of the German enterprise. He claims compensation from the Austrian state arguing that the Austrian courts had incorrectly assumed their jurisdiction. He holds that the courts would have 42 43

ecolex 2008/116 = Zak 2008/220. Council Regulation (EC) No. 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, OJ L 12, 16.1.2001, 1–23.

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had to either request a preliminary ruling by the ECJ on the question of jurisdiction or to adjourn proceedings until the decision of the ECJ in the pending case 27/02 – Petra Engler – on comparable facts was issued (though for this case the Brussels Convention44 was still applicable)45. Both, the court of first instance and the Court of Appeal in the present public liability lawsuit denied the plaintiff’s claim.

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b) Judgment of the Court

The OGH first states that, according to Art. 234 of the EC Treaty, a national court against whose decision there is no judicial remedy under national law is obliged to request a preliminary ruling if the interpretation of Community Law is doubtful. If a national organ does not request a preliminary ruling although it is obliged to do so, this national organ violates the parties’ constitutionally guaranteed right to their lawful judge. However, in the view of the OGH46, parties do not have a subjective right to recourse to the ECJ, which means that the decision about a request for a preliminary ruling lies with the deciding court alone. Yet wrongful and faulty acts in the course of the assessment of the question whether a request for a preliminary ruling is required or not may, according to the OGH, lead to public liability, both in case of an omission of an obligatory request as well as in case of an unjustified request.

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However, the OGH also stresses that not every incorrect court decision but only a decision which is not maintainable will justify a public liability claim. The OGH then examines whether the decisions of the lower courts were defensible: When doing so it examines the case law of the ECJ and also looks at the legal situation in another Member State, namely Germany, where the BGH had decided in favour of jurisdiction of German courts in a comparable case. On the basis of this examination, the OGH comes to the conclusion that the decisions of the court of first instance and the Court of Appeal were defensible.

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Moreover, the OGH decides that a request for a preliminary ruling by another national court does not oblige a court to adjourn its proceedings. Therefore, the mere fact that another court requested a preliminary ruling does not, according to the OGH, suffice to qualify the objected decision as being indefensible.

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c) Commentary

Although the present decision contains many interesting aspects on questions of jurisdiction and procedure, I have limited my presentation to aspects relevant for the question of public liability. In this context, the OGH stresses that 44

45

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Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters. In the Engler case the ECJ later decided that an isolated prize promise does not fulfil the requirements set by Art. 13 para. 1 point 3 for jurisdiction on consumer contracts, which were, however, tighter than the prerequisites of Art. 15 para. 1 point c Brussels I Regulation. Entscheidungen des Österreichischen Obersten Gerichtshofes in Zivil- und Justizverwaltungssachen (SZ) 68/249.

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the decisive question in the public liability trial is not whether the decision in the original trial was correct but only whether it was maintainable. Public liability according to the Official Liability Act (Amtshaftungsgesetz, AHG) requires wrongful and faulty conduct of the state organ in question. However, as court practice should be animated, not every incorrect interpretation of the law will be considered as faulty but only such interpretations which are not maintainable47. In the present case the OGH applies this practice to requests for preliminary rulings. 7. OGH 11 December 2007, 5 Ob 148/07m48: Wrongful Birth a) Brief Summary of the Facts

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The plaintiffs are the parents of a boy born with a serious disability. Their son suffers from a severe form of myelomeningocele involving clubfeet on both sides, an open vertebral column and a hydrocephalus. The boy had to undergo numerous operations and will remain handicapped for the rest of his life. In the course of the 20th week of her pregnancy the first plaintiff underwent a special ultrasound test, the so-called “organ screening”, which, among others, aims at detecting severe bodily and mental disabilities. The doctor performing this test in the defendant hospital negligently overlooked indications of a beginning hydrocephalus. Moreover, due to the position of the child, not all structures relevant for diagnosis were visible. Nevertheless, no new appointment was made with the first plaintiff for further examinations.

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The parents argue that they would have opted for an abortion had they been informed of the child’s disability in time and claim compensation for the child’s maintenance costs. b) Judgment of the Court

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After referring to Swiss and German law, the 5th panel of the OGH awards the plaintiffs compensation for their child’s entire maintenance costs. The OGH holds that, although compensation claims related to the birth of a child raise ethical and moral questions, the legal problems have to be solved on the basis of the applicable law. It refers to the wide notion of damage of § 1293 ABGB and argues that, according to prevailing court practice, the emergence of an obligation will already be considered as damage. In the view of the OGH’s 5th panel, it is therefore obvious that the maintenance costs for an unwanted child qualify as damage. If one compares the plaintiffs’ existing maintenance obligation to the situation after an abortion there can, according to the OGH, 47 48

Cf. W. Schragel, Kommentar zum Amtshaftungsgesetz (2003) no. 159. ecolex 2008, 322 with cmt. by G. Wilhelm = Zeitschrift für Ehe- und Familienrecht (EF-Z) 2008, 108 = RdM 2008, 47 with cmt. by Ch. Kopetzki = Zak 2008/164. See also D. HinghoferSzalkay/C. Hirsch, Wrongful Birth – Wrongful Conception: Die Diskussion geht in die Verlängerung, Interdisziplinäre Zeitschrift für Familienrecht (FamZ) 2008, 120; K. Grüblinger, „Wrongful birth“ – A never ending story? Zak 2008, 143; B.C. Steininger, Wrongful birth revisited: Judikatur zum Ersatz des Unterhaltsaufwands nach wie vor uneinheitlich, ÖJZ 2008, 436.

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be no doubt that the entire maintenance costs for the disabled child constitute damage. c) Commentary

The question whether and if so to what extent maintenance costs related to the birth of a child are compensable is highly controversial in Austria. Although there have in the meantime been several OGH decisions on wrongful birth or wrongful conception49 there is still no consistent line of court practice. In 2006, the two most fiercely discussed OGH decisions dealt with this question. The first was issued by the OGH’s 5th panel50 and, for the first time, awarded compensation for the entire maintenance cost in a wrongful birth case arguing that in case of an abortion, the plaintiffs would not have had to pay any maintenance for a disabled child. In the second decision, the 6th panel of the OGH denied the parents of a healthy child born after an unsuccessful sterilisation compensation of maintenance costs51. The 6th panel – in line with the leading decision on wrongful birth – argued that compensation is only possible exceptionally if the maintenance obligation places an extraordinary burden on parents, be it because of the limited means of the parents or the special needs of the child52. Therefore, the 6th panel qualifies the existence of a financial emergency as a prerequisite for compensation. The latter view was confirmed by another 2006 OGH decision in a wrongful conception case – this time issued by its 2nd panel53.

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Consequently, Austrian law was confronted with a contradictory Supreme Court practice on compensation for maintenance costs: If one assumes that maintenance costs will only be compensable exceptionally in case of an “extraordinary burden” to the parents, it is not clear why, in case of a disability of the child, this child’s normal maintenance costs should always qualify as an “extraordinary burden”. Therefore, if compensation for the entire maintenance costs is awarded to the parents of a disabled child, the maintenance costs for a healthy child would also have to be compensable.

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Taking into account these discrepancies, it is clear that the next decision on the topic was awaited eagerly. This new decision was issued in December by the OGH’s 5th panel and has again led to widespread discussion of the topic. It

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50 51 52

53

The first decision awarding compensation in a wrongful birth dates back to 1999 (OGH 25 May 1999, 1 Ob 91/99k: JBl 1999, 593 = RdM 1999/23 with cmt. by Ch. Kopetzki = RdW 1999, 781). For a summary of this decision see Steininger (fn. 31) no. 13 f. OGH 7.3.2006, 5 Ob 165/05h. See Steininger (fn. 31) no. 5 ff. with further references. OGH 14.9.2006, 6 Ob 101/06f. See Steininger (fn. 31) no. 18 ff. with further references. The underlying argument as put forward by some scholars being that the tortfeasor’s conduct does not merely cause maintenance costs but leads to a comprehensive family relationship including different pecuniary and non-pecuniary aspects, which will in total usually not be considered as damage and can therefore only be considered as being detrimental if it causes an extraordinary burden to parents. Cf. Steininger (fn. 31) no. 13 and the references ibid. in fn. 18. OGH 30.11.2006, 2 Ob 172/06t = ecolex 2007, 169 with cmt. by G. Wilhelm = Zak 2007, 77. See also D. Hinghofer-Szalkay/C. Hirsch, Wrongful Conception die Zweite – (k)ein Ende in Sicht, EF-Z 2007, 90.

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did, however, not bring about a solution for the contradictory court practice as it did not deal with the limitation of compensation to cases of an extraordinary burden at all. Just like the 6th and the 2nd panel in the past two decisions, the 5th panel in the present case denied a need to deal with the contradictions in court practice arguing that cases of wrongful birth and wrongful conception are not comparable. However, this reasoning disregards the fact that the basic problem, whether and if so to what extent maintenance costs are compensable, arises in both groups of cases.

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Austrian law therefore still struggles with a contradictory Supreme Court practice. As already mentioned in last year’s Yearbook, the main reason for the problems court practice is facing when dealing with wrongful birth or wrongful conception cases lies in the fact that there are hardly any clues in the law as to how this group of cases should be dealt with. Consequently, it would be very important to have a decision by the legislator. It is therefore a positive sign that the revised version of the Austrian tort law draft contains a clause on this topic54.

C. LITERATURE 1. P. Apathy, Schadenersatzreform – Gefährdungshaftung und Unternehmerhaftung, JBl 2007, 205

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In this article the author, who is a member of the working group who elaborated the Austria tort law draft, discusses the rules on strict liability and enterprise liability as foreseen in the draft’s original version. The article’s first part deals with strict liability and starts with a presentation of the status quo under Austrian law. Subsequently, the author focuses on the Austrian tort law draft. He first discusses the relationship between fault liability and strict liability and stresses that the draft considers both forms to be equal grounds for justifying liability. Then the author examines liability for sources of high danger as foreseen in the original draft’s § 1302 (§ 1304 of the draft’s revised version). He thereby not only deals with criticism put forward against this general clause for strict liability as foreseen by the draft, but also discusses the advantages and disadvantages related to a general clause for strict liability and the problems related to the formulation of such a clause on a more general basis. The author then focuses on the draft’s notion of “Halter” or keeper, which refers to the person liable. Moreover, he also examines grounds for exclusion or reduction of liability as foreseen in § 1302 para. 3 of the draft and agrees with criticism of this clause being too open. In a next step the author examines liability for means of transportation and makes references to the law currently applicable. Consequently, the author deals with liability for increased danger (§ 1303 of the draft; in the revised version this clause was modified and is now to be found under the heading of “faulty conduct in the case of special danger” while the numbering did not change). After a brief reference to liability for auxilia54

§ 1321 of the revised draft. See below 167.

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ries in case of strict liability, the author, in the second part of the article, deals with enterprise liability. Again, he first refers to the situation under current law and then examines the rule on enterprise liability as foreseen in § 1304 of the draft’s original version (the modified version of the clause on enterprise liability is now to be found in § 1302 of the draft’s revised version) which he circumscribes as liability for certain (avoidable) defects combined with a reversal of the burden of proof concerning compliance with the standard of care required for averting the damage. He outlines the reasons for such an enterprise liability and examines the consequences of an introduction of this rule compared to the current applicable regime. 2. M. Schauer, Die Reduktionsklausel im Entwurf des österreichischen Schadenersatzrechts, NZ 2007, 129 The author of the current article critically examines the reduction clause foreseen in § 1317 of the Austrian tort law draft55. After a brief description of this clause and references to the motives brought forward by the drafters, Schauer presents four main reasons which speak against the inclusion of such a reduction clause in a future Austrian Tort Law. First of all, he considers the clause to be too open and unspecific, thereby leaving too much discretion to judges. Moreover, he argues that decisions of judges based on the reduction clause would only to a limited extent be subject to control by the Austrian Supreme Court, the OGH, as recourse to the OGH presupposes that the decision depend on the resolution of a question of law which is of considerable importance for preserving unity of the law, legal certainty or legal development. According to the author, this will regularly not be the case as such decisions will only be of importance for the individual case. Second, a reduction clause would, in the view of the author, be in conflict with existing rules of debt enforcement and insolvency law and could, moreover, lead to a discrimination of liability law creditors in relation to other creditors. Third, the author suspects that the reduction clause might conflict with the rules on limitation of liability in the field of corporation law. In this field, liability of corporate members is usually limited by their contributed capital. An application of the reduction clause might, in the view of the author, in the face of an insolvency lead to a reduction of the claims of the party having suffered damage and would thereby reduce the already limited risk of corporate members to lose their contributed capital. According to the author, the reduction clause might in such cases become an instrument of recapitalisation in the face of insolvencies although instruments which are better equipped for this task already exist in insolvency law. Finally, the fourth reason brought forward by the author against a reduction clause is that such a clause might provide incentives to abstain from or reduce financial securities for liability such as liability insurance because persons disposing of financial security will be less likely to benefit from a reduction than people who do not dispose of any security. On the basis of these reasons, the author declines the inclusion of a reduction clause in Austrian tort law.

55

§ 1318 of the revised version.

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3. R. Pletzer, Vorteilsausgleich beim Schmerzengeld? JBl 2007, 409

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This contribution deals with the question whether advantages caused by the damaging event will have to be taken into account in the field of compensation for pain and suffering. While such a Vorteilsausgleich (adjustment of damages due to benefits received) is under certain conditions generally accepted if an event apart from causing pecuniary loss also causes pecuniary advantages, it is open how advantages should be dealt with in the field of non-pecuniary loss. After a brief overview of recent decisions on the question of Vorteilsausgleich in the field of damages for pain and suffering, which are to be found in the field of medical liability but do not bring a clear result, the author generally discusses the problem of Vorteilsausgleich. She gives an overview of different groups of cases identified in court practice and then examines the position in doctrine on this topic. She comes to the conclusion that neither Austrian nor German doctrine or court practice has established clear criteria for the question of Vorteilsausgleich.

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The author then examines whether non-pecuniary advantages are to be taken into account when assessing damages for pain and suffering and comes to the conclusion that the principles underlying the idea of Vorteilsausgleich in the field of pecuniary loss and advantages, namely a valuing assessment of damages, also apply here on condition that the non-pecuniary advantage is apt to off-set the disadvantage suffered at least in part. Subsequently, the author discusses the application of such a Vorteilsausgleich to cases in which liability claims are based on medical interventions which at the same time ameliorate the patient’s health condition (especially cases of medical intervention without consent) and to cases in which pain is spared to the person harmed.

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Finally, the article discusses to what extent there can be a Vorteilsausgleich in case of coincidences of the pecuniary and the non-pecuniary sphere: In accordance with prevailing opinion, Pletzer holds that setting off pecuniary advantages against non-pecuniary losses is not possible as, in the view of the author, the mere fact that the person harmed will also have pecuniary advantages due to the damaging event does in itself not change the extent of the encroachment suffered. Subsequently, the author analyses whether non-pecuniary advantages are to be taken into account when assessing pecuniary loss, which has been argued in relation to cases of wrongful birth and wrongful conception. Based on the argument that this would mean that the plaintiff would have to “pay” for the non-pecuniary advantage, the author declines this possibility. In both cases, a Vorteilsausgleich, in the view of Pletzer, fails as advantage and disadvantage are structurally incomparable. 4. B.C. Steininger, Verschärfung der Verschuldenshaftung (Verlag Österreich, Vienna 2007)

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This book is a revised version of the author’s doctoral thesis and examines the importance of dangerousness (Gefährlichkeit) as a factor justifying liability between classical fault liability on the one hand and strict liability based on dangerousness (Gefährdungshaftung) on the other hand. While classical fault

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liability is based on the tortfeasor’s conduct, Gefährdungshaftung is based on dangerousness. However, fault liability is often tightened and Gefährdungshaftung softened so that a continuous transition between the two categories emerges, in which both factors, conduct and dangerousness, are of importance. After a chapter dealing with the notion of dangerousness, this “grey area” between fault and strict liability is analysed for Austrian law. Thereby, the author stresses the importance of varying standards of conduct and the reversal of the burden of proof as instruments for tightening or softening liability. Subsequently, German, Swiss, French and Dutch law are examined. The author comes to the conclusion that an interplay of the factors conduct and dangerousness can be found in all these jurisdictions although, on the one hand, the degree of this interplay varies and is only noticeable to a very limited extent in France and, on the other hand, this interplay is not always openly acknowledged. For future Austrian law, the author suggests a combination of three general clauses: One for fault-based liability, a second one for liability based on both, conduct and dangerousness, and a third one for Gefährdungshaftung. Finally, the results of the present book are contrasted with the original version of the Austrian tort law draft. 5. E. Wagner, Gehilfenhaftung im Deliktsbereich de lege lata und de lege ferenda, ÖJZ 2007, 755 In this article the author examines questions of liability for auxiliaries in the field of tort law. After a brief outline of the problems Austrian law faces in this respect, she gives an overview of how liability for auxiliaries could be constructed and presents three different options, namely a strict liability of entrepreneurs, liability of the principal for misconduct of auxiliaries (principle of respondeat superior) and, finally, liability based on the entrepreneur’s own fault. However, the author stresses that there will often be hybrid forms of these three options. The author then analyses the Austrian rule of § 1315 ABGB on delictual liability for auxiliaries, discusses this rule’s disadvantages and the strategies chosen in judicature to circumvent these problems. Consequently, the article examines how this field of law could be regulated in the future. Thereby, the author stresses the importance of a compatibility of contractual and delictual liability for auxiliaries. She refers to developments on a European level and presents the solutions chosen in the Principles of European Tort Law of the European Group on Tort Law and in the Study Group on a European Civil Code’s Principles of European Law: Non-Contractual Liability Arising out of Damage Caused to Another. Subsequently, the author analyses the rules on this topic foreseen in the Austrian tort law draft (original version) and criticizes the draft’s concept of enterprise liability. Finally, she refers to other positions in doctrine concerning delictual liability for auxiliaries and, in conclusion, presents her own suggestions for reform advocating liability of the principal for acts of the auxiliary violating the required standard of conduct, whereby the standard for the principal would apply. Thereby she brings liability for auxiliaries in the field of delictual liability closer to the current concept of § 1313a ABGB on liability for auxiliaries in the field of contractual liability. Moreover, she considers a reversal of the burden of proof for the violation of the required standard of conduct.

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Further Selected Literature:

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ABGB: H. Koziol/P. Bydlinski/R. Bollenberger (eds.), Kurzkommentar zum ABGB (2nd ed., Springer, Vienna 2007) – general commentary on the ABGB including its tort law section; P. Rummel (ed.), Kommentar zum Allgemeinen bürgerlichen Gesetzbuch II/2a (3rd ed., Manz, Vienna 2007) – this is the second of the third edition’s two volumes on the ABGB provisions on contractual and delictual liability commented on by R. Reischauer. It covers §§ 1293 to 1312 ABGB.

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Auditors’ Liability: H. Wilhelmer, Abschlussprüferhaftung und Versicherungsschutz, RdW 2007, 455.

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Aviation: B.A. Koch, Keine Haftung der Fluglinien für Reisethrombosen, Zeitschrift für Europäisches Privatrecht (ZEuP) 2007, 622.

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Causation: H. Koziol, Wegdenken und Hinzudenken bei der Kausalitätsprüfung, RdW 2007, 12.

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Environmental Liability: B. Troiss, Neue Umwelthaftung – Deckungsvorsorge und Versicherbarkeit, ecolex 2007, 751.

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Information Duties: M. Gruber, Kapitalmarktinformationshaftung der Aktiengesellschaft und Kapitalerhaltungsgrundsatz, JBl 2007, 2, 90; id., Prospekthaftung der Emissionsbank, RdW 2007, 195; G. Heindl, Kapitalmarkt, Anlegerschutz und Haftungsfragen, ecolex 2007, 427.

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Liability in General: K.-H. Danzl, Bemerkenswerte schadenersatzrechtliche Entscheidungen des OGH aus dem Jahr 2006, ZVR 2007, 75; H. Koziol, Gedanken zum privatrechtlichen System des Rechtsgüterschutzes, in: Festschrift Canaris (2007) vol. I, 631.

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Medical Liability: M. Haag, Schadenersatz bei lege artis durchgeführter, indizierter und geglückter, aber eigenmächtiger Heilbehandlung? RdM 2007, 114; A. Leischner, Streitbeilegung in medizinischen Haftungsfällen (Manz, Vienna 2007); M. Nademleinsky, Die Rechtsprechung zur Arzthaftung 2006, in: M. Kierein/P. Lanske/S. Wenda (eds.), Jahrbuch Gesundheitsrecht 2007 (Neuer Wissenschaftlicher Verlag, Vienna 2007), 223; R. Pletzer, Die Haftung des Arztes für Behandlungsfehler und Aufklärungsmängel, in: M. Kierein/P. Lanske/S. Wenda (eds.), Jahrbuch Gesundheitsrecht 2007 (Neuer Wissenschaftlicher Verlag, Vienna 2007), 199; L. Stärker, Contra „ausufernde“ ärztliche Aufklärungspflicht, FamZ 2007, 4; B.C. Steininger, Verpflichtung zu paternalistischer ärztlicher Aufklärung statt eigenverantwortlicher Patientenentscheidungen? Einige Bemerkungen zur Entscheidung 5 Ob 165/05h, JBl 2007, 198.

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Non-Pecuniary Loss: G. Christandl/D. Hinghofer-Szalkay, Ersatzansprüche für immaterielle Schäden aus Tötung naher Angehöriger – eine rechtsvergleichende Untersuchung, Zeitschrift für Rechtsvergleichung, Internationales Privatrecht und Europarecht (ZfRV) 2007, 44; D. Hinghofer-Szalkay, Ge-

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fühlsschäden nach schwerster Verletzung naher Angehöriger: pro und contra Ersatzfähigkeit, Zak 2007, 166; D. Hinghofer-Szalkay/M. Prisching, Schmerzunempfindlichkeit bereits vor Schadenszufügung durch den Schädiger: pro und contra Schmerzengeld ohne Schmerzen, Zak 2007, 143; id., Schmerzengeld ohne Schmerzen – Neue Entwicklungen? ZVR 2007, 116. Patents: H. Koziol, Patentverletzung und Schadenersatz, RdW 2007, 198.

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Personal Injury: Ch. Huber, Das Ausmaß des Schadenersatzanspruchs bei Pflege durch Angehörige rund um die Uhr, ÖJZ 2007, 625.

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Personality Rights: E. Ratz, Schutz der freien Meinungsäußerung und Schutz vor ihr im Straf- und Medienrecht durch den OGH, ÖJZ 2007, 948; C. Thiele, Der Holocaust auf Ihrem Teller – Wanderausstellung macht Station beim österreichischen Höchstgericht, wbl 2007, 263.

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Private International Law: A. Haberl, Außervertragliche Schuldverhältnisse: Neuerungen durch die Verordnung „Rom II“, Zak 2007, 287; Ch. Handig, Rom II-VO – Das neue IPR für außervertragliche Schuldverhältnisse, ecolex 2007, 733; H. Heiss/L.D. Loacker, Die Vergemeinschaftung des Kollisionsrechts der außervertraglichen Schuldverhältnisse durch Rom II, JBl 2007, 613; H. Koziol/T. Thiede, Kritische Bemerkungen zum derzeitigen Stand des Entwurfs einer Rom II-Verordnung, Zeitschrift für vergleichende Rechtswissenschaft (ZVglRWiss) 2007, 235; T. Thiede/M. Kellner, „Forum Shopping“ zwischen dem Haager Übereinkommen über das auf Verkehrsunfälle anzuwendende Recht und der Rom-II-Verordnung, Versicherungsrecht (VersR) 2007, 1624; T. Thiede/K. Ludwichowska, Die Haftung bei grenzüberschreitenden unerlaubten Handlungen, ZVglRWiss 2007, 92.

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Professional Liability: H. Krejci, Zur Schiedsrichterhaftung, ÖJZ 2007, 87; B. Nunner-Krautgasser, Masseverwalterhaftung für Prozesskosten, Zak 2007, 212; S. Riel, Zur Haftung des Masseverwalters für Prozessführung bei Masseunzulänglichkeit, Zeitschrift für Insolvenzrecht und Kreditschutz (ZIK) 2007, 146; M.-Th. Volgger, Die Haftung des Sachwalters, FamZ 2007, 74; W. Völkl/C. Völkl (eds.), Handbuch der Beraterhaftung (Manz, Vienna 2007).

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Property Damage: J. Kriegner, Wrackwertproblematik bei KFZ-Totalschäden in der Haftpflichtversicherung aus österreichischer und deutscher Sicht, wbl 2007, 365.

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Public Liability: M. Aufner, Das gerichtliche Testament einer unter Sachwalterschaft stehenden Person – ein alter Bekannter der Amtshaftung, FamZ 2007, 92; M. Battlogg, Amtshaftungsansprüche bei Fahrverboten auf Güterwegen, Österreichisches Anwaltsblatt (AnwBl) 2007, 502; D. Hinghofer-Szalkay, Amtshaftungsansprüche wegen Baulandwidmung bzw Baugenehmigung in hochwassergefährdeten Gebieten, Zak 2007, 364; E. Karner, Grenzen der Amtshaftung bei mangelhafter Bankaufsicht, ÖBA 2007, 794.

90

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Road Traffic: P. Baran, Umsetzung der 5. Kfz-Haftpflichtversicherungs-RL im Versicherungs- und Kraftfahrrecht, ZVR 2007, 250; K.-H. Danzl, EKHG. Das Eisenbahn- und Kraftfahrzeughaftpflichtgesetz (8th ed., Manz, Vienna 2007); G. Kathrein, Verkehrsopferschutz neu – Das Verkehrsopfer-Entschädigungsgesetz, ZVR 2007, 243; F. Kerschner, Verkehrsimmissionen. Haftung und Abwehr (Neuer Wissenschaftlicher Verlag, Vienna 2007).

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Sports: M. Obermeier, Sicherungspflichten für Pistentouren? Zak 2007, 387; U. Poscharnegg, Haftungsrechtliche Fragen bei Verletzung von Pistensicherungspflichten, Zak 2007, 383.

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Tort Law Reform: I. Griss, Reform des Schadenersatzrechts (LexisNexis, Vienna 2007); B. Schilcher, Das bewegliche System wird Gesetz, in: Festschrift Canaris (2007) vol. II, 1299.

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Wrongful Birth: J. Cornides, Zur Haftung des Arztes bei fehlerhafter pränataler Diagnose, JBl 2007, 137; D. Hinghofer-Szalkay/C. Hirsch, Wrongful Conception die Zweite – (k)ein Ende in Sicht, EF-Z 2007, 90; id., Wrongful birth/ Wrongful conception quo vadis? ÖJZ 2007, 519; A.E. Hollaender, Die Geburt als schadensstiftendes Ereignis – Schadenersatz für „wrongful birth“ bei Behinderung? RdM 2007, 7; G. Luf, Kind als Schadensquelle? AnwBl 2007, 547; S. Merckens, Kein Schaden ohne Kind, AnwBl 2007, 237; J.N. Sääf, Kein Schaden ohne Kind, AnwBl 2007, 365.

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Other: S. Perner, Die Haftung des Scheinvertreters nach dem UGB (§ 1019 ABGB), RdW 2007, 14; M. Neumayr/H. Steiner, Schadenersatzrenten und ihre Besteuerung, Zak 2007, 63.

APPENDIX: REVISED WORKING GROUP DRAFT Preliminary Final Version (end of June 2007)56 I. General Part Section 1 Principles of liability Fundamental rule

§ 1292. (1) It is the task of tort law to compensate damage and at the same time to thereby create an incentive to avoid damage. (2) A person is liable to compensate damage to another if that damage can be legally attributed to him. (3) The consequences of mere chance are borne by the person whose patrimony or person is thereby affected. 56

Translation by Fiona Salter-Townshend LL.B., LL.M.

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159 Damage; protected interests

§ 1293. (1) Damage is any harm that a person suffers to his person, patrimony or any other of his protected interests. If such harm can be measured in money then there is pecuniary damage, otherwise it is non-pecuniary damage. (2) The protection of interests depends in particular on the interest’s rank and value, the precision of its definition and its obviousness, but also on the interests of others in free development and in the exercise of rights as well as public interests. (3) The clearly defined and manifest personality rights such as above all, life and bodily integrity, the rights in rem and intellectual property rights, enjoy the highest protection. Pure economic interests outside of contractual relationships are only protected by way of exception. Causation

§ 1294. (1) An act, an omission or another event is the cause of damage if it would not otherwise have occurred. (2) Damage can be attributed to a person if he caused it or the causative event was otherwise within his sphere. This also applies if the event was highly likely to cause the damage but the same is true of another event (cumulative and superseding causation). If one of the events is a chance or caused by the victim or if only the one or the other of the events could have caused the damage (alternative causation) then the damage is to be apportioned according to the weight of the respective grounds for imputation and the likelihood of causation. (3) To the extent that the same damage is attributable to multiple persons and nothing else arises from para. 2, they are solidarily liable. If multiple persons have acted wrongfully together, it is presumed that each of them caused the entire damage. (4) In the case of multiple events, all of which may have caused the damage, if none has caused the entire damage or a determined part thereof, but each, however, is highly likely to have caused a part; it is presumed that the events have caused equal shares of the damage. (5) Insofar as multiple persons are solidarily liable, recourse shall be according to the weight of the respective grounds for imputation, especially the gravity of the fault and the degree of the danger. Section 2 Liability for fault or otherwise wrongful conduct Conditions for fault liability

§ 1295. (1) A person is liable on the basis of fault if he unlawfully, that is by violating the objective standard of conduct (§ 1296), and culpably (§ 1300) injures a protected interest or contravenes a concrete duty of care (protective law) or acts contra bonos mores.

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(2) A person violates bonos mores if he acts contrary to the fundamental values of the legal order or grossly offends against the general morality, if he acts only with the object of injuring another or if he pursues interests which are in gross disproportion to those of the victim. Standard of conduct

§ 1296. (1) In general, the standard of conduct to be applied is that which is to be expected of a reasonable person having regard to the interests of others under the circumstances given. In this context, the rank and value of the interests endangered and the interests pursued, the hazardousness of the situation, the proximity between the parties involved, the possibility of averting the danger and the cost and effort associated therewith, shall be considered. (2) A person who facilitates traffic or creates or maintains a source of danger shall apply all special care reasonable that is necessary in order to prevent damage. Duty to act

§ 1297. Everyone has a duty to prevent damage which discernibly threatens another if there is a special relationship to the endangered person, if he facilitates traffic or creates or maintains a source of danger or if the threatened damage is grossly out of proportion to the burden of preventing it. Protection of pure economic interests

§ 1298. (1) Duties of care to protect pure economic interests consist in particular in a contractual relationship, in the case of pre-contractual contact, of declarations on which the grantee is recognisably dependent and which are directed at arousing the trust of the grantee, as well as in the case of rules of conduct for the protection of patrimony. The same applies when the tortfeasor is aware of the threatened damage and there is a gross disproportion between the interests endangered and those pursued. (2) A person who knows the claim a third party has may not consciously work towards a breach of contract by the debtor, unless he thus protects his own right which is founded earlier in time or in the absence of knowledge of the third party’s claim. A person who merely takes advantage of the fact that a debtor is determined on breaching contract is only liable if he knows the debtor’s obligation or if this obligation is manifest and he cannot prove that the damage would also have occurred regardless. Defences based on justifications and necessity

§ 1299. (1) A person who defends himself or others in an appropriate fashion against a present or immediately threatening unlawful attack on life, bodily integrity, liberty or patrimony (justifiable defence of oneself or another person) or who acts in the non-postponable implementation of a right of his own (lawful self-help) or with the valid consent of the victim or in some other manner justified on the basis of the law, shall not be liable.

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(2) A person who causes damage in circumstances of necessity in order to avert an immediate threat of danger to himself or others may have his liability reduced or extinguished. The relation of damage and danger, any omission of defence out of consideration for the endangerment as well as the pecuniary circumstances of both sides shall be taken into account thereby. There is full liability if the tortfeasor brought about the emergency culpably. Fault

§ 1300. (1) A person is at fault if he should have acted differently and on the basis of his abilities and knowledge would have been in a position to do so and would have been able to foresee the damage. (2) A person who culpably contravenes a concrete duty of care (protective law) is liable even when he could not foresee the damage. A person who knowingly acts unlawfully and who at the least approvingly accepts the damaging consequence of his conduct acts with intent, otherwise negligently. (3) Persons over 14 years are presumed to have ordinary abilities and knowledge; in the case of persons between 7 and 14 years the opposite is presumed. Persons under 7 years are under no circumstances capable of fault. (4) A person who enters into a contract to bring a performance must bear the consequences of lacking the abilities and knowledge necessary. The same applies when someone exercises without necessity an activity that requires special abilities and knowledge. Defective conduct in the case of persons under 14 or lacking mental competence

§ 1301. (1) If persons below the age of 14 or mentally incompetent persons violate the objective standard of conduct, then the basis and extent of their liability depends on their being at fault after all by way of exception, on any benefit they derive from the injury and on any omission of defence out of consideration for them as well as their pecuniary circumstances and those of the victim. The same applies when another person’s conduct is not at fault because he lacks the necessary abilities and knowledge. (2) A person who has voluntarily put himself in a condition of mental incapacity must compensate the damage another suffers as a result. Defective conduct in enterprises

§ 1302. (1) A person who operates an enterprise out of commercial or vocational interests is also liable for damage caused by a defect in the enterprise or its products or services. The entrepreneur is not liable if he proves that the care necessary to avert the damage was exercised. (2) A defect is any deviation from the standard that can be expected from the enterprise, its products or services according to the presentation, the state of the art of science and technology and the customary practice. The defect must be proven by the victim. (3) Pure economic loss is not compensable under this provision.

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Defective conduct in the case of special danger

§ 1303. (1) A person who creates or maintains a special danger is liable for the damage resulting therefrom, unless he proves that the care necessary to avert the damage was taken. (2) A special danger can in particular be generated by animals, buildings, motor vehicles or activities like cycling or skiing at high speed. Section 3 Strict liability Liability for sources of high danger

§ 1304. (1) The keeper of a source of high danger is liable insofar as this danger results in damage. (2) Who the keeper is depends on who has an especial interest in the source of danger, who bears the costs and who exercises the actual power of disposition. (3) A source of high danger exists when a thing either in itself or in the course of its ordinary use or an activity involves the risk of frequent or serious damage in spite of the exercise of due care. Sources of high danger include in particular nuclear facilities, dams, oil and gas pipelines and electric power lines, ammunition factories and depots, also aircraft, railway, cableway, motor vehicles and motor boats as well as mines and blastings. (4) Liability is excluded if the damage is caused by force majeure or in spite of the thing being free from defect and exercise of the greatest possible care (unavoidable event); in particular when such damage is attributable to the conduct of the victim, of a third party not employed in the operation of the thing or of an animal. In cases of especially high danger, e.g. nuclear facilities, dams, aeroplanes or ammunition factories, liability can also merely be reduced in accordance with the degree of danger. The same applies when the unavoidable event substantially increases the danger posed by a thing in the concrete situation (exceptional operational risk). (5) Liability can also be excluded or reduced if the victim has knowingly accepted exposure to the danger of a special nature. Section 4 Liability for third parties and for technical equipment Auxiliaries in the performance of obligations (Erfüllungsgehilfen)

§ 1305. (1) A principal is liable to his partner for the misconduct of his auxiliaries, who he uses in the performance of his obligations or who work for him on the basis of the law. This applies not only in the case of breach of performance duties but also to other misconduct not extraordinary for the activity of such performance agent (Erfüllungsgehilfe). (2) A performance agent (Erfüllungsgehilfe) can also be someone who takes on an activity to carry it out independently.

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(3) The principal is also liable for the failure of technical equipment which he uses in the same way as an auxiliary in the performance of his obligations. Other auxiliaries (Besorgungsgehilfen)

§ 1306. (1) In the absence of a pre-existing obligation vis-à-vis the victim the principal is only liable for the damage caused by the misconduct of his auxiliaries if the victim proves that the auxiliary was inept or that the principal did not select him carefully or did not supervise him adequately. If the principal is an entrepreneur, then he bears the burden of proof. (2) In the case of special danger (§ 1303) and sources of high danger (§ 1304) the principal is in any case also liable for the misconduct of his auxiliaries (Besorgungsgehilfen). (3) A person who undertakes to carry out work independently is not an auxiliary in the sense of this provision (Besorgungsgehilfe). The principal is liable only if he has not selected him with reasonable care or not adequately supervised him. (4) The principal is also liable for the failure of technical equipment which he uses in the same way as an auxiliary if the victim proves that the equipment was unsuitable, the principal did not select it with reasonable care or did not monitor it adequately. If the principal is an entrepreneur, he bears the burden of proof. (5) The principal is furthermore liable for the misconduct of persons who have a leading position in his scope of activities with their own decision-making powers and the authority to issue directives. Corporate bodies must in any case answer for their constitutional organs. Liability of the auxiliaries

§ 1307. The liability of auxiliaries under other provisions is unaffected by the liability of the principal (§§ 1305 and 1306). Insofar as principal and auxiliaries are both liable they must compensate solidarily. Liability of supervisory persons

§ 1308. Supervisory persons are liable for the misconduct of the persons entrusted to them if they are negligent in their duties. Insofar as the supervisory persons must and can compensate for the non-culpable misconduct of persons below the age of 14 or mentally incompetent persons, the victim has no claim against these persons Section 5 Liability for encroachment upon another’s right

§ 1309. A person who on the basis of an official or legal authorization encroaches upon another’s right is liable for the damage thus caused, unless otherwise provided. The same applies to anyone who merely invokes such authorization.

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§ 1310. (1) Compensation shall be paid for damage adequately caused and which is covered by the protective purposes of the norm that was infringed or which in some other way was the basis for liability. The weight of the grounds for imputation and the benefits gained by the person liable are to be considered. (2) If the tortfeasor has behaved unlawfully but the damage would also have occurred if he had behaved lawfully, the damage must be apportioned according to the weight of the grounds for imputation. § 1311. Material benefits which would have been gained through unlawful behaviour are not to be compensated unless the purpose of the prohibition norm is not opposed by this. § 1312. The victim can also claim compensation if the damage has been shifted to a third party, unless the tortfeasor ought thus to be relieved. Insofar as the third party renders to the victim, the right to compensation is transferred to him. Contributory conduct or activity

§ 1313. (1) If the victim has contributed to his damage or neglected to mitigate it, then the damage is to be apportioned. In particular, the gravity of the fault, the degree of danger and the existence of several grounds for imputation shall be taken into account thereby. In case of doubt, the damage shall be apportioned evenly. In the event of causing death, the contributory conduct of the person killed is decisive. (2) Even in the absence of a special legal relationship, the misconduct of persons to whom the victim entrusted the damaged goods is imputable to the victim. This does not apply to legal agents or to persons who have been assigned to carry out the work independently. (3) If the grounds for imputation on one side far outweigh those on the other, then the damage shall not be apportioned. Also to be considered in this context is whether the tortfeasor was under the very obligation to prevent the damage which occurred. Section 7 Type and extent of compensation Restitution in kind

§ 1314. The victim can demand the restoration of the previous or a similar or an equivalent state as far as restoration in kind is possible and is not substantially outweighed by the interests of the tortfeasor in monetary compensation. The tortfeasor can insist on restoration in kind if his interest therein substantially preponderates.

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§ 1315. (1) If restoration is not to be in kind, then the tortfeasor shall compensate the entire damage in money. The damage is to be calculated under consideration of all consequences, including loss of profit, precisely for the victim (concrete calculation). Benefits the victim gained from the damaging event reduce the claim for damages, with the exception of mere shifts of damage (§ 1312) or allocations intended to serve the interests of the victim. (2) If no substantial interest of the person liable to pay compensation speaks against it, the victim can instead of restoration in kind (§ 1314) claim either reimbursement for the amount of money used for this purpose or an advance. The victim shall render account within a reasonable time for the disposal of this advance. (3) If restoration in kind is not possible and if therefore the victim replaces the damaged item with a new one then the victim can claim for the replacement value of the damaged thing and the costs incurred by the earlier replacement. If a replacement value cannot be established, the costs of the acquisition or the making of the newer thing with a deduction for the possibility of longer use shall be decisive. (4) If the damaged good has a market value, the victim can require that the damage be calculated according to the market price at the time of the damaging event (abstract calculation). Compensation for non-pecuniary damage

§ 1316. (1) Non-pecuniary damage shall always be compensated insofar as the restoration in kind is possible and feasible (§ 1314). (2) Whether damages are to be paid depends on the significance of the damaged good, the objective traceability, extent and length in time of the impairment and the weight of the grounds for imputation. For serious and objectively traceable injuries to personality rights, damages shall always be paid. Insignificant harm is not compensable. (3) An appropriate compensation for pain and suffering is to be paid in the following cases in particular 1. bodily injury, injury to health or liberty, 2. for the suffering of closely related persons in the event of causing death or particularly severe injury of a person; in the case of spouses, parents and children a close relationship is presumed, other persons must prove a comparable relationship, 3. in the case of sexual abuse or injury to the right to sexual self-determination by means of malice, threat or abuse of a relationship of dependence or authority, 4. in the case of intentional or serious discrimination because of gender, a disability, ethnic origin, religion or comparable reasons,

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5. in the case of intentional or serious invasion of privacy or, 6. insofar as serious grounds for imputation exist, for the fear of dying or of being seriously injured if such fear has been caused by a concrete endangerment. (4) In the case of intentional damage to items of property, the value of special affection shall be compensated. In the case of breach of a contract, the nonpecuniary damage is to be compensated if the contract is aimed above all at the satisfaction of non-pecuniary interests and these are substantially impaired and an appropriate compensation cannot be obtained anyway by the reversal of the transaction. (5) In assessing damages, regard must be had to the circumstances listed in para. 2 and the benefits gained by the tortfeasor from the conduct establishing liability. In the case of compensation for the damage because of improper performance of a contract, the amount of the agreed contract price is to be considered. (6) Claims for the compensation of non-pecuniary damage are transferable and hereditary. § 1317. Continuing damage is to be compensated by a lump sum for the past and by periodical payments for the future. For good cause, the victim can seek compensation by a lump sum if this is not an unreasonable economic burden on the tortfeasor. The lump sum is to be calculated according to the estimated length of time the periodical payments would be paid, with the interest discounted. Reduction of damages

§ 1318. In exceptional circumstances, damages can be reduced if they would be an unreasonable and oppressive burden for the tortfeasor and a merely partial compensation would be reasonable to the victim. The weight of the grounds for imputation, the economic circumstances of the victim as well as those of the tortfeasor and the benefits gained by the latter are to be taken into consideration. Section 8 Burden of proof

§ 1319. Insofar as not otherwise provided, the victim must prove all requirements of his claim. If the victim has a special legal relationship to the tortfeasor and if he proves a defect in the tortfeasor’s sphere, then the latter must show that he complied with the required standard of conduct. If the victim desires compensation for non-performance of a contractual or legal obligation, then the tortfeasor must prove compliance with the required standard of conduct or the absence of fault.

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§ 1320. (1) A person who causes bodily injury or injury to the health of another must in particular compensate costs of treatment and care and increased expenses, loss of earnings including future loss of earnings, the impediment of better advancement (§ 1315) and for pain and suffering (§ 1316). Impairment of earning capacity shall also be compensated even while the actual earnings are not yet reduced. (2) If the injury leads to death, the tortfeasor must reimburse those who paid the funeral costs and compensate those who were legally entitled to be maintained by the deceased or for whom the deceased would have paid the necessary maintenance, for the loss of this maintenance including future maintenance. Unwanted birth of a child

§ 1321. (1) A person who by improper performance of a contract thwarts the decision of parents to avoid the birth of a child in an admissible fashion must render appropriate compensation for the non-pecuniary damage caused by such injury of the parents’ freedom of decision. (2) Such person must only compensate for the expenses of the child’s maintenance if and insofar as such expenses lead to an exceptional burden for the parents and their standard of living is significantly reduced. Interference with liberty

§ 1322. (1) A person who interferes with the liberty of another must restore it (§ 1314) and compensate the pecuniary (§ 1315) and non-pecuniary damage (§ 1316). (2) If the deprivation of liberty stems from a non-public untrue communication, the tortfeasor is not liable if there was a justified interest in the communication and he proves that he did not know that it was untrue. (3) If the victim does not obtain his liberty and cannot enforce his claim, the tortfeasor must compensate those who were legally entitled to be maintained by the victim or for whom the victim would have paid the necessary maintenance, for the loss of this maintenance including future maintenance. Defamation

§ 1323. (1) A person who is defamed or whose credit, earnings or advancement is impaired by libel or slander can seek the retraction of the utterance (§ 1314), the compensation of the pecuniary loss (§ 1315) and in the case of serious impairment of his standing, also the non-pecuniary loss (§ 1316).

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(2) The tortfeasor is not liable for the non-public distribution of untrue statements if there was a justified interest in the communication and he proves that he did not know they were untrue. (3) The tortfeasor is liable for the distribution of true facts only if these were not generally known, there was no justified interest in their communication and the facts originate from the private sphere or if the distribution was manifestly designed to impair another person seriously. Damage to property and injury to an animal

§ 1324. (1) If the tortfeasor destroys a thing he must at least replace its market value (§ 1315 para. 4), in the case of intent also the value of special affection. (2) If a thing is damaged, the victim can also seek costs of repair exceeding the loss of its value (§ 1315 para. 2) insofar as a reasonable victim would have invested the costs, in particular because of a non-pecuniary interest in the thing. (3) The same shall apply for the killing or injuring of an animal. Providing incorrect advice and misinformation

§ 1325. (1) A person who in a contractual relationship or in pre-contractual contact culpably gives his partner incorrect advice or misinformation is also liable for pure pecuniary damage. The same applies to declarations on which the grantee is recognisably dependent and which are directed at arousing the trust of the grantee; furthermore when the person making the declaration is aware that the information provided is wrong. (2) If incorrect advice or misinformation provided leads to an injury of personality rights, rights in rem or intellectual property rights, then the tortfeasor is liable regardless of whether a contractual relationship or pre-contractual contact exists, if it is discernible to him that the grantee trusts in the declaration and is thereby put at risk. Section 2 Liability for roads Liability of the keeper of a road

§ 1326. (1) If at fault, the keeper of a road is liable for damage that occurs as a result of a permitted use because of the inadequate state of the road. Any use which is not opposed by precept or prohibition or the type of road shall be deemed permitted. Whether the state of a road is inadequate depends on the users’ safety expectations justified by the type of road. (2) The keeper’s duty of care is reduced when the road serves above all the interest of the users. This is without prejudice to the contractual liability arising from special arrangement. Public authorities are liable as road keepers in the same way as an entrepreneur (§ 1302).

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(3) A path consists of the ground area designated for the traffic including the constructions belonging thereto. Section 3 Liability for means of transportation Liability of the keeper

§ 1327. (1) If through an accident in the operation of means of transportation, that is railway, cable car or motor vehicle, a person is killed or injured (§ 1320) or a thing is damaged, the keeper is liable under § 1304. (2) The keeper of a drag lift is liable for the damage which arises merely out of the condition of the drag track only on a fault basis. § 1328. (1) The keeper is not subject to strict liability if the injured or deceased person at the time of the accident was using the means of transportation (§ 1327) or was being transported therewith without the consent of the keeper. (2) For damage to transported goods, the keeper is only subject to strict liability if at the time of the accident they were being carried by a passenger as hand luggage or on the passenger’s person. Liability in the case of illegal use of means of transportation

§ 1329. (1) A person who knowingly without the consent of the keeper, operates or takes part in the operation of means of transportation, is liable in place of the keeper. The keeper is liable solidarily with him if he or his auxiliaries who are engaged in the operation of the means of transportation made the illegal use possible through their fault. (2) If the keeper has employed the user for the operation of the means of transportation or handed it over to him, then the user is not liable in place of the keeper provided that the non-consensual use was minimal or justified by a particular cause. Reduction or exclusion of liability

§ 1330. The liability can be reduced or excluded under the rule of § 1304 para. 4 (unavoidable event). Exclusion of liability

§ 1331. The liability for causing death or injury of paying passengers can neither be excluded nor reduced in advance. Section 4 Product liability Liability for defective products

§ 1332. (1) If a person is killed or injured by a defect in a movable, physical thing (product) (§ 1320) or if property separate from the product is damaged,

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the producer is liable. The same applies if the product is part of another movable thing or is attached to an immovable thing. (2) Damage to property is only to be compensated under this section insofar as it exceeds EUR 500, and if such property is of a type ordinarily intended for private use or consumption, and if it indeed was used by the injured person mainly for his own private use or consumption. (3) The provisions of this section are not to be applied to damage caused by a nuclear event that is covered by a treaty ratified by the member states of the Treaty on the European Economic Area. Producer

§ 1333. The producer is the manufacturer of the product, or the person who 1. produced any raw material or a component part of the product, 2. presents himself as the producer by the putting of his name, his trade mark or other distinguishing feature on the product, 3. imports the product into the European Economic Area for sale, hire, leasing or any form of distribution in the course of his business (importer) or 4. supplied the product if the producer or importer cannot be ascertained and unless he informs the injured person, within a reasonable time, of the identity of the producer or of the person who supplied him with the product, or, in case of an imported product, of the importer. Defectiveness

§ 1334. (1) A product is defective when it does not provide the safety which a person is entitled to expect, taking all circumstances into account, including: 1. the presentation of the product, 2. the use to which it could reasonably be expected that the product would be put, and 3. the time when the product was put into circulation, (2) A product shall not be considered defective for the sole reason that a better product is subsequently put into circulation. Limitation of liability

§ 1335. (1) The producer shall not be liable under this section if he proves 1. that the defect is due to compliance of the product with mandatory regulations issued by the public authorities, 2. that he did not put the product into circulation; or that the product was neither manufactured by him for sale or any form of distribution for economic purpose nor manufactured or distributed by him in the course of his business,

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3. that, having regard to the circumstances, it is probable that the defect which caused the damage did not exist at the time when the product was put into circulation by him or that this defect came into being afterwards, 4. that the state of scientific and technical knowledge at the time when he put the product into circulation was not such as to enable the existence of the defect to be discovered, or 5. in the case of a manufacturer of a component, that the defect is attributable to the design of the product in which the component has been fitted or to the instructions given by the manufacturer of the product. (2) Liability under this section is extinguished, if not time-barred earlier, upon the expiry of a period of 10 years from the date on which the producer put into circulation the actual product which caused the damage, unless the injured person has in the meantime instituted proceedings against the producer Exclusion of liability

§ 1336. The liability under this section cannot be excluded in advance. Section 5 Environmental liability Liability for environmental damage

§ 1337. A person is liable for a source of high danger (§ 1304) if he operates a facility or engages in an activity which involves the risk of frequent or serious environmental damage. In the same way, a person who operates a facility or engages in an activity for which the risk for the environment obviously cannot be assessed shall be liable for serious environmental damage. Presumed causation

§ 1338. If, according to the circumstances of the case in point, in particular the type of the damage, time and place of the occurrence of the damage, the operating procedure, the equipment used, the type and concentration of the substances used and the meteorological conditions, a facility or activity which carries a risk for the environment is likely to cause the damage, it will be assumed that it did cause the damage. This assumption is rebutted if the keeper proves that there is a preponderant probability that his facility or activity did not cause the damage. In such a case, the damage can be apportioned under § 1294 para. 2. Environmental damage

§ 1339. If damage to property at the same time constitutes an impairment of the environment, the importance of the damaged or destroyed thing for the environment is to find appropriate consideration when assessing the claim for restoration in kind (§ 1314) or compensation for the amount of money used for restoration (§ 1315 para. 2). …

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§ 1489. (1) Claims for damages are time-barred three years after knowledge or manifestness of the damage and the tortfeasor. If the victim does not gain knowledge of the damage or the identity of the tortfeasor, the period of limitation is 30 years, in the case of pure pecuniary damage 10 years. If the damage resulted from one or more criminal actions that could only be committed intentionally and that are punishable by more than one year imprisonment, the claims for damages expire in any case only when thirty years have passed after the occurrence of the damage. (2) After ten years since the occurrence of the damage, the victim – except in cases of personal injury – must prove all requirements of the claim.

II. Belgium Isabelle C. Durant*

A. LEGISLATION1 1. Loi du 15 février 2007 portant assentiment à la Convention civile sur la corruption, faite à Strasbourg le 4 novembre 1999/Wet van 15 februari 2007 houdende instemming met het Burgerlijk Verdrag inzake corruptie, gedaan te Straatsburg op 4 november 1999 (Act of 15 February 2007 Ratifying the Civil Law Convention on Corruption done at Strasbourg on 4 November 1999)2 The Council of Europe made the fight against corruption a priority because corruption represents “a threat not only to international business or to the financial interests but to the democratic values, the rule of law, human rights and social and economic progress”.3 Concretely, the Council of Europe adopted different instruments and in particular, on 4 November 1999, a convention on corruption aiming at requiring each signatory and party to it “to provide in its international law effective remedies for persons who have suffered damage as a result of corruption”.4 Indeed, the Council of Europe considered that it would be possible to “tackle the corruption phenomena from a civil law point of view”.5 The Civil Law Convention on Corruption, the civil pillar of the Council’s strategy, entered into force on 1 November 2003, after fourteen signatories had expressed their consent to be bound by the Convention.

1

The Convention, which is not directly applicable (non-self-executing Convention) but obliges its signatories to take actions in the case they would not already comply with its provisions, deals in particular with the notions of corruption, compensation for damage, liability, contributory negligence and limitation periods.

2

* 1

2 3 4 5

With many thanks to Donna Stockenhuber for her invaluable help. Belgian Acts, published in the Belgian official journal (Moniteur belge/Belgisch Staatsblad), are nowadays only available on the website of the Belgian Ministry of Justice: http://www.ejustice. just.fgov.be/cgi/welcome.pl. Belgian official journal of 28 March 2007 62888 (Moniteur belge/Belgisch Staatsblad). Civil Law Convention on Corruption of 4 November 1999, Explanatory Report, no. 1 and 33. Ibid., no. 22. Ibid., no. 11.

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3

Belgium has approved the Convention by an Act of 15 February 2007. As indicated below, the approval has implied one adaptation of the Belgian legislation.6 For the rest, principles and rules contained in the Convention did not require any specific implementation.

4

The Convention can be summarized as follows, being specified that only the principles and rules concerning liability are here taken into account. One underlines that the main purpose of the Convention is indeed “to provide the right to compensation for damage resulting from an act of corruption”7 and that “For the purpose of this Convention, ‘corruption’ means requesting, offering, giving or accepting, directly or indirectly, a bribe or any undue advantage or prospect thereof, which distorts the proper performance of any duty behaviour required of the recipient of the bribe, the undue advantage or the prospect thereof”.8

5

Any victim of an act of corruption must be entitled to institute legal proceedings to obtain compensation for his/her damage, being understood that three conditions have to be fulfilled in order for the damage to be compensated: “(i) the defendant has committed or authorized the act of corruption, or failed to take reasonable steps to prevent the act of corruption; (ii) the plaintiff has suffered damage; and (iii) there is a causal link between the act of corruption and the damage”.9 These three conditions are the traditional conditions required to engage somebody’s liability.

6

Concerning the requirement of causation between the unlawful conduct of the defendant and the suffered damage, one may observe that, according to the Explanatory Report elaborated by the Council of Europe, “an adequate causal link must exist between the act and the damage, in order for the latter to be compensated. The damage should be an ordinary and not extraordinary consequence of corruption. Thus, for instance, ‘loss of profits’ by an unsuccessful competitor, who would have obtained the contract if an act of corruption had not been committed, is an ordinary consequence of corruption and should normally be compensated. On the other hand, there would be no adequate connection if, for example, an unsuccessful competitor, in his or her anger and disappointment over the loss of business, fell down the stairs and broke his leg. Moreover, it should be noted that parties are free to apply in their domestic law and practice a wider concept of causal link”.10 That will be the case for Belgium whose causal conception is theoretically described as being as large as possible: indeed, every faulty conduct but for which the damage should not have occurred is considered to be a cause of this damage. In this way of looking at causation, extraordinary consequences of corruption should also be compensated. 6 7 8 9 10

Cf. no. 8. Civil Law Convention on Corruption of 4 November 1999, Explanatory Report, no. 35. Art. 2 of the Civil Law Convention on Corruption of 4 November 1999. Art. 4 (1) of the Civil Law Convention on Corruption of 4 November 1999. Civil Law Convention on Corruption of 4 November 1999, Explanatory Report, no. 45.

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The Civil Law Convention on Corruption lays down the principle of full compensation for the suffered damage, thus covering in principle pecuniary losses as well as non-pecuniary losses (such as the loss of reputation), although concerning non-pecuniary losses it is indicated in the Explanatory Report that each signatory may decide the nature of the losses which will be covered as well as the nature of the compensation which will be given.11 Belgian tort law is governed by the principle of full compensation of the occurred damage and did not take the decision to diverge from this principle in the framework of corruption.

7

According to the Explanatory Report, “damages must not be limited to any standard payment but must be determined according to the loss sustained in the particular case”.12 Considering this clarification, it was decided to adapt the Belgian legislation relating to tenders.13 Indeed, according to this legislation, the tenderer irregularly excluded by a public authority having called for tender may claim for compensation valuated at 10% of the lower tender.14 From now on, this lump sum is supplemented by extra damages with the aim of full compensation when the damage results from corruption in the meaning of the Civil Law Convention on Corruption.15

8

Paragraph 2 of art. 4 of the Convention provides for joint and several liability in the event that several defendants would be liable for the same damage. Once again, this provision complies with Belgian tort law and did not require any amendment of this later.

9

Art. 6 of the Convention introduces a specific provision concerning contributory negligence. According to this provision, “Each Party shall provide in its internal law for the compensation to be reduced or disallowed having regard to all circumstances, if the plaintiff has by his or her own fault contributed to the damage or to its aggravation”. As is the case in many other European countries, Belgian courts take into account the tortious conduct of the victim when they establish the portion of liability of the defendant. Considering that the apportionment of liability between the defendant and the victim is only admissible after causation has been shown between the faulty conduct of the defendant and the damage as well as between the faulty conduct of the victim and the damage, judges are not authorized to relieve totally the defen-

10

11 12 13

14

15

Ibid., no. 39. Ibid., no. 36. Parliamentary documents (Sénat de Belgique – Projet de loi du 28 septembre 2006 portant assentiment à la Convention civile sur la corruption, faite à Strasbourg le 4 novembre 1999/ Belgische Senaat – Wetsontwerp van 28 mei 2006 houdende instemming met het Burgerlijk Verdrag inzake corruptie, gedaan te Straatsburg op 4 november 1999, doc. 3-1847/1, 22). Loi du 24 décembre 1993 relative aux marchés publics et à certains marchés de travaux, de fourniture et de services/Wet van 24 december 1993 betreffende de overheidsopdrachten en sommige opdrachten voor aanneming van werken, leveringen en diensten (Act of 24 December 1993 Relating to Public Procurements). Art. 15 of the Act of 24 December 1993 as modified in 2003 (art. 15 de la loi du 24 décembre 1993 modifié par l’art. 396 de la loi-programme du 22 décembre 2003/art. 15 van de wet van 24 december 1993 gewijzigd door art. 396 van de programma-wet van 22 december 2003).

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dant or the victim of liability.16 In this respect, the Explanatory Report is less favourable to the victim since it allows the judge to decide “that, in the light of the culpable behaviour of the victim, no compensation is to be awarded”.17 The Report gives the following example: “For example, employers who leave complete responsibility for dealing with large sums of moneys to employees, who are also in charge of negotiating certain contracts, without exercising, or having somebody else exercise, proper control over the conditions for the awarding of contracts or whether the contract is awarded to a suitable company may be accused of culpable behaviour which has contributed to the damage”;18 “If, after having discovered that an employee had already paid a bribe, the employer did not take the necessary measures to avoid a repetition of events, his or her claim for compensation might be reduced or even rejected owing to the employer’s contribution to the aggravation of the financial damage suffered by the company”.19

11

Finally, the Convention deals with limitation periods.20 Considering that Belgian law complies with the minimal requirement of the Convention, no adaptation was necessary. One recalls that, relating to non-contractual liability, art. 2262bis of the Belgian Civil Code provides for a limitation period of five years from the day following the day the victim became aware that damage or aggravation occurred and aware of the identity of the responsible person, and for a limitation period of 20 years from the day following the day of the fact having caused the damage.21

16

17 18 19 20 21

Recently, cf. Cass., 25 January 2002, C.00.0068.F; 12 February 2003, P.02.1465.F; 5 September 2003, C.01.0602.F-C.01.0604.F; 25 February 2004, P.03.1313.F; 28 June 2006, P.05.1141.F. The situations in which the maxim “Fraus omnia corrumpit” should be applicable are not dealt with here. Civil Law Convention on Corruption of 4 November 1999, Explanatory Report, no. 56. Ibid., no. 57. Ibid., no. 58. Art. 7 of the Civil Law Convention on Corruption of 4 November 1999. During the Parliamentary works, it was recalled that discussions exist towards the limitation period that applies to proceedings introduced against the State. According to some authors, this limitation period is the same as the limitation period deriving from the Civil Code. According to other authors, the specific provision contained in the Act relating to the accounting of the State (and called to be abrogated in the next years) should be applicable to the State. Anyway, both provisions comply with the Civil Law Convention on Corruption. Cf. Parliamentary documents (Sénat de Belgique – Projet de loi du 28 septembre 2006 portant assentiment à la Convention civile sur la corruption, faite à Strasbourg le 4 novembre 1999/Belgische Senaat – Wetsontwerp van 28 mei 2006 houdende instemming met het Burgerlijk Verdrag inzake corruptie, gedaan te Straatsburg op 4 november 1999, doc. 3-1847/1, 25).

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2. Loi du 25 avril 2007 portant des dispositions diverses (IV) [Titre XI – Chapitre II – Responsabilité environnementale – art. 216 et seq.]/Wet van 25 april 2007 houdende diverse bepalingen (IV) [Titel XI – Hoofdstuk II – Milieuaansprakelijkheid – art. 216 e.v.] (Act of 25 April 2007 Containing Various Provisions (IV) [Titel XI – Chapter II – Environmental Liability – art. 216 ff.])22 On 21 April 2004, the European Parliament and the Council adopted a Directive on environmental liability with regard to the prevention and remedying of environmental damage.23 It is recalled that “the fundamental principle of this Directive should therefore be that an operator whose activity has caused environmental damage or the imminent threat of such damage is to be held financially liable”.24 “According to the ‘polluter-pays’ principle, an operator causing environmental damage or creating an imminent threat of such damage should, in principle, bear the cost of the necessary preventive or remedial measures. In cases where a competent authority acts, itself or through a third party, in the place of an operator, that authority should ensure that the cost incurred by it is recovered from the operator”.25 The principle is thus that the operator has to bear the costs for the preventive and remedial actions.26 When these actions are taken by the competent authority, this latter has to recover its full costs from the operator.27

12

Considering that the recovery costs have to be undertaken within a reasonable period of time from the date the preventive or remedial measures were completed, the Directive provides for a limitation period for the recovery of costs by the competent authority from the operator. Indeed, art. 10 indicates that “the competent authority shall be entitled to initiate cost recovery proceedings against the operator (…) within five years from the date on which (the measures taken in pursuance of this Directive) have been completed or the liable operator, or third party, has been identified, whichever is the later”. Moreover, the Directive “shall not apply to: (…) damage, if more than 30 years have passed since the emission, event or incident, resulting in the damage, occurred” (art. 17).

13

The Belgian Act of 25 April 2007 implements these provisions of the Directive (art. 10 and 17). The rest of the Directive has been implemented or should be implemented either in other federal acts or in regional decrees. Indeed, in Belgium, environmental matters are the responsibility of different authorities.28

14

22 23

24 25 26 27 28

Belgian official journal of 8 May 2007 (3rd ed.) 25103 (Moniteur belge/Belgisch Staatsblad). Directive 2004/35/EC of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage, OJ L 143, 30.4.2004, 56–75. Preamble, no. 2. Preamble, no. 18. Art. 8.1 of the Directive 2004/35/EC. Art. 8.2 of the Directive 2004/35/EC. Parliamentary documents (Chambre des représentants de Belgique – Projet de loi du 29 janvier 2007 portant des dispositions diverses (IV)/Belgische Kamer van volksvertegenwoordigers – Wetsontwerp van 29 januari 2007 houdende diverse bepalingen (IV), doc. 51-2873/001, 134).

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15

More precisely, the Act of 25 April 2007 introduces a new provision in the part of the Civil Code devoted to limitation periods. This new provision – art. 2277ter of the Civil Code – indicates that the cost recovery proceedings (against the operator or a third party who has caused the environmental damage) have to be initiated within five years from the date on which the preventive and remedial measures have been completed or from the date on which the responsible person (operator or third party) has been identified. In any case, proceedings are barred at the end of 30 years from the day following this on which the event having caused the environmental damage occurred.

16

Two limitation periods are thus introduced that have to be combined:29 the first one can be considered as being the prescription period sensu stricto,30 the second is an absolute period after which the possibility of recovering no longer exists.31

17

The prescription period is worthy of some explanation. The legislator calculates the period of five years from the moment the preventive or restoration measures have been completed or from the moment the responsible person has been identified. Moreover, it specifies that, in case of conflict between both moments, the most recent date must be taken into consideration. Concretely, if the identification of the responsible party has happened after the measures had been completed, the period of five years will be calculated from the moment of identification.32

18

One more word concerning the prescription period of five years: the European legislator as well as the Belgian legislator take as the (second) starting point of the period the moment the responsible party has been identified. They do not add “or the moment at which the identification should reasonably have been made”. The first commentators of the Belgian Act are of a mind that this precision would nevertheless comply with the requirement of good faith that rests on the shoulders of the competent authorities entitled to recover the costs they incurred.33

19

The Act of 25 April 2005, as far as it concerns environmental liability, entered into force on 18 May 2007.

29

30 31

32

33

During the Parliamentary works, it was noted that at least 11 Acts from eight different authorities will be necessary to implement the Directive 2004/35/EC. On five of these acts, cf. no. 44, 47, 50, 53 and 62. The Directive has not yet been implemented in the Brussels Region but has already been implemented in the Walloon and Flemish Regions. B. Dubuisson, Les nouveaux délais de prescription pour les actions exercées par les pouvoirs publics en matière environnementale, Journal des tribunaux (JT) 2008, 171. Liable to be suspended or interrupted according to Belgian tort law. Probably not liable to be suspended or interrupted considering the second limitation period is an absolute (and not exactly a prescription) period. Parliamentary documents (Chambre des représentants de Belgique – Projet de loi du 29 janvier 2007 portant des dispositions diverses (IV)/Belgische Kamer van volksvertegenwoordigers – Wetsontwerp van 29 januari 2007 houdende diverse bepalingen (IV), doc. 51-2873/001, 138). Dubuisson, JT 2008, 171.

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Considering that the new art. 2277ter of the Civil Code implements the Directive 2004/35/EC, it has to be understood and interpreted in the light of this Directive, according to the principle of effectiveness of directives. In particular, “‘costs’ means costs which are justified by the need to ensure the proper and effective implementation of this Directive including the costs of assessing environmental damage, an imminent threat of such damage, alternatives for action as well as the administrative, legal, and enforcement costs, the costs of data collection and other general costs, monitoring and supervision costs” (art. 2, 16 of the Directive). Moreover, “‘environmental damage’ means: (a) damage to protected species and natural habitats (…); (b) water damage; (c) land damage, which is any land contamination that creates a significant risk of human health being adversely affected as a result of the direct and indirect introduction, in, on or under land, of substances, preparations, organisms or micro-organisms” (art. 2, 1 of the Directive). Damage other than environmental damage (bodily damage, damage caused to private property, economic losses, etc.) are not dealt with by the Directive and remain governed by the ordinary time limitation rules.

20

3. Loi du 9 mai 2007 relative aux aspects civils de la protection des droits de propriété intellectuelle/Wet van 9 mei 2007 betreffende de burgerrechtelijke aspecten van de bescherming van intellectuele eigendomsrechten (Act of 9 May 2007 Concerning the Civil Aspects of the Protection of Intellectual Property Rights)34 On 29 April 2004, the European Parliament and the Council adopted a Directive on the protection of intellectual property.35 The Belgian Act of 9 May 2007 aims to implement this Directive, by modifying in particular the Act of 28 March 1984 on Patents, the Act of 30 June 1994 on Copyrights, the Act of 20 May 1975 concerning the Protection of Plant Varieties, the Act of 10 January 1990 concerning the Legal Protection of Topographies of Semiconductor Products and the Act of 31 August 1998 concerning the Legal Protection of Databases.

21

The Act of 9 May 2007 provides for the principle that the holder of an intellectual property right is entitled to claim for damages in case of counterfeiting, being understood that each violation of the right of the holder constitutes counterfeiting.36

22

Although the legislator acknowledges expressly that the holder of a protected intellectual property right may sue the counterfeiter to hear him liable for the

23

34

35

36

Belgian official journal of 10 May 2007 (2nd ed.) 25704 (Moniteur belge/Belgisch Staatsblad); erratum Belgian official journal of 15 May 2007 (2nd ed.) 26677 (Moniteur belge/Belgisch Staatsblad). Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights, OJ L 157, 30.4.2004, 45–86; Corrigendum, OJ L 195, 2.6.2004, 16–25. Art. 2 of the Act of 9 May 2007 (patents), art. 6 (plant varieties), art. 7 (topographies of semiconductor products), art. 13 (copyrights) and art. 16 (databases).

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consequences of the counterfeiting, the authors do not read the legal text in the same way.

24

According to some commentators, basing notably their opinion on the parliamentary documents,37 the Act of 9 May 2007, having modified various Acts on intellectual property rights, does nothing else than recalling the general rule of liability laid down in art. 1382 of the Civil Code (which is the statutory provision of Belgian tort law).38 According to Belgian tort law, each violation of a legal text constitutes in principle a faulty conduct provided that this violation had been committed willingly and knowingly.39 This implies that the concept of fault presents two components: an objective component (the violation of the legal provision)40 and a subjective component (the willing and knowing violation).41 In the framework of intellectual property rights, the legal provisions that are generally violated by the counterfeiter are those that indicate that only the holder of an intellectual property right may use it (or authorize the use of it).

25

Other authors are of the opinion that the Act of 9 May 2007 surreptitiously introduces a substantial modification of the liability system in the framework of intellectual property rights. They are of the opinion that from now on there is a damaging event as soon as a legal text has been infringed. They base their opinion on the new provisions introduced in the various acts on intellectual property. Indeed, each time, the legislator notes that the victim (the holder of the right) is entitled to obtain compensation for the damage he/she suffers from the violation of his/her right (for instance the copyright), without saying 37

38

39

40

41

B. Michaux/E. De Gryse, De handhaving van intellectuele rechten gereorganiseerd, Revue de droit commercial belge/Tijdschrift voor Belgisch handelsrecht (RDC/TBH) 2007, 640. They refer to Parliamentary documents (Chambre des représentants de Belgique – Projet de loi I du 26 février 2007/Belgische Kamer van volksvertegenwoordigers – Wetsontwerp I van 26 februari 2007, doc. 51-2943/001-2944/001, 29). Cf. also M.-C. Janssens, Drie wetten inzake handhaving van intellectuele rechten openen nieuwe horizonten in de strijd tegen namaak en piraterij, Rechtskundig Weekblad (RW) 2007–2008, 938; B. Van Reepinghen/L. Van Reepinghen, Les droits intellectuels renforcés: la contrefaçon en point de mire, JT 2008, 156. “Any act whatever of man, which causes damage to another, obliges the one by whose fault it occurred, to compensate it” (translation by G. Rouhette, with the assistance of A. Berton, and published on the official website of the French Government: http://www.legifrance.gouv.fr/ html/codes_traduits/code_civil_textA.htm). Cass., 10 April 1970, Pasicrisie (Pas) 1970, I, 682; 22 September 1988, Pas 1989, I, 83; 3 October 1994, C.93.0243.F. To be correct, it should be said that the objective angle of the concept of fault has to be understood as being either the violation of a precise norm imposing a conduct (what could be the case in the scope of intellectual property) or the violation of the general rule of carefulness and diligence. On the subjective angle of the notion of fault: B. Dubuisson, Faute, illégalité et erreur d’interprétation en droit de la responsabilité civile, Revue critique de jurisprudence belge (RCJB) 2001, 33; X. Thunis, Théorie générale de la faute (vol. 1), in: J.-L. Fagnart (ed.), Responsabilités. Traité théorique et pratique (2001) 20; H. Vandenberghe/M. Van Quickenborne/K. Geelen/S. De Coster, Overzicht van rechtspraak. Aansprakelijkheid uit onrechtmatige daad (1979–1984), Tijdschrift voor privaatrecht (TPR) 1987, 1263; H. Vandenberghe/M. Van Quickenborne/L. Wynant, Overzicht van rechtspraak. Aansprakelijkheid uit onrechtmatige daad (1985–1993), TPR 1995, 1122.

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that the violation must have been committed willingly and knowingly. They deduced that the event giving rise to liability no longer presents two components but only one: the objective violation of a legal provision.42 The subjective aspect of the notion of fault should have surreptitiously disappeared.43 From this perspective, it would no longer be possible for the infringer to invoke an insurmountable mistake to escape from liability (i.e. the belief that he was entitled to make use of the copyright). Would this last point of view be correct, it should be observed that the legislator would have given its approval, in a certain way, to the writings of scholars and case-law that, for at least ten years, have assimilated the mere violation of a right to the notion of faulty conduct, especially in the scope of copyrights.44 Anyway, whatever the meaning of the new provisions could be, it seems that the Belgian legislator has been more favourable to the victim than the European legislator. Indeed, art. 13 (2) of the Directive 2004/48/EC states that: “Where the infringer did not knowingly, or with reasonable grounds to know, engage in infringing activity, Member States may lay down that the judicial authorities may order the recovery of profits or the payment of damages, which may be pre-established”.

26

The Act of 9 May does not only establish the principle according to which the victim of counterfeiting may claim compensation for the suffered damage, it also gives some indication as to the manner in which to evaluate the damages that may be composed of different elements.45 The legislator states three principles. First of all, the legislator indicates that the judge may allow a lump sum to compensate the damage, when the extent of the compensation may not be

27

42

43

44

45

Cf. for instance the new art. 86bis of the Act of 30 June 1994 on copyrights (Loi du 30 juin 1994 relative au droit d’auteur et aux droits voisins/Wet van 30 juni 1994 betreffende het auteursrecht en de naburige rechten). Th. Léonard, Atteintes au droit subjectif et responsabilité civile: réflexions suite à l’adoption de la loi du 10 mai 2007 relative aux aspects civils de la protection des droits de propriété intellectuelle, in: P. Wéry (ed.), Droit des obligations: développements récents et pistes nouvelles (2007) 195, 198 ff., 201. This author speaks erroneously about the Act of 10 May 2007 when the Act bears the date of 9 May 2007 after an erratum was published in the Belgian official journal of 15 May 2005 (2nd ed.) 26677. J. Corbet, Auteursrecht (1997) 103; F. De Visscher, Observations under Cass. 10 March 1994, RDC/TBH 1995, 284; F. De Visscher/B. Michaux, Précis du droit d’auteur et des droits voisins (2000) 521; Fr. Petillion, Précisions bienvenues sur la responsabilité objective et la réparation du dommage en droit d’auteur, Intellectuele Rechten/Droits intellectuels (IR DI) 2007, 21; A. Puttemans, Quelles suites donner à la future directive en Belgique? in: M.-Chr. Janssens (ed.), Beteugeling van inbreuken op intellectuele rechten/Combattre les atteintes à la propriété intellectuelle (2004) 192; id., Les droits intellectuels en action(s), in: P. Jadoul/A. Strowel (eds.), Les droits intellectuels: développements récents (2004) 36. In case-law: Bruxelles, 23 March 2001, Auteurs & Media (A & M) 2001, 375, cmt. E. Derclaye/A. Cruquenaire; Gent, 16 April 2002, A & M 2002, 347; Mons, 13 May 2002, A & M 2002, 421, cmt. F. Brison; Civ. Bruxelles, 3 February 2006, A & M 2006, 450. Cf. art. 13 a) of the Dir. 2004/48/EC: “When the judicial authorities set the damages: (a) they shall take into account all appropriate aspects, such as the negative economic consequences, including lost profits, which the injured party has suffered, any unfair profits made by the infringer and, in appropriate cases, elements other than economic factors, such as the moral prejudice caused to the rightholder by the infringement”.

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determined in another way, according to art. 13.1.(b) of the Directive.46 Secondly, the judge may order as damages the delivery to the victim of the counterfeit goods as well as the delivery of the materials and instruments which were used to make the counterfeit goods. If the value of these goods, materials and instruments exceeds the amount of the effective sustained damage in the particular case, the sum in excess shall be reimbursed by the holder of the intellectual property right to the tortfeasor.47 Thirdly, in case of bad faith on the part of the tortfeasor, the judge may also order the transfer of the benefits resulting from the counterfeiting.48 4. Loi du 15 mai 2007 relative à l’indemnisation des dommages résultant de soins de santé/Wet van 15 mei 2007 betreffende de vergoeding van schade als gevolg van gezondheidszorg (Act of 15 May 2007 Concerning Compensation for Damage Resulting from Medical Care)49

28

On 15 May 2007, an Act was adopted in Belgium aiming at compensating the damage sustained by patients and their successors and caused in Belgium by a care provider (either a medical practitioner50 or a hospital51).52

29

The general idea on which it is based is to organize a totally new system of compensation of accidents which occur in the course of medical treatment, would they result from a faulty conduct of the provider or not. It is sometimes presented as being a no-fault system. The authors of the Act of 15 May 2007 were of a mind that the replacing of the actual system based on tort law (according to which the victim of a medical accident has to prove the existence of a fault having caused his/her damage) by a no-fault system was founded considering the dissatisfaction generated by the present system, being due to various factors: the difficulty in proving the fault, the slowness of the legal proceedings, the non-granting of compensation in too many cases of medical accidents, the feeling among practitioners that they are treated in an unfair and repressive manner, the risk of the development of defensive medicine, the increase in the frequency of legal proceedings, the increase of the premiums paid by practitioners and hospitals, etc. 46

47 48 49 50

51

52

For instance, new art. 52 (5) of the Act of 28 March 1984 on patents, new art. 36 (2) of the Act of 20 May 1975 on the protection of the plant varieties, new art. 13 (2) of the Act of 10 January 1990 on the legal protection of the topographies of semiconductor products, new art. 86bis (2) of the Act of 30 June 1994 on copyrights and new art. 12quater (2) of the Act of 31 August 1998 on the legal protection of databases. Ibid. Ibid. Belgian official journal of 6 July 2007 37151 (Moniteur belge/Belgisch Staatsblad). Considered as medical practitioners are the practitioners concerned by the Royal Decree no. 78 of 10 November 1967. Therefore, not only medical doctors but also dentists, pharmacists, midwifes, physical therapists, nurses, etc. are concerned. Cf. Arrêté royal no. 78 relatif à l’exercice des professions des soins de santé/Koninklijk besluit nr. 78 betreffende de uitoefening van de gezondheidszorgberoepen. Actually, not only hospitals as defined by the Law are concerned (Loi du 7 août 1987 sur les hôpitaux/Wet van 7 augustus 1987 op de ziekenhuizen), but also centres for blood transfusions and laboratories. Art. 3 (1) of the Act of 15 May 2007.

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The new Belgian system is summarized hereinafter. Let us nevertheless first indicate that it is not yet in force. Indeed, according to art. 35 (1), the Act will enter into force on a date to be determined by the King and by the latest on 1 January 2009.53 Moreover, some Royal Decrees have to be adopted to ensure the application of the system. Once the new system is in force, victims of accidents will be treated differently: victims of medical accidents will be compensated on the basis of a no-fault system while victims of other types of accidents will be compensated in principle according to (traditional) tort law. The future will tell whether this difference in treatment will be considered as acceptable by the Constitutional Court. This may only be the case if the difference is founded on objective criteria and if it is reasonably justified taking into account the aim and the effects of the new Act.

30

Although the new Belgian system aims at repairing the damage resulting from medical care, nevertheless not all damage will be compensated. The legislator specifies that which will be compensated: (1) the damage resulting from the performance of medical care; (2) the damage resulting from the absence of medical care on which the patient might legitimately count taking into account the state of the art; (3) the damage resulting from an infection caught on the occasion of medical care.54 On the other hand, the following will not be compensated: (1) the damage resulting from the initial state of the patient and/or from the foreseeable development of this initial state, taking into account the condition of the patient and the scientific information at the moment the medical care was given; (2) the damage resulting from the intentional fault of the patient or from the refusal of the patient (or his representative) to receive medical treatment; (3) the damage resulting from normal and foreseeable risks or side effects that are linked to the treatment, taking into account the initial condition of the patient and the scientific information at the moment the medical treatment was provided.55 As a consequence of this third exclusion, the patient will probably always be obliged to prove that his/her damage was unforeseeable and was not a normal consequence of the medical act.56 Normal consequences will not give rise to compensation under the new no-fault system.57

31

The legislator pays some special attention to the birth of handicapped babies. If nobody may claim damages by simply being born, the person born with a handicap may nevertheless obtain damages when the handicap (or its aggravation) was caused by medical treatment or when the medical care did not allow

32

53

54 55 56

57

Initially, the entry into force was fixed for 1 January 2008, but considering especially the absence of the Royal Decrees that have to be adopted to ensure the application of the system, it was decided to postpone this entry into force. Cf. Loi du 21 décembre 2007 modifiant la loi du 15 mai 2007/Wet van 21 december 2007 tot wijziging van de wet van 15 mei 2007, Belgian official journal of 31 December 2007 (4th ed.) 66268 (Moniteur belge/Belgisch Staatsblad). Art. 4 of the Act of 15 May 2007. Art. 5 (1) of the Act of 15 May 2007. E. Langenaken, La réforme de l’indemnisation du dommage issu des soins de santé: révolution ou régression? Revue générale des Assurances et des Responsabilités (RGAR) 2007, no. 14312 (3). Ibid., no. 14312 (7).

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the taking of measures deemed to reduce the handicap (for instance, the baby born with a handicap provoked by the administration of a toxic product to the mother which caused irreversible injuries to the foetus).58 On the other hand, when the parents of the baby born with a handicap, not discovered during the pregnancy following the negligence or intentional faulty conduct of a practitioner, sustain damage, these parents may claim damages. Nevertheless, this damage may not include the particular costs resulting from this handicap over the life of the child (but may include for instance moral damage).59 As already observed by a commentator, it is somewhat illogical to re-introduce the notion of (gross or intentional) faulty conduct in legislation establishing a compensation system deemed to be free from the idea of fault.60

33

Later, the legislator makes it clear which damage could be compensated, the notion of damage being very widely embraced. Various components are described depending on the recipient of the damages: either the patient or his/her successors. In the first case, the compensation will cover: (1) the economic loss resulting from bodily lesions, reduction or removal of the capacity to indulge in activities deemed to provide professional income or having an economic value; (2) the costs of the medical care resulting from the damage sustained by the patient; (3) the costs of the assistance care (in particular in the event that the patient becomes dependant on somebody); (4) the non-economic loss (including for instance the aesthetic damage). When the recipients of the damages are the successors of the patient, three items could be compensated: (1) the economic loss (i.e. the loss of the patient’s capacity to indulge in activities deemed to provide professional income or at least having some value from which the relatives benefitted personally and directly); (2) the funeral costs and the costs related to the transfer of the body of the deceased patient to the place of burial or cremation; (3) the moral damage. It results from the aforementioned that the kinds of compensable damage are defined in a very broad way.

34

If every kind of damage seems eligible to be compensated, the legislator decides nevertheless that compensation will only be allowed according to rules that have still to be adopted by Royal Decree.61 The idea is that, except for the compensation of the medical care necessitated by the damage sustained by the patient, the King may set exemptions and/or maximal amounts for the compensation with the aim of ensuring the financial equilibrium of the system. Considering that the amounts of damages that will be effectively paid are for the moment unknown, it is too early to announce that the new Act will or will not constitute any progress for the victims of medical treatment.

35

After having described the various kinds of damage that may be compensated and laid down the principle according to which the King will determine the 58

59 60 61

Example given by J.-L. Fagnart, De l’erreur médicale aux erreurs de la loi, Forum de l’assurance 2007, 145. Art. 5 (2) of the Act of 15 May 2007. D. de Callataÿ, Halte au Fonds! JT 2007, 250. Art. 6 (2) of the Act of 15 May 2007.

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rules applicable to compensation, the legislator stresses expressly the subsidiary principle.62 Following this principle, the award of damages will only take place within the framework of the new Act to compensate what would not yet have been compensated in application of other acts (i.e. the Act on Social Security, the Act on Industrial Accidents, the Act relating to Experiments on Human Beings, the Act on Defective Products, etc.). We may also say that the functioning of the new system of compensation, elaborated without the idea of fault, was conceived with two important principles in mind.

36

First of all, no legal action will be brought against the care provider on the basis of tort law, except in two cases: (1) in case of intentional faulty conduct or (2) gross faulty conduct of him,63 being understood that the notion of gross faulty conduct is limited to three situations (when the damage is the consequence of the influence of alcohol or drugs, when it results from a refusal to assist a person in danger or when it results from an activity illegally exercised).64 At least four reasons were invoked to deny in the future the possibility for the victim to sue practitioners on the basis of tort law. First, the maintaining of this possibility would have had as a consequence, according to the authors of the project, that less financial resources would have been available for the financing of the new no-fault system. Indeed, it would then not have been imaginable to abolish the necessity to maintain the classical liability insurance, although the new no-fault system is only financially conceivable on the condition that all the insurance premiums paid at the present time by practitioners and hospitals would be allocated to it.65 Secondly, the removal of the system based on fault would grant more transparency in the gathering of data relating to medical accidents. Thirdly, a nofault system would also be a means to reverse the current tendency of allowing defensive medicine to develop (certain medical acts would not be executed to improve the wellness of the patient but to avoid a potential reproach later). Fourthly, the Minister in charge of Health was of the opinion that all victims sustaining a certain type of damage have to be compensated in an identical manner.66

37

The second important principle is that each care provider (practitioners and hospitals) will from now on be legally bound to take out insurance. This insurance will cover all the risks resulting from the occurrence of damage as defined by the Act.67 The guarantee may be limited but may not be lower than approx.

38

62 63 64 65

66

67

Art. 6 (4) of the Act of 15 May 2007. Art. 7 (1) of the Act of 15 May 2007. Art. 7 (4) of the Act of 15 May 2007. Parliamentary documents (Chambre des représentants de Belgique – Projet de loi du 22 mars 2007 relatif à l’indemnisation des dommages résultant de soins de santé//Belgische Kamer van volksvertegenwoordigers – Wetsontwerp van 22 maart 2007 betreffende de vergoeding van schade als gevolg van gezondheidszorgen, doc. 51-3012/001, 7 f. and 10). Parliamentary documents (Sénat de Belgique – Rapport du 18 avril 2007 fait au nom de la Commission des affaires sociales par M. Vankrunkelsven/Belgische Senaat – Verslag van 18 april 2007 namens de Commissie voor de sociale aangelegenheden uitgebracht door de heer Vankrunkelsven, doc. 3-2397/3, 17). Art. 8 ff. of the Act of 15 May 2007.

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€ 2,500,000 for each victim.68 This amount will be linked to the consumer price index.69

39

Practically, the new system should work as follows: the victim of medical treatment will address a special fund (Fonds des accidents soins de santé/Fonds voor de vergoeding van ongevallen bij gezondheidszorg) that will examine the request and transfer it to the insurer which is competent depending on the care provider.70 The request must be made within five years after the moment the victim has become aware or should have become aware that damage occurred and within 20 years after the occurrence of the conduct having caused the damage.71 The insurer will then take the decision to compensate the victim or not, if he considers that there is no damage, and, in the first case, will submit his proposal regarding payment to the victim who will have some days to convey his/her possible remarks.72 The proposal and remarks will then subsequently be transferred to the Fund that will take the final decision.73

40

Concerning the effective payment of damages, the Act plans for a division between the Fund and the (private) insurers in accordance to an allocation scheme that has still to be adopted by the King. The concerned insurer will credit the Fund with the amount due to the victim and the Fund will credit the victim with the total sum due to him/her.74 Should the practitioner not have been insured, an ad hoc fund, that has still to be created, would be held to compensate the victim (Fonds commun de Garantie/Gemeenschappelijk Waarborgfonds).75

41

On 19 December 2007, the Federal Centre of Expertise on Medical Care (Centre fédéral d’expertise des soins de santé/Federaal Kenniscentrum voor de Gezondheidszorg)76 delivered a report concerning the elaboration of the above 68

69 70 71 72 73

74 75 76

The Act gives the amount of € 2,176,393.29 but this amount is expressed in “euros of 1996”. To know the present value of this ceiling it is necessary to multiply it by 1.1487 (Parliamentary documents doc. 51-3012/001, 15). Art. 11 (2) of the Act of 15 May 2007. Art. 14 and 18 of the Act of 15 May 2007. Art. 17 of the Act of 15 May 2007. Art. 23 (2) of the Act of 15 May 2007. Art. 24 of the Act of 15 May 2007. In case of dispute between the insurer and the Fund, arbitration and legal recourse proceedings are organized. Legal proceedings are also conceivable if the victim does not agree with the common decision of the Fund and insurer. On these specific proceedings, cf. the Act of 15 May 2007 concerning the settlement of the disputes (Loi du 15 mai 2007 concernant le règlement des différends dans le cadre de la loi du 15 mai 2007 relative à l’indemnisation des dommages résultant de soins de santé/Wet van 15 mei 2007 met betrekking tot de regeling van de geschillen in het kader van de wet van 15 mei 2007 betreffende de vergoeding van schade als gevolg van gezondsheidszorg) published in the Belgian official journal of 6 July 2007 37163 (Moniteur belge/Belgisch Staatsblad). Art. 26 of the Act of 15 May 2007. Art. 28 of the Act of 15 May 2007. The Federal Centre is a public organism created by an Act of 24 December 2002, that collects information and makes studies in the framework of health with the aim of supporting better medical care and of allowing a better use of available means (Loi-programme (I) du 24 décembre 2002/Programmawet (I) van 24 december 2002, art. 262 ff.) published in the Belgian official journal of 31 December 2007 58686 (Moniteur belge/Belgisch Staatsblad).

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mentioned allocation scheme.77 In this report, proposals regarding possible allocation systems are made as well as proposals regarding the possible evolution of these schemes. Apparently, one could choose a “fifty-fifty” division between the Fund and private insurers.78 One more word about the Fund and more precisely about the financing of it. The Act of 15 May 2007 provides for four sources of financing:79 (1) an annual contribution from the State; (2) an annual contribution from the National Institute for Health and Disability Insurance (Institut national d’Assurance Maladie Invalidité/Rijksinstituut voor Ziekte- en Invaliditeitsverzekering)80; (3) the income of the legal action brought by the Fund against the practitioners and hospitals in case of gross negligence or intentional faulty conduct of one of these;81 (4) the financial income resulting from the sums at the disposal of the Fund.

42

Finally, when the practitioner committed a grossly negligent or an intentionally faulty act, the victim will also be indemnified according to the Act but will be entitled to sue him to obtain full compensation. In this particular case, the Fund (or the ad hoc Fund) and the insurer will be entitled to sue the practitioner to obtain the recovery of what they would have paid to the victim.82

43

5. Arrêté royal du 3 août 2007 concernant la prévention et la réparation des dommages environnementaux lors de la mise sur le marché d’organismes génétiquement modifiés ou de produits en contenant/ Koninklijk besluit van 3 august 2007 betreffende de preventie en het herstel van milieuschade bij het in de handel brengen van genetisch gemodifieerde organismen of van producten die er bevatten (Royal Decree of 3 August 2007 Concerning the Prevention and Remedying of Environmental Damage as the Result of Placing GMOs on the Market)83 As is the case of the Act of 25 April 2007 above commented, which introduced a new art. 2277ter in the Civil Code, the Royal Decree of 3 August 2007 aims to implement (also partially) the European Directive 2004/35/EC of 21 April 2004 on environmental liability.

44

The implementation concerns especially the environmental damage caused by a professional activity consisting in the placing on the market of GMOs or of

45

77

78

79 80

81 82 83

X. Maréchal/M. Denuit/I. Vinck/J.-P. Closon, Indemnisation des dommages résultant des soins de santé. Phase IV: clé de répartition entre le Fonds et les assureurs. Health Services Research (HSR) (2007) KCE Reports 68B. According to the study published by the Federal Centre of Expertise on Medical Care (Centre fédéral d’expertise des soins de santé/Federaal Kenniscentrum voor de Gezondheidszorg), the costs generated by the new system should stand around € 61,000,000. Art. 31 (1) of the Act of 15 May 2007. The National Institute is a federal institution that organizes, manages and supervises the correct application of the “compulsory health care and benefits insurance”. Art. 7 and 30 of the Act of 15 May 2007. Art. 7 (1) (3) and art. 30 of the Act of 15 May 2007. Belgian official journal of 20 September 2007 (2nd ed.) 49665 (Moniteur belge/Belgisch Staatsblad).

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products containing GMOs. According to art. 2 of the Royal Decree, some operations are nevertheless not considered as “placing on the market”: in particular, the case (1) of the placing of micro-organisms genetically modified for activities indicated in the regional decrees implementing the Council Directive 90/219/EEC on the contained use of genetically modified micro-organisms84 and (2) of the placing of GMOs exclusively used for deliberate release according to the Royal Decree of 21 February 200585 implementing the Directive 2001/18/EC.86

46

According to the principles laid down in Directive 2004/35/EC, the Royal Decree of 3 August 2007 imposes on the operator who places on the market GMOs a duty to take the necessary preventive measures when there is an imminent threat of environmental damage.87 The competent authority, which is the Ministry of Public Health, Security of the Food Chain and Environment,88 may also order the operator to take such measures or take them itself. When environmental damage has occurred, the operator or the competent authority shall take the necessary remedial measures.89 In all cases, the operator shall bear the costs of all these measures,90 except when the damage was caused by a third party or when it results from compliance with a compulsory order or instruction.91 Both exceptions are briefly commented on later.92 6. Arrêté royal du 25 octobre 2007 concernant les mesures de réparation à la suite de la détérioration significative du milieu marin/Koninklijk besluit van 25 oktober 2007 betreffende herstelmaatregelen ingevolge de aanmerkelijke aantasting van het maritieme milieu (Royal Decree of 25 October 2007 Concerning the Remedial Measures Following a Significant Deterioration of the Marine Environment)93

47

As is the case of the Act of 25 April 2007 and of the Royal Decree of 3 August 2007 above commented, the Royal Decree of 25 October 2007 aims to imple84

85

86

87 88

89 90 91 92 93

Council Directive 90/219/EEC of 23 April 1990 on the contained use of genetically modified micro-organisms, OJ L 117, 8.5.1990, 1–14. Arrêté royal du 21 février 2005 réglementant la dissémination volontaire dans l’environnement ainsi que la mise sur le marché d’organismes génétiquement modifiés ou de produits en contenant/Koninklijk besluit van 21 februari 2005 tot reglementering van de doelbewuste introductie in het leefmilieu evenals van het in de handel brengen van genetisch gemodifieerde organismen of van producten die er bevatten (Belgian official journal of 24 February 2005 7129 (Moniteur belge/Belgisch Staatsblad)). Directive 2001/18/EC of the European Parliament and of the Council of 12 March 2001 on the deliberate release into the environment of genetically modified organisms and repealing Council Directive 90/220/EEC, OJ L 106, 17.4.2001, 1–39. Art. 5 of the Directive; art. 5 and 6 of the Royal Decree. Service public fédéral Santé publique, Sécurité alimentaire et Environnement/Federale Overheidsdienst Volksgezondheid, Veiligheid van de Voedselketen en Leefmilieu. Art. 6 of the Directive; art. 7–9 of the Royal Decree. Art. 8 (1) of the Directive; art. 10 of the Royal Decree. Art. 8 (3) of the Directive; art. 11 of the Royal Decree. No. 57. Belgian official journal of 9 November 2007 56820 (Moniteur belge/Belgisch Staatsblad).

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ment (also partially) the European Directive of 21 April 2004 2004/35/EC on environmental liability. This Royal Decree of 25 October 2007 is very exactly entitled: Royal Decree Concerning the Remedial Measures Following a Significant Deterioration of the Marine Environment and the Recovering of the Costs of the Preventive, Containment and Remedial Measures (Arrêté royal concernant les mesures de réparation à la suite de la détérioration significative du milieu marin et la récupération des coûts des mesures de prévention, des mesures de confinement et des mesures de réparation/Koninklijk besluit betreffende herstelmaatregelen ingevolge de aanmerkelijke aantasting van het maritieme milieu en de terugvordering van de kosten voor de preventieve maatregelen, inperkingsmaatregelen en herstelmaatregelen). In particular, the implementation concerns the environmental damage consisting in a significant deterioration of the marine environment, more precisely of protected species and natural habitats. Nevertheless, the Royal Decree is not applicable to deterioration caused by an incident or activity in respect of which liability or compensation falls within the scope of one of the international conventions listed in art. 3.94 The Royal Decree is not applicable either to deterioration of the marine environment resulting from authorized activities.95

48

With regard to damage falling within the scope of the Royal Decree, the owner of the ship or the operator who causes or threatens to cause marine pollution bears all the costs of the remedial measures taken according to the Decree as well as the costs of the preventive and containment measures. It makes no difference whether the measures were taken in the Belgian marine environment or beyond.96

49

7. Arrêté royal du 8 novembre 2007 concernant la prévention et la réparation des dommages environnementaux dus au transport d’espèces exotiques envahissantes/Koninklijk besluit van 8 november 2007 betreffende de preventie en het herstel van milieuschade tengevolge van het vervoer van invasieve uitheemse soorten (Royal Decree of 8 November 2007 Concerning the Prevention and the Remedying of Environmental Damage due to Carriage of Intrusive Non-Native Species)97 As is the case of the Act of 25 April 2007 and of the Royal Decrees of 3 August and 25 October 2007 above commented, the Royal Decree of 8 November 2007 aims to implement (also partially) the European Directive 2004/35/EC of 21 April 2004 on environmental liability. This Royal Decree of 8 November 2007 is very exactly entitled: Royal Decree Concerning the Prevention and Remedying of Environmental Damage Due to Carriage by Road, Rail, Navigation Vessels and Air of: Non-Native Plant Species and Non-Native Ani94

95 96 97

These conventions are the first four conventions listed in the Annex IV of Directive 2004/35/ EC, the five international instruments listed in the Annex V of this Directive and the Treaty establishing the European Atomic Energy Community. Cf. art. 4 (2) (4) of the Directive. Art. 3 (4) of the Royal Decree of 25 October 2007. Art. 22 of the Royal Decree of 25 October 2007. Belgian official journal of 9 November 2007 (2nd ed.) 56956 (Moniteur belge/Belgisch Staatsblad).

50

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Isabelle C. Durant

mal Species as well as the Remains of These Latter Following Their Import, Export and Transfer; as well as Waste During Their Transfer (Arrêté royal du 8 novembre 2007 concernant la prévention et la réparation des dommages environnementaux dus au transport par la route, la voie ferrée, par voie navigable ou par les airs: d’espèces végétales non indigènes et d’espèces animales non indigènes, ainsi que les dépouilles de ces derniers suite à leur import, export et transit; ainsi que de déchets lors de leur transit/Koninklijk besluit van 8 november 2007 betreffende de preventie en het herstel van milieuschade tengevolge van het vervoer over de weg, per spoor, over de binnenwateren of in de lucht van: uitheemse plantensoorten evenals van uitheemse diersoorten en hun krengen, naar aanleiding van de in-, de uit- en de doorvoer ervan; alsook van afvalstoffen bij hun doorvoer).

51

In particular, the implementation concerns the environmental damage deriving from a professional activity consisting in the carriage of non-native plant species and non-native animal species or consisting in the transfer of waste that requires an authorization or which is prohibited by Council Regulation no. 259/93 of 1 February 1993 on the supervision and control of shipment of waste within, into and out of the European Community. Nevertheless, the Royal Decree is not applicable to environmental damage (or threat of damage) caused by an incident in respect of which liability or compensation falls within the scope of the international conventions listed in art. 4. The Royal Decree is also not applicable to some other damage and especially to damage (or threat of damage) caused by war or natural phenomena of an exceptional, inevitable and irresistible character.

52

With regard to the damage falling within the scope of the Royal Decree, the operator of the activity who causes or threatens to cause environmental damage bears all the costs of the remedial measures as well as the costs of the preventive measures.98 The competent authority who may order the operator to take the appropriate measures or who may take them itself is the Ministry of Mobility and Transport.99 8. Décret wallon du 22 novembre 2007 modifiant le Livre Ier du Code de l’Environnement en ce qui concerne la prévention et la réparation des dommages environnementaux/Waals Decreet of 22 november 2007 tot wijziging van Boek I van het Milieuwetboek met betrekking tot het voorkomen en herstellen van milieuschade (Walloon Decree of 22 November 2007 Modifying the First Book of the Environmental Code as far as it Concerns the Prevention and Remedying of Environmental Damage)100

53

As is the case of the Act of 25 April 2007 and of the Royal Decrees of 3 August, 25 October 2007 and 8 November 2007 above commented, the Walloon Decree 98 99 100

Art. 9 of the Royal Decree of 8 November 2007. Service public fédéral Mobilité et Transports/Federale overheidsdienst Mobiliteit en Vervoer. Belgian official journal of 19 December 2007 (2nd ed.) 62888 (Moniteur belge/Belgisch Staatsblad).

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of 22 November 2007 implements, with some delay,101 Directive 2004/35/EC of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage. It is reminded that the Directive establishes a common framework for the prevention and remedying of environmental damage, namely damage to protected species and natural habitats, water damage and land contamination, caused by any of the occupational activities listed by the European legislator. The Directive is also applicable to damage to protected species and natural habitats caused by activities other than those listed, provided that the operator has been at fault or negligent. The Directive thus makes a distinction between two systems of liability: a strict liability regime as far as the damage has been caused by specific listed activities and a liability system based on the notion of fault as far as the environmental damage (only to protected species and natural habitats) has been caused by another activity. By implementing the Directive, the Walloon Region extended the scope of the strict liability regime to some agricultural and industrial activities, to activities having as consequences the dumping of heavy metals in the air or in water, to installations producing dangerous chemical substances and to activities of waste management (such as rubbish dumps or incineration), as well as to activities related to GMOs.102

54

As is the case in the European Directive, the Walloon Decree of 22 November 2007 lists a certain number of instances of environmental damage to which the new legislation shall not be applicable. For instance, it does not cover environmental damage caused by a natural phenomenon of exceptional, inevitable and irresistible character.103 It is also provided for in the Directive that it “shall not apply to activities the main purpose of which is to serve national defence or international security”.104 With the implementation of the Walloon Decree, it was nevertheless decided to go beyond the European text and not to provide for an exception that would apply in case of damage caused by activities of national defence.

55

The Directive bases the framework of environmental liability on the “polluterpays” principle.105 As a result of this principle, “the operator shall bear the costs for the preventive and remedial actions”.106 Should the competent authority take actions under the new environmental legislation, it would be entitled to recover from the operator the costs it has incurred.107

56

101 102

103

104 105

106

107

The Directive should have been implemented by 30 April 2007. Parliamentary documents (Parlement wallon – Projet de décret du 8 novembre 2007 modifiant le Livre Ier du Code de l’Environnement, doc. 646 (2006–2007), no. 2, 3). Art. 4.1 of the Dir. 2004/35/EC and art. D.95 of the new Part VII of the Title I of the Walloon Environmental Code. Art. 4.6 of the Dir. 2004/35/EC. Art. 1 of the Dir. 2004/35/EC and art. D.93 of the new Part VII of the Title I of the Walloon Environmental Code. Art. 8 of the Dir. 2004/35/EC and art. D.122 of the new Part VII of the Title I of the Walloon Environmental Code. In the Walloon Region, this authority is from now on the General Director of the General Direction of the natural resources and of the environment or his representative (art. D.94, 22° of the new Part VII of the Title I of the Walloon Environmental Code).

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57

The Directive provides for two specific cases in which the operator shall not be required to bear the costs of the actions taken. These two specific cases are reproduced in the new Walloon legislation: the operator shall not bear the costs when he can prove that the environmental damage (or imminent threat of such damage): “(a) was caused by a third party and occurred despite the fact that appropriate safety measures were in place; or (b) resulted from compliance with a compulsory order or instruction emanating from a public authority other than an instruction consequent upon an emission or incident caused by the operator’s own activities”.108 In the first case (a), the operator shall only be exempted from bearing the costs of the measures taken by the authority if the intervention of the third party was of such a nature to foil the security measures applied by the operator, as a result of which it is required from him that he exercises his activity taking all necessary precautions.109 In the second case (b), the operator shall not benefit from any exemption when the damage results from compliance with an injunction when this injunction would have been made necessary considering the pre-existence of a damage caused by the behaviour of the operator.110

58

Apart from these two compulsory defences, the Directive allowed the Member States to provide for two other situations in which the competent authority would not be authorized to recover the costs of its actions, as far as these actions are remedial actions.111 The Walloon Region took the decision to introduce in its legislation these two other defences.

59

The first one, sometimes called “the permit defence”, concerns cases in which the environmental damage was caused by an emission or event expressly authorized, provided that the operator was not at fault or negligent.112 By introducing this exclusion, the Walloon legislator expresses the idea that public authorities have to impose the conditions necessary to avoid the occurrence of environmental damage.113

60

The second defence, called “the state of the art defence”, concerns the cases in which the environmental damage was caused by an emission or activity or any manner of using a product in the course of an activity, where the potential for damage could not have been known according to the state of scientific and

108

109

110 111

112

113

Art. 8 (3) of the Dir. 2004/35/EC and art. D.126 of the new Part VII of the Title I of the Walloon Environmental Code. Ch. Pirotte, La directive 2004/35/CE du 21 avril 2004 sur la responsabilité environnementale: premiers commentaires, in: G. Viney/B. Dubuisson (eds.), Les responsabilités environnementales dans l’espace européen (2006) 672. Ibid., 673. In the Walloon Region, the competent authority is the administration of environment (art. D.94, 22° of the new Part VII of the Title I of the Walloon Environmental Code). Art. 8 (4) (a) of the Dir. 2004/35/EC and art. D.128, 1° of the new Part VII of the Title I of the Walloon Environmental Code. Parliamentary documents (Parlement wallon – Projet de décret du 8 novembre 2007 modifiant le Livre Ier du Code de l’Environnement, doc. 646 (2006–2007), no. 2, 8).

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technical knowledge when the event or the emission took place and provided that the operator was not at fault or negligent.114 If the notion of “state of scientific and technical knowledge” were to be understood and interpreted in the same way as it is interpreted in the framework of the Directive on product liability, this notion would mean the objective state of knowledge about which the operator is presumed to be informed.115

61

9. Décret flamand du 21 décembre 2007 (…) convertissant la Directive 2004/35/CE/Vlaams Decreet van 21 december 2007 (…) tot omzetting van de Richtlijn 2004/35/EG (Flemish Decree of 21 December 2007 Implementing Directive 2004/35/EC)116 As is the case of the Act of 25 April 2007, of the Royal Decrees of 3 August, 25 October and 8 November 2007 and of the Walloon Decree of 22 November 2007, above commented, the Flemish Decree of 21 December 2007 aims to implement, with some delay,117 Directive 2004/35/EC of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage, adding a new title in the Flemish Decree of 5 April 1995 on Environment Policy.118

62

The structure of the Flemish Decree tallies mainly with the European Directive, whose essential ideas are recalled above.119 It can be observed that the chapters of the Decree dealing with the preventive or remedial measures that have to be taken by the operator are conceived starting from the duties laying on the shoulders of the operator.

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As is the case in the European Directive, the Flemish Decree of 5 April 1995 (as amended in 2007) lists a certain number of instances of environmental damage to which the new legislation shall not be applicable. For instance, it does not cover environmental damage caused by war or by a natural phenomenon of exceptional, inevitable and irresistible character.120 It is also provided for in the Directive that it “shall not apply to activities the main purpose of which is to serve national defence or international security”.121 By implementing the Directive, this exception was inserted in the Flemish Decree;122 it is not the case in the Walloon Decree.123

64

114

115

116 117

118 119 120 121 122 123

Art. 8 (4) (b) of the Dir. 2004/35/EC and art. D.128, 2° of the new Part VII of the Title I of the Walloon Environmental Code. Pirotte (fn. 109) 682. This author refers to ECJ C-300/95, Commission v. United Kingdom [1995] ECR I-2649, no. 26. Belgian official journal of 12 February 2008 9148 (Moniteur belge/Belgisch Staatsblad). The Directive should have been implemented by 30 April 2007. Nevertheless, it has to be observed that the Decree of 21 December 2007 entered into force retrospectively on 30 April 2007 (art. 6). Art. 15.1.1 to art. 15.11.1 of the Flemish Decree of 5 April 1995. No. 54. Art. 4.1 of the Dir. 2004/35/EC and art. 15.1.6 (1) of the Flemish Decree of 5 April 1995. Art. 4.6 of the Dir. 2004/35/EC. Art. 15.1.6 (2) of the Flemish Decree of 5 April 1995. Cf. no. 55.

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The Directive provides for two specific cases in which the operator shall not be required to bear the costs of the actions taken. These two specific cases are reproduced in the new Flemish legislation: the operator shall not bear the costs when he can prove that the environmental damage (or imminent threat of such damage): “(a) was caused by a third party and occurred despite the fact that appropriate safety measures were in place; or (b) resulted from compliance with a compulsory order or instruction emanating from a public authority other than an instruction consequent upon an emission or incident caused by the operator’s own activities”.124

66

Apart from these two compulsory defences, the Directive allowed the Member States to provide for two other situations in which the competent authority would not be authorized to recover the costs of its actions, as far as these actions are remedial actions.125 As was the case in the Walloon Region, the Flemish Region took the decision to introduce in its legislation these two defences (“the permit defence” and “the state of the art defence”).126

B. CASES127 1. Cour de cassation/Hof van Cassatie (Supreme Court), 18 January 2007, C.05.0529.F: Contribution and Absence of a Tortfeasor at Trial a) Brief Summary of the Facts

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JM was the victim of an accident provoked by various faulty acts: the conduct of the administration of electricity, the faulty conduct of the Walloon Region, the faulty conduct of JM’s employer and of JM himself. Taking into account the seriousness of the different faults, the court of appeal decided to apportion the liability between the plaintiff and the other parties as follows: the victim was found liable for three ninths (3/9) and the three other parties were found jointly and severally liable for the other six ninths (6/9).

68

Relating to the recourse between the liable parties, considering that the employer had not been sued before the court, the judges decided that each of the two present parties (i.e. the Walloon Region and the administration of electricity) had to bear responsibility for two ninths (2/9), i.e. one third of the amount jointly due by the liable parties. It could be here useful to indicate that the judges had considered that the faulty conduct of the liable parties was equally serious.

69

The administration of electricity did not agree with this decision. It was of a mind that due to the absence of the employer at trial, each of the two liable par124 125

126 127

Art. 8 (3) of the Dir. 2004/35/EC and art. 15.5.3-4 of the Flemish Decree of 5 April 1995. In the Flemish Region, the competent authority is the Department of Environment, Nature and Energy of the Flemish Government (art. 15.8.1 of the Flemish Decree of 5 April 1995). Art. 8 (4) of the Dir. 2004/35/EC and art. 15.5.5-6 of the Flemish Decree of 5 April 1995. The commented decisions are to be found on the official website of the Belgian judicial power: www.juridat.be.

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ties sued before the court had to bear three ninths (3/9) of the debt. Therefore, it appealed before the Supreme Court. b) Judgment of the Court

The Supreme Court did not quash the decision of the court of appeal. According to the Court, when the damage has been caused by concurrent faults, the one who compensates the victim may recover contribution from each of the parties who was or would have been held jointly liable and has to limit his recourse against each co-debtor, taking into account the portion of liability of each of them. This limitation has also to be respected in the event that some of these co-debtors would not have been declared jointly liable.

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c) Commentary

The Supreme Court often has the opportunity to give some indication as to the principles governing the recourse between co-debtors jointly held liable towards the victim. Two principles may be drawn from the case-law of this Court.128

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First, in the relationship between the co-debtors, the principle is that none of them may be totally discharged from liability. This principle has two exceptions: (1) one co-debtor may be totally discharged when it results from a contractual provision that a party accepted to bear definitively the consequences of liability; (2) one of the defendants may also be totally discharged when he was held liable on the basis of a strict liability regime or on the basis of a presumption of liability (for instance liability for persons under supervision) and not on the basis of the general liability rule.129

72

Secondly, the damages are allocated among the liable parties in proportion to the relative severity of their faulty conduct but the Supreme Court also admits that the trial judges take into account the causal role of each fault in the occurrence of damage.

73

The interest of the commented decision consists in the fact that the Supreme Court said expressly that the liable party who compensates the victim has not only a recourse against the defendants jointly held liable but also against a party who would have been held jointly liable. The consequence of this is that each contributory recourse has to be exercised taking into account all liable parties, even those who were not summonsed to appear before the trial judges.

74

128

129

Cf. especially L. Cornelis, Le partage des responsabilités en matière aquilienne, RCJB 1993, 327. On this second exception, cf. no. 89.

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2. Cour de cassation/Hof van Cassatie (Supreme Court), 15 February 2007, C.05.0274.F: Elements and Extent of Material Damage a) Brief Summary of the Facts

75

On 7 September 1996, firemen removed tiles from the front of a roof. The owner of the house did not replace them and subsequently water leaked into the house. Some months later, on 20 October 1997, the roof fell in.

76

The owner of the house sued the firemen for having removed the tiles unnecessarily. He was of the opinion that this conduct was the cause of the roof falling in.

77

However, the court of appeal of Mons decided that there was no causal link between the alleged negligence of the firemen and the damage they could have caused (i.e. the removing of tiles), considering that the roof would have fallen in anyway due to the rotting state of the frame.

78

The owner did not agree with this decision and decided to appeal before the Supreme Court. According to him, the court of appeal was not allowed to deduce from the second damage (the falling in of the roof) the absence of a causal link between the first damage (resulting from the removal of the tiles) and the intervention of the firemen. b) Judgment of the Court

79

The Supreme Court recalled first that the consistency of the damage has to be determined at the moment the fault has been committed (contrary to the valuation of the damage that has to be done at the moment the judgment is pronounced). As a result of this principle, the judge may not take into consideration events having occurred after the faulty conduct and irrelevant to this conduct that would have improved or aggravated the situation of the victim.

80

The Supreme Court acknowledged the fact that the court of appeal took into consideration an event which occurred later than the conduct reproached to the firemen and irrelevant to this conduct (and to the damage), i.e. the falling in of the roof due to the rotting frame. Consequently, the judges were not allowed to deny the existence of a causal link between the conduct of the firemen and the removal of tiles, simply by saying that the roof would have fallen in anyway due to the negligence of its owner.

81

The decision of the court of appeal was quashed. c) Commentary

82

The case submitted to the Supreme Court is presented as a situation in which a (real occurred) damage would have occurred even in the absence of the conduct considered by the victim as having been faulty: the water would also have leaked in even if the firemen had not removed the tiles. The court of appeal applied the but-for test strictly but this was not approved by the Supreme Court.

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The Supreme Court explains its solution with regard to the notion of damage considering that the consistency of the damage must be determined at the moment it occurred. Instead, the valuation of the damage is made by the judge at the moment of his/her decision. Therefore, the judge has to take into account later events which influenced the damage resulting from the faulty conduct (for instance, the death of the victim).130

83

This decision is consistent with art. 3:104 PETL: “If an activity has definitely and irreversibly led the victim to suffer damage, a subsequent activity which alone would have caused the same damage is to be disregarded”.

84

3. Cour de cassation/Hof van Cassatie (Supreme Court), 4 June 2007, C.06.0112.F: Who May Invoke the Presumption of Liability of the Guardian? a) Brief Summary of the Facts

As he was leaving a national path (the custody of which lies with the Walloon Region) to access a municipal road, ED hit the coating of the national path with the bottom of his car because of a difference in level between both paths. Considering that the national road was damaged, it could be said that it was defective. On the other hand, the municipality could be reproached of faulty conduct as it had not ensured the safety of drivers. Consequently both the Walloon Region and the Municipality of Malmedy were held jointly liable to compensate the damage caused to the car. The Walloon Region was held liable on the basis of art. 1384 of the Civil Code, according to which, the guardian of a defective thing is presumed liable for the damage caused by the defect of the thing. The Municipality was held liable on the basis of art. 1382 of the Civil Code which is the statutory basis of liability based on fault.131

85

As regards the apportionment of liability, the Walloon Region and the Municipality of Malmedy were considered to be equally liable. Therefore, pronouncing on the claim of the Municipality against the Walloon Region, the judges condemned the Walloon Region to reimburse half of the damages to the Municipality, in the case the latter should have fully compensated the victim.

86

The Walloon Region did not agree with the decision and appealed before the Supreme Court. According to the Region, when two persons are held jointly liable towards the victim, the first on the basis of art. 1384 of the Civil Code (presumption of liability of the guardian of a defective thing) and the second on the basis of art. 1382 of the Civil Code (liability based on a faulty conduct), the second is not entitled to recover a contribution from the guardian.

87

130

131

Cass., 2 May 2001, P.00.1703.F; Revue générale de droit civil belge/Tijdschrift voor Belgisch burgerlijk recht (RGDC/TBBR) 2003, 45, cmt. D. Simoens. “Any act whatever of man, which causes damage to another, obliges the one by whose fault it occurred, to compensate it” (translation by G. Rouhette, with the assistance of A. Berton, and published on the official website of the French Government: http://www.legifrance.gouv.fr/ html/codes_traduits/code_civil_textA.htm).

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b) Judgment of the Court

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The Supreme Court agreed with the Walloon Region and quashed the decision of the trial judges. According to the Court, the presumption of liability incumbent upon the guardian of the defective thing is to be explained by the burden of having to effectively protect the victims of damage caused by things. This liability exists only in favour of the victims and may only be invoked by them and not by a contributory tortfeasor.132 c) Commentary

89

When two tortfeasors are held jointly liable towards the victim, the question of the apportionment of liability between them almost inevitably arises. When both were held liable on the basis of fault, the apportionment is often made taking into account the seriousness of the respective faulty conduct or the influence of the respective faults in the production of the damage. The apportionment of liability is likely to be more difficult when the tortfeasors were not all held liable on the basis of fault.

90

The commented decision concerns, in particular, the situation in which one tortfeasor has been held liable on the basis of fault and the other has been held strictly liable. In these situations, the doctrine is generally of a mind that the liability based on fault takes precedent over the strict liability.

91

As a result of this principle, the co-debtor having been held liable on the basis of fault will not be allowed to recover contribution from the one whose liability was established on a no-fault basis. On the contrary, the co-debtor having been held liable on a no-fault basis (for instance, the guardian of a defective thing) will be allowed to recover contribution from the other party.

C. LITERATURE133 1. A. Alen/E. Dirix/W. Pintens/P. Senaeve (eds.), Feestbundel Hugo Vandenberghe (Brugges, die Keure 2007) 472 pp.

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Prof. Dr. H. Vandenberghe taught tort law and property law for several decades at the Katholieke Universiteit Leuven. He became emeritus in 2007 and on this occasion his colleagues and friends published a collection of studies in particular devoted to tort law. Of particular interest are the contributions on State liability in case of faulty conduct of the legislator (A. Alen), on force majeure in the context of liability based on fault (F. Baudoncq/T. Viaene), on the combination of contractual and non-contractual liability (H. Bocken), on the liability of mayors and deputy mayors (M. Boes), on the Principles of European Tort Law (H. Cousy/D. Droshout, J. Herbots and A. Van Oevelen), on

132 133

Cf. also Cass., 17 January 1991, RGAR 1994, no. 12272; 26 September 2002, C.00.0444.F. Obviously, a fine selection…

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the liability of the guardian for defective things (M. Debaene/P. Debaene) and on the doctrine of nuisance (S. Stijns/H. Vuye). 2. F. Baudoncq/M. Debaene/S. Snaet (eds.), Aansprakelijkheidheid van ouders en onderwijzers, coll. Les Dossiers du Journal des Juges de Paix et de Police no. 6 (Brugge, die Keure 2007) 103 pp. This book, devoted to the liability of parents and teachers, contains four contributions: (1) T. Wuyts deals with the concepts of father, mother and minor child used in art. 1384 (2) of the Civil Code; (2) A. Van Oevelen presents the latest developments in the framework of liability of teachers and establishments; (3) H. Vandenberghe and M. Muylle present the latest developments in the framework of liability of parents and (4) S. Zegers deals with insurance problems.

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3. M. Coipel/P. Wéry (eds.), Guide juridique de l’entreprise. Traité théorique et pratique (Brussels, Kluwer) In this treatise composed of multiple separate volumes, the readers find now an extensive study, due to the contribution by G. Gathem, devoted to product liability. The author does not only pay attention to the legislation having implemented in 1991 the European Product Liability Directive, but also to the other legislation co-existing with the Act of 25 February 1991 (in particular, art. 1384 of the Civil Code concerning the liability of the guardian of a defective thing, the Act of 9 February 1994 concerning the safety of products and services, the provisions relating to the sellers’ liability, etc.).

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4. Y. De Cordt/D. Philippe (eds.), La responsabilité des dirigeants de personnes morales (Brussels, la Charte 2007) 256 pp. This book, containing five contributions on liability of managers of legal persons, was published on the occasion of a symposium organized at the Université catholique de Louvain on 22 March 2007: (1) Y. De Cordt and Marie Amélie Delvaux wrote a contribution on managers’ liability in corporate and financial law; (2) D. Philippe and G. Gathem examine the conditions under which managers’ liability may be engaged on the basis of art. 1382 of the Civil Code (which is the statutory text of liability based on fault); (3) A. Couret examines managers’ liability in French law; (4) V. Callewaert devoted his contribution to liability insurance and (5) H.D. Bosly to the criminal liability of managers and of legal entities.

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5. E. Dirix/A. Van Oevelen (eds.), Bijzondere overeenkomsten. Artikelsgewijze commentaar met overzicht van rechtspraak en rechtsleer (Mechelen, Kluwer) From now on this treatise includes a volume devoted to the difference between liability based on tort law and contractual liability. This volume was written by M. and P. Debaene.

96

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6. C. Engels/P. Lecocq (eds.), Chronique de droit à l’usage des juges de paix et de police 2006, coll. Les Dossiers du Journal des Juges de Paix et de Police no. 4 (Brussels, la Charte 2006) 276 pp.

97

This book, containing various studies relating to matters especially treated by some first instance judges, proposes four contributions of interest to tort law: (1) M. Houben wrote a contribution on compensation of damage suffered by “weak” road users; (2) G. Jocqué studied some aspects of liability insurance (defence mechanisms, nullity and forfeiture); (3) E. Vieujean examines the compensation of damage caused to a minor child by tortious conduct and (4) K. Bernauw deals with the rules of compensation with which insurers have to comply in the presence of persons legally incompetent. 7. C. Engels/P. Lecocq (eds.), Chronique de droit à l’usage des juges de paix et de police 2007, coll. Dossiers Tijdschrift van de Vrede- en Politierechters no. 7 (Brussels, la Charte 2007) 382 pp.

98

This book, containing various contributions relating to matters especially treated by some first instance judges, contains two articles written, on the one hand, by I. Boone and, on the other hand, by S. Gilson, K. Rosier and M. Glorieux on the recourse action of employers and insurers who are obliged to pay (or to continue to pay) some amounts to the victim after an accident occurs. 8. J.-L. Fagnart (ed.), Responsabilités. Traité théorique et pratique (Brussels, Kluwer)

99

The treatise on torts edited by J.-L. Fagnart became richer by various manuals in 2007. In particular can be mentioned the two volumes written by E. Montero and R. Marchetti on liability in the framework of sport (vol. 1 deals specifically with the liability of sportsmen, of organizers, of spectators and third parties; vol. 2 deals specifically with the liability of trainers, sportsmen’s parents, principals, guardians of defective things, guardians of animals, etc.) and the volume written by C. Eyben and Y. Ninane on damage caused by the pumping of underground waters. 9. A. Vanheuverzwijn, Manuel de la réparation des dommages corporels en droit commun (Mechelen, Kluwer)

100

This loose-leaf book, updated in October 2007, concerns especially the valuation of bodily damage (in case of temporary or permanent disability or in case of death). Various topics are studied: the compensation of costs, the recourse of the victim or employer or insurer against the liable third party, the possibility of transaction, the forensic examination, the interest payable to the victim, the tax system on damages, limitation periods, etc.

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10. M. Van Quickenborne, Oorzakelijk verband tussen onrechtmatige daad en schade, coll. Recht en Praktijk (Mechelen, Kluwer 2007) 160 pp. M. Van Quickenborne, who devoted his PhD to causation,134 publishes a new monograph on this topic, this time in a collection especially intended for practitioners. After some comments on various theories of causation, the author confirms that Belgium conforms with the theory of equivalence of conditions, but admits some exceptions to this theory. He also deals with two specific topics: the proof of causation and the problem of multiple causes. He concludes his book with a selective bibliography.

101

11. V. Vervliet, Buitencontractuele aansprakelijkheid bij professionele risico’s. Betekenis en draagwijdte van de buitencontractuele aansprakelijkheid doorheen de evolutie van de professionele risicoverzekering (Antwerp, Intersentia 2007) 679 pp. This book is the publication of the PhD obtained by the author in 2006 at the University of Antwerp. It concerns non-contractual liability studied from the angle of professional risks. In this context, the author examines liability in case of industrial accidents or occupational diseases, paying particular attention to the industrial context of the 19th century, the legal system of professional risks, the system of immunities, the rules applicable in case of damage caused to third parties, insurance rules, etc.

102

12. P. Wéry, Droit des obligations: développements récents et pistes nouvelles (Louvain-la-Neuve, Anthemis 2007) 221 pp. This book, devoted to some recent developments in the law of obligations, contains two contributions concerning tort law. The first is by Th. Léonard and analyses the concept of violation of subjective rights (especially in the framework of intellectual property rights)135 and the undersigned wrote a contribution on causation in tort law.

103

13. La rupture du lien causal ou “L’avènement de l’action directe et le déclin du recours subrogatoire?” (Liège, Editions du Jeune Barreau de Liège 2007) 254 pp. This book was published on the occasion of a symposium organized on 23 November 2007 by the bar of Liège. The aim of this symposium was to observe and, if needed, to criticize the current tendency observed by employers (and especially public employers) and insurers, who may be compelled to pay various amounts to the victims of accidents after an accident occurs, and who decide afterwards to sue the tortfeasor, no longer on the basis of the provision granting them subrogation in the rights of the victims, but directly on the basis of art. 1382 of the Civil Code, which is the statutory basis of liability based on 134

135

M. Van Quickenborne, De oorzakelijkheid in het recht van de burgerlijke aansprakelijkheid. Een methodologische en positief-rechtelijke analyse (1972) 563 pp. Cf. no. 25.

104

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fault. Contributions by the following authors, I. Boone, J.-Fr. Jeunehomme and J. Wildemeersch, N. Simar, J. Decharneux, C. Eyben and C. Verdure, S. Gilson and B. Dubuisson were devoted to this general topic. 14. W. Abbeloos, Werken in de omgeving van kabels en leidingen, L’entreprise et le droit (Entr. et dr.) 2007, 33 ff.

105

In this contribution the author examines the principles relating to damage to cables and pipes, provoked by works. He pays some attention to the obligations of the contracting party, the constructor and the utility company (société utilitaire/nutsmaatschappij), concerning especially the need of information, and the need to put (and move) correctly (and in time) the cables and pipes (carrying gas, electricity, etc.). 15. H. Bocken, Samenloop contractuele en buitencontractuele aansprakelijkheid. Verfijners, verdwijners en het arrest van het Hof van Cassatie van 29 september 2006, Nieuw juridisch Weekblad (NjW) 2007, 722 ff.

106

On the occasion of a decision delivered by the Supreme Court on 29 September 2006,136 the author examines the conditions under which a lawsuit may be brought against a contracting party on the basis of non-contractual liability. He concludes that the conditions elaborated by this Court relating to the notions of faulty conduct and damage are contradictory and pleads for more explanation from the Court in the future. 16. M. Debaene/A. Van Grunderbeek, De aansprakelijkheid van aannemers en nutsmaatschappijen bij de beschadiging van ondergrondse kabels en leidingen, Tijdschrift voor Bouwrecht en Onroerend Goed (TBO) 2007, 10 ff.

107

In this contribution the authors examine the principles relating to the liability of constructors and utility companies (sociétés utilitaires/nuts-maatschappijen) when they cause damage to underground cables and pipes (carrying gas, electricity, telecommunication data, etc.). They observe that this liability may be engaged on the basis of the general principle of liability based on fault or on specific provisions contained in various legal texts. 17. S. De Jonghe, Notariële aansprakelijkheid, in: Rechtskroniek voor het Notariaat (2006) 31 ff.

108

This contribution is especially devoted to the liability of notaries. Specific topics are treated by the author such as the nature of this professional (contractual or non-contractual) liability, the concept of fault, damage (including non-economic damage), loss of a chance, causation, partial liability, etc.

136

Cass., 29 September 2006, C.03.0502.N.

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18. W. Dijkhoffz, Organisatiefouten in ziekenhuisverband, Revue de droit de la santé/Tijdschrift voor gezondheidsrecht (Rev. Dr. Santé/T. Gez.) 2006–2007, 240 ff. Hospitals are complicated institutions and a patient who suffered damage caused during his stay will frequently institute legal proceedings against the hospital by invoking a faulty conduct in its organization. The author examines especially four types of organization faults: (1) the faulty conduct that may be reproached to hospitals relating to the placing at patients’ disposal of accommodation and food; (2) the faulty conduct in the medical management (by doctors and nurses); (3) the faults committed on the occasion of supplying equipment and means; (4) the faulty conduct in the development of nosocomial infections.

109

19. B. Dubuisson, La théorie de la perte d’une chance en question: le droit contre l’aléa? Journal des tribunaux (JT) 2007, 489 ff. On the occasion of the publication of the decision of 1 April 2004 delivered by the Supreme Court,137 the author examines the necessity to maintain or to condemn the use of the theory of the loss of a chance, especially in the medical context. He is of the opinion that the abolition of this theory would have serious consequences for the victims of negligence and pleads for the upholding of the theory, even when it is used in the presence of causal uncertainty.

110

20. G. Gathem, La réparation du préjudice économique causé par les O.G.M.: un nouveau défi pour le droit de la responsabilité civile, Revue générale des assurances et des responsabilités (RGAR) 2007, no. 14254 In this contribution, the author examines how civil (non-contractual) liability could be used to solve problems resulting from the co-existence of GMO cultivations and traditional cultivations. He pays some attention not only to the principle of liability based on fault but also to some specific regimes such as the liability of the guardian of defective things, product liability and the doctrine of nuisance.

111

21. K. Grillet, Verantwoordelijkheid vennootschap en bestuurders. Schadevergoeding voor individuele aandeelhouders wegens waardevermindering van aandelen, NjW 2007, 146 ff. In this contribution, the author examines if and how an individually harmed shareholder may seek damages from the company managers to compensate the depreciation of his shares caused by wrong management.

137

I.C. Durant, Belgium, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2004 (2005) 178.

112

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22. Fr. Lagasse/M. Palumbo, Action civile naissant d’un délit, délai de prescription et Cour de cassation, Journal des tribunaux du travail (JTT) 2007, 473 ff.

113

This contribution deals with the problem of limitation period, especially in the case of recourse of a worker against his past employer, when the judicial action is based on the rules relating to non-contractual liability. The authors comment on various decisions delivered by the Supreme Court.138 23. S. Lierman, Causaliteit en verlies van een kans in de medische context, Rev. Dr. Santé/T. Gez. 2006–2007, 259 ff.

114

On the occasion of the very current debate on the merits of the loss of a chance theory, which should not be condemned, according to the author, the author examines whether it should not be necessary to adapt the traditional conditions of liability, and especially the concepts of damage and causation. Nevertheless, he is of the opinion that a liability system based on probabilistic causation would be too flexible. However, he would be favourable to an extension of the concept of compensable damage. 24. E. Maes, Het Hof van Cassatie over de fout van overheidsorganen: streng, strenger, strengst…, Tijdschrift voor Bestuurswetenschappen en Publiek Recht (TBP) 2007, 547 ff.

115

This contribution concerns the liability of the legislator.139 The author examines whether the legislator may commit faults and, if so, under which conditions. 25. M. Rigaux, Eloges de la modestie publique. Réflexions en marge des arrêts de la Cour de cassation du 1er juin 2006 et du 28 septembre 2006 concernant la responsabilité civile de l’Etat pour les fautes commises par le pouvoir législatif, Chroniques de droit public/ Publiekrechtelijke Kronieken (CDPK) 2007, 196 ff.

116

The author makes some comments on the liability of the State on the occasion of the publication of two decisions of the Supreme Court, one delivered on 1 June 2006 and one delivered on 28 September 2006.140 26. J. Van Compernolle/M. Verdussen, La responsabilité du législateur dans l’arriéré judiciaire, JT 2007, 433 ff.

117

Commenting the decision of 28 September 2006 delivered by the Supreme Court and relating to the liability of the legislator,141 the authors consider that this Court adopts a modern perspective of the functioning of the State. However, they are of the opinion that the violation of a superior norm (constitu138

139

140 141

Cass., 23 October 2006, S.05.0010.F; 22 January 2007, S.04.0165.N; 22 January 2007, S.04.0088.N-S.04.0169.N. I.C. Durant, Belgium, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2006 (2008) 113 ff. Durant (fn. 139) 113. Ibid.

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tional or international norm) has to be observed to reproach a faulty conduct to the State. Concerning the specific problem of judicial backlog, the authors recall that the State has the positive obligation to ensure the good functioning of justice within a reasonable time, and the obligation to organize recourse if this reasonable time has not been respected. 27. S. Van Drooghenbroeck, Arriéré judiciaire et responsabilité de l’Etat-législateur: dissiper les malentendus et les faux espoirs, Revue critique de jurisprudence belge (RCJB) 2007, 367 ff. On the occasion of the decision of 28 September 2006 delivered by the Supreme Court,142 the author proposes a very detailed study on the liability of the State because of faulty conduct of the legislator. The author first examines the context in which the decision was pronounced and then comments on the major lesson of the decision, i.e. the principle according to which the liability of the State may be engaged on the basis of art. 1382 of the Civil Code when the legislator neglects to legislate. According to the author, the decision does however not contain any general rule about the standard norm that should be respected by the legislator to avoid behaving in a faulty manner. This principle should be elaborated in the future and the author proposes in this respect some suggestions. He also considers whether the legislator should adopt specific provisions relating to recourse from which the victims should benefit in case of judicial arrears.

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28. C. Verbruggen, Een nieuwe stap in de erkenning van overheidsaansprakelijkheid: de aansprakelijkheid van de Staat wegens de uitoefening (of niet-uitoefening) van de wetgevende macht, Rechtspraak Antwerpen Brussel Gent (RABG) 2007, 323 ff. After commenting briefly on the facts which led to the decision of 28 September 2006 of the Supreme Court,143 the author recalls the important steps in the elaboration of the liability of the State and comments on the implications of this decision.

142 143

Ibid. Ibid.

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III. Bulgaria Christian Takoff

A. LEGISLATION 1

In the year 2007 there were neither amendments nor new instruments in Bulgarian legislation concerning the essence of tort matters.

B. JUDICIAL PRACTICE 2

In 2007 there were not any surprising decisions or revolutionary developments in the judicial practice related to tort.

3

The 2007 report is structured around separate spheres of problems that the courts had the occasion of ruling upon. The practice of the Supreme Court of Cassation and the courts of second instance are dealt with. The practice of the courts of first instance is not included because it is enormous and inaccessible, and, besides, it is not unusual to encounter inconsistency in deciding similar cases.

4

Contrary to expectations, until now the courts of second instance and the Supreme Court of Cassation (SCC) have had no practice regarding two comparatively new and important Laws – the Consumer Protection Law1 and the Private International Law Code2. These two Laws are directly related to tort law. The Consumer Protection Law regulates the liability for defects in goods on sale, this liability being of a tortious nature, while the Private International Law Code regulates the law applicable to torts involving an international element. 1. Suspension of Prescription of a Claim for Tort

5

The prescription of a claim is suspended for the period of time in which the proceedings regarding the said claim are conducted (Art. 115, par. 1, item “g” of the Law on Obligations and Contracts). The issue considered by the court 1 2

State Gazette (SG), No. 99/2005, latest amendment SG, No. 64/2007. SG, No. 42/2005, latest amendment SG, No. 59/2007.

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is whether the prescription should also be suspended for the period of time in which the punitive proceedings related to the crime from which the damage occurred are conducted. The court has ruled that, in order for the prescription period to be suspended, the presence of punitive proceedings is not sufficient. As punitive proceedings are not proceedings which concern claims for damages, a civil claim should be brought as a separate claim originating from the crime (Decision No. 732/30 October 2007 on penal case No. 354/2007 of the 3rd Penal Division of the SCC3). The civil claim can be brought either within the punitive proceedings (Art. 83 ff. of the Penal Procedure Code) or as a separate claim before a civil court. Probably, following the same logic, it can be presumed that the courts should assume that punitive proceedings in themselves neither suspend nor renew the prescription of a claim for damages resulting from a crime (Art. 116, item “b” of the Law on Obligations and Contracts).

6

2. Insurance Indemnity for Tort In order for an insurance indemnity relating to tort to be sought, the tortfeasor should necessarily incur liability and should not be exempt from it on any grounds (d. No. 458/14 May 2007, t.c. No. 106/2007, 2nd t.d. SCC).

7

The decision seems to be formulated too broadly, even reaching a point of incorrectness. Only the motives can make its meaning clear – when rendering it, the SCC considered only the obligatory insurance of civil liability, for which the fault of the tortfeasor of damage is really a precondition. Of course, things would not be the same in the cases of “casco” insurance, for example.

8

3. Amount of the Indemnity Adjudged As evidenced by the decisions mentioned below, not only the amounts of compensation for damage of a divergent nature, but also those for damage of a similar nature show wide margins of variation. This makes it clear that there are no unified criteria for determining the amount of indemnity. Neither the doctrine nor the judicial practice has exhaustively listed these criteria. They have also not been precisely formulated. Therefore, as far as these aspects are concerned, the differences in judicial practice are not surprising at all.

9

In addition, the comparatively low compensation amounts, which are sometimes humiliatingly low, are to be disapproved of. This can possibly be explained by the general standard of living in Bulgaria as well as by the court’s concern that an extremely high amount of compensation might lead to severe economic hardship for the tortfeasor.

10

3

Hereinafter the Decisions are referred to as follows: d. (decision), p.c. (penal case)/c.c. (civil case)/t.c. (trade case), p.d./c.d./t.d. (penal, civil, trade division) of the SCC/Sofia CC (Supreme Court of Cassation/Sofia City Court).

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4. In Cases of Death

11

In a case of death resulting from a work-related accident, a woman who had co-habited with the deceased man was granted compensation for non-pecuniary damage and for being deprived of the possibility of receiving support from the deceased man. The total amount of compensation was BGN 15,000 (€ 7,500). In addition, the court took into consideration the fact that the female claimant was at an employable age and this probably led to a reduction in the amount of compensation awarded (d. No. 414/28 Sept. 2007, c.c. No. 32/2006, 3rd c.d. SCC).

12

According to another decision of the supreme judicial instance (d. No. 447/21 May 2007, p.c. No. 1091/2006, 1st p.d. SCC), bus drivers who negligently caused the death of twelve children riding in a bus were ordered to pay to their parents an indemnity of BGN 50,000 (€ 25,000) for each dead child.

13

According to a recent decision of the SCC (d. No. 70/28 February 2007, 3rd c.d. SCC), the widow of a person who died in a work-related accident was awarded the amount of BGN 500 (€ 250).

14

The same decision deals with the periodic indemnities to be paid by the employer to the dead employee’s minor child. The amount adjudged was BGN 100 (€ 50) per month for a period of eleven years. 5. In Cases of Rape

15

In a case of a fourfold rape, a civil claim was brought for compensation amounting to BGN 50,000 (€ 25,000) for non-pecuniary damage. Given that the victim had to experience pain and suffering, that her bodily and sexual inviolability was infringed and that she suffered from post-traumatic stress syndrome, the court upheld the claim for damages. However, the amount awarded was BGN 15,000 (€ 7,500), which was much lower than the amount claimed (d. dated 11 April 2007, p.c. No. 1975/2006, p.d. SCC). 6. For Non-Pecuniary Damage in Cases of Wrongful Dismissal

16

The Supreme Court of Cassation (d. No. 259/16.03.2007, c.c. No. 3228/2005, 4th c.d. SCC) awarded BGN 2,500 (€ 1,250) for mental suffering which was caused by physical diseases. In addition, the court disallowed the amount of BGN 5,500 (€ 2,750) sought by the claimant, awarding an amount of BGN 2,500 (€ 1,250). The decision takes into consideration that the claimant had been under a lot of stress as a result of his dismissal. The stress was expressed in the claimant’s social self-isolation, cessation of his private practice as a physician and suspension of his scientific career. Along with all this, the claimant suffered haemorrhaging of a gastric ulcer and sudden loss of hearing (tinnitus aurium). The court finds that a causal relationship exists between the wrongful act (dismissal), the stressful consequences and the physical disease.

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In addition, the court points out that there neither is, nor can there be a unified “price-list” for the evaluation of pain and suffering, as each person has his own mental and bodily resistance. The court maintains that the basis of determining a pecuniary equivalent to pain and suffering should be “the economic development, standard of living and incomes” of the injured person as at the date of the tort. The court obviously opts for an individual approach when determining the amount of indemnity, thus neglecting both the degree of the tortfeasor’s fault and the foreseeability of the damage.

17

7. Scope of Persons Having the Right to Indemnity Where Death is Caused Through its decision (d. No. 414/28 Sept. 2007, c.c. No. 32/2006, 3rd c.d. SCC) mentioned above, the supreme judicial instance confirms the currently valid rule (established in judicial practice) according to which, a person who has cohabited, even without formal marriage, with the individual who died has the right to indemnity. In this case it is interesting that the female claimant who had cohabited with the deceased man is awarded not only non-pecuniary damages, but also damages originating from being deprived of the possibility of receiving support from the deceased man.

18

8. Difference between Contractual, Work-Related and Tortious Liability The same decision (d. No. 414/28 September 2007, c.c. No. 32/2006, 3rd c.d. SCC) assumes that, in cases of incidental assignment of a task to a person who is not in a labour relationship with the assignor when the said person dies in the course of performing the task, the assignor incurs liability on delictual grounds to the legal successors of the deceased person.

19

Some might find this decision just and equitable, but it is hard to share the arguments on the grounds of which the court draws its conclusions.

20

The factual situation is as follows: following orders of their superior, employers of a department store agree with a few passers-by (who have no relationships with the store) that the latter will help unload a truck carrying goods. In the course of unloading the goods, one of the persons falls down, is injured and later dies as a consequence of the injuries.

21

The court is right to assume that in this case no labour relationship is present. Nevertheless, the court finds that the requirements set forth in the Law on Healthy and Safe Working Conditions should have been fulfilled. It is doubtful whether in a case of a service contract (where the rules on manufacture apply by analogy) the said requirements should be fulfilled by the assignor. The court itself comes to this conclusion, stating that in a relationship of manufacture the process of the fulfilling is on the manufacturer’s risk and immediately afterwards the court assumes that “the liability is tortious”. Obviously, the court assumes that liability should necessarily be present, and, having found that the liability is neither contractual nor work-related, the court decides that it must

22

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be tortious. Evidently, the court has been surprised at the excessiveness of its own conclusion, and has decided to mitigate it, assuming that in this case contributory negligence is present due to the fault of the person suffering the damage, and has therefore reduced the amount of the compensation awarded.

C. DOCTRINE 23

In the year 2007 no articles or monographs in tort law matters were published.

IV. Czech Republic Jiří Hrádek

A. LEGISLATION 1. Regulation No. 366/2007 Coll., on Compensation for Loss of Earnings1, Regulation No. 12/2007 Coll. and No. 373/2007, on the Regulation concerning Compensation for Loss of Earnings of Soldiers2 In accordance with regulation No. 366/2007 Coll., which alters the current level of compensation for loss of earnings arising in connection with both the Labour Code and Civil Code, the compensation to be granted because of inability to work or disability shall be changed by increasing the average earnings by 3%. The average earnings are the deciding factor for the computation of compensation (possibly changed by previous regulations). This change shall apply only to cases of compensation that arose at the latest by 31 December 2007.

1

The compensation based on the provisions of sec. 445 and 447 of Act No. 40/1964 Coll., the Civil Code (“Civil Code”)3 as well as sec. 193, 195, 197 and 199 of Act No. 65/1965 Coll., Labour Code (“former Labour Code”)4 and sec. 369, 371, 375 and 377 of Act No. 262/2006 Coll., the Labour Code (“Labour Code”)5 is always provided in the form of a pecuniary pension. The aim of this provision is that if damage to health occurred in causality with

2

1

2

3 4

5

Nařízení vlády č. 366/2007 Sb., ze dne 19. prosince 2007 o úpravě náhrady za ztrátu na výdělku po skončení pracovní neschopnosti vzniklé pracovním úrazem nebo nemocí z povolání, o úpravě náhrady za ztrátu na výdělku po skončení pracovní neschopnosti nebo při invaliditě a o úpravě náhrady nákladů na výživu pozůstalých (úprava náhrady). Nařízení vlády č. 12/2007 Sb., ze dne 29. ledna 2007 o úpravě náhrady za ztrátu na výdělku po skončení pracovní neschopnosti nebo při invaliditě vzniklé služebním úrazem nebo nemocí z povolání vojáků při výkonu vojenské základní nebo náhradní služby a výkonu vojenských cvičení a o úpravě náhrady za ztrátu na platu po skončení neschopnosti výkonu služby nebo při invaliditě vzniklé služebním úrazem nebo nemocí z povolání vojáků z povolání (úprava náhrady za ztrátu na výdělku vojáků). Zákon č. 40/1964 Sb., občanský zákoník. Zákon č. 65/1965 Sb., zákoník práce (abolished by Act No. 262/2006 Coll., as from 1 January 2007). Zákon č. 262/2006 Sb., zákoník práce.

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the activity of the wrongdoer, this person shall consequently compensate the difference between the wage of the injured before and after the damage. The authorization of the government based on sec. 447 (4) of the Civil Code and sec. 390 (2) of the Labour Code should ensure that the standard of living of the injured remains the same, despite the influence of inflation or the general improvement of standards of living.

3

The regulation concerning soldiers has the same purpose. In this case the compensation for loss of earnings shall be increased by 3% as well. The authorization of the government is based on sec. 71 (3) of Act No. 220/1999 Coll. and sec. 127 (3) of Act No. 221/1999 Coll., both Acts regulating the service relationships of soldiers in the Czech army. 2. Decree No. 263/2007 Coll., on Working Rules for the Employees of Schools and Educational Institutions6

4

This Decree relates to the liability of schools and educational institutions. The legal principles concerning schools’ duty to supervise pupils that apply in the Czech Republic and the subsequent liability are primarily based on the provisions of the School Act and further on the provision of sec. 422 of the Civil Code which sets out the principles of supervisory persons’ liability.

5

Under the provision of sec. 422 of the Civil Code, a minor or a person suffering from a mental disorder is liable for the damage he caused if he is capable of controlling his own conduct and considering its consequences, while anyone who has a duty to exercise supervision over the person shall be jointly and severally liable with him. Thus, if the current capacity of the minor does not fulfil the legal conditions, the provision of sec. 422 of the Civil Code provides that anyone who has infringed his obligation of supervision over the minor has to be held liable.

6

Due to compulsory school attendance, schools and other educational institutions can also be held liable for damage caused by a child who is at school, based on their failure to carry out proper supervision.

7

If the damage is caused while the minor is attending school, pursuant to sec. 422 (3) of the Civil Code, the teacher shall never be liable towards the third party. In accordance with this provision, the only liable subject is the legal entity, due to the fact that its employees have not performed sufficient and proper supervision. However, the employee of this legal entity would be liable under the provisions of, and to the extent limited by, the Labour Code.

8

To specify in more detail the limits and conditions for the acceptable behaviour of the teacher and other school staff, the School Act empowers the Ministry of Education to lay down working rules for school employees. In particular, sec. 6 of the Decree sets forth the following principles and rules: 6

Vyhláška č. 263/2007 Sb., ze dne 4. října 2007, kterou se stanoví pracovní řád pro zaměstnance škol a školských zařízení zřízených Ministerstvem školství, mládeže a tělovýchovy, krajem, obcí nebo dobrovolným svazkem obcí.

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“(1) Pupil supervision assuring security and health protection of pupils in schools or educational institutions in the course of education and related activities and in the course of providing school services is performed with the objective to prevent personal injury, property damage and environmental damage. (2) The director of the school or the educational institution determines the performance of the pupil supervision. He acts based on the specific conditions and takes into account the pupil’s age, his mental maturity, traffic and other risks. (3) The educator performs the supervision of pupils according to a timetable, especially in schools before classes, during the breaks between classes, where necessary also while crossing the streets between school buildings, school canteens and day nurseries. If the school director allows the pupils to stay in the school before classes, during the break between morning and afternoon classes and after classes, he is obliged to assure their supervision. The supervision in schools starts at least 15 minutes before the beginning of the morning classes and ends at the earliest with the end of teaching or providing school services. (4) According to the instructions of the director, the educator also performs supervision outside the school and educational institutions, especially during school courses, excursions and other activities resulting from school educational programmes, participation at competitions, exhibitions, possibly also during their preparation and during other events organized by the school or educational institution. (5) During events taking place outside the school or educational institution, where the school or educational institution is not the meeting place for pupils, the supervision starts at least 15 minutes before the meeting time at the given place. After the end of the event, the supervision ends at the time and place specified beforehand. The legal representatives of the pupils shall be informed at least one day before the event about the meeting time and place and the end of the event. (6) In addition to the educators, supervision can be performed by another adult employee of the school or educational institution, provided that he has been duly instructed to perform the supervision. This instruction shall be recorded.”

9

B. CASES 1. Ústavní soud České republiky (Constitutional Court of the Czech Republic) 28 August 2007, IV. ÚS 642/2005: Commencement of the Limitation Period in case of Liability of the State7 a) Brief Summary of the Facts

The District Court in Šumperk awarded damages pursuant to the State Liability Act to the plaintiff based on an illegal decision of the state.8 The plaintiff 7 8

Soudní rozhledy 2007, 416. The Czech State Liability Act does not contain regulations of compensation for damage that has arisen in the above-mentioned case; however, the courts will apply the provision on dissolution of custody as set forth in sec. 9 of the State Liability Act. Under such conditions, damages can be granted to the injured parties who were not kept in custody or imprisonment, but a court decided at a later stage that their accusation was illegal.

10

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suffered damage due to incurred costs of legal counsel in criminal proceedings introduced against him for alleged battery pursuant to sec. 221 of Act No. 140/1961 Coll., the Criminal Act.9 However, based on the judgment of the District Court in Šumperk, the charges were dismissed in 2000 because the act he was accused of was not a criminal offence. As the plaintiff did not pay the legal costs, the legal counsel sued him and the court ruled in 2001 that the legal fees must be paid. The plaintiff paid off his debt in 2004.

11

The State Liability Act contains two relevant provisions for the commencement of a limitation period. In case of maladministration, the limitation period commences when the injured party becomes aware of the damage and the liable party. If the cancellation of an illegal decision is required, the limitation period commences at the time when the decision on cancellation is delivered. However, there is no regulation of the present case where damage occurs without the injured party being in custody or imprisonment. Thus, the issue of this specific case of state liability is unclear.

12

The appellation court dismissed the plaintiff’s claim for damages because, in its opinion, the claim was statute-barred. Whereas the court of first instance held that the limitation period commenced from the time when the plaintiff reimbursed all costs to his legal counsel, i.e. in 2004, the appellation court examined the case differently. It argued that, since pursuant to sec. 32 (1) of the State Liability Act, the condition for asserting claims for compensation for damage is the cancellation of the illegal decision, the limitation period commences at the time when this condition is met, i.e. in 2000. At this time the plaintiff should know who is liable for the damage, the scope of damage and also the fact that this damage will no longer increase.

13

Based on such refusal the plaintiff filed a constitutional complaint to the Constitutional Court. Since the Constitutional Court answered the question of whether such a claim can become subject to a constitutional complaint positively, it further dealt with the interpretation of the concept of limitation of action from the constitutional point of view. b) Judgment of the Court

14

Concerning the concept of limitation of actions for compensation for damage which arose in connection with the performance of public authority, it must be considered from the constitutional point of view that it includes both the protection of the ownership rights of the entitled party on the one hand and the protection of legal certainty of the obliged party on the other.

15

As regards the protection of the entitled party, the ownership of an individual should be protected by such means that the state compensates costs which the individual had to incur in connection with the proceedings of the state. On the other hand the state should not remain in uncertainty of how long the claim 9

Zákon č. 140/1961 Sb., trestní zákon.

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established in connection with its illegal proceedings can be enforced in judicial proceedings. Finding a reasonable balance between the protection of the ownership of one party and the legal certainty of the other happens in the present case when it is determined that the damage that has occurred becomes objective. In the opinion of the Constitutional Court, the relevant moment for the objectification of the existence of damage and its amount in this specific case of state liability should be considered the moment when such a decision became valid, in which the state confirmed the plaintiff’s obligation to pay the costs of the defence. On the other hand it cannot be accepted that the commencement of the limitation period would depend on the plaintiff’s willingness to pay off his debt. In the first case, the limitation period would start at the time when the plaintiff was not aware of whether he pays the reasonably incurred expenses of the defence, i.e. damage which he could subsequently claim from the state; in the second case the commencement would be dependent solely on the plaintiff’s will and the state would be uncertain if or when the plaintiff would be claiming damages.

16

In the opinion of the Constitutional Court, the moment in which the state confirmed the plaintiff’s obligation to pay the costs of the defence, when such a decision became valid should be considered relevant for the objectification of the existence of damage and its amount. By this judgment the state also approved the amount of damage suffered by the plaintiff in connection with the proceedings of the state.

17

c) Commentary

Firstly, certain remarks must be made with respect to the Constitutional Court. The Constitutional Court does not present any further instance of the general courts, nor is it in any sense a superior instance. It shall only protect constitutionality in the Czech Republic by control of the decision-making activity of the general courts, provided that the guaranteed fundamental rights and freedoms of the individual have been breached. Therefore, the Constitutional Court is bound only by the Czech Constitution (largo sensu) and by the Act on the Constitutional Court.

18

When revising decision-making activities, the Constitutional Court takes into account not simply national law, but also the principles of the constitutional law resulting especially from the Charter on Fundamental Rights and Freedoms as a part of the Constitution and the international treaties on the protection of fundamental rights and freedoms which are directly applicable in the Czech Republic.

19

In this case the Constitutional Court dealt with the issue of limitation periods, in particular with the issue of when exactly the limitation period commences in the case of damages based on reimbursement of costs of legal counsel. Even though such a topic is not typical for the competence of the Constitutional Court, and the decision of the Constitutional Court can be considered unsolicited from a judicial point of view, the Constitutional Court inferred its competence based on the protection of ownership rights.

20

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21

The Constitutional Court refused the opinion held by the appellation court that the limitation period should have commenced at the time when the relevant judgment discharging the plaintiff from accusation became valid. The Constitutional Court considered such timing irrelevant because at the given time the damage presented only a claim which the legal counsel had towards the plaintiff. Thus, the plaintiff could not have been aware of the specific damage which he suffered in connection with the state’s administration.

22

From the legal point of view, such conclusion is correct. Since the concept of limitation period is coherent with the enforceability of the particular claim, the plaintiff, i.e. the debtor, must know the exact amount of his debt. In other words, the limitation period can first commence at the time of the damage’s objectification which should be a moment when such a decision became valid, in which the state confirmed the plaintiff’s obligation to pay the costs of the defence. 2. Nejvyšší soud České republiky (Supreme Court of the Czech Republic) 26 September 2007, 25 Cdo 1961/2005-2: Liability of Municipality for Damage Caused in a Public Tender; Causal Connection between Administrative Costs and Municipality’s Decision-making10 a) Brief Summary of the Facts

23

Based on a public tender for “operation of a public swimming pool”, the defendant decided that, despite offering the lowest bid, the plaintiff would not receive the public procurement for the subject matter of the public tender. This decision was approved by the municipal council of the defendant and confirmed by the mayor of the municipality as the supreme instance.

24

Since the mayor did not accept the plaintiff’s objections, the plaintiff filed a petition to the Office for Protection of Economic Competition (“OPEC”) and had to pay, in accordance with sec. 6 (2) of Act No. 368/1992, an administrative fee for the proceedings before the OPEC. After examining the plaintiff’s objections the OPEC cancelled the decision of the mayor in accordance with sec. 59 of Act. No. 199/1994 Coll., on Public Procurements (“Act on Public Procurement”).11 Subsequently, the defendant cancelled the public tender.

25

In accordance with its success in the administrative proceedings, the plaintiff claimed damages pursuant to the State Liability Act. However, the court of first instance concluded that the claim for compensation for the administrative fee in accordance with the State Liability Act is not given. It held that it may be that the mayor’s decision, which was cancelled by the OPEC, presents a decision of the municipality within its autonomous capacity; however it cannot be considered a decision of public administration, because it relates to management of the municipality’s property. Such proceedings are not subject 10 11

www.epravo.cz, www.nsoud.cz. Zákon č. 199/1994 Sb., o zadávání veřejných zakázek.

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to the State Liability Act. Therefore the conditions for application of the State Liability Act are not met, in particular sec. 1 (2) and sec. 19 of the State Liability Act.12 The same applies to the application of the general provision on liability as stipulated in sec. 420 of the Civil Code because no causal connection between the administrative fee paid and the decision of the defendant was found. Despite the OPEC’s declaration that the defendant breached the Act on Public Procurement, this decision did not immediately cause material damage to the plaintiff. The administrative fee, which is considered damage by the plaintiff, was paid only after the plaintiff objected to the decision of the defendant and thus cannot be compensated by the defendant.

26

Since the issue of liability for damage caused by an illegal decision of a tenderer of a public procurement on the most advantageous bid had yet to be considered by the Supreme Court, the court agreed on the appellation with respect to the present case.

27

b) Judgment of the Court

From the relevant provisions of the State Liability Act, the municipality as a self-governing unit shall be liable for damage caused by the decisions of its bodies if damage was caused when performing competence within their autonomous capacity. Another condition for liability is the fact that damage was caused by an illegal decision or maladministration of the municipality issued when performing public administration, i.e. by such a decision which applies public authority, whose representative the municipality in the particular case is.

28

It is obvious that, when choosing the operator of its facility and deciding on the results of the public tender, the municipality acts and decides as the owner who carries out its capacity to dispose of its property. Such a disposal is of a private law nature, and thus the given decision-making of the municipality cannot be considered the performance of public authority. Based on this, despite being cancelled by a competent public authority, the decision cannot become the subject of liability under sec. 19 ff. and 31 of the State Liability Act.

29

As regards the liability pursuant to sec. 420 of the Civil Code, it is obvious that the cause of the plaintiff’s duty to pay the administrative fee was not the decision of the public tender, because no payment duty resulted from this decision for the plaintiff. The same follows from the payment order issued by the OPEC. In accordance with this order, the administrative fee was imposed because the

30

12

Under sec. 1 (2) of the State Liability Act, the regional self-governing units shall be held liable, under conditions set forth in the State Liability Act, for damage caused when performing public authority handed over to them within their autonomous capacity. Pursuant to sec. 19 of the State Liability Act, the self-governing units shall be held liable for damage caused by an illegal decision or maladministration which they caused when performing public administration within their autonomous capacity.

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plaintiff challenged the decision and asked for an examination of the decision in question.

31

Therefore, the obligation of the plaintiff to pay the administrative fee is not a direct result of the present decision of the defendant. It is a result of the factual circumstance that the plaintiff as a legal entity filed a petition with the public authority. Even though the plaintiff filed this petition based on its – as later proved – reasonable conviction that the decision of the defendant was incorrect, without such a petition with the public authority no payment duty would have occurred. Thus, it was solely the choice of the plaintiff whether it filed a petition or not. In this respect, the incentive that caused the filing of the petition is of no legal importance. c) Commentary

32

The Supreme Court decided on one hand whether a decision of a municipality could become subject to provisions of the State Liability Act and, on the other hand, whether the plaintiff should be entitled to compensation for damage if the damage arose as a consequence of a petition in which the plaintiff sought the cancellation of a decision made by the defendant. The Supreme Court refused the State Liability Act-based liability of a municipality when deciding on disposal of its property. However, the most important outcome resulting from this decision was not the answer to this question, but the solution with respect to causation.

33

As to causation, current Czech legal theory acknowledges that causality is based on the existence of cause and result in such a manner that, without the cause, no result would have occurred. The result must be in direct connection with the cause and the case law strictly applies this approach influenced by a 20-year-old decision of the Supreme Court of the Czech Republic, published under R 7/1979.13

34

The Supreme Court followed this approach in the current case and refused the liability of the municipality. The liability was denied, although the plaintiff filed this petition in order to protect his rights resulting from the public tender published and organised by the defendant. Such outcome cannot be considered absolutely correct. The petition was based on the applicable legislation that entitles the participant of a public tender to seek protection in administrative proceedings, and this fact is foreseeable for the tenderer, despite not being the direct result of the wrongful decision.

35

The approach to causation should not be so strictly limited to the issue of a direct and indirect cause. It may be the case that the result arises as a consequence of another circumstance which was caused by something that can be 13

R 7/1979 – “The health of the plaintiff was damaged as a consequence of the reaction to the death of her child. The alleged cause therefore consists of the fact which alone is the result for which the defendant is held liable. […] Therefore, the causality as the legal condition of the liability is missing. The direct result of the breach of the legal duty of the defendant was the death of the plaintiff’s child and not the damage to the plaintiff’s health.”

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attributed to a wrongdoer, assuming that this consequential damage was foreseeable and therefore attributable to the wrongdoer. Causality as an inevitable condition of liability must therefore be concluded also in the case when the relation between the cause and the result is indirect; however, this result is the consequence of the cause. Nevertheless, this conclusion is not always accepted by case law and causality is in many cases refused, as also happened in the current case.

36

3. Nejvyšší soud České republiky, 31 January 2007, 25 Cdo 312/2005: Liability of the State as an Owner of Property; Nature and Limits of a Ministry’s Approval14 a) Brief Summary of the Facts

The defendant, the Czech Republic, organised a public tender for the purchase of state property, which Company C won. However, this company went bankrupt and the state concluded an agreement on the purchase of the property with another participant in the tender. This agreement was concluded with the condition subsequent that a competent authority, namely the Ministry of Finance, approves the purchase. However, the transfer was never affected, because in the meantime the purchase price increased due to a change in price regulations.

37

Based on this, the plaintiff claimed damages in the form of lost profit amounting to the difference between the value set by an expert opinion (CZK 67 million, i.e. approx. € 2,680,000) and the agreed purchase price (CZK 10 million, i.e. approx. € 400,000). The plaintiff alleges that this damage arose due to maladministration consisting in the time consuming decision-making of the defendant, which caused the purchase price to increase. He further claimed maladministration regarding the fact that, contrary to the previous company, the procedure to grant approval took a substantially longer period of time.

38

The court of first instance concluded, in accordance with the decision of the Constitutional Court of the Czech Republic15, that also in the case of a purchase agreement concluded based on a public tender with certain public law elements, such disposal of property by the state must be considered as would be the case with any other owner under the private law relationship.

39

The court also refused the liability of the defendant based on sec. 420 of the Civil Code because the state’s behaviour did not infer any breach of legal duty. It held that there is no claim for granting an exception or approval by the Ministry of Finance. The Ministry alone has sole discretion regarding whether it grants such approval, regardless of whether it granted the approval in previous cases.

40

The appellation court confirmed the decision of the court of first instance. It held that in the given case the state acts as an owner which declares its

41

14 15

Právní rozhledy 2007, 683; Soudní judikatura 2007, 432, www.nsoud.cz. II. ÚS 93/99.

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will with the disposal of the property. Also under provision of sec. 46 of Act No. 219/2000, on the Property of the Czech Republic (“State Property Act”)16 the process and decision-making of the state when administrating property shall be excluded from the application of the State Liability Act. b) Judgment of the Court

42

Based on the outlined history of the case the crucial issue in the appellation before the Supreme Court was whether the authorisation clause in the meaning of sec. 44 of the State Property Act presents an act relating to public law and whether the failure to grant approval for the transfer of property within a private law relationship can be considered a performance of public authority within the meaning of the State Liability Act.

43

The Supreme Court ruled that the administration of the competent authorities in the disposal of state property presents the acting of the state, however not the state as a holder of the public authority, but as the current owner of the property. Thus, the disposal of the property is the expression of the owner’s will (Constitutional Court, III. ÚS 380/97). This conclusion applies also if, during the disposal of the state property, any rule set forth by legislation is breached, i.e. rules set forth by the State Property Act.

44

From the regulation laid down in the State Property Act17 it can be inferred that the public interest consists in the goal that disposal of state property is always carried out carefully, and that the management of the state is not burdened by the sale of property in contradiction with legislation and in a disadvantageous way. This system is protected by provisions which do not relate to the purchaser but only control the activity of the state bodies in order to reach the set goal. The law expressly designates the granting of exceptions and approvals as a part of the expression of the state’s will as an owner.

45

Thus, if the disposal of the property is the expression of the owner’s will and not the performance of a public authority, then the particular legal acts specified by law must also be of a private law nature. This conclusion is supported by the provision of sec. 44 (1) of the State Property Act, under which the decision-making shall not be subject to administrative proceedings and judicial review. A similar outcome can be inferred from the provision of sec. 46 of the State Property Act which expressly excludes the application of the State Liability Act to damage which arises as the result of proceedings and decisionmaking during the management of state property.

16 17

Zákon č. 219/2000 Sb., o majetku České republiky a jejím vystupování v právních vztazích. In accordance with sec. 22 (3) of the State Property Act, unless transferring a certain immovable, each agreement on the transfer of immovables to be registered in the Cadastral register shall be approved by the Ministry of Finance of the Czech Republic. Under the provision of sec. 44 (1) of the State Property Act exceptions shall be allowed and granted only in specific cases. For such a decision-making no provisions on administrative proceedings shall apply and the decisions are not subject to judicial control.

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For the sake of completeness it must be stated that the plaintiff was, based on the purchase agreement, only entitled to acquire ownership rights over part of the state property. Since the transfer has never been affected, the plaintiff has never acquired the property for which he claims compensation. Thus, he could not lose the property and the same applies to the loss of property values (which the plaintiff did not own). Correspondingly, he did not suffer damage.

46

c) Commentary

In this case the Supreme Court decided on an issue which was topical in 2007, i.e. whether the legal acts of the state, its bodies or self-governing units, when performing their ownership rights over property, can be considered acts which are subject to the State Liability Act.

47

The Supreme Court denied such a qualification. It ruled that although the proceedings of the competent authorities when disposing of state property are acts of the state, a strong distinction must be made between the state as a public authority and as an owner of property. Thus, any disposal of the property is the expression and result of the owner’s will. This conclusion applies also if, during the disposal of the state property, any rule set forth by legislation is breached, for instance rules stipulated by the State Property Act.

48

In my opinion, this conclusion of the Supreme Court, despite being justified by and based on the applicable legislation, retracts a certain part of the public decision-making from the strict liability regime laid down by the State Liability Act.

49

In particular, since the State Property Act requires approval to be granted for disposal of public property, the competent authority shall no longer be subject to standard checks and controls stipulated by the State Liability Act, and claims for damages can only be based on general provisions on liability stipulated by the Civil Codes. Moreover, the legal certainty of a potential purchaser is limited. Namely, in accordance with the reasoning, neither terms nor principles for public decision-making set by administrative law shall apply.

50

4. Nejvyšší soud České republiky, 27 September 2007, 25 Cdo 2142/2005: Liability of an Owner for Damage Caused by Failure to Maintain a Local Road or Pavement; Release from Liability18 a) Brief Summary of the Facts

The plaintiff claimed compensation for damage to health, consisting in a loss of earnings during her inability to work, pain suffered, aggravation of social position and administrative costs incurred in connection with her injury. The plaintiff suffered damage while returning from work in the evening when she slipped on an icy pavement. As a result she broke her right leg. She was unable 18

www.epravo.cz, www.nsoud.cz.

51

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to work for almost one year. The defendant was the municipality who was legally obliged to maintain roads and pavements to be passable and to keep them in a suitable condition. As a consequence of the failure to fulfil this duty, the obliged party shall be held strictly liable for any damage which occurs.

52

The court of first instance, after two reversals from the court of second instance, rejected the claim by the plaintiff. The court of first instance argued that, taking into account the provision of sec. 9a (3) of Act No. 135/1961 Coll., on Land Roads (“Road Act”)19, which provides for strict liability of the obliged party to maintain the pavement, the liability of the municipality is not given. The reason for this conclusion was that, in its opinion, the condition of safety of the pavement was not restricted within the meaning of sec. 12 (5) of decree No. 35/1984 Coll. This provision states that defects in the practicability of pavements are defects which do not allow the safe passage of pedestrians even under due caution. Moreover, the court also refused the liability of the municipality based on sec. 420 of the Civil Code20. In its view, the municipality fulfilled its duty to maintain pavements in the winter through the conclusion of an agreement with a third party which should have performed this duty on the municipality’s behalf.

53

The court of second instance confirmed this judgment. To the reasoning of the court of first instance it added that the application of sec. 420 of the Civil Code was not possible because the Road Act, as a special law, excludes its application to the fullest extent. Therefore the consideration of the court of first instance was obsolete in that regard. b) Judgment of the Court

54

Pursuant to sec. 9a (3) of the Road Act, the administrators of local roads are liable for damage whose cause was a defect in the practicability (passability) of, inter alia, pavements, unless they provide that it was not feasible to remove such defects or to make an announcement of them.

55

Therefore, the conditions for liability of the administrator in the meaning of sec. 9a (3) of the Road Act are defects (i) in the practicability, (ii) the occurrence of damage and (iii) causal connection between them, regardless of the fault of the administrator of the road or its employees. If one of the most crucial reasons for liability can be subsumed under the concept “defect in the practicability” (závada ve sjízdnosti) as defined by sec. 12 (5) of Decree No. 136/1961 Coll., which provides for interpretation of the Road Act, the strict liability of the administrator is established. Consequently, it is its duty to prove that it was neither feasible for it to remove such defect nor to draw attention to such defect.

56

Thus, the decision regarding the administrator’s liability depends especially on the identification of the road’s conditions at the time and on the place of the 19 20

Zákon č. 135/1961 Sb., o pozemních komunikacích (silniční zákon). Sec. 420 of the Civil Code provides that every person is liable for damage which he caused by breaching a legal obligation.

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accident as well as on the nature of the defect that led to the accident. In general, the strict liability is bound to such a state of the pavement that establishes the defect in the practicability in the meaning of sec. 9a (3) of the Road Act. Therefore, if the courts concluded that the defect in the practicability cannot be subsumed under the provisions of the Road Act, the denial of the administrator’s liability is a correct application of law. As to the exclusion of application of sec. 420 of the Civil Code, the Supreme Court does not agree with the court of second instance as to the opinion that the Road Act is of such a nature that it excludes the application of a general provision on liability for damage as stipulated under sec. 420 of the Civil Code. It also does not agree with the conclusion that the municipality shall not be liable for damage pursuant to sec. 420 of the Civil Code because it fulfilled its obligation resulting from the Road Act through the conclusion of an agreement with a third party under which the third party should provide for maintenance of the pavement in the winter period.

57

The Road Act presents a special law with respect to the general provision on liability for damage as stipulated in sec. 420 of the Civil Code. However, this fact does not mean that, in the case of denying strict liability of the road’s administrator pursuant to the Road Act, its general liability for a particular breach of legal duties shall also be excluded. The Road Act regulates only the strict liability of the road’s administrator for damage whose cause was solely a defect in the practicability and not a breach of a general legal duty.

58

The Civil Code regulates general liability based on fault, whereas the conditions for liability based on fault and without fault are not identical. The same applies to conditions under which the liable subject can exculpate or release itself from liability. However, in all cases of liability the contributory negligence of the injured party, in accordance with sec. 441 of the Civil Code, can limit or exclude liability.

59

The defendant as an obliged party to provide maintenance of pavements cannot release itself from liability for the breach of such duties through the conclusion of an agreement with a third party under which this duty is shifted to such a person. Due to the conclusion of this agreement, the third party becomes obliged to arrange for such maintenance; however, the legal liability for a breach of the obligation cannot be assigned to another. Only the legally obliged subject bears this liability. However, it can also claim redress against the party who breached its contractual duties.

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c) Commentary

The decision of the Supreme Court can be divided into two parts: (i) the qualification of the liability of an owner of the local road and the conditions for release from liability and (ii) conditions of application of sec. 420 of the Civil Code.

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As to the application of the Road Act, the new Act No. 13/1997 Coll., on Land Roads, was adopted by the Czech Parliament after the accident had happened.

62

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Even though this Law is in accordance with the previous Road Act as concerns the liability of subjects, it uses different terminology. The previously used term “administrator” (see sec. 9a (3) of the Road Act) was substituted by the concept of an owner which corresponds with the current ownership title of the given person. Further, the crucial definitions for the interpretation of the conditions of safety are included in the new Act so that statutory instruments are no longer necessary.

63

The first issue the court decided on was the interpretation of the provisions of the Road Act which stipulate the duty of the owner of a land road to keep it in a safe condition, and its possible liability if it fails to do so. The court concluded that such a provision establishes cases of strict liability. However, the owner can be released from liability if it proves that it was neither feasible for it to remove such defect in the practicability nor to draw attention to such defect. Besides this, release from liability can be influenced by the qualification of the defect in the practicability, as stipulated further in the statutory instrument.

64

Thus, the decision regarding the owner’s strict liability depends especially on the identification of the road’s conditions at the time and place of the accident as well as on the nature of the defect that led to the accident. In general, the strict liability is bound to the state of the pavement, which establishes the defects in the practicability in the meaning of sec. 9a (3) of the Road Act.

65

It must be mentioned that a similar obligation applies to owners, administrators and users of immovables which border a built-up area on a road or local road. However, these persons shall be liable solely for damage caused by defects in the practicability which arise from pollution, black ice or snow and which were not removed without undue delay. In other words, these persons are liable for cleaning the pavements and the injured party should take into account this fact.

66

If damage was caused in connection with a defect in the practicability, it should be differentiated between the relevant causes for the damage, i.e. the defect in the practicability and the cleanliness of the pavement. This determination influences also the contributory liability of the potentially liable parties. If the damage is caused by defects consisting in the failure to clean the pavement, the liability of the owner of the neighbouring immovable can be limited to the extent to which a defect in the practicability of the pavement was relevant for the damage which occurred.21

67

The second issue decided by the Supreme Court related to the fact whether sec. 9a of the Road Act excludes the application of the general provision on liability for damage pursuant to the Civil Code.

21

M. Holub/J. Bičovský/M. Pokorný/J. Hochman/I. Kobliha/R. Ondruš, Odpovědnost v občanském, obchodním, pracovním a správním právu (Liability for Damage in Civil, Commercial, Labour and Administrative Law) (2003) 38.

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Following the previous case law of the Supreme Court22, the court decided that even though the Road Act presents a special law with respect to the general provision on liability for damage as stipulated in sec. 420 of the Civil Code, this fact does not mean that, in the case of denying strict liability pursuant to the Road Act, general liability for a particular breach of legal duties shall also be excluded.

68

Based on this, the defendant as a party obliged to provide for maintenance of pavements cannot exonerate itself from liability for the breach of such duties through conclusion of an agreement with a third party under which this duty is shifted to such a person. The reason is that, under sec. 420 (2) of the Civil Code, any person shall be held liable for damage caused by persons used for the fulfilment of its obligation. Due to the conclusion of this agreement, the third party becomes obliged to arrange for such maintenance; however, the legal liability for breach of the obligation cannot be assigned to another. However, the owner can claim redress against the party who breached its contractual duties.

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5. Nejvyšší soud České republiky, 27 September 2007, 29 Odo 1220/2005, 29 Odo 1395/2005: Damage in case of Bankruptcy Proceedings; Liability for the Failure to File an Application for Adjudication of Bankruptcy23 a) Brief Summary of the Facts

The plaintiff claimed compensation for damage as a result of breach of duty by a managing director who failed to file an application for adjudication of bankruptcy over the property of company A. The plaintiff claimed joint and several liability of the defendant together with the company A which was formerly obliged to fulfil the debt which had arisen as a result of a transport agreement.

70

The court of first instance as well as the court of second instance dismissed the claim. Both instances held that the plaintiff did not fulfil the conditions resulting from his burden of proof. They reasoned this by interpretation of his argument that he would never have entered into the relevant transport agreement based on which he obtained his receivables against company A if he had known that the conditions for ordering bankruptcy were met. Thus, based on the plaintiff’s allegation, the damage would cover the whole consideration for the performed services. However, the court held that in the case of bankruptcy, damage may present only a difference between the satisfaction of the plaintiff’s claim if the bankruptcy proceedings were ordered in due time and the actual satisfaction of his receivables in the bankruptcy proceedings.

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22 23

Supreme Court, R 93/1957, R 23/1976. www.nsoud.cz.

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b) Judgment of the Court

72

Act No. 328/1991 Coll., on Bankruptcy and Composition (“BCA”)24 sets forth a special regulation of liability for cases when duties stipulated in the BCA are not fulfilled. Under such condition and in accordance with the general opinion in the legal doctrine, the regulation of sec. 420 of the Civil Code does not apply in any way. In other words, the provision of sec. 3 of the BCA25 is a specific provision which defines persons liable as well as determines the number of persons who are entitled to compensation (only the creditors of the debtor). The elementary conditions for liability are a breach of a legal duty, occurrence of damage, causal connection between the breach and the damage and fault.

73

The Supreme Court concluded the following principles concerning the nature and conditions of liability for damage consisting in an omission to file an application for adjudication of bankruptcy proceedings.

74

The liability of persons specified in sec. 3 (2) of the BCA for breach of duty to file an application for adjudication of bankruptcy proceedings is a general civil law liability based on presumed fault. Due to these subjective criteria, the potentially liable parties are able to exculpate themselves by proving that they were not at fault.

75

Actual damage that can occur to the creditors in connection with the breach of duty to file an application for adjudication of proceedings, if relevant, is the difference between the amount which would have been received by the creditors in the bankruptcy proceedings if the application had been duly filed and the amount which they ultimately received in the bankruptcy proceedings. This also applies to creditors whose existing receivables were not due at the time when the application had to be filed.

76

In the case of creditors whose receivables arose first when the persons stipulated in sec. 3 (2) of the BCA were in delay with the performance of their obligation, damage shall be considered as the difference between the remainder of the debt and the amount which the creditor subsequently received in the bankruptcy proceedings. 24 25

Zákon č. 328/1991 Sb., o konkursu a vyrovnání. (1) A legal entity or an individual entrepreneur who has gone bankrupt shall file an application for adjudication of bankruptcy without undue delay. A legal entity in liquidation shall do so only if it has become over-indebted. (2) The obligation under paragraph 1 shall apply also to the statutory bodies of the legal entity, to the liquidator of the over-indebted legal entity in liquidation, and to the legal representatives of the individual. Should these persons not fulfil this obligation, they are liable to the creditors for damages arisen to them therethrough unless they prove that the damages were caused neither by their intention nor by their negligence; if more persons are concerned, they are liable for the damages jointly and severally. (3) The obligation under paragraphs 1 and 2 is understood not to be fulfilled if the proceedings on the application to adjudicate bankruptcy were stayed or if the application was rejected. (4) Instead of the application for adjudication of bankruptcy, the persons mentioned in paragraphs 1 and 2 may file an application for composition; however, if the composition was not approved of or confirmed, they shall file the application for adjudication of bankruptcy within 15 days. (Translation: http:// www.iiiglobal.org/country/czech/czec_bankruptcy.pdf).

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The claim for damages pursuant to sec. 3 of the BCA cannot be satisfied if the causal connection is not proved, i.e. (i) the application for bankruptcy proceedings over the asset or an application for composition had never been filed at all or (ii) based on such application, the insolvency of the debtor was not confirmed by ordering bankruptcy over its assets or allowing composition.

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c) Commentary

The Supreme Court decided on the issue of what the general criteria for the liability of persons stipulated in sec. 3 of the BCA are. The court dealt in particular with the nature of the liability pursuant to the BCA (the distinction between strict liability and liability based on fault), scope of damage and causation. However, the most important conclusion was drawn with respect to the scope of damage sustained.

78

Based on consistent case law, actual damage in case of omission in filing an application for adjudication of bankruptcy proceedings is the difference between the satisfaction of the plaintiff’s claim if the bankruptcy had been ordered in due time and the real satisfaction in the bankruptcy proceedings.

79

However, the Supreme Court also adjudicated another situation which may arise in the case of omission to file an application, i.e. if the receivables of the creditor arise after the commencement of the delay in filing.

80

With respect to this issue, the court concluded that, since the provision of sec. 3 (2) of the BCA aims to protect any creditor of the company against consequences resulting from the failure to file a petition, their exclusion from the provided protection would contradict the purpose of the provision.

81

However, the scheme of the compensation must be determined differently. Since the receivable arose after the commencement of the delay in filing an application and the creditor would certainly have refused to enter into the mutual relationship if he had been aware of the insolvency, damage shall be the difference between the amounts fulfilled and the amount which the creditor subsequently received for the receivable in the bankruptcy proceedings.

82

6. Nejvyšší soud České republiky, 26 September 2007, 25 Cdo 2064/2005: Liability of a State Body (Government) for its Normative Activity (Legislation)26 a) Brief Summary of the Facts

The plaintiff, a non-state health facility, concluded contracts with a health insurance company (“VZP”) on rendering health services refunded from the public health insurance in the period from 1997 to 30 June 2005. VZP undertook to reimburse proved and reasonably rendered services to its clients based on a point scale evaluation. The value of one point was determined in these 26

Jurisprudence 2007, 6/2007, 39.

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contracts and modified by subsequent amendments hereto based on governmental legislation.

84

Based on the authorisation of sec. 17 (5) of Act No. 48/1997 Coll., on Public Health Insurance (“Health Insurance Act”),27 the Czech Government determined by various Decisions28 the value of one point, which was, however, limited in maximum time and amount. In the case the limits set forth in the Decision were exceeded, the reimbursement of costs was correspondingly restricted. As a result, VZP also reduced the reimbursed costs to the plaintiff pursuant to such regulation.

85

The provision of sec. 17 (5) of the Health Insurance Act was repealed by the decision of the Constitutional Court No. 167/2000 Coll. as of 31 December 2000. However, the Constitutional Court did not repeal the statutory instruments relating to the repealed provision of the Health Insurance Act, i.e. the governmental decisions.

86

The court of first instance accepted the claim of the plaintiff against the defendant, the Czech Republic – Ministry of Public Health. It reasoned that the property of the plaintiff was damaged by a reduction in payments, i.e. in direct connection with the defendant’s maladministration consisting in the issuance of the governmental decisions. Also the court of second instance accepted the claim and confirmed the judgment of the court of first instance. b) Judgment of the Court

87

As the crucial issue, the Supreme Court considered the nature of the governmental decision which implemented the Health Insurance Act. It concluded that all the decisions are normative legal acts (laws) which do not present individual legal acts as a result of the decision-making activity in specific cases. Thus they must be considered a result of so-called “derived normative activity of the Government” pursuant to art. 78 of the Constitution.

88

Pursuant to art. 78 of the Czech Constitution, the Government is authorised to issue legislation in the form of a regulation in order to ensure a proper implementation of an Act in the limits set by the Act. For such activity no express legal authorisation (as set in the Health Insurance Act) is required. Thus, the governmental decisions in question are not individual normative acts and even though designated “decisions”, they are the results of the normative activity of the Government.

89

Based on this, the Supreme Court refuted the conclusion of the courts which inferred liability of the state for maladministration also in the case of a normative (legislation) activity of the Government. The issue of legislation is not an 27

28

Zákon č. 48/1997 Sb., o veřejném zdravotním pojištění a o změně a doplnění některých souvisejících zákonů. Decision No. 230 of 30 March 1998, No. 657 of 23 June 1999 and No. 1374 of 22 December 1999.

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administration procedure of the Government but the result of its normative (legislation) activity. In accordance with this conclusion, if the legislative activity or inactivity of the public authority body cannot be considered maladministration, no liability of the state for maladministration in the meaning of the State Liability Act can be deduced. c) Commentary

The crucial issue in this case was the question of whether the Czech Government, which is a state body liable in general under provisions of the State Liability Act, can also be held liable for its normative activity. However, in order to infer such liability, the activity of the Government must qualify as maladministration pursuant to sec. 13 of the State Liability Act.

90

Since the concept of maladministration is not defined by the State Liability Act, the interpretation by the judiciary is crucial for the correct application. Under the current opinion of the Supreme Court, not every activity of the Government shall be considered administrative procedure and a possible source of maladministration. This term should cover only such activity in which the Government issued a decision as an individual legal act, i.e. a result of the decision-making activity in specific cases.

91

Based on this conclusion, legislative activity of any state or public body, i.e. the Government or the Parliament, cannot become subject to liability provisions stipulated in the State Liability Act because it does not meet the conditions for qualification as maladministration.

92

The only exception is liability for a breach of EC law. However, since this liability is created and established by the case law of the ECJ, and thus it is independent of the particular provisions of the Czech State Liability Act, it cannot apply also to other cases in which the state provides for legislation activity without taking into account EC law.

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C. LITERATURE 1. J. Šilhán, Náhrada škody v obchodních vztazích a možnosti její smluvní limitace (C.H. Beck, 2007)29 The Czech Commercial Code contains an autonomous regulation concerning compensation for damage which is governed by its own principles different to the Civil Code. One of the most disputed issues is the limitation of damages based on a contractual arrangement. The Commercial Code prohibits the waiver of claims for damages until the relevant duty is breached. However, this provision is very often subject to discussion. 29

Compensation for Damage in Business Relationships and the Possibility of its Contractual Limitation.

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The author deals with the issue of the contractual limitation of compensation for damage from both the theoretical and practical point of view. In the first part the current regulatory approach to the limitation in damages is described, including relevant case law. In the second part the author deals with the theoretical approach with the focus on the issue of limitation before the actual occurrence of damage. 2. M. Králík, Právní odpovědnost za sportovní úrazy, Právní rádce 2007, 02/2007, 4 ff.30

96

The author introduces some basic approaches of case law concerning the liability of sportsmen for harm and injuries incurred during a sporting activity. He mentions the opinions and most important decisions in Germany and Austria and also provides for a summary of the Czech case law. 3. K. Svoboda, Absolutní odpovědnost za škodu. Existuje vůbec? Právní rozhledy 2007, 864 ff.31

97

The author presents the issue of strict liability with respect to the impossibility of being released from liability, i.e. an absolute strict liability. He defines this concept and examines whether any case in Czech law of such a type of liability exists. He comes to the conclusion that no case can be found because in any case contributory fault of the injured party can apply. 4. V. Jirka, K objektivní odpovědnosti za škodu na zdraví ve zdravotnictví de lege lata a de lege ferenda, Právní rozhledy 2007, 347 ff.32

98

The author presents in a comprehensive manner the current concept of compensation for damage caused by operational activity as mentioned under sec. 421a of the Czech Civil Code as maintained by the Czech courts. However, he also deals with this issue from the point of view of the draft Civil Code, in particular sec. 2436. He criticises the fact that the proposed regulation would not allow the provider of a medical service to be released from liability, even in cases when complications arise which could not be excluded (the service is de lege artis) and the patient was aware of such risk. 5. T. Doležal, Europeizace právních úprav škody na zdraví a náhrady imateriální újmy, Právník 2007, 423 ff.33

99

The author presents an overview of relevant European-based regulation of compensation for damage to health and non-pecuniary injury which was established by European institutions, such as liability for defective products, arising from package travel contracts, for medical devices or employer’s liability. Fur30 31 32 33

Legal Liability for Sport Injuries. Absolute Strict Liability. Does it Exist at All? Strict Liability for Damage to Health in the Health Care, de lege lata and de lege ferenda. European Influence on the Legal Regulation of Compensation for Damage to Health and Compensation for Non-pecuniary Injury.

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ther comments on the role of the ECJ as well as the relevant Czech legislation are also included in this publication. 6. Zvláštní číslo: K některým otázkám náhrady škody na zdraví, Soudní rozhledy 2007, 08/200734 Based on co-operation with the judges of the Czech Supreme Court, the special issue of the journal contains an updated overview of the most important and recent cases from the point of view of compensation for damage to health.

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The presented cases deal with the following topics: (i) the judgment of recognition in case of extraordinary increase in compensation for aggravation of social position;35 (ii) increase in compensation for aggravation of social position;36 (iii) relationship between the compensation for aggravation of social position and for loss of earnings;37 (iv) compensation for new consequences of an injury38 and (v) contributory fault of the injured party.39

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34 35 36

37 38 39

Some issues relating to the Compensation for Damage to Health. Regional Court Hradec Králové, 17 Co 487/2005. Supreme Court, 25 Cdo 2497/2004, 25 Cdo 2414/2006, 25 Cdo 2186/2004, 25 Cdo 1575/2005, 25 Cdo 759/2005, 25 Cdo 3147/2005. Supreme Court, 25 Cdo 1988/2005, 25 Cdo 2709/2005. Supreme Court, 25 Cdo 275/2006, 25 Cdo 1129/2005. Regional Court Tábor, 14 To 371/2005.

V. Denmark Vibe Ulfbeck and Søren Bergenser

A. LEGISLATION 1

No new tort law legislation was introduced in 2007.

B. CASES 1. Højesteret (Danish Supreme Court) 26 September 2007, U (Ugeskrift for Retsvæsen, Weekly Law Report) 2007.3124 H (Højesteret, Supreme Court): State not Liable for Recall of Permission to make Parallel Import of Medicine a) Brief Summary of the Facts

2

The Danish Medicines Agency (DMA) gave a Danish company dealing with the parallel import of medicine permission to import ulcer medicine as the company had submitted an application according to the law. The producer of this medicine withdrew the product from the market as they had made a new product replacing the old product. The producer asked DMA to force parallel importers to also withdraw the old parallel imported products from the market. DMA did so accordingly. The identical problem had occurred in Sweden and Finland in the parallel court cases where the national courts had decided to ask the European Court of Justice to address the question whether the recall was consistent with EU jurisdiction. The European Court of Justice decided that the recall was inconsistent with the EC Treaty, art. 28 and 30. Hence the Danish company decided to commence proceedings against the Danish State/DMA claiming € 400,000 for lost income. b) Judgment of the Court

3

The claim was denied by both the High Court (east) and the Supreme Court – both decisions reasoned identically. The main reason being that DMA’s contravention with the EU jurisdiction was not sufficiently qualified to constitute liability based on negligence. A further reason given was that other EU Member States had arrived at similar solutions and that each EU state could individually

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decide, on the basis of the rules of the EU Treaty, how parallel importers of medicine should be treated in case the direct import of a certain type of medicine was terminated. Finally the decision was justified as this specific legal question had already been clarified as the result of a decision by the European Court of Justice. c) Commentary

This case is an example of several newer decisions from the Danish Supreme Court1 dealing with the issue of liability of the State concerning the interpretation of regulations which are difficult to interpret. The case shows that the courts are – naturally – reluctant to impose liability on the State or other public bodies even though private companies suffer substantial losses although they acted in accordance with administrative acts from the public bodies.

4

2. Vestre Landsret (Court of Appeal) 26 April 2006, U 2007.1973 V (Vest, West): Liability of Horse Riders a) Brief Summary of the Facts

A cyclist suffered personal injury when he was riding his mountain bike on a trail in a forest where he tried to pass a horse with its rider. The rider had seen the oncoming cyclist and had moved the horse left of the trail where she had stopped the horse so that the cyclist could pass the horse on the right hand side of the trail. When she saw the oncoming cyclist, the rider shouted, “Take it easy!” so that the cyclist was aware of the horse. As the cyclist was passing the horse suddenly turned its rear end, touching the cyclist who suffered personal injury.

5

b) Judgment of the Court

The majority of the judges (2 of 3) voted that the horse rider had acted negligently by failing to secure full control over the horse as the cyclist passed it and found the horse rider liable for the cyclist’s personal injuries. The minority judge found that the horse rider had not shown negligent behaviour as she had guided the horse to a position left of the trail, had warned the cyclist who chose to continue cycling instead of either getting off his bike and pushing it past the horse or at least slowing down as he passed the horse. Furthermore this judge reasoned that there are no rules or guidelines for cyclists or horse riders in Danish forests and finally that both activities are fully legal.

6

c) Commentary

In Danish law there are several very old and historically motivated rules concerning liability for owners of animals. Most of these rules impose a no-fault strict liability. Traditionally extensive interpretations of this strict no-fault liability have not been made. The liability of horse owners is in principle a 1

For other cases concerning this issue, see U 2003.1331 H and the article by Prof. Dr. Jur. Bernard Gomard U 2004B.383.

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fault-based liability. This case, however, shows that the courts impose a strict liability on horse owners which is very close to a no-fault liability. 3. Højesteret, 23 August 2007, U 2007.2821 H: Danish State (National Survey and Cadastre, NSC) not Liable for Damage to a Ship that was Grounded despite Faulty NSC Map a) Brief Summary of the Facts

8

A ship owner grounded his ship just outside a small Danish island. He used a map drawn up by the NSC. The NSC had transferred old maps into new digitalized versions of sea maps and in this process information that the sea was not as deep at a point 800 metres away from the place where the sailor grounded his ship was missing. The ship owner had chosen to sail outside the recommended route away from the small island. The ship owner’s insurance company paid for the damage to the boat and commenced proceedings against the NSC. b) Judgment of the Court

9

The Maritime and Commercial Court of Copenhagen found that the sea map was a product as defined in the Danish Product Liability Act and for this reason the NSC was held liable for the damage to the ship on a strict liability basis. However, the Supreme Court found that the NSC was not liable as the ship owner chose a route which was not recommended and that the sea bed in the area chosen by the ship owner was described as rocky. The Supreme Court stated further that the ship owner had not sailed in this area before. The Supreme Court therefore found that the ship owner had accepted the severe risk of grounding his ship and the claim against the NSC was dismissed. c) Commentary

10

This case illustrates the complexity of the issue of the liability of public bodies. The case concerns a situation where the Danish Product Liability Act should apply. The case law rules of contributory negligence show that there must be severe negligence on the part of the claimant in cases where the defendant is strictly liable, which was the case in this decision. However the Supreme Court decided that the claimant had acted sufficiently negligently so that the claim against the defendant was dismissed. However the Supreme Court did not state to what form of liability the defendant was subject. 4. Højesteret, 23 March 2007, U 2007.1562 H: Wrongful Death of a Minor; Non-Pecuniary Loss of Mother a) Brief Summary of the Facts

11

On 8 July 2001 a 12-year-old girl (G) was admitted to a hospital after having been struck in the head by the boom of a sailing vessel. On 10 July 2001 the doctors erroneously concluded that G had made a good recovery and thus she was released from the hospital the next day. However, in the period following her release, G continued to suffer severe health problems and on 29 August

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2001 she was re-admitted to the hospital diagnosed with meningitis. G died on 31 August 2001 and in the period following her death G’s mother was unable to work due to mental anguish and grief. G’s parents claimed damages under the Danish Patient Insurance Act (Consolidated Act No. 228 of 24 March 1997) for (among other things) loss of income sustained by G’s mother. However, this claim was rejected by the Patient Insurance Association (in Danish: Patientforsikringen) and said rejection was upheld by the Patients’ Injury Board of Appeal (in Danish: Patientskadeankenævnet).

12

Thus, G’s parents instigated legal proceedings against the Patients’ Injury Board of Appeal.

13

b) Judgement of the Court

The claim for loss of income was rejected by both the High Court (East) and the Supreme Court.

14

The Supreme Court noted that Danish case law merely allows damages for emotional harm sustained as a result of physical harm (or danger of such harm) to the same person. Nevertheless, the Court said that it could not be ruled out that “in certain circumstances” damages would be awarded for emotional harm sustained by persons who merely witness the death of, for example, close relatives. In such cases, however, damages were recoverable, the Court said, only if the psychological condition could be qualified as a “proper emotional harm”. The mental anguish and grief suffered by the mother did not constitute such “proper emotional harm” and thus compensation for loss of income was not allowed.

15

c) Commentary

The decision of the Supreme Court is in itself not surprising since Danish case law has consistently rejected claims for compensation of emotional harm if such harm is not the result of physical harm (or danger of such harm) suffered by the same person. However, it is interesting that the Court for the first time explicitly admits the possibility of recovery by persons having merely sustained emotional harm by witnessing some sort of physical harm to another person.

16

The reasoning employed by the Court is not entirely clear but it appears to lay down at least two conditions which must be satisfied in order for emotional harm to be compensated as described above. First of all the term “proper emotional harm” implies that the degree of harm must exceed a certain minimum level (being above mere anguish and grief). Second, the person suffering emotional harm must have a certain (close) relationship to the person who was physically injured.

17

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C. LITERATURE 1. Jesper Perregaard, Personskadeopgørelse – hvad er status? (Settlement of Personal Injury Claims – a Status) Ugeskrift for Retsvæsen, sektion B (Weekly Law Report, sec. B) 189 U 2007B.189

18

This article deals with the status of how the changes in the Danish Tort Act of 1 July 2002 have been applied in Danish law. The Law deals with the principles of claims for compensation of personal injuries. The article is an overview of the most important court decisions which have been made since the introduction of the law. The overview is meant as a tool for practitioners dealing with compensation for personal injury cases and the article is very suitable for this purpose. 2. Hans Henrik Tausen, Erstatningsansvar i forbrugerforhold ved handel med fast ejendom (Gjellerup, Copenhagen 2nd ed. 2007)

19

This book in an updated version of the first version of the book from 2003. The area under examination is the liability that relates to turnover of real property concerning consumers. The book is a very thorough and well documented presentation of the specific practical problems arising out of this law concerning liability and insurance coverage in this area. The book is excellent as a practitioners’ handbook. 3. Bo von Eyben/Helle Isager, Lærebog i erstatningsret (DJØF Forlag, Copenhagen 2007)

20

This book is the 6th revised edition and it has for several decades been an important part of Danish tort law literature and has been used as a textbook at the law faculties of Danish universities. Furthermore it is used by practitioners at the courts, by lawyers and insurance companies. This 6th edition is revised mainly due to changes in the Danish general rules of limitation of actions and environmental law and the scope of the book has therefore been widened with this edition. 4. Vibe Ulfbeck, Produktansvarsskader i transportretten (DJØF Forlag, Copenhagen 2007)

21

This book deals with product liability issues within the field of transport law. Product liability issues can arise if damage is caused because the means of transport is defective or because the goods being transported are defective. One of the main questions is to what extent transport law rules on limitation of liability can be evaded by bringing into play the rules on product liability. The book addresses this question in many different contexts and draws an interesting picture of a field of the law which has not yet been greatly explored in European legal science.

VI. England and Wales Ken Oliphant

A. LEGISLATIVE PROPOSALS 1. Department for Constitutional Affairs, The Law of Damages, Consultation Paper 09/07 (May 2007) This consultation paper presents the Government’s proposals on several disparate areas of law relating to liability in damages, of which only the most important are highlighted here. First, in the area of wrongful death, the Government’s intention is to reform the Fatal Accidents Act 1976 to increase the class of potential claimants for both loss of financial dependency and bereavement damages. It is proposed to extend the entitlement to claim damages for loss of financial dependency to all those in fact being maintained by the deceased immediately before his/her death. At present, the dependant must fall within a fixed list of qualifying relationships. Additionally, in assessing the quantum of a loss of dependency claim, it is proposed to amend the current provision (sec. 3(3) of the 1976 Act) by which the fact or prospect of a widow’s remarriage shall not be taken into account. In future, the assessment should take account of the fact of the dependant’s remarriage (whether as widow or widower), entry into a civil partnership, or financially supportive cohabitation for at least two years following the death, but no inquiry into future prospects should be permitted as this would involve intrusive and potentially distasteful investigations. For similar reasons, it is recommended that the courts should no longer attach significance to the prospect of a breakdown in the relationship between dependant and deceased, had the latter not died. Turning from pecuniary to non-pecuniary loss, the entitlement to claim bereavement damages is to be extended beyond the currently very narrow list of qualifying relationships (parents of minor children and spouses) to cover children whose parents are killed, so long as they are under 18, and unmarried/unregistered partners who have been cohabiting for at least two years. The proposed reforms would go some way – though not the whole way – towards implementing recommendations made by the Law Commission in 1999.1

1

Law Commission, Claims for Wrongful Death, Law Com No 263 (1999).

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2

Secondly, the consultation paper records the Government’s assessment of the state of the law on liability for negligently-inflicted psychiatric illness. It is widely accepted that the law here is unsatisfactory. The Law Commission in 1998 recommended a partial statutory reform, with some relaxation of the categories of those to whom a duty of care may be owed.2 But in the present consultation paper the Government has indicated its rejection of the Law Commission proposal. Remarkably, the paper claims that the courts have been interpreting the requirements established in the leading cases in a flexible and sensible way (§ 89), and it recommends that they continue to take responsibility for developing the law flexibly and incrementally to take account of changes in medical knowledge and diagnoses. Legislation would run the risk of imposing rigid requirements which would be unable to accommodate such developments. Whether or not one agrees with that analysis, and the prescription for future (non-)action, it is evident that the courts themselves are of a wholly different mind. In last year’s Pleural Plaques case before the House of Lords (considered below),3 the Law Lords were adamant that responsibility for reformulating the boundaries of liability in this area lay with Parliament, not the judiciary.4 That was in October 2007, some five months after the consultation paper’s publication. Disappointingly, the Law Lords seemed wholly unaware of its existence.

3

Thirdly, the consultation paper considers the issue of aggravated and exemplary damages. It confirms the Government’s intention (previously announced in Parliament in 19995) not to legislate on exemplary damages in civil proceedings, notwithstanding the recommendations of the Law Commission in 1997 that punitive damages should be put on a statutory footing and their availability extended beyond the existing categories (oppressive, arbitrary or unconstitutional action by a public servant, and conduct calculated to make a profit exceeding any compensation payable to the claimant) to any case of deliberate and outrageous disregard of the claimant’s rights.6 Nor did the consultation paper accept that there was any need for legislation to clarify that the purpose of aggravated damages is compensatory, not punitive. It is interesting to note that, notwithstanding the Government’s view that “[t]he purpose of the civil law on damages is to provide compensation for loss, and not to punish” (§ 198), the consultation paper gives no consideration to the question of whether to abolish exemplary damages altogether.

4

Lastly, the consultation paper seeks views on a variety of specific issues which cannot be considered in detail here, namely, the treatment of collateral benefits 2 3

4

5 6

Law Commission, Liability for Psychiatric Illness, Law Com No 249 (1998). Rothwell v Chemical & Insulating Co Ltd, Re Pleural Plaques Litigation [2007] United Kingdom House of Lords (UKHL) 39. See especially Lord Hope’s invocation, at [54], of Lord Steyn’s cautionary advice in White v Chief Constable of South Yorkshire Police [1999] 2 Law Reports, Appeal Cases (AC) 455 at 500: “In my view the only sensible general strategy for the courts is to say thus far and no further… [and] by and large to leave any expansion or development in this corner of the law to Parliament.” Hansard HC (House of Commons) vol 337 col 502, 9 November 1999 WA (Written Answers). Law Commission, Aggravated, Exemplary and Restitutionary Damages, Law Com No 247 (1997).

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(i.e. payments or benefits in kind, including gratuitous care, which a tort victim receives as a result of the tort), the recoverability of private medical costs where public medical treatment is available, the effect on a tortfeasor’s liability that a public body has a statutory obligation to provide the claimant with care or accommodation, and the calculation of damages where alterations to the claimant’s home as a result of personal injury, or his purchase of a new home, result in an increase or decrease in the value of his capital assets.

B. CASES 1. Rothwell v Chemical & Insulating Co Ltd, Re Pleural Plaques Litigation [2007] UKHL 39, [2008] 1 AC 281, [2007] 4 All England Law Reports (All ER) 1047: Actionable Damage; Psychiatric Illness7 a) Brief Summary of the Facts

Each of the four claimants had been exposed to asbestos in the course of their employment with their respective employers, the defendants in this appeal. They subsequently developed pleural plaques (fibrous tissues on the membrane of the lung). Pleural plaques are evidence of exposure to asbestos but are not harmful in themselves, nor do they lead themselves to other asbestos-induced conditions (e.g. asbestosis or mesothelioma). They are, however, an indicator of an enhanced risk of developing such conditions in the future. The claimants claimed damages on the basis that the pleural plaques were themselves a compensatable injury (in other words, that they were actionable damage), or alternatively that the plaques constituted actionable damage when combined with (1) the risk of future disease and (2) the claimants’ anxiety about their future. In one of the four appeals, Grieves v FT Everard, a further issue arose because the claimant had suffered not merely anxiety but clinical depression in consequence of his becoming aware of the risk of future illness. Clinical depression is a recognised psychiatric illness and there was no doubt that this constituted actionable damage. The question was rather whether his employers owed him a duty of care in respect of psychiatric illness caused by his anxiety at the risk of future illness. The Court of Appeal found against the claimants on all points,8 and the test cases subsequently came before the House of Lords. In the lower courts, the claimants had conceded that the pleural plaques were not damage in themselves, but that concession was withdrawn before the Law Lords.

5

b) Judgment of the House of Lords

The House of Lords unanimously dismissed the claimants’ appeals against the decision of the Court of Appeal. The pleural plaques were not actionable damage, either in themselves or in combination with the claimants’ increased risk 7

8

Noted by M. Jones (2008) 24 Professional Negligence (PN) 13 and J. Steele [2008] Cambridge Law Journal (CLJ) 28. [2006] England and Wales Court of Appeal, Civil Division (EWCA Civ) 27, [2006] 4 All England Law Reports (All ER) 1161. Noted in H. Koziol/B.C. Steininger (eds.), European Tort Law 2006 (2008) 155 ff.

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of future disease and their consequent anxiety. Furthermore, the depressive illness suffered by the claimant Grieves, although it did constitute actionable damage, fell outside the (limited) scope of the employer’s duty of care in respect of psychiatric illness. The reasoning of the Law Lords on each of these points will now be summarised.

7

First, the Law Lords concluded that pleural plaques did not in themselves constitute actionable damage because they were asymptomatic, not visible or disfiguring, and not the first stage of any-asbestos related disease.9 To Lord Hoffmann10 and Lord Hope,11 the facts warranted the application of the maxim de minimis non curat lex, but Lord Scott12 expressly denied that the maxim applied to the facts of the case, resting his decision on the grounds that asymptomatic pleural plaques do not constitute damage and therefore cannot sustain a tort action. In his opinion, the plaques were to be contrasted with a scratch on the skin which can – conceptually – qualify as damage but may be too trivial to constitute damage sufficient to complete a cause of action. Neither Lord Rodger nor Lord Mance directly addressed the maxim. (The latter expressly agreed with the – contradictory! – reasons of both Lord Hoffmann and Lord Scott.13)

8

Secondly, the Law Lords rejected the claimant’s “aggregation theory”. It was established law that neither risk alone14 nor anxiety at the risk of harm15 was actionable damage, and one could not take three conditions falling short of actionable damage and, by adding them together, produce a compensatable injury. As Lord Scott tersely observed: “Nought plus nought plus nought equals nought.”16 The situation under consideration was distinguishable from that where the claimant has actually suffered actionable damage, and so does have a cause of action: in such a case, the claimant may recover damages for the risk of further injury from the same wrongful act or omission, and (it seems) for anxiety consequent on the injury that established the cause of action. There was no need to buttress this conclusion with policy arguments of a consequentialist nature such as found favour with a majority of the Court of Appeal.17 These were in any case “rather speculative”.18 9

10 11

12 13 14 15 16

17

18

At [11], per Lord Hoffmann, at [50], per Lord Hope, at [68], per Lord Scott, at [88], per Lord Rodger, and at [103], per Lord Mance. At [8]. At [47]. But note his observation, at [44], that the literal wording of the maxim “is liable to mislead”. At [73]. At [103]. See Gregg v Scott [2005] 2 AC 176. See Hicks v Chief Constable of the South Yorkshire Police [1992] 2 All ER 65. At [73], per Lord Scott. Cf. Lord Hope, at [42], who stated that it would not “do justice to… a genuine problem of legal analysis” to dismiss the appellants’ argument by applying that simplest of mathematical formulae. At [17], per Lord Hoffmann, and at [50], per Lord Hope. The Court of Appeal had been influenced by (amongst other things) its belief that the costs of litigation in such cases were likely to be disproportionate to the damages recoverable: [2006] 4 All ER 1161 at [67]. At [17], per Lord Hoffmann.

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Lastly, the foreseeable risk that the fourth claimant, Everard, might in future suffer a physical disease did not relieve him of the burden of showing that his psychiatric illness was reasonably foreseeable. On the facts, it was not reasonably foreseeable from the defendant employer’s perspective that the claimant would suffer a depressive illness because of the employer’s breach of duty. His injury therefore fell outside the scope of the employer’s duty of care. The House of Lords declined to extend the application of the rule in Page v Smith,19 where the claimant recovered damages for unforeseeable psychiatric illness triggered by a minor car accident, the Law Lords accepting there that proof of the foreseeability of some injury, whether physical or psychiatric, made the claimant a “primary victim” of the defendant motorist’s negligence and was sufficient in itself to establish a cause of action. Page v Smith was a case where the claimant had developed a psychiatric illness as an immediate response to a past event involving an (unrealised) risk of instant physical harm, and did not apply to cases of psychiatric illness arising from stress caused by discovery of a continuing risk of future physical harm. Two members of the House of Lords expressly reserved their opinion on the correctness of the decision in Page v Smith.20 But, for the time being, it was enough to recall Lord Steyn’s cautionary advice in another previous decision21 that the difficulties inherent in the present law required the courts to abstain from further expansion of liability for psychiatric illness, and to leave this as a matter for Parliament.22

9

Lord Scott stated that the conclusion that there was no cause of action struck “a somewhat discordant note”, as it seemed to him that the negligent employers must have been in breach of their contractual duty to their employees, and liability for breach of contract does not require proof of damage but arises once there is sufficient proof of the breach. In his view,23

10

“it might be well arguable that the breach of a contractual duty to provide a safe working environment for employees, an environment where reasonable precautions had been taken to avoid their exposure to injurious asbestos dust, would justify an award of contractual damages to compensate the employees for subjecting them to the risk of contracting in the future a life-threatening asbestos related disease.” However, the claimants had relied exclusively on a cause of action in tort, and Lord Scott (followed on this by three other members of the House of Lords24) therefore expressly reserved his opinion on any possible claim under the contract of employment.25

19 20 21 22 23 24 25

[1996] 1 AC 155. At [52], per Lord Hope, and at [104], per Lord Mance. White v Chief Constable of South Yorkshire Police [1999] 2 AC 455, 500. See fn. 4 above. Lord Steyn’s dictum was expressly invoked by Lord Hope, at [54], and Lord Rodger, at [95]. At [74]. Lord Hope at [59], Lord Rodger at [82], and Lord Mance at [105]. At [74].

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c) Commentary

11

The actionability of pleural plaques was accepted in three High Court decisions in the 1980s,26 following which insurers regularly settled claims on that basis.27 In a case such as those before the Law Lords, a claimant might have expected to recover £4,000 to £6,000 in “provisional damages”,28 entitling him to return to court to seek further compensation if he should subsequently suffer from asbestosis or mesothelioma. Even if the number of successful claims since the 1980s were to prove substantial – I have not been able to track down reliable statistics – the total amount paid out in compensation cannot be very high. This decision is not going to save the insurance industry a lot of money!

12

The House of Lords had previously considered the concept of actionable damage in the context of the law of limitation of actions. In Cartledge v E Jopling & Sons Ltd,29 the plaintiffs had undoubtedly suffered actionable injury (pneumoconiosis) as the result of toxic exposure in the workplace, but its onset was only gradual, and the question was when the physical effects to which the plaintiffs were subjected constituted such injury. Different formulations of the relevant requirement are to be found in the opinions delivered in the House of Lords – for example, that there should be “personal injury beyond what can be regarded as negligible”30 or “real damage as distinct from purely minimal damage”.31 On the facts, the House of Lords found that the onset of pneumoconiosis amounted to actionable damage, completing the plaintiffs’ causes of action and triggering the relevant limitation period. It was immaterial that the plaintiffs were unaware they had the condition – which, in its early stages, could not even be detected on X-ray examination – and experienced no symptoms.32 It seems that the factors distinguishing such injury from the pleural plaques in the present case included its negative effects on lung capacity (which would be apparent in situations of unusual exertion), susceptibility to other conditions, and life expectancy, and its potential to advance without further exposure.33

13

Turning to the other main issue before the House of Lords – liability for negligently-inflicted psychiatric illness – it is somewhat depressing to see the Law Lords reiterate their previously-expressed view34 that the law in this area is beyond judicial repair and that further development should be left to the legislature. It is hard not to see this as an abnegation of judicial responsibility. In fact, when the Law Commission considered liability for psychiatric illness 26

27 28

29 30 31 32 33 34

See Church v Ministry of Defence (1984) 134 New Law Journal (NLJ) 623, Sykes v Ministry of Defence, The Times, 23 March 1984, and Patterson v Ministry of Defence [1987] Current Law Yearbook (CLY) 1194. It was in the latter case that the “theory of aggregation” had emerged. At [6], per Lord Hoffmann, at [43], per Lord Hope, and at [79], per Lord Rodger. At [43], per Lord Hope, citing the opinion of Lord Phillips CJ in the Court of Appeal: [2006] 4 All ER 1161 at [107]. [1963] AC 758. [1963] AC 758, 772, per Lord Reid. [1963] AC 758, 774, per Lord Evershed. The law of limitation has now been amended: see Limitation Act 1980, sec. 11. See [8], per Lord Hoffmann. See fn. 4 and 21 above.

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and proposed legislative reform,35 it expressly refrained from recommending legislation dealing specifically with primary victims, taking the view that it was for the courts to resolve the existing difficulties, in particular, by considering whether practical significance should still attach to the distinction between primary and secondary victims.36 Additionally, as noted above (no. 1 ff.), the Government announced in May 2007 – a month before the Lords hearing in the present case, and 5 months before the decision was handed down – that it has no present intention to legislate on liability for psychiatric illness, and that further developments should be for the courts. We therefore have an impasse, with neither the courts nor the legislature willing to take responsibility for the resolution of such difficulties and uncertainties as exist in the current law. On the briefly mentioned question of the possible availability of a claim for breach of contract, it is enough to note that – notwithstanding the theoretical distinctions between liabilities in tort and liability for breach of contract – it would surely be undesirable as a practical matter if the existing law of employers’ liability were to be radically reshaped by the simple expedient of changing the cause of action. I should be very surprised if subsequent decisions allow contractual damages to be awarded for losses of the type that were considered by the House of Lords in the present case.

14

2. Cookson v Novartis Grimsby Ltd [2007] EWCA Civ 1261: Causation a) Brief Summary of the Facts

The claimant was diagnosed with bladder cancer in 2001, following his exposure to carcinogens in his employment in the defendant’s dye plant from the 1960s on. The exposure was in breach of the employer’s duty of care. The claimant had been a moderate smoker for 20 years, giving up in 1980. Both the smoking and the toxic workplace exposure were capable of causing bladder cancer and would have had at least an additive, and perhaps multiplicative, effect. The experts disagreed whether it was the exposure or the smoking that caused the claimant’s condition. The trial judge allowed the claimant’s action for damages, preferring the view that, of the two contributory causes, the occupational exposure had been the major contributing cause of the cancer, contributing 70% of the total risk. The defendant appealed to the Court of Appeal.

15

b) Judgment of the Court

The Court dismissed the appeal. On the evidence, the occupational exposure more than doubled the risk of bladder cancer attributable to the smoking, and the natural inference to draw was that, if that exposure had not occurred, the claimant would not have developed bladder cancer. It was not necessary to grapple on the facts with difficult and as yet unsettled aspects of the law on causation, for example, the scope and effect of the doctrines of material con35 36

Law Commission (fn. 2). Ibid., § 5.54.

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tribution to injury37 and material contribution to risk.38 Nor was this a case for the application of a dictum of Lord Hoffmann39 – to the effect that liability for material contributing to risk could not arise where one source of the risk was toxic exposure in the workplace and the other was smoking – because he evidently had in mind that the two factors would act on the body in different ways. Here, by contrast, the evidence was that the carcinogens in cigarette smoke act on the body in the same way as the carcinogens in the occupational exposure. It seemed to the Court of Appeal that it was “highly arguable” that the doctrine of material contribution to risk should apply to bladder cancer, but it was not necessary to resolve the issue in the present case because the “but for” test was clearly satisfied on the facts, and there was no need to consider liability under any alternative test. That would have been necessary only if the claimant’s occupational exposure to carcinogens had contributed to the risk of his developing bladder cancer but to a lesser extent than the contribution made by his smoking. That was not the situation before the court. c) Commentary

17

After a lengthy review of the evidence, the Court’s conclusion is rather abruptly stated and does not give express consideration to an important issue, namely whether the defendant’s liability in such a case is for full or merely proportional damages. In other words, should the damages recovered by the claimant be reduced by 30% to reflect the risk of bladder cancer arising from his own smoking? The present authorities provide no clear guidance. Admittedly, proportional liability is established already in two comparable situations: first, under the doctrine of material contribution to injury, where the claimant’s injury is divisible,40 and, secondly, under the doctrine of material contribution to risk (the Fairchild exception41), whether the injury is divisible or indivisible.42 But – putting the Fairchild exception aside – indivisible injuries normally attract full damages, even if there are a number of different contributory causes. So the result here seems to accord with general principle, even if the reasoning of the Court here is cursory to the point of non-existence.

18

More problematic is the Court’s view that the Fairchild exception would have governed the outcome of the case if the risk arising from the workplace exposure had been less than the risk from the smoking. Correctly speaking, the exception applies in cases of alternative causation – where either one factor or another causes the injury, but it is unknown which – and not in cases of additional causation where two or more factors act cumulatively. The present case falls squarely in the latter category: the occupational exposure and the smoking 37 38

39 40 41 42

Bonnington Castings Ltd v Wardlaw [1956] AC 613. Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22, noted in H. Koziol/B.C. Steininger (eds.), European Tort Law 2002 (2003) 144 ff. Barker v Corus (UK) plc [2006] UKHL 20 at [24]. Holtby v Brigham & Cowan (Hull) Ltd [2003] 3 All ER 421 (asbestosis). Following Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22. Barker v Corus (UK) plc [2006] UKHL 20 (mesothelioma), noted in Koziol/Steininger (fn. 8) 162 ff. Reversed for mesothelioma claims only by Compensation Act 2006, sec. 3, noted in Koziol/Steininger (fn. 8) 1 ff.

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had an additive, perhaps even multiplicative, effect. In such a case, following Bonnington Castings Ltd v Wardlaw,43 the claimant establishes a cause of action by demonstrating that the defendant’s breach of duty made a material (i.e. more than negligible) contribution to his injury. This does not require that the “guilty” contribution should be greater than the “innocent” contribution. So the claimant in the present case should have been entitled to succeed even if the risk from the workplace exposure had been less than the risk from his smoking, and his compensation determined in the light of the principles discussed above. 3. OBG Ltd v Allan [2007] UKHL 21, [2008] 1 AC 1, [2007] 4 All ER 545: Intentional Infliction of Economic Loss44 a) Brief Summary of the Facts

This was a conjoined appeal of three separate actions. In Mainstream Properties Ltd v Young, two dishonest employees of the claimant property development company diverted a lucrative land purchase to their own joint venture with the defendant financier. They could not have proceeded with the purchase without the latter’s assistance. The financier asked the two rogues if the deal would conflict with their obligations to the claimant, and they told him (untruthfully) that it would not, and he believed them. The property company brought proceedings against the financier on the basis that he was liable for procuring breach of the rogues’ contracts of employment.

19

In OBG Ltd v Allan, the defendant receivers were purportedly appointed to manage the affairs of the claimant company, which was experiencing dire financial difficulties. The appointment proved to be invalid. The company went into liquidation and sued the receivers for loss suffered as a result of their wrongful interference with the company’s contractual relations, and for conversion of its contracts.

20

Douglas v Hello!, appears to be the final chapter in the long-running saga of the wedding photographs of Hollywood stars Michael Douglas and Catherine Zeta-Jones. In fact, the celebrity couple were no longer involved in the case by the time it reached the House of Lords, which was concerned only with the rights and obligations of the magazines that published the pictures: OK! magazine, who had paid £1 million for the exclusive rights, and Hello! magazine, who acquired covertly and unlawfully taken film of the wedding. The Court of Appeal had ruled that OK! had rights only over the photographs whose publication the couple had authorised, and not the unauthorised photographs.45

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43 44

45

[1956] AC 613. Noted by H. Carty (2007) 15 Torts Law Journal (TLJ) 283, S. Douglas (2008) Lloyd’s Maritime and Commercial Law Quarterly (LMCLQ) 129, S. Green (2008) 71 Modern Law Review (MLR) 114, J. Lee (2007) 15 Tort Law Review (Tort L Rev) 172, J. O’Sullivan [2007] CLJ 503, B. Simpson (2007) 36 Industrial Law Journal (ILJ) 468, and P. Watts (2007) 123 Law Quarterly Review (LQR) 519. Douglas v Hello! Ltd (No. 3) [2005] EWCA Civ 595, noted in H. Koziol/B.C. Steininger (eds.), European Tort Law 2005 (2006) 239 ff.

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OK! appealed to the House of Lords, relying in the alternative on breach of confidence and the tort of causing loss by unlawful means. b) Judgment of the Court

22

The House of Lords began by analysing the conceptual basis of liability for the intentional infliction of economic loss. It rejected what it termed the “unified theory” of the economic torts, ruling that there are in fact two distinct principles of liability underpinning the various causes of action, not one single underlying principle. The two principles are (1) procuring breach of contract, a tort of secondary liability in which the tortfeasor may be regarded as accessory to the liability of the contract-breaker, and (2) intentionally causing loss by unlawful means, a “stand-alone” tort of primary liability, which arises irrespective of the liability of anyone else. The elements of the two liabilities are different in a number of respects.46 First, as regards the intention which needs to be shown: in the unlawful means tort, the defendant must intend to cause damage, but in the accessory tort an intention simply to cause the breach of contract is sufficient. In fact, in the accessory tort, recklessness as to whether the procured conduct is in breach of contract is sufficient for liability (e.g. where the defendant turns a blind eye towards the possible breach). This view, advanced by Lord Denning in a previous case,47 had been rejected by the Court of Appeal in Mainstream Properties Ltd v Young,48 but the House of Lords said that Lord Denning’s approach had been followed without difficulty for a long time and saw no reason to change the law in this regard. Secondly, the accessory tort simply requires the defendant’s participation in another person’s breach of contract, but the tort of primary liability requires him to have acted in a manner which is independently unlawful. In the view of a majority of the House of Lords, clarifying another point of uncertainty, “unlawful” entails civil actionability, and it is not enough that the defendant’s conduct gives rise to criminal liability or involves purely regulatory illegality. Thirdly, only the accessory tort requires that the claimant has suffered loss in relation to a subsisting contract. Liability in the unlawful means tort may arise in respect of gains the claimant would have expected to make under future contracts he would have expected to enter had the defendant not employed unlawful means against him.

23

The Law Lords noted that it followed from their reasoning that there can be no liability for bare interference in contractual relations, contrary to another dictum of Lord Denning.49 In such a case, there is no breach of contract to which the interferer can be joined as accessory; nor is there any element of unlawfulness sufficient to establish the primary liability.

24

Applying these principles to the facts of the three conjoined appeals before them, the Law Lords reached the following conclusions. 46 47 48 49

See further [8], per Lord Hoffmann. Emerald Construction Co Ltd v Lowthian [1966] 1 All ER 1013. [2005] EWCA Civ 861; [2005] Industrial Relations Law Reports (IRLR) 964. Torquay Hotel Co Ltd v Cousins [1969] 2 Ch 106, 138.

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In Mainstream Properties Ltd v Young, the House of Lords rejected the claim against the defendant financier of the property deal. His honest belief that there would be no breach of contract was inconsistent with any intention on his part to induce such a breach. It mattered not that his belief might have been muddle-headed and illogical.50

25

The House of Lords also rejected the claim in OBG Ltd v Allan. There was no tort of bare interference with contractual relations. It was necessary to show that the defendant receivers had either procured a breach of contract, or that they had used unlawful means with the intention of injuring the claimant. Here, their invalid appointment was not “unlawful” in the necessary sense, because (in the view of the majority Law Lords) it was not itself a legal wrong that was actionable against them in damages. Nor did the receivers have any intention to injure OBG. They could not therefore be liable in the tort of unlawful means, and – as they had at worst interfered with the claimant’s contracts, without causing their breach – they were not liable under the tort of procuring contractual breach either. Nor (Lord Nicholls and Baroness Hale dissenting) were they liable in the separate tort of conversion: there cannot be conversion of intangible property.

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In Douglas v Hello!, a majority of the House of Lords allowed OK!’s appeal (Lord Nicholls and Lord Walker dissenting), but under the law of confidence, not the economic torts. OK! had paid £1 million for the benefit of an obligation of confidence on those present at the wedding in respect of any photographs of the wedding, and there was no reason why they should not be entitled to enforce that obligation. The question of liability under the economic torts therefore did not strictly speaking call for consideration, but their Lordships indicated strong reservations about the availability of any such claim on the facts. Though Hello! was guilty of using unlawful means against the celebrity couple (breach of confidence) and had the necessary intention to cause loss to OK! (as this was the inevitable consequence of Hello!’s “spoiler”), it did nothing to interfere with the couple’s liberty to deal with OK! or to perform their contractual obligations. It merely made OK!’s contractual rights less profitable.

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c) Commentary

In this judgment, the House of Lords has authoritatively restated the conceptual basis of liability for the intentional infliction of economic loss and settled several important issues that have for some time been the subject of dispute. The judgment must now be regarded as the starting point for modern consideration of the so-called “economic torts”.

28

Some background may be useful. English law recognises a wider liability for the intentional infliction of economic loss than it does for negligence. There is no general principle of liability, but instead a loose confederation of “economic torts” whose origins can be traced back several hundred years. In Tarleton v

29

50

At [202], per Lord Nicholls.

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M’Gawley,51 dating from 1790, for example, the master of a trading ship anchored off the coast of West Africa fired his cannon to scare away local traders who were approaching a rival vessel by canoe. The owner of the rival ship successfully sued for damages on the basis that he had suffered loss of trade by reason of the defendant’s threats of unlawful violence. Another landmark case dates from 1853,52 and was an action between the owners of two rival London opera houses, who were competing for the services of a star singer, Mademoiselle Johanna Wagner, niece of the composer Richard. Miss Wagner was under contract to sing for Lumley at the Queen’s Theatre, but was given a better offer to sing for Gye at Covent Garden instead. Lumley succeeded in getting judicial recognition of an apparently new tort – intentional procurement of a breach of contract – though his claim for damages failed subsequently, for reasons that need not concern us now.

30

In the period since these historical landmarks, the economic torts have proliferated, and most modern treatments include at least the following different liabilities: procuring breach of contract, both direct and indirect; intimidation (the tort recognised in Tarleton v M’Gawley, the case of the cannon fire on the West African traders); conspiracy, itself taking more than one form; and intentional interference with trade or business.53 The most significant question for the Law Lords in the present case was whether there was any unified theory that (as suggested by a number of academic commentators54) underpinned the various causes of action and required the recognition of requirements that were common to all. Rejecting the submission, the House of Lords identified two separate bases for (the majority of) the economic torts, namely, the torts recognised respectively in Lumley v Gye (procuring breach of contract) and Tarleton v M’Gawley (causing economic loss by unlawful means), and ruled that there was no need to insist on a uniform approach to the elements of each. This represents an important clarification.

31

Nevertheless, a number of uncertainties remain. First, what is the scope of the exclusion of liability in Douglas v Hello! on the basis that the defendants’ conduct did nothing to interfere with the celebrity couple’s liberty to deal with OK! or to perform their contractual obligations? The reasoning here, it seems to me, is somewhat novel and rather opaque, and we shall have to see what later cases make of it. Secondly, what is the status of the tort of conspiracy to injure (or “simple” conspiracy)? Here, liability does not depend upon the use of unlawful means, but merely upon the conspirators’ “predominant purpose” to injure the claimant. It therefore falls outside the two-fold categorisation of causes of action adopted by the House of Lords in OBG v Allan. Nevertheless, the Law Lords said nothing to cast doubt on its continued legitimacy, even if only as an exception to the normal requirement of unlawfulness. Lastly, is 51 52 53

54

(1790) 1 Peake New Practice Cases (NPC) 270. Lumley v Gye (1853) 2 Ellis & Blackburn’s Queen’s Bench Reports (E & B) 216. See, e.g. K. Oliphant, The Economic Torts, in: K. Oliphant (ed.), The Law of Tort (2nd ed. 2007). E.g. T. Weir, The Economic Torts (1997).

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“unlawful” to be given a common definition across the various specific torts of unlawful means? This would have appeared the natural interpretation of the opinions delivered in the House of Lords, but it has since been rejected by a differently-constituted panel of Law Lords in a case on which I shall report next year.55 For now, it is enough to note that the rationalisation and re-conceptualisation effected by the decision in OBG v Allan may not be as complete as may have appeared at first glance.

C. LITERATURE In addition to the works considered separately below, a number of other tort law books and articles published in 2007 merit attention. There were editions of two leading textbooks: Street on Torts,56 given an extensive and very effective overhaul by the present editor, and Markesinis and Deakin.57 Also in a new edition is the Lunney and Oliphant sourcebook,58 which has a new rival this year authored by J. Steele.59 The author of this report also acted as general editor for the new edition of the practitioner’s reference work, The Law of Tort, in the Butterworths Common Law Series.60

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Amongst the most significant articles to appear in 2007 were three pieces on liability for negligence, one dealing with new forms of damage (focusing in particular on negligent imprisonment, wrongful conception and educational negligence),61 one on liability for psychiatric illness,62 the other considering the negligence jurisprudence of the House of Lords.63 The House of Lords decision in OBG Ltd v Allan (supra no. 19 ff.) provided the springboard for an insightful analysis of accessory liability in tort law and in equity.64 Vicarious liability, too, attracted scholarly attention.65 Remedies were the focus of several important articles, one by a current Law Lord, the text of a stimulating lecture on the purposes served by the award of damages;66 others dealt with restitution for wrongs,67 monetary awards for wrongful disclosure of private

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55

56 57 58

59 60 61 62 63

64

65

66 67

Customs and Excise Commissioners v Total Network SL [2008] UKHL 19, [2008] 2 All ER 413. J. Murphy, Street on Torts (12th ed. 2007). S. Deakin/A. Johnston/B. Markesinis, Markesinis and Deakin’s Tort Law (6th ed. 2007). M. Lunney/K. Oliphant, Tort Law: Text and Materials (3rd ed. 2008). (This was published in October 2007 but given a 2008 copyright date for reasons known only to the publishers.) J. Steele, Tort Law: Text, Cases and Materials (2007). K. Oliphant (ed.), The Law of Tort (2nd ed. 2007). D. Nolan, New forms of damage in negligence, (2007) 70 MLR 59. P. Handford, Psychiatric injury in breach of a relationship, (2007) 27 Legal Studies (LS) 26. K. Stanton, Decision making in the tort of negligence in the House of Lords, (2007) 15 Tort L Rev 93. S. Baughen, Accessory liability at common law and in equity – “The redundancy of knowing assistance” revisited, [2007] LMCLQ 545. D. Brodie, Enterprise liability: justifying vicarious liability, (2007) 27 Oxford Journal of Legal Studies (OJLS) 493. Rt Hon Lord Scott of Foscote, Damages, [2007] LMCLQ 465. C. Rotherham, The conceptual structure of restitution for wrongs, [2007] CLJ 172.

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information,68 and injunctions.69 A major re-evaluation of the debate about “compensation culture” provided one of the year’s highlights.70 Lastly, we may note one final article,71 which critically analyses the reform of clinical negligence compensation effected by the NHS Redress Act 2006.72 1. A. Beever, Rediscovering the Law of Negligence (Hart Publishing, 2007)73

34

The author presents an account of negligence law as an expression of corrective justice, in opposition to rival accounts which emphasise the role played by policy. In a nutshell, his argument is that liability in negligence properly arises when, and only when, the claimant suffers injury to a protected right because of the defendant’s creation of an unreasonable risk of the same type. The reasonable foreseeability of damage thus plays a crucial role in linking the defendant’s wrong with the claimant’s injury. Where injury is reasonably foreseeable, restrictions of liability under the heads of duty of care, remoteness of damage, etc., may still be justified insofar as they indicate situations where the claimant has no right worthy of protection (e.g. in the area of pure economic loss). Otherwise, they are to be rejected as unprincipled. Beever’s account is presented with great conviction and frequent recourse to philosophical devices, allusions and quotations. I cannot confess to being wholly convinced by the analysis, but it is certainly never dull, and there is something to stimulate, provoke, puzzle or infuriate on almost every page. It can be firmly recommended to those wanting a taste of an increasingly influential strand of Anglo-Commonwealth tort scholarship. 2. F. Giglio, The Foundations of Restitution for Wrongs (Hart Publishing, 2007)

35

In a revised version of his doctoral dissertation, the author develops a theory of restitution for wrongs as corrective justice, drawing upon comparative research which takes in English, German, Italian and Roman law. In part, the book is a response to the groundbreaking work of J. Edelman (Giglio’s contemporary as a doctoral student in Oxford) in his monograph entitled Gain-Based Damages (2002). The analysis stretches over proprietary and intellectual property wrongs, breach of contract, breach of fiduciary duty, and breach of confidence/ the violation of personality rights. Regrettably, it is beyond my competence to comment upon the work’s quality.

68 69 70

71

72 73

N. Witzleb, Monetary remedies for breach of confidence in privacy cases, (2007) 27 LS 430. J. Murphy, Rethinking injunctions in tort law, (2007) 27 OJLS 509. A. Morris, Spiralling or stabilising? The compensation culture and our propensity to claim damages for personal injury, (2007) 70 MLR 349. See also D. de Saulles, The media circus – how injuries make the news, [2007] Journal of Personal Injury Law (JPIL) 209. A.-M. Farrell/S. Devaney, Making amends or making things worse – clinical negligence reform and patient redress in England, (2007) 27 LS 630. Noted in Koziol/Steininger (fn. 8) 154 f. Reviewed by P. Giliker, (2008) 28 LS 140.

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3. V. Harpwood, Medicine, Malpractice and Misapprehensions, BioMedical Law and Ethics Library (Routledge-Cavendish, 2007) This timely and useful contribution to the growing literature on “compensation culture” focuses on the healthcare sector and seeks to account for the large increase in the number of clinical negligence claims in the last 30 or more years. As other commentators too have pointed out, various social actors (the media, politicians, insurers, etc.) may have an interest in presenting the outcome as undesirable, and it is by no means easy to separate “compensation culture” myth from the reality. In Harpwood’s view, the historic rise in claims numbers is attributable to a complex and as yet dimly understood set of factors, no single one of which can be identified as the main cause. At the same time, contrary to popular belief, there is still a culture of under-claiming against healthcare professionals, with many patients injured by medical error taking no action at all against those responsible for their injury. Harpwood does a good job of setting out the facts for her intended readership, which encompasses healthcare professionals as well as medical lawyers, and can be applauded for putting together a readable and informative volume, the final chapter of which contains critical analysis of the NHS Redress Act 2006 and the author’s own tentative recommendations for further action.

36

4. L. Hoyano/C. Keenan, Child Abuse: Law and Policy Across Boundaries (Oxford University Press, 2007) This impressively detailed study considers legal responses to child abuse in the key areas of family, criminal and tort law. Its main focus is English law, but there is substantial comparative analysis of the law from other common law or mixed jurisdictions (Canada, Australia, New Zealand, the United States and Scotland). The section on tort law considers both the liability of the abuser (e.g. for battery or the intentional infliction of mental suffering) and the liability of third parties who fail to protect a child, dealing specifically with the passive parent or carer, institutions such as care homes, and child protection agencies/social services. Sometimes the level of detail comes at the expense of easy reference, but overall this ranks as a major achievement.

37

5. L. McNamara, Reputation and Defamation (Oxford University Press, 2007) The author starts with the observation that the aim of the tort of defamation is to protect reputation, and argues that the common law has no satisfactory answer to the question of what is defamatory because it lacks an adequate theory of reputation. Drawing upon sociological and political-philosophical literature, he proposes a new theory of reputation in terms of the moral judgments that a community makes about its members. Every national system contains numerous communities and sub-communities with different and sometimes conflicting criteria for moral judgment, and these must all be taken into account in any legal framework that seeks to protect reputation. It follows that the current English test of what is defamatory, based on the general standards of the community, should be discarded in favour of a sectional standards test – in-

38

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corporating the opinions of substantial and respectable minorities – that more effectively takes account of diversity. Further, it should not make a statement defamatory that it causes its object to be shunned or avoided, or exposes him to ridicule (as the current law allows), as such statements affect only one’s freedom to associate with others and self-worth, not reputation. McNamara has produced a stimulating and valuable contribution to the literature, though his account of reputation is somewhat limited by his decision to focus exclusively on matters of moral worth, leaving on one side questions of (e.g.) professional and commercial competence. An unanswered question is whether the rejected tests (causing a person to be shunned or avoided, or exposing him to ridicule) might be justified in terms of a broader (not exclusively moral) theory of reputation. It must also be noted that the author assumes without substantial argument that defamation should protect only reputation, so his account may be less persuasive to those who consider that the tort could be legitimately used to protect a wider range of personality interests. 6. J.W. Neyers/E. Chamberlain/S.G.A. Pitel (eds.), Emerging Issues in Tort Law (Hart Publishing, 2007)

39

The list of contributors to this excellent collection reads like a roll-call of leading tort scholars in the common law world (especially the British Commonwealth). P. Cane develops a distinction between the general and special parts of tort law. L. Klar writes on breach of statutory duty, S. van Pragh on the liability of children and their parents, E. Adkin-Tettey on claims of involuntary parenthood, M. Jones on liability for psychiatric damage. Then a quartet of essays deals with pure economic loss. P. Benson questions whether the decision of the House of Lords in White v Jones (solicitor’s liability to beneficiaries for negligence in preparation of a will) represents Canadian law. S. Waddams considers claims by third parties following a breach of contract, S. Todd policy issues in defective property cases, and D. Partlett defective structures and economic loss in the United States. I. Gilead then develops a concept of “harm screening”, before R. Wright analyses acts and omissions as positive and negative causes, and V. Black advances a theory of “decision causation”. Essays follow on non-delegable duties (R. Stevens and J. Murphy) and vicarious liability (D. Wingfield and P. Giliker), before A. Tettenborn asks, What is a loss?, leading on naturally to K. Amithalingam’s paper on the “changing face” of the gist of negligence. The collection then moves from Damage to Damages, with R. Lewis’s discussion of periodical payments. The end approaches but there is still space for a pair of papers on intentional wrongdoing (K. Oliphant and D. Réaume) and – lastly – R. Glofcheski makes the case for the distinctiveness of Hong Kong tort law. The editors are to be congratulated on putting together such a stimulating and diverse volume of essays. 7. N. Priaulx, The Harm Paradox: Tort Law and the Unwanted Child in an Era of Choice, Bio-Medical Law and Ethics Library (RoutledgeCavendish, 2007)

40

Writing in a lively and engagingly discursive style, Priaulx tackles the twin concepts of wrongful conception and wrongful birth from an explicitly gen-

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dered perspective. She quotes extensively from the literature of feminist legal studies, and feminist theory more broadly, with excursions into medical sociology too. The foundational claim in her argument – which she presents most persuasively – is that the English courts have erred by conceiving of pregnancy in primarily physical terms, as a form of, or akin to, personal injury, rather than as an interference with reproductive autonomy. The error has made it easier for the courts to separate the harm associated with pregnancy (pain and suffering, etc.) from the economic costs consequent on the birth of the “unwanted” child, and to reject any liability for the latter. Insofar as the woman’s autonomy is considered at all, it is used against her – her choice to have the child, and not to terminate the pregnancy, being taken as an indication that the birth is not harmful at all, but a benefit. As Priaulx justly points out, such perceptions reflect stereotyped and pernicious attitudes towards women and fail to acknowledge the difficult, sometimes desperate, conditions under which such choices may have to be made. All in all, this is a fine addition to an excellent and attractively produced series (see also no. 36 above). 8. R. Stevens, Torts and Rights (Oxford University Press, 2007)74 The author sets out to defend a conception of the law of torts as fundamentally concerned with the infringement of rights, rather than with liability for culpably causing loss. His emphasis on the primary rights that torts protect is rather similar to that of A. Beever in the work reviewed above (no. 34), but, in contrast with Beever, Stevens expressly disavows reliance upon any theory of corrective justice to determine the content of the primary rights that are central to both accounts. Throughout, Stevens refers to the law of torts (plural), as opposed to tort (singular), because he believes that the primary rights which tort remedies protect are so various as to preclude any general theory of the wrong that generates the secondary right to compensation. Stevens writes clearly, fluently, and often vigorously. To me, his account is compelling if not always utterly convincing. I am yet to be persuaded that the loss-based model of the law of tort(s) that Stevens opposes is to be categorically distinguished from the rights-based model that he defends, rather than merely reflecting a different definition of the primary rights whose infringement triggers the tort remedy. From the perspective of the comparative lawyer, Stevens’ insistence on the irreconcilability of the French (loss-based) and English (rights-based) approaches evidently poses a challenge to those engaged in the enterprise of seeking common principles of European tort law (though French lawyers may be surprised to learn that their law of responsabilité civile is not fundamentally concerned with the infringement of rights). All in all, whether one agrees with everything in it or not, this is a major contribution to the literature, demanding the attention of anyone with a serious interest in the theory of the law of tortious responsibility.

74

Reviewed by J. Murphy (2008) 28 OJLS 393.

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9. C. Veljanovski, Economic Principles of Law (Cambridge University Press, 2007)

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This book is an introduction to the economics of law for the law student and non-economist. The author’s aim is to show that the economics of law has equal applicability to common law jurisdictions outside North America, notwithstanding the limited inroads it has so far made in them. The first chapter contains a short history of law and economics, highlighting the foundational role played by Ronald Coase’s article “The Problem of Social Costs”, which Veljanovski describes as both the most cited and the most misunderstood article in law and economics. The misunderstanding, Veljanovski submits, is that Coase believed in a world without transaction costs, whereas it was in fact his purpose to focus on such costs. Veljanovski then proceeds to explain his focus on the common law, citing empirical evidence that common law systems are more efficient than other legal systems. The next chapter introduces “the economic approach”, with analysis of key concepts like choice and scarcity, benefits and costs, and efficiency. The remaining chapters deal with the application of the theory to various legal categories: property, contract, tort and crime. The substantial chapter on tort begins with the well-known “Learned Hand formula”, and demonstrates how its constituent elements have been recognised repeatedly by the English courts, before considering a number of complicating factors (for example, situations where efficiency requires incentives on both injurer and victim). Interesting sections follow on the reasonable person standard, contributory negligence, strict liability, causation and remoteness, economic loss, product liability, employers’ liability, and damages. The book admirably succeeds in achieving what it sets out to do, and can be recommended with enthusiasm.

VII. Estonia Janno Lahe and Irene Kull

A. LEGISLATION 1. Environmental Liability Act1 of 14 November 2007, (2007) Riigi Teataja (RT)2 I, 62, 396 Before the adoption of the Environmental Liability Act, liability for damaging the environment was regulated by several pieces of environmental legislation (such as the Nature Protection Act, Water Act); compensation for health damage and patrimonial damage caused through damage to the environment has also been provided in one of the sections of the Law of Obligations Act3 (§ 133 LOA). The application of the provisions contained in the specific law gave rise to a number of issues that were not governed by the law and required special regulation (e.g. whether a person is liable if damage was caused by acts for which there is a permit, how the amount of the damage is calculated; how the environmental damage caused is remedied; what costs will be borne by the tortfeasor, etc.).

1

The adoption of the Act was motivated by Directive 2004/35/EC of the European Parliament and of the Council on environmental liability with regard to the prevention and remedying of environmental damage. The Environmental Liability Act implements the underlying “polluter-pays” (§ 1) principle of the Directive, which allows for a more efficient response to environmental damage. The goal of the Act is to ensure that the damage caused to the environment is remedied and above all that public interest is protected thereby. The Environmental Liability Act regards as environmental liability, liability for damage caused to the environment per se; any claims made by private persons against the tortfeasor are regulated by the provisions on compensation for damage, contained in the LOA.

2

1

2 3

Keskkonnavastutuse seadus (in Estonian). Available only in Estonian: https://www.riigiteataja. ee/ert/act.jsp?id=12888473. State Gazette, hereinafter RT. Law of Obligations Act (LOA) of 26 September 2001, (2001) Riigi Teataja (RT) I, 81, 487; amended several times, last amendments are (2007) RT I, 56, 375. Available in English: http:// www.legaltext.ee/en/andmebaas/ava.asp?m=022.

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3

The objective of restoring or replacing the environment damaged by the tortfeasor (Environmental Liability Act § 1 (1)) should be pointed out as an important change in the regulation of environmental liability. According to the “polluterpays” principle, all the costs incurred as a result of the remedial activities must be borne by the polluter, which prevents the costs arising from the environmental damage being imposed on society as a whole. A further goal is to avoid a situation in which services or products provided by a person economising on environmental protection obtain a price advantage compared to the services or products of persons who act in a more environmentally friendly manner.

4

If more than thirty years have passed since the environmental damage was caused, the Environmental Liability Act is no longer applied to the case.

5

When developing the notion of the tortfeasor, it was taken into account that any person can cause environmental damage, regardless of the economic motives of his or her behaviour, or the form of the activities. As a rule, the tortfeasor must compensate for the damage if he/she is guilty of causing the damage. The same applies to the person’s obligation to prevent environmental damage if the risk of damage has become evident. Culpability is in this case furnished based on the relevant regulation of the Law of Obligations Act (LOA § 104). The tortfeasor is not liable for the damage if the activities of the tortfeasor were in line with the requirements of a licence issued to him/her and of legislation, that is, he/she is not guilty of causing the damage. A list of damaging activities which oblige the person to remedy the damage regardless of his or her culpability has been provided in § 8 (2).

6

Anyone whose acts or omissions have caused or may cause environmental damage is obliged to remedy the damage caused or, in case the damage has not yet been caused, to prevent the risk of damage. Prevention of damage is seen as acts/measures that should fully prevent or limit the potential damage, as well as measures that are taken to control the pollutants or other hazards in the case of environmental damage already caused, to limit their dissemination, to eliminate or control them in any other manner, in order to limit or prevent further environmental damage and harm to human health or further deterioration of the quality of a benefit offered by habitat, species, protected zone or water. The notion of the threat of environmental damage is influenced by the precautionary principle. Unless it has been possible to prevent environmental damage by preventive measures and if significant environmental damage has been caused, the tortfeasor is obliged to remedy the environmental damage. The objective of remedying environmental damage is to restore the initial condition, i.e. the condition prevailing before the environmental damage was caused or a condition equivalent to it.

7

An important change compared to the regulation applicable before the adoption of the Act lies in the principle of compensation for damage. Namely, instead of paying an abstract amount of financial compensation, the tortfeasor must organise the actual remedy of the damage. Taking into account that the entry into force of the Environmental Liability Act entails principal changes in the

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legal order related to the remedy of the environmental damage, it has been prescribed that the provisions that allow for remedying the environmental damage are applied also in the cases when the Act in its entirety will not be applied. If a person pays financial compensation and also begins to factually remedy the damage according to the Environmental Liability Act, the remedy costs will be set off against the amount of financial compensation already paid. It is also important that in the Environmental Liability Act, the concept of environmental damage is furnished somewhat differently from the legislation applicable in Estonia before the entry into force of the Act. Environmental damage used to be regarded by Estonian law as a violation of legal provisions; the consequences of the violation were not considered. The actual extent of environmental damage as set out in the Environmental Liability Act becomes apparent only in the course of practice; however, it may be estimated that in certain cases, it would set higher standards compared to the present regulation: that is why the Act prescribes that the previous regulation is applied in parallel to the Environmental Liability Act. To the extent to which the regulations coincide, the financial compensation paid will be set off against the costs incurred by the tortfeasor to actually remedy the damage.

8

2. Commercial Code4 of 15 February 1995, (1995) Riigi Teataja (RT) I, 26/28, 355, last changes 21 November 2007, (2007) RT I 67, 412 The regulation applicable to private limited companies in the Commercial Code was complemented by § 1671 to follow the example of the regulation concerning public limited companies, which governs the liability of a person who, misusing his or her influence, solicits a member of the management board of a private limited company to make a decision that is damaging to the company. In such a case, the person is as a rule solidarily liable with a member of the management board of the private limited company. A member of the management board or supervisory board who violated his or her obligations shall be held solidarily liable with the person who solicited him or her, unless he or she proves having performed his or her obligations with due diligence. In the case specified in the Act, the persons who derived gains from such damage shall also be held solidarily liable with the person who misused his or her influence. The Act also prescribes a five-year limitation period for claims. A claim for payment of compensation to a private limited company for the damage specified in the Act may also be submitted by a creditor of the private limited company if the assets of the company are not sufficient to meet the claims of the creditor. In the case that a private limited company is declared bankrupt, only a trustee in bankruptcy may file such a claim on behalf of the private limited company. This also applies if the private limited company has waived the claim or has entered into a contract of compromise or, resulting from an agreement, has limited the claim or filing thereof in another manner or reduced the limitation period. 4

Äriseadustik (Commercial Code); available only in Estonian: https://www.riigiteataja.ee/ert/act. jsp?id=12952012.

9

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B. CASES 1. Riigikohus (Supreme Court) 24 September 2007, No. 3-2-1-75-07, (2007) RT III 31, 255: Strict Liability5 a) Brief Summary of the Facts

10

On 18 November 2004, a dog ran from a farm yard onto a road, into a Volkswagen LT28 belonging to the plaintiff. The dog hit the front part of the plaintiff’s vehicle thereby damaging the vehicle. An action was filed against the owner of the dog, who is a keeper of an animal as defined by § 1060 of the Law of Obligations Act (LOA). According to LOA § 1060, the keeper of an animal as the possessor of a major source of danger shall be liable for damage caused by the animal. The damage consisted of the repair costs of the vehicle in the amount of EEK 14,319 (€ 916) and the rental of a car leased for the time of the repairs in the amount of EEK 10,500 (€ 671). As the plaintiff uses the vehicle for economic activities, the rental of the replacement car for the period of the repairs of the plaintiff’s car constituted unavoidable expenses. The defendant did not admit the claim and objected to it. He alleged that the action was filed against the wrong defendant because the dog did not belong to him but to a third party. The defendant acquired the dog in 1996 but in 1998 gave it as a gift to the tenant residing in his house. b) Judgment of the Court

11

The County Court established that the keeper of the animal as defined in LOA § 1060 was the defendant, who had acquired the dog and in whose house the dog stayed. The damage was caused as a result of the defendant’s carelessness. The Circuit Court annulled the judgment of the County Court and returned the matter to be re-opened by the County Court. The County Court granted the action also in the second hearing, establishing that both the original owner and the tenant to whom the dog was allegedly given had to be considered as the possessors of the dog. Both persons took care of the dog and referred to each other as the owners. Thus, the defendant and the person who took care of the dog had to be considered as solidary debtors. The Circuit Court dismissed the action by its decision, establishing that the action had been filed against the wrong person and the problem of who could be considered as the owner of the dog had legal effect.

12

The Supreme Court annulled the judgment of the Circuit Court and submitted the matter to the same court for a new hearing. According to the Supreme Court, the Circuit Court had incorrectly established that the problem of who could be considered as the owner of the dog had been decisive in the adjudication of the matter. The Supreme Court found that a keeper of an animal as defined in LOA § 1060 is the person who acts as the owner of an animal, i.e. who uses the animal, having power over it. A keeper of an animal in this sense can also be the direct possessor of the animal who is not the owner of the animal, 5

The decisions of the Supreme Court are available at www.riigikohus.ee.

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but also a person who is not the owner or possessor of the animal, but who as the user of the animal decides either alone or with another person on the issues related to the keeping of the animal, taking care of it and supervising it. The fact that a third party is the owner and the possessor of the dog does not preclude the solidary liability of the defendant as the person who transferred the ownership and possession of the dog as the joint keeper of the same animal. The Circuit Court should have considered whether the dog was kept by the defendant in the plaintiff’s knowledge and interests at the same time, whether the defendant used the dog and whether he participated in deciding on the issues related to the keeping of the dog.

13

The Supreme Court also established (paragraph 12 of the judgment) that the defendant could be liable based on LOA § 1060 regardless of the fact that the plaintiff managed a major source of danger as the possessor of the motor vehicle at the moment when damage was caused to him. The liability that is independent of the culpability of the person managing a major source of danger or strict liability (LOA §§ 1056–1060) is also applied if the person managing the major source of danger causing the damage was not guilty of causing damage to another person managing a major source of danger. The potential role of the plaintiff as a person managing the major source of danger in causing damage must be considered as the basis for the potential reduction of the damages in the case of the defendant’s strict liability.

14

c) Commentary

In this judgment, the Supreme Court explained in detail the notion of a keeper of an animal, establishing inter alia that a person who is not the owner of an animal might be the keeper of the animal. The Supreme Court highlighted the facts that had to be taken into account when deciding on whether a person could be regarded as a keeper of an animal. It is important that the Supreme Court assumed a position according to which the application of strict liability is not precluded by the fact that the injured party managed another major source of danger or that the person managing the major source of danger having caused the damage was not guilty of causing the damage.

15

With this judgment, the Supreme Court altered the earlier practice according to which it was not strict liability but the general liability based on culpability that had to be applied in cases where both persons managing major sources of danger suffered damage from the same act (e.g. judgment No. 3-2-1-11-00 of the Civil Chamber of the Supreme Court; last judgment No. 3-2-1-118-06). The Supreme Court repeatedly noted in its previous judgments that if several persons possessing major sources of danger jointly cause damage to themselves, the culpability of each person possessing a major source of danger is important for determining the civil liability of the possessors of the major sources of danger. Thus, according to the earlier practice of the Supreme Court, only the person managing a major source of danger who was guilty of causing the damage is obliged to compensate for the damage.

16

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The wording of the judgment commented on, according to which the liability that is independent of the person managing a major source of danger or strict liability (LOA §§ 1056–1060) is applicable also when the person managing a major source of danger causing the damage was not guilty of causing the damage to the other person managing a major source of danger, leads to the conclusion that culpability is not a precondition for the creation of liability when two or more persons managing major sources of danger cause damage to each other. Thus, the Supreme Court has significantly altered the earlier judicial practice, establishing that the duty to compensate for damage arises also in the case that neither person managing a major source of damage was guilty of causing the damage. Based on the judgment of the Supreme Court, both parties must compensate for the damage caused to each other in such a case. However, the role of the other person managing a major source of danger must be regarded as the basis for the potential reduction of the compensation for damage in the case of the defendant’s strict liability pursuant to LOA § 139 (1) and (2). Hence, when deciding the amount of compensation for damage, the court must take into account the role of the injured person in causing the damage. 2. Riigikohus 18 April 2007, No. 3-2-1-27-07, (2007) RT III 17, 141: Strict Liability a) Brief Summary of the Facts

18

The plaintiff participated in a horseback riding trip organised by the defendant. Although the defendant’s representative assured the riding party that his horses were trained and the track was easy, the horse led by the plaintiff suddenly began to gallop during the trip, as a result of which the plaintiff fell off the horse and suffered damage to his health. The plaintiff demanded that the defendant compensate him in the amount of EEK 30,000 (€ 1,918). The defendant objected to the action. He claimed that he was not liable for the damage caused as he granted the plaintiff the use of the horse at his request. The plaintiff had to consider the possibility of falling and assumed liability voluntarily. b) Judgment of the Court

19

The County Court granted the action. The Circuit Court annulled the judgment of the County Court and returned the matter to be re-opened in the same County Court. The Circuit Court established that the County Court had not identified the legal basis upon which the plaintiff was granted use of the horse. The court also established that although the plaintiff suffered damage because he fell off the horse, it had to be taken into account that he himself had voluntarily gone riding. It is unreasonable to apply the strict liability of a keeper of an animal if the injured party has placed himself voluntarily in a potentially dangerous situation. Riding involves certain reasonably expected dangers, the greatest of which is falling off the horse and, starting from the moment when the plaintiff mounted the horse and began to control and lead it, the horse obeyed the instructions, orders and signals of the plaintiff, while it was impossible for the defendant to intervene in leading the horse. As the plaintiff wished to participate in the riding trip and got an acceptance from the defendant, this agreement

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could be treated as a contract. Under Estonian law, a contract between parties excludes the application of the rules of extra-contractual liability (LOA § 1043 ff.) and the plaintiff cannot be regarded as protected under LOA § 1060. Since the plaintiff suffered bodily injuries as a result of falling off the horse, he has the right to choose, according to LOA § 1044 (3), whether to file the action on the basis of contract law or tort law (LOA §§ 1043, 1045). The plaintiff filed an appeal in cassation against the judgment of the Circuit Court, in which he demanded the cancellation of the judgment of the Circuit Court and a new judgment that would leave the judgment of the County Court in force. The Supreme Court dismissed the plaintiff’s appeal in cassation and did not change the judgment of the Circuit Court. According to the Supreme Court, the Circuit Court had correctly established that LOA § 1060 did not have to be applied to the matter. The court emphasised that the liability of a keeper of an animal does not always arise when damage is caused by an animal based on LOA § 1060, because in addition to the fact that strict liability only resulted from the enhanced danger inherent in a thing or activity, the circle of entitled subjects of strict liability needed to be defined with a view to the liability of the person managing a major source of danger provided in law for causing damage, as well as the protective purpose of the strict liability deriving from the principle of good faith.

20

According to the principle of good faith, any individuals participating in managing a major source of danger, taking a major source of danger into their possession or benefiting from it are not entitled to demand from the person managing the major source of danger compensation for damage caused to them on the basis of strict liability provisions. This also applies to LOA § 1060. The failure to apply LOA § 1060 in this matter does not preclude the liability of the defendant as the keeper of the horse for non-excusable breach of contract or unlawful and wrongful act based on LOA § 1056 (3).6

21

Pursuant to LOA § 1044 (3), if the death or bodily injury or damage to the health of a person is caused as a result of the violation of a contractual obligation, the tortfeasor shall be liable for such damage also on the basis of the liability for tort. If the preconditions for both types of liability (contractual and non-contractual) are present, according to LOA § 1044 (3) and § 1056 (3), the plaintiff may choose whether he or she demands compensation for damage due to breach of contract on the basis of LOA § 101 (1) 3), § 103 and § 115 or for causing bodily injury as an unlawful act based on LOA § 1045 (1) 2) and § 1050. In both cases, LOA § 130 must be applied regarding the extent of the claim, which sets out the general foundations of compensation for damage in case of health damage or bodily injury.

22

If the defendant is liable for the damage caused to the plaintiff by bodily injury, the compensation for damage may be reduced according to LOA § 139 (3), un-

23

6

LOA § 1056 (3) provides that the provisions of this Division (strict liability) do not preclude or restrict the right to make claims on any other legal basis, including claims for compensation of unlawfully and wrongfully caused damage.

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less agreed otherwise, only if the plaintiff contributed to the damage intentionally or through gross negligence. c) Commentary

24

In the judgment commented on, the Supreme Court has explained the scope of application of strict liability. More specifically, the judgment points out the circumstances that limit the application of strict liability. Before this judgment, no position had evolved in practice concerning how the voluntary acceptance of risk influenced the potential application of strict liability. The Supreme Court is of the opinion that strict liability does not protect inter alia persons who have voluntarily accepted the risk deriving from a major source of danger.

25

It should be added that the case could have been settled justly according to Estonian law by applying strict liability, while reducing the amount of compensation under LOA § 139 because of the role of the injured party in causing the damage. In this case, we also have to take into account that it is not possible to choose the basis of a claim under Estonian law if the parties have entered into a contract. As in this case the court did not identify the legal basis of the transfer of the possession of the horse, the judgment of the Supreme Court is justified in the part concerning the need to establish all the circumstances relating to the case. Thus, in the case of contractual liability, standard conditions may be applied which limit the defendant’s liability or entail a sharing of risk between the parties. 3. Riigikohus 31 May 2007, No. 3-2-1-54-07, (2007) RT III 23, 190: Unlawfulness, Fault a) Brief Summary of the Facts

26

On 20 July 2005, the plaintiff used the multi-storey car park of a shopping centre. After paying the parking charge, the plaintiff headed towards his car. While heading towards his car, the plaintiff walked under the barrier placed in front of the entrance to the car park, and the barrier fell on his head. The barrier caused a light wound in the plaintiff’s head. The plaintiff filed an action against the defendant for compensation of EEK 50,000 (€ 3,197) for moral damage. The County Court dismissed the action and the Circuit Court did not alter the judgment made by the County Court. Both courts established that the preconditions for liability were not met. b) Judgment of the Court

27

The Supreme Court annulled the judgment of the Circuit Court and submitted the matter to the same Circuit Court for a new hearing. The Supreme Court established that the deliberations of the courts over whether the defendant committed an unlawful act by installing barriers in the car park or violating other obligations arising from law were irrelevant. The defendant’s act is unlawful already because of the bodily injury according to LOA § 1045 (1) 2).7 7

LOA § 1045 (1) 2) provides that causing damage is unlawful above all when causing bodily injury or damage to the health of the victim.

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The Civil Chamber of the Supreme Court explains that, when establishing the existence of general delictual liability, the element of culpability is the final issue to be considered since the damage caused by the defendant and the unlawfulness of the act committed by the defendant must be established before discussing the issue of culpability. Subjective circumstances can be taken into account in assessing culpability only if the defendant is a natural person.

28

The Supreme Court added that, according to LOA § 130 (2), non-patrimonial damage was presumed and in order to receive financial compensation, the plaintiff did not need to prove anything but the bodily damage.8 The amount of damages, however, depends on the degree of severity of the bodily injury or damage to health.

29

c) Commentary

When explaining the establishment of unlawfulness in this judgment, the Supreme Court proceeded from the so-called unlawfulness of consequence theory, according to which the defendant’s behaviour was unlawful in this case already because the plaintiff was injured due to circumstances caused by the defendant. Such an opinion is important because, according to the law applicable before the LOA entered into force, a provision of law which the defendant had violated had to be identified in order to establish unlawfulness. From the judgment of the Supreme Court it appears that it is not always necessary to look for the violation of such a provision.

30

The positions of the Supreme Court regarding the subjective assessment of culpability and application of LOA § 130 (2) are no less important. In the case of both provisions, the Supreme Court has confirmed the positions already proposed in Estonian legal literature.

31

4. Riigikohus 10 October 2007, No. 3-2-1-53-07, (2007) RT III 35, 279: Personal Rights, Defamation a) Brief Summary of the Facts

The plaintiff filed an action against the defendant, in which he demanded that the defendant refute the incorrect facts published in several issues of daily newspaper in February 2006 and to compensate for the non-patrimonial damage caused to the plaintiff. The articles stated inter alia that the obligation to procure the (radar) equipment necessary for the Border Guard Administration for detecting oil pollution on the coasts on 28 January 2006 lay with the defendant as the Chairman of the Supervisory Board of the Centre of Environmental Investments and the head of the Ministry of the Environment.

32

The County Court partially granted the action, obliging the defendant to refute the incorrect information. The County Court dismissed the claim for the com-

33

8

LOA § 130 (2) provides that in the case of an obligation to compensate for damage arising from a bodily injury or health damage caused to a person, the obligated person shall pay the aggrieved person a reasonable amount of money as compensation for non-patrimonial damage caused to the person by such damage or injury.

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pensation of non-patrimonial damage. The Circuit Court annulled the part of the County Court judgment in which the County Court granted the action. The Circuit Court made a new judgment regarding the annulled part, by which it dismissed the action in full. b) Judgment of the Court

34

The Supreme Court established that the allegations of the appeal in cassation did not provide grounds for annulling the judgment of the Circuit Court.

35

The Chamber was of the opinion that the statement in the articles published by the defendant was not a fact but a general legal opinion about the duties of the defendant as the head of the Ministry of the Environment and the Chairman of the Supervisory Board of the Centre of Environmental Investments. The Circuit Court correctly established that the articles published contained inter alia opinions of a legal nature about the organisation of environmental protection in Estonia, and the legal opinions contained in the articles about the competence and duties of national institutions in exercising state authority represent an assessment, the refutation of which cannot be required on the basis of the provisions governing the refutation of incorrect information. The Chamber noted that, in relation to the public duties of a public figure, there could be cases where the statement concerning the obligations of the official directly listed in the legal Act will be treated as a case of allegation. In that cases the application of LOA § 1047 (4) may be considered, unless the information is truthful.9 In the commented case, however, the defendant had not published such statements in his articles. The allegations made by the defendant were general and disputable, but not as facts but as legal opinions. c) Commentary

36

Estonian law requires that in order to use legal remedies, it must first be decided whether the allegations made by the defendant constitute values or facts. Pursuant to LOA § 1047 (4), it is only possible to demand the correction or refutation of a fact. The Supreme Court stated an important position in its judgment – if a duty is ascribed to a person, it usually represents a valuation, the refutation of which cannot be required. According to the Supreme Court, refutation can be considered only if a reference has been made to a particular legal Act, in which the relevant duty has been prescribed.

37

Apparently, however, the judgment of the Supreme Court concerned should not be interpreted so that everything said by a person and containing legal qualification is a valuation. Otherwise, a person who has been called a thief would not have a chance to demand the refutation of the statement.

9

LOA § 1047 (4) provides that in the case of the disclosure of incorrect information, the victim may demand that the person who disclosed such information refute the information or publish a correction at the person’s expense regardless of whether the disclosure of the information was unlawful or not.

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C. LITERATURE 1. T. Tampuu, Law of Non-Contractual Obligations (Lepinguväliste võlasuhete õigus) (Tallinn, Juura Õigusteabe AS 2007) 244 pp. A textbook on the law of non-contractual obligations, prepared by a Judge of the Civil Chamber of the Supreme Court and Lecturer of Civil Law of the University of Tartu, T. Tampuu, can be considered as the most important publication of 2007 in the field of compensation for damage. Although all types of non-contractual obligations are discussed in the book, the systematic approach to tort law constitutes the bulk of the textbook.

38

The separate chapter on tort law presents a general description of tort law, subjects of the obligation to compensate for tort, wrongful causing of tort, strict liability, producer’s liability, liability for damage unlawfully caused by another person and limitation of claims for compensation of tort.

39

The textbook is of great value both for students and practising lawyers in Estonia. This is true also because it is the first textbook on non-contractual obligations in Estonia.

40

2. J. Lahe/T. Tampuu, Law of Obligations Act, with Commentary. Notes on the Commentary to Chapter 7 of the Law of Obligations Act (Võlaõigusseadus I. Kommenteeritud väljaanne. Märkusi võlaõigusseaduse 7. peatüki kommentaaride kohta) Juridica 5 (2007) 314 ff. The paper reviews the commented edition of the Law of Obligations Act, published in 2006, focusing on the comments discussing Chapter 7 of the Law of Obligations Act, which governs the scope of the claim for compensation of damage. The objective of the authors of the paper was to highlight the opinions given in the comments to which they did not agree and to propose their opinions and additions where necessary. The paper may be considered important as it fosters the evolvement of legal discourse among Estonian jurists (that has been clearly scarce so far considering the small size of Estonia).

41

The authors have noted that LOA § 129, which governs compensation for patrimonial damage upon causing death, is an important section because it does not grant claims for compensation to persons not specified in this provision, who may have suffered economic damage as a result of the death of another person (i.e. the employer, spouse, etc. of the deceased person).

42

The authors find it worthwhile to consider whether it would be possible on the basis of the provisions of negotiorum gestio to impose on a person liable for causing bodily injury or health damage to a child an obligation to compensate the parents for the costs of the treatment of the child.

43

As to compensation for non-patrimonial damage, the authors have said that cases of compensation for non-patrimonial damage have been delimited clear-

44

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ly, as opposed to cases of causing non-patrimonial damage. Hence, it may happen that non-patrimonial damage is caused as a result of an unlawful act, yet the victim has no right to demand financial compensation for it.

45

The authors believe that the intention of LOA § 138 (1) (which provides that if several persons may be liable for damage caused and it has been established that any of the persons could have caused the damage, compensation for the damage may be claimed from all such persons) is to expand the expected circle of the persons causing damage if the injured party proves that it was certainly one of the several persons acting in an equally dangerous manner towards him or her who caused all of the damage. Any person who potentially could have caused the damage is released from liability if he or she proves that the damage was not caused by his or her act. If he or she fails to do so (as only the causal relationship between the act and damage has been proven), he or she may still be released from liability, provided that he or she proves that the breach was excusable (liability arising from non-performance), that there are circumstances precluding unlawfulness, that there is no culpability (liability based on the general elements of tort), or that there are circumstances that preclude the strict liability of a person managing a major source of danger or the liability of a producer. 3. K. Sein, Claims Resulting From Activities Causing Environmental Damage – Under Private Law and/or Public Law? (Keskkonnakahjulikust tegevusest tulenevad nõuded – kas eraõiguslikud ja/või avalik-õiguslikud?) Juridica 1 (2007) 54 ff.

46

The paper analyses whether and to what extent an activity causing environmental damage may result in claims for compensation of damage under both public and private law against the person causing the damage.

47

The paper by K. Sein was published before the Environmental Liability Act entered into force, and the author has noted that the Act harmonised Estonian law with the environmental liability directive of the European Communities and entitled the state to require compensation for environmental damage from persons damaging certain natural resources in the form of restoration of the original state of the environment. It is a claim for compensation of damage in public law, which the state can impose also when the damage is caused to an environmental medium that is owned by a private person. Yet the Environmental Liability Act does not cover all, but only certain types of environmental damage.

48

Private persons cannot file a claim for compensation of environmental damage on the basis of the Environmental Liability Act. In the case of damage caused to a private person by activities causing environmental damage, he or she can file claims for compensation of damage under tort law and claims for eliminating harmful effects under property law. Claims in private law for eliminating or compensating damage caused by environmentally harmful activities will most likely be rare. However, the existence of claims in private law is also necessary

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because it ensures protection for a private person in a situation in which public law for some reason refuses to collect damages or is in delay, or there has been abuse of discretion in issuing a permit. 4. K. Sein, Should Estonian Law Provide for an Award of Punitive Damages? Juridica International 2007, 46 ff. Estonian legal literature has not as yet seriously discussed the issue of punitive damages in the context of Estonian law. This is also perfectly understandable as Estonia belongs to the Continental European judicial area.

49

In her paper, K. Sein analyses the nature of punitive damages as well as the possibility of introducing the institute of punitive damages into Estonian law and whether it should be done. The main question of the paper is whether punitive damages are necessary in the cases of defamation and the violation of other personality rights.

50

The author has noted that punitive damages are an institute of law in the AngloAmerican legal system. They are defined as damages awarded in addition to the actual material or non-material damages to punish the defendant and deter him or her from committing violations of law in the future. Estonian lawyers too have somewhat unexpectedly proposed to set forth in Estonian law the possibility of awarding punitive damages, especially for violations of personal rights (e.g., defamation). The reasoning behind the proposal is that today defamation is not punished as a criminal offence in Estonia, and injured parties allegedly remain without effective judicial protection.

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The author ends with the conclusion that she does not support the introduction of the institute of punitive damages into Estonian law. Firstly, because it may be in conflict with the Constitution of Estonia. Secondly, there is no actual practical need for it since, according to Estonian law, in the case of violation of the victim’s personality rights, results can be obtained that are identical to or very similar with those of the states where punitive damages are recognised.

52

5. J. Lahe, Fault in the Three-stage Structure of the General Elements of Tort, Juridica International 2007, 152 ff. The paper by J. Lahe is a study of legal dogmatics, in which he mainly focuses on the relations and specifications of fault as a precondition for liability in tort law compared to other preconditions for liability.

53

The author has noted that it is not always an easy task to draw a line between the elements of tort, but it is necessary, because even, e.g., the burden of proof may be distributed differently depending on the prerequisites for liability. Distinguishing fault from the other elements of tort may cause the greatest problem. Besides distinguishing between the prerequisites for general delictual liability, the mutual relations between the relevant prerequisites need to be understood for a better comprehension of the structure of delictual liability.

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55

When discussing the distinction between the act and the fault, the author brings the example of a person suffering an epileptic seizure in an antique shop and causing a valuable vase to break as he falls. In Estonian jurisdiction, any movements caused by epilepsy should not be regarded as an act for the purposes of tort law; however, if the person had to know that there was a risk of seizure, his entry in the shop could already be regarded as an act for the purposes of tort law. When deciding on the fault of a person, it should also be taken into account how likely the doctor treating the patient has considered a seizure to occur and what he or she has told the patient.

56

Regarding causal relationships and the relationships and distinctions of fault, the author has noted that, as the LOA uses a standard of subjective culpability, it is not very difficult to delimit causal relationship and culpability in the Estonian legal order. The author has also found that the predictability of damage becomes a “preliminary stage” for carelessness when implementing the theory of the objective of a provision.

VIII. Finland Suvianna Hakalehto-Wainio

A. LEGISLATION 1. Tort Liability Act The most significant Finnish statute applying to liability in damages is the Tort Liability Act (412/1974: vahingonkorvauslaki). The Tort Liability Act applies both to tort liability and the quantum of damages. In contrast, it does not apply to contractual liability or damages or to liability provided in another Act, unless otherwise provided.

1

No relevant tort law legislation was introduced in 2007.

2

B. CASES The main task of the Supreme Court (Korkein oikeus, KKO) is to hand down precedents on points of law that are important for the whole legal system and in this way to give guidance for the application of the law. In 2007, the Supreme Court handed down 103 precedents, 3 of which dealt with tort law matters. Unfortunately none of the cases are exactly important or interesting.

3

C. LITERATURE 1. Päivi Tiilikka, Sananvapaus ja yksilön suoja. Lehtiartikkelin aiheuttaman kärsimyksen korvaaminen (Freedom of expression and the protection of privacy and reputation – Liability in damages for distress caused by a newspaper article) (WSOYpro, Helsinki 2007) Päivi Tiilikka has written her doctoral thesis on the grounds on which a newspaper publisher, editor, reporter, or other journalist becomes liable in damages for distress caused by the contents of an article or image in the paper.

4

According to chap. 5, sec. 6(1)(1), of the Tort Liability Act, the right to damages for distress appertains to a person whose liberty, peace, honour or privacy

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has been violated by a punishable act. In the newspaper business, liability is virtually always based on an act constituting one of two criminal offences: invasion of personal privacy or defamation. The author argues that chap. 5, sec. 6(1)(1), of the Tort Liability Act is to be interpreted so that liability arises only from a deliberate act, in so far as the act itself is punishable only when committed deliberately. Accordingly, as both the invasion of personal reputation and defamation as criminal offences are punishable only when committed deliberately, a person who has caused injury through negligence will not be liable in damages even if the act would otherwise fulfil the constituent elements of a criminal offence.

6

The attachment of liability to a punishable act, and hence also to the restrictions imposed by the principle of legality under criminal law, hampers the assessment of events from a tort law point of view and interferes with the application of the values, objectives and principles of tort law.

7

The author argues that liability in damages may also be assessed in the framework of chap. 5, sec. 6(1)(4), of the Tort Liability Act. According to this provision, the victim of a violation has the right to damages for distress also where his or her dignity as a human being has been seriously violated, through a deliberate act or gross negligence, in a manner comparable to the violations referred to in subparagraphs 1–3 of chap. 5, sec. 6(1) of the Tort Liability Act. The author further argues that the liability in damages may, in these cases, also be based on cumulative negligence. This criterion may be met e.g. where the negligence of any one person cannot be deemed gross, but the negligence evident in the operations of the newspaper in question and resulting in distress can be deemed gross when assessed as a whole.

8

In the assessment of liability, it should be noted that both the freedom of expression and the protection of privacy and reputation have been enshrined as fundamental human rights. Any application of the law should arrive at a conclusion that guarantees the realisation of these contradictory rights as fully as possible. In the assessment, the most important criteria are the impact that the article or image may have on public debate and, as regards defamation, also whether the defamatory allegation has been adequately substantiated.

9

The dissertation emphasises the case-law of the European Court of Human Rights also as a provider of guidance to the national courts when they make rulings in this field. That being said, the considerable volume of ECHR caselaw on freedom of expression issues, the variety in the facts and procedural constellations of the cases, and the broad scope of discretion allowed for national governments often make it quite difficult to determine, in any individual case, what would be the outcome that is most amenable both to the freedom of expression and the protection of privacy.

10

When a determination is made regarding the restriction of the freedom of expression, the benefits from free expression must be balanced against the protection of privacy and reputation. Neither the function nor the purpose of freedom

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of expression legitimises the expression of false or mendacious information. That being said, if the liability threshold in such cases is too low, debate of a more general public significance may be impeded and the work of the media as a “public watchdog” may be hampered. The main issue in the assessment of liability in damages and, as a prerequisite, in the assessment of criminal liability, is whether there has been a sufficient factual basis for the allegation printed in the newspaper. The European Court of Human Rights has emphasised the good faith of the journalist in the provision of reliable and accurate information, with a correct factual basis and in accordance with the tenets of media ethics. The relevant point of reference here is whether the journalist has made use of sources that can reasonably have been considered reliable when taken in proportion to the nature and degree of the allegation. Another relevant issue is whether the allegation is a position taken by the journalist himself or herself or whether it is the reproduction of acquired information.

11

Yet other relevant issues are the status of the media outlet, the status of the subject, that is, the person to whom the article or image pertains, and the possible connection of the article or image to the evaluation of the performance of the subject in a public position. Some relevance must be afforded also to the earlier action of the subject in a public position in respect to the allegation, the opportunity afforded to the subject to make a response, and other debate on the same issue in the same newspaper. Finally, other significant issues include the type of media where the allegation is published, the manner of its publication, its visibility, whether a photograph of the subject has been published, and the degree of precision in the provision of identifying information on the subject of the allegation.

12

2. Jaana Norio-Timonen, Toiselle aiheutettujen vahinkojen korvaaminen, vahingontorjunta ja moraalinen uhkapeli (Liability for third party loss, loss prevention and moral hazard) Lakimies (The Journal of the Finnish Lawyers’ Association) Vol. 105, No. 6 (2007) 807–829 The author serves as an acting professor at the University of Helsinki. She points out that the essence of liability insurance is that someone with the potential to cause loss to a third party may take out an insurance policy against an eventual liability to compensate that third party. This raises the issue of moral hazard. In this article she discusses the various counter-measures in the Finnish Insurance Contracts Act against precisely such moral hazard. At the same time, she compares the Insurance Contracts Act and the Tort Liability Act with regard to their incentives against loss-causing behaviour.

13

The various degrees of negligence are not normally taken into consideration in the evaluation of tort liability; instead, mere slight negligence will result in full liability. That being said, the degree of negligence may have some significance for an eventual adjustment of the damages. The liability basis with the greatest impact on loss-causing behaviour is the enhanced duty of care, with the con-

14

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comitant reversed burden of proof, which in most situations actually calls for active measures towards the avoidance of loss.

15

Under the Insurance Contracts Act, the policyholder must not cause the insured event to occur, he or she must comply with the precautionary guidelines in the policy, and finally he or she must take the necessary loss-reducing measures when the insured event occurs or an insured event is imminent.

16

The provisions concerning the causing of insured events do not entail conduct norms for the policyholder. In contrast, the precautionary guidelines are concrete calls for action. Also the insured’s duty to reduce the loss is a concrete duty. The provisions on when the actions of the loss-causer/policyholder result in the insurance compensation being reduced or even refused, linked as they are to the degree of negligence, are more precise than the corresponding norms governing tort liability.

17

An attempt has been made to reduce the moral hazard inherent in liability insurance by introducing certain provisions into the Insurance Contracts Act. This has resulted in a set of norms that provide a more concrete framework for the actions of the loss-causer/policyholder and their financial consequences. 3. Thomas Wilhelmsson, Harmoniseringen av skadeståndsrätten och behovet av en europeisk moraldiskurs (The Harmonisation of Tort Law and the Need for a European Moral Discourse) JFT (Tidskrift utgiven av Juridiska Föreningen i Finland) No. 5–6 (2007) 359–376

18

In this article the author – a professor in civil law – discusses the possibilities and needs of using tort law as a foundation for discussion in Europe about morality. He stresses that when it comes to legislation and court practice in the field of tort law, we often have to debate important current questions which have a strong moral colouring.

19

The author discusses four main arguments that have been mentioned in favour of harmonising private law. The first argument, which has been stressed by the Commission, is that common legislation will eliminate obstacles hindering the free market. According to the author, this argument is not valid for arguing in favour of the harmonisation of tort law in the EU. It is more realistic to aim at avoiding national regulations which can be totally surprising for companies acting in another Member State.

20

The second argument concerns maintaining the traditional values of law. According to the author, this kind of attitude in the field of tort law would put at risk the special Scandinavian model of tort law with its elements of insurance and collective thinking.

21

The author points out that the third idea behind the European codification is striving towards stability of legal regulation. He thinks that this kind of thinking could be an obstacle for adjusting tort law to social needs and changes in commercial practice.

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The author also throws doubt on the fourth argument – building a European identity – concerning tort law. He questions whether the main gist on the contrary is the attitude which admits and appreciates pluralism when it comes to social, cultural and judicial structures. The author stresses that building a European identity calls for open discussion on moral and values.

22

The author further discusses the function of tort law as a forum for European moral discussion. He names four reasons why this is relevant: a stronger emphasis on personal liability, the close connection of tort law and morality, the natural context of tort law and the flexibility of tort law.

23

The author has two theses: 1) Building a European pluralistic identity needs arenas for a European moral discourse also in law. 2) Tort law has many characteristics which make it a suitable forum for moral discourse.

24

The author asks further which conditions we should set when it comes to harmonisation. He mentions three conditions: a sufficient common basic rule, a common legal language and a will to use the experiences of others.

25

IX. France Olivier Moréteau

A. INTRODUCTION 1

2007 was a rather interesting year regarding the evolution of French tort law. No significant legislative text was adopted, and the Avant-projet to reform the law of obligations is still waiting for some space on a very hectic political agenda.

2

A number of remarkable cases were decided, often marking a comeback to orthodoxy. The constant search for new solutions, to offer an extended and complete guarantee of the right of victims led to counterproductive developments and to the development of inconsistencies, some of which have been eliminated during the present year, such as the strange exclusion of the driver of a vehicle’s right to be compensated when at fault, even where the fault had not contributed to the damage (Case no. 7). The once overstretched concept of collective guard is back to normal ground (Case no. 1), liability for others is less invasive (Case no. 3), and the fault of the other is back under the spotlight (Case no. 4). Irresponsible individuals who obstruct economic activity by picketing are now solidarily liable and face the obligation to compensate massive economic loss (Case no. 5). All these decisions are welcome. Two opportunities have been missed however, one to give a more complete definition of the loss of a chance (Case no. 2), and the other to introduce the compensation of preventive expenses into French law (Case no. 6).

3

As to the literature, it unsurprisingly focuses on the still recent Avant-projet to reform the law of obligations, commented in the two previous editions of the Yearbook.

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B. CASES 1. Cass. 2nd Civ. 19 October 2006, JCP 2007, II, 10030, Note M. Mekki, RTDCiv 2007, 130, Observations P. Jourdain: The Retreat of the Collective Guard a) Brief Summary of the Facts

Three children, including two brothers, were playing in a warehouse. For the fun of it or to have more light, they manufactured torches, using the hay around them, and lit them with a lighter. One of the boys burned his fingers with the torch, and dropped it on the floor, causing a fire and the entire destruction of the warehouse. The company insuring the parents of the child who dropped the torch compensated for a third of the damage, and the insurer of the two brothers paid for the other two thirds. The latter sued the first insurance company, arguing that the entire damage had been caused by the child who carried and dropped the torch.

4

b) Judgment of the Court

The Versailles Court of Appeal reversed a first judgment in favour of the claimant, pointing out that the three boys had participated in “a deliberate co-action that had caused the damage”, generating solidary liability. The Court of Cassation reversed. The judgment recognizes that the three children had engaged in a joint activity of manufacturing, lighting, and extinguishing the torches but, in the opinion of the court, this is not sufficient to make them jointly guardian of the torch that caused the damage.

5

c) Commentary

In this case, liability was based on art. 1384 par. 1 of the French Civil Code: “A person is liable not only for the damage he causes by his own act, but also for that which is caused by the acts of persons for whom he is responsible, or by things which are in his guard”.1 Who had the guard of the thing at the time when it caused the damage? French courts define the guard as including the “use, direction, and supervision” of the thing.2 When children engage in a collective activity, the identification of the guardian of the things they use is not always easy. Where one guardian can be identified, he should bear the full onus of liability. The courts may otherwise conclude that this was a joint action, in which case there should be a collective guard, making the guardians solidarily liable.

6

The present case marks a retreat of the use of collective guard, once used more generously to favour the victims. French courts are presently unwilling to accept that several persons can be guardian at the same time, and this case proves that

7

1

2

The French garde is translated by “custody” on the Legifrance website. We prefer the word “guard”, and “guardian of the thing” for gardien de la chose. The definition was given in the Franck case, Cass. Chambres Réunies 2 December 1941, DC 1942, 25, note G. Ripert, as including “l’usage, la direction et le contrôle.”

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wherever one of several may be identified as having the guard at the moment of the damage, there will be no collective guard and solidarity will be avoided.3 2. Cass. 1st Civ. 4 June 2007, Juris-Data No. 2007-039205, JCP 2007, I, 185, No. 2, Observations Ph. Stoffel-Munck: A New Definition of the Loss of a Chance a) Brief Summary of the Facts

8

Two spouses, who were in a situation of over-indebtedness, complained that they had been unduly denied a right to petition for the suspension of the repossession of their home. The administrative agency that was investigating their over-indebtedness had the power to request a judicial suspension, but had refused to do so. b) Judgment of the Court

9

The challenged judgment held the State liable. On appeal, the Court of Cassation quashed and annulled the judgment, insisting that redress for a loss of a chance is available only where the claimant is presently and certainly deprived of a favourable opportunity.4 The fact that the agency had noted that the couple had enough resources to pay off their loans did not make it certain that they would obtain the suspension that they were praying for. c) Commentary

10

A few months earlier, the same Chamber of the Court of Cassation had used the same definition of a loss of a chance in the context of a contractual dispute.5 A client sued his advocate for malpractice, blaming him for not having appealed an unfavourable judgment. Based on the new definition, the Court of Cassation denied liability: the client still had the possibility to appeal at the moment when he found out that the advocate had not acted. Therefore, the loss was not certain.

11

In the present case, where tort liability would be based on art. 1382 of the French Civil Code, it seems that the loss of the opportunity to apply for the suspension was certain. What the Court of Cassation is insisting on is the likelihood of the favourable event, which did not look that serious to the Court under the circumstances of the case. Even when the courts find the chance serious enough, they do not grant compensation equivalent to the lost advantage. In that respect, they are less generous than administrative courts, which seem to grant compensation equivalent to the lost advantage wherever the damage looks certain enough.6 3

4

5

6

See, in a similar case where one girl was holding the lighter, Cass. 2nd Civ. 11 July 2002, Gazette du Palais (Gaz. Pal.) 2003, 2308, note V. Le Blan-Delannoy, Revue Trimestrielle de Droit Civil (RTDCiv) 2002, 823, observations P. Jourdain. According to the Court, “seule constitue une perte de chance réparable, la disparition actuelle et certaine d’une éventualité favorable.” Cass. 1st Civ. 21 November 2006, Juris-Data no. 2006-036009, Juris-Classeur Périodique (JCP) 2007, I, 115, no. 2, observations Ph. Stoffel-Munck. CE 5 July 2006, JCP 2006, act. 350; JCP 2007, I, 115, no. 3, observations Ph. Stoffel-Munck. This was also a legal malpractice case.

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One may praise the Court of Cassation for the brevity and clarity of its definition.7 Such brief statements may be elegant and almost as easy to memorize as antique Roman maxims, yet they are often incomplete. It is good to know that redress for a loss of a chance is available only where the claimant is presently and certainly deprived of a favourable opportunity. However, a few additional words explaining that the favourable opportunity should be “very likely to occur” may be added, making the definition more complete and even clearer.

12

3. Cass. 2nd Civ. 26 October 2006, D. 2007, 204, Note J.B. Laydu, JCP 2007, II, 10004, Note J. Mouly, RTDCiv 2007, 357, Observations P. Jourdain, JCP 2007, I, 115, No. 5, Observations Ph. Stoffel-Munck: A Trade Union is not Liable for its Members a) Brief Summary of the Facts

On the occasion of a national protest rally coordinated by the National Federation of Farmers’ Union (FNSEA), some farmers, members of the Union, demonstrated on the site of a supermarket, blocking the access to it and causing some damage. The owners of the supermarket sued the Union, arguing that it was liable for the acts of its members on the basis of art. 1384 par. 1 of the French Civil Code.

13

b) Judgment of the Court

The owners’ claim for compensation was dismissed and the judgment was upheld by the Court of Cassation. The Court noted that the direction and supervision of the activities of members during rallies or demonstrations are not incumbent on a union. A union is not liable for the personal faults of its members.

14

c) Commentary

Art. 1384 par. 1 reads: “A person is liable not only for the damage he causes by his own act, but also for that which is caused by the acts of persons for whom he is responsible, or by things which are in his guard”. In the Blieck case decided in 1991, the Plenary Assembly of the Court of Cassation held that this provision establishes the principle of a presumption of liability for the acts of others for whom one is responsible.8 In Blieck, a mental patient who had been placed in a working centre operated by a non-profit making organisation had set a forest fire. The organisation was found liable, since it had accepted the burden of organising and supervising the daily life of the disabled person, and this on a permanent basis.

15

The Blieck case was a breakthrough in the French tort law jurisprudence. Was the Court of Cassation recognising a general cause of action for liability for

16

7

8

Professor Stoffel-Munck points out to its doctrinal origin, citing J. Flour/J.L. Aubert/E. Savaux, Les obligations, 2. Le fait juridique (11th ed. 2005) no. 138. Cass. Plen. Ass. 29 March 1991, Recueil Dalloz (D.) 1991, 324, note C. Larroumet; RTDCiv 1991, 541, observations P. Jourdain.

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others, on the basis of art. 1384 par. 1 and in addition to all the special cases enumerated in the following subsections?9 Thus far, liability for others had been limited to those situations provided for in the following paragraphs, making employers liable for acts of the employees, parents for their children, etc.

17

The use of the general clause in art. 1984 par. 1 regarding liability for others would never spread like the liability for the things under one’s guard contained in the same paragraph. The Court of Cassation carefully monitors its scope: the general clause only applies to persons organising, directing, and supervising the activity of others, which is not the task of a labour union.

18

Thus far, the Blieck jurisprudence has prospered in two different fields. Firstly, in all situations where some people are permanently in charge of others, organising their way of life, such as institutions in charge of the disabled, the young, and the elderly.10 Secondly, it applies to entities organising “one-off” collective activities or events, such as sports or processions,11 which is useful in all cases where the player or the party causing the damage cannot be identified.12 Trade unions could have been added to the list, but the Court of Cassation is moving very carefully there, showing some reluctance based on technical but also political reasons. Labour unions do not monitor the activity of their members in a way that would compare to football or rugby clubs and, in addition, in a country known for its social unrest and where social protest easily gets out of control, making unions liable may be perceived as an infringement on collective labour rights. 4. Cass. Plen. Ass. 29 June 2007, D. 2007, 2455, JCP 2007, II, 10150, Note J.M. Marmayou: Liability for Others, Should the Other be at Fault? a) Brief Summary of the Facts

19

During a rugby match in Southwest France, a player was seriously injured as a scrum collapsed. The exact circumstances of the accident could not be determined and it was not clear that anyone had violated the rules. The injured player sued the two rugby clubs that had organised the game, on the basis of art. 1384 par. 1 of the French Civil Code. b) Judgment of the Court

20

The Court of Appeal of Agen held that the collapse of a scrum was necessarily the result of a fault, with players not properly in place or someone pushing the 9

10 11

12

See G. Viney, Vers un élargissement de la catégorie des “personnes dont on doit répondre”: la porte entrouverte sur une nouvelle interprétation de l’article 1384, alinéa ler, du code civil, D. 1991, Chron. 157. L. Perdrix, La garde d’autrui, thèse, Paris 1, direction G. Viney (2006). Like a communal association organising a “majorettes” parade: see Cass. 2nd Civ. 12 December 2002, commented by P. Brun, France, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2002 (2003) 179, no. 93–96. Yet with the restriction imposed by Cass. Plen. Ass. 29 June 2007, Case no. 4 below.

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wrong way.13 However, the Second Chamber of the Court of Cassation was not satisfied, noting that despite the severe attitude of the International Rugby Board in similar circumstances, this did not constitute a fault consisting in a violation of the rules of the game.14 The case was remanded to the Bordeaux Court of Appeal, where the position of the Court of Cassation was resisted: causation was enough, and no fault was required to make the rugby clubs liable. The clubs appealed again to the Court of Cassation, which had this time to sit in Plenary Assembly. They ruled that “Sport clubs having the objective of organising, directing, and supervising the activity of their members, are liable for the damage they cause on such an occasion, where a fault characterised by a violation of the rules of the game is attributable to one or several of their members, even unidentified.” c) Commentary

This case seems to indicate that after years of unrestrained jurisprudence favouring the victims, the Court of Cassation may be retreating to more conservative, fault based solutions. The Blieck case15 had opened the way to actions against entities organising “one-off” collective activities or events, such as sports or processions, without necessarily requesting proof to be adduced of a fault by one of the members. Liability for others, when based on art. 1384 par. 1 looked to be based on causation only. The present case confirms a shift to a liability for others based on the fault of the one having caused the damage.

21

The Blieck jurisprudence was first established to allow victims to sue those directing the lives of others, such as entities looking after the disabled or young people in foster care. It was later extended to sport clubs organising, directing, and supervising the activity of their members during games, competitions,16 and also during training periods.17 This extension by the Second Chamber of the Court of Cassation now receives the approval of the Plenary Assembly in the present case.18 Interestingly, no corresponding provision is to be found in the Catala Avant-projet de réforme du droit des obligations.19

22

However, in so doing, the Plenary Assembly is restricting the scope of the liability for others, moving back from a more and more objective or non-fault

23

13 14 15 16

17

18

19

CA Agen 20 November 2002, Juris-Data no. 2002-202128. Cass. 2nd Civ. 13 May 2004, Bull. Civ. 2004, II, no. 232, Juris-Data no. 2004-023722. See fn. 8. Cass. 2nd Civ. 22 May 1995, JCP 1995, II, 22550, note J. Mouly; RTDCiv 1995, 899, observations P. Jourdain. Cass. 2nd Civ. 21 October 2004, D. 2005, 40, note J.B. Laydu; RTDCiv 2005, 412, observations P. Jourdain. See J. François, Fait générateur de la responsabilité du fait d’autrui: confirmation ou évolution? D. 2007, 2408. For a general presentation of the Avant-projet, see O. Moréteau, France, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2005 (2006) 270, no. 1–11. The Avant-projet limits liability for others to cases where their life is permanently organized and supervised: see art. 1355, 1359 and 1360, and François, D. 2007, at 2409.

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based liability, to a fault based liability. The move to non-fault based liability had happened in two steps.

24

The first step was to deprive the party liable for the act of others of any exoneration based on the absence of fault, leaving force majeure or the fault of the victim as the only possible exoneration.20

25

The second step related to the act of the party who actually caused the damage. It should indeed be a cause of liability in itself. There again, in the case of very young children, the Plenary Assembly of the Court of Cassation came to admit that children could be at fault, or could have the guard of a thing causing a damage, even when having no discernment.21 In 2001, the Court of Cassation abandoned the requirement of fault by the party causing the damage in a case where a child injured another child in an improvised rugby match in a school playground.22 The year after, this was approved by the Plenary Assembly in a rather similar case where parents were sued on the basis of an act of their child.23

26

This leads to a very strange situation. Victims could get redress from third parties liable for others in situations where there would have been no cause of action against the direct author of the damage. This may be acceptable in the case of children, upon the understanding that the liability be based on the duty by parents to supervise the education and activity of their offspring,24 pushed to the extreme in French law with the imposition of strict liability on the parent in charge.25 However, this does not apply in other cases where the direct author of the damage has full capacity.

27

Also, starting in 2003, the Second Chamber of the Court of Cassation gave a series of judgments in actions against sport clubs, where the liability for others had to be based on the personal liability of the direct author of the damage.26 In the present case, this was the attitude taken by the Second Chamber in its May 13, 2004 judgment. It was reinforced by the present judgment of the Plenary Assembly. After all, there is a clear assumption of risks in the case of sports 20

21

22

23

24 25

26

Liability of the parents for the facts of their children: Bertrand case, Cass. 2nd Civ. 19 February 1997, JCP 1997, II, 22848, note G. Viney. Cass. Plen. Ass. 13 December 2002, D. 2003, 231, note P. Jourdain, commented by Brun (fn. 11) no. 86–92, insisting, at no. 92, that the scope of the decision may encompass all cases of liability for others. Gabillet, Lemaire, Derguini cases, Cass. Plen. Ass. 9 May 1984, D. 1984, 525, note F. Chabas; RTDCiv 1984, 508, observations J. Huet. Levert case, Cass. 2nd Civ. 10 May 2001, D. 2001, 2851, note O. Tournafond; RTDCiv 2001, observations P. Jourdain. Cass. Ass. Plen. 13 December 2002, cited fn. 20, art. 1384 par. 1 was cited, though technically the solution could be based on par. 4: “(Act no. 70-459 of 4 June 1970) The father and mother, in so far as they exercise ‘parental authority’ (Act no. 2002-305 of 4 March 2002), are solidarily liable for the damage caused by their minor children who live with them.” See Principles of European Tort Law, Art. 6:101, comments 7 and 8 by O. Moréteau. See L. Francoz-Terminal/F. Lafay/O. Moréteau/C. Pellerin-Rugliano, Children as Tortfeasors under French Law, in: M. Martín-Casals (ed.), Children in Tort Law, Part I: Children as Tortfeasors (2006) 169 ff., at no. 94 ff. Cass. 2nd Civ 20 November 2003, D. 2004, 300, note G. Bouché; RTDCiv 2004, 106, observations P. Jourdain.

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competitions. This may explain why the Court of Cassation requests a very obvious fault on the part of the author of the damage, still accepting that such author may not be identified. The law to be applied to sport grounds seems now to be clarified. Where the players are minors, parents may be answerable even where there is no fault on the part of the child. But the sporting club will only be liable in those cases where at least one player was at fault.27 The same rule of course applies in the case of major players. Are there reasons to extend the liability of the club beyond the scope of the liability of the individual players? The French response is now in the negative, and this should apply to all cases of liability for others, with the exception of the liability of parents for the acts of their children, where, as we noted, the requirement of the fault by the child is now abandoned. At the end of the day, and this is the good news, one sees the French law of liability for others come closer to the Principles of European Tort Law.28

28

5. Cass. 2nd Civ. 28 June 2007, Juris-Data no. 2007-039763, JCP 2007, I, 185, No. 4, Observations Ph. Stoffel-Munck: Liability for Picketing a) Brief Summary of the Facts

Some employees of a bus company were on strike. They organised picketing, with the help of people who were not employed by the enterprise, to block the circulation of buses and paralyse bus traffic. The bus company sued two non-employee participants, asking them to compensate for the economic loss caused by the blockade.

29

b) Judgment of the Court

The lower court dismissed the claim, noting that the bus company had not proved that the two defendants alone had prevented the buses from running. The Court of Cassation quashed and annulled the decision, holding that where several persons have caused the same damage, each tortfeasor is liable to pay the full compensation.

30

c) Commentary

This is a very ordinary and classical solution, traditionally applied to cases of multiple tortfeasors. In 2007 again, the same Second Chamber of the Court of Cassation applied it to a hunting accident.29 What is new is to see it applied in the context of a labour dispute. The Social Chamber of the Court of Cassation has in the past excluded the solidary liability of picketing employees, just because the lower courts had not identified the fault of each employee and its causal link to the damage.30 The employer has of course the possibility of 27 28 29 30

See François, D. 2007, at 2413, citing J. Mouly, JCP 2004, II, 10007, no. 8. See art. 6:101 and 6:102. Cass. 2nd Civ. 26 April 2007, Juris-Data no. 2007-038504. Cass. Soc. 30 January 1991, Bull. Civ. 1991, V, no. 40; Cass. Soc. 18 January 1995, Bull. Civ. V, no. 27.

31

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dismissing them. In the present case we are dealing with third parties, and it is fair to treat them as solidary tortfeasors.

32

Is the Court of Cassation ready to extend the present ruling to picketing employees? It recently refused to make unions liable for the acts of their members,31 and the logical move would be to allow employers to sue their picketing employees. But for this to happen, it would take a bold employer not fearful of the strikes that such action may trigger. France is changing these days, but maybe not that far. 6. Cass. 1st Civ. 19 December 2006, JCP 2007, II, 10052, Note S. Hocquet-Berg, RTDCiv 2007, 352, Observations P. Jourdain: Hypothetical Damage and Preventive Expenses a) Brief Summary of the Facts

33

A pacemaker with an auricular probe had been implanted in a heart patient. This type and model of probes caused problems, due to the wire connecting the probe to the pacemaker. For that reason, the manufacturer of the probes stopped marketing this model and organised a worldwide survey to monitor possible problems, informing cardiologists of the risk, and recommending that patients be subjected to more frequent check-ups. The claimant was one of several patients who just could not face the prospect of living with a lifethreatening device: cases of death and severe heart injury had been reported wherever the wires happened to break. She had the unit removed and replaced on the occasion of another surgical operation that she had to undergo anyway. Upon removal, it appeared that the probe was not defective at all, but the patient sued the producers of the probe, arguing that she had suffered severe shock and stress when discovering the risk. b) Judgment of the Court

34

The first judges held the manufacturing company liable: there was a defect in the design of the product, making the producers liable on the basis of the European Directive of 1985 on product liability. The first judgment was reversed, the Lyon Court of Appeal noting that the probe had no defect at all. The claimant had been exposed to a risk, but there was no actual damage to be repaired. The First Civil Chamber of the Court of Cassation reversed in part. The appellate judges had rightly decided that the damage was hypothetical and therefore there was no ground of action. However, they had failed to respond to the claim based on the compensation of the non-pecuniary damage (dommage moral). c) Commentary

35

Conventional analysis leads to the conclusion that the damage was purely hypothetical (préjudice éventuel). The position of the Lyon Court of Appeal and of the First Civil Chamber does reflect what appears to be the dominant view 31

Cass. 2nd Civ. 26 October 2006, case no. 3 above.

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in French jurisprudence and doctrine:32 the patient had to undergo surgery anyway, all went well, and the probe was not defective. There is therefore no room for compensation, neither based on the general rules of the Civil Code, nor on the special rules derived from the product liability directive.33 According to this traditional view, compensation may only be due if the probe or wire was broken or if surgery had been undergone for the exclusive purpose of the removal. However, this does not exclude the compensation of the non-pecuniary damage generated by the stress and anxiety, as pointed out by the Court of Cassation. Insisting on the hypothetical character of the damage, Sophie Hocquet-Berg notes that the manufacturing company had acted in a responsible manner when discovering the risk and insists that the duty to compensate may deter producers from disclosing the potential defect and risk.34 One should not add the burden of a financial risk to companies acting as good citizens and disclosing problems.

36

Still, one may argue that the financial risk is much higher for companies when people happen to die. Also, may we reasonably tell proactive victims such as the plaintiff in the present case that their risk is purely hypothetical? Victims will reply that they have been subjected to a very obvious non-pecuniary damage, and add that the cost of preventive expenses is way below that of the actual risk. There is an obvious call here for admitting the compensation of preventive expenses.

37

What is the position of French law regarding the compensation of preventive expenses? French law may generally be regarded as victim friendly. Yet, it does not appear, at least at first sight, as prevention oriented. French tort law does not oblige victims to mitigate their damage35 and does not allow them to receive compensation for their preventive expenses. Things may change if the Catala Avant-projet is adopted. It provides for mitigation of damage36 and makes rules on preventive expenses,37 echoing the Principles of European Tort Law.38

38

32

33 34 35

36

37

38

See G. Viney/P. Jourdain, Les conditions de la responsabilité (3rd ed. 2006) no. 276 and S. Hocquet-Berg, note on the present case. Civil Code, art. 1386-1 ff. Note to the present case. Cass. 2nd Civ. 19 June 2003, D. 2003, 2326, note J.P. Chazal, commented by O. Moréteau, France, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2003 (2004) 156, no. 64–76. For a comparative approach advocating the introduction of mitigation of damage into French law, see S. Le Pautremat, Mitigation of Damage: A French Perspective, 55 International & Comparative Law Quarterly (ICLQ) 2006, 205 ff. Art. 1373: “When the victim by sure, reasonable, and proportionate means might have reduced the extent or the aggravation of the injury suffered, his failure to do so will result in a reduction of his award, unless the nature of the measures would be such as to violate his physical integrity.” Art. 1344: “Expenditures committed to the prevention of the imminent occurrence of some harm or its aggravation, or to reduce its effects, constitute a compensable injury, provided they have been reasonably committed.” Principles of European Tort Law, art. 2:104: “Expenses incurred to prevent threatened damage amount to recoverable damage in so far as reasonably incurred.”

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Olivier Moréteau

39

The French Court of Cassation may have missed an opportunity to anticipate an evolution to come. This may be regretted, given the possibility of doing so without departing from traditional rules. Firstly, there was a defect in the design of the product, the probe coming with wires that break easily. Secondly, this defect is potentially life-threatening, causing a serious risk to human life, the most protected of interests. Thirdly, the interference of the victim in the chain of causation is triggered and justified by the initial cause: she tried to escape a risk of death by a reasonable choice, which is good judgment and common sense. Her effort to avoid the highest risk by incurring a much lower risk is exactly in line with art. 1344 of the Catala Avant-projet and art. 2:104 of the Principles of European Tort Law.

40

The Court of Cassation was not totally sure it exerted good judgment in the present case: it decided not to publish the case in its Bulletin. Yet, it is good news that the case did not go unnoticed. It triggers a discussion that may eventually lead French jurisprudence to align with an enlightened European evolution. Prevention has heavy bearings in the area of public health and environmental protection. The preventive dimension of tort law cannot be ignored. It is clearly asserted in art. 10:101 of the Principles of European Tort Law: “Damages also serve the aim of preventing harm.” 7. Cass. Plen. Ass. 6 April 2007 (two cases), D. 2007, 1839, Note H. Groutel, JCP 2007, II, 10078, Note P. Jourdain, JCP 2007, I, 185, No. 9, Observations Ph. Stoffel-Munck: The Driver’s Fault Must be Causal to Restrict or Exclude Compensation a) Brief Summary of the Facts

41

In the first case, a collision took place between a car and a motorcycle at an intersection with a stop sign. According to the Gendarmerie and witnesses, the car did not stop long enough at the sign to be able to identify incoming traffic on the protected road. The victim was riding the motorcycle at a reasonable speed and on the proper side of the road, but was found with 0.85 grams of alcohol per litre of blood, and was therefore driving in an intoxicated state.

42

In the second case, a car driver had hit a motorcycle that was driving in the opposite direction. The motorcyclist was found with 1.39 grams of alcohol per litre of blood, but his intoxicated state had been found to have had no influence on the circumstances of the collision. b) Judgment of the Court

43

In both cases, the lower courts ordered the car drivers and their insurance companies to fully compensate the motorcyclists for the full damage suffered as a consequence of the accidents. In both cases, the defendants appealed to the Court of Cassation, arguing that, according to art. 4 of the Law of 5 July 1985 relating to the compensation of victims of road-traffic accidents,39 the driver’s 39

Law no. 85-677 of 5 July 1985.

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fault “has the effect of limiting or excluding the compensation of the damage he suffers.” In both cases, the Plenary Assembly of the Court of Cassation dismissed the appeal, holding that the lower judges had duly checked that the driver’s fault (driving the motorcycle in an intoxicated state) had had no causal impact on the damage. c) Commentary

This looks like an easy problem receiving a straightforward and obvious solution. The Law of 1985 had established an efficient system of compensation for victims of road accidents, making the driver fully answerable wherever his vehicle is implicated, regardless of his fault or of the victim’s fault, except where the latter is inexcusable and can be regarded as the exclusive cause of the accident. Art. 4 of the Law of 1985 deals with the compensation of the driver when the driver is also a victim of the accident. It has the effect of limiting or excluding compensation wherever the driver had been at fault.

44

For some, this provision aims at punishing the driver and creating an incentive for safer driving. It is seen as a forfeiture of the right to compensation, regardless of causation.40 The driver should be deprived of compensation, even if the fault did not cause the accident or did not make its consequences more damaging. For others, the driver’s fault is to be taken into consideration on the basis of causation.41 To make a long story short, art. 4 of the Law of 1985 has generated many cases and shifts in the jurisprudence of the Court of Cassation.

45

From the very beginning, the courts insisted that the driver’s fault should have had some causal impact,42 with hesitations as to whether causation should be presumed or not.43 A willingness of the Court of Cassation to see the victim’s fault as obviously causal appeared in recent cases decided by the Second Civil Chamber of the Court of Cassation.44

46

In the present cases, the Plenary Assembly insists on the necessity of proving causation. As noted by Professor Jourdain, this is a return to orthodoxy.45 Such a solution must be approved and the idea of forfeiture of the right to compensation is to be rejected. The very idea that a driver may lose his right to compensation because of a delay in buckling up when pulling out of his driveway, being hit by an intoxicated driver passing through a village at 100 km per hour, is not acceptable. It is the task of criminal law to punish, and of civil law to compensate. After all, the very purpose of the Law of 1985 was to improve the condition of victims, not to make it more difficult for them to be compensated.

47

40 41 42 43

44 45

H. Groutel, note on the present cases. P. Jourdain, note on the present cases. Cass. 2nd Civ. 2 December 1987, Bull. Civ. 1987, II, no. 254. The fact of driving beyond authorized speed limits (Cass. 2nd Civ. 16 November 1994, Bull. Civ. 1994, II, no. 228) or of not wearing a seat belt (Cass. 2nd Civ. 5 October 1994, Bull. Civ. 1994, II, no. 187) was presumed to be a fault making the damage more serious, if not causing the accident itself. See Cass. 2nd Civ. 13 October 2005, JCP 2006, II, 10004, note G. Kessler. Note on the present cases.

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Thanks to the present decisions coined with the authority and wisdom of the Plenary Assembly, we may avoid situations where victims of car accidents would receive compensation under the traditional rules in the Civil Code and be deprived of it under the supposedly more favourable statute.

C. LITERATURE 1. Philippe Brun/Patrice Jourdain (eds.), Loi Badinter: le bilan de 20 ans d’application (LGDJ Bibliothèque de l’Institut André Tunc, 2007)

48

These are the papers of a conference exploring the development and the perspectives of the jurisprudence based on the Law of 5 July 1985 relating to the compensation of victims of road-traffic accidents. Much information is to be found in this volume, which will remain a source book for specialists in tort and insurance law. 2. Cécile Le Gallou, La notion d’indemnité en droit privé (LGDJ Bibliothèque de droit privé, 2007)

49

This well documented study is much more than an encyclopaedic approach of the question of compensation in the area of private law. It is also a reflection on commutative justice and distributive justice. Cutting across the two, indemnity is defined as a financial compensation of an unjustified loss. It is not a counterpart or consideration, it is not a private penalty, it should not permit the enrichment of the victim, and it is not a gift. Indemnification aims at re-establishing the objective balance between an enriched patrimony and impoverished patrimony. 3. Clothilde Grare, Recherches sur la cohérence de la responsabilité délictuelle – L’influence des fondements de la responsabilité sur la réparation (Dalloz Nouvelle bibliothèque de thèses, 2005)

50

The author shows how French tort law has lost consistency with the multiplication of special regimes, and how consistency can be found again, based on the five articles in the Civil Code. This is a very ambitious project, showing that if fault is often abandoned in all new doctrines and regimes, even where strict liability is established, the rules relating to the compensation of damage have not changed much and are still based on the doctrine of fault, controlling solutions behind the scene, as shown in some of the cases commented above, especially case number 7. The author then proposes to rebuild the entire system, re-establishing tort law on its two traditional legs, a compensatory function and a normative function. She proposes two types of actions: “reparation-compensation” aiming exclusively at compensating a damage, and “reparation-expiation” aiming at irreparable loss such as non-pecuniary damage, the latter to include a dimension of penalty. This is a very inspired and inspiring reflection on the future of tort law.

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4. Julie Traullé, L’éviction de l’article 1382 du Code civil en matière extracontractuelle (LGDJ Bibliothèque de droit privé, 2007) Much has been written on the development of special rules and regimes and the shrinking scope of application of the general clause in art. 1382 of the Civil Code. This well researched doctoral work shows that art. 1382 should only be disregarded when making the special regime less efficient. Otherwise, it should combine with such regime, such as in the area of freedom of the press where it has been unduly disregarded.46

51

5. Geneviève Viney (ed.), L’avant-projet de réforme du droit de la responsabilité (Revue des contrats 2007, no. 1) The first volume of the Revue des contrats for 2007 published the papers of a major conference where the best specialists of the French law of obligations presented reports on the tort aspects of the Avant-projet and its relationship with the law of contract, with an introduction by Pierre Catala, a general presentation by Geneviève Viney. Pascal Ancel, Philippe Brun, Bernard Fages, Jérôme Huet, Fabrice Leduc, Denis Mazeaud, Christophe Radé, Eric Savaux, and Philippe Le Tourneau commented on various aspects of the project. Comparative overviews were given by Bernard Dubuisson (Belgium), Stefan Lorenz (Germany), Pierre Wessner (Switzerland) and Simon Whittaker (United Kingdom).

52

6. Marcel Bayle, La responsabilité du bailleur de fonds pour préjudice environnemental: proposition de réforme, D. 2007, 2398 In French, one utters “pollueur, payeur”: the one who pollutes must pay. This article adds that parties financing polluting activities must pay, inviting the legislature to intervene so that institutions financing polluting and dangerous activities should be liable. The article addresses procedural aspects as well as banking law.

53

7. Christine Noiville (ed.), Le principe de précaution, D. 2007, 1514 This series of articles, signed by A. Alemanno, G. Brücker, F. Ewald, L. Fonbaustier, L. Gradoni, M.A. Hermitte, C. Noiville, A. Rouyère, H. Ruiz-Fabri and G. Viney explores the slow impact and development of the precautionary principle through French and European Union jurisprudence in various fields.

46

See Cass. 1st Civ. 27 September 2005, D. 2006, 485, note T. Hassler, commented by O. Moréteau, France, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2006 (2008) 196, no. 20– 24.

54

X. Germany Jörg Fedtke

A. LEGISLATION 1. Umweltschadensgesetz1

1

This piece of legislation, which can be translated as the Environmental Damage Act, is based on EC Directive 2004/35/EC.2 The Act, which entered into force in November 2007, has retroactive effect (dating back to 30 April 2007)3 and aims at the prevention and removal of health risks and threats to biodiversity caused by occupational (and in particular industrial) activities. The Umweltschadensgesetz establishes liability under public law and addresses damage or threats to water resources, soil, protected species, and natural habitats.4 In line with Community law, liability is limited to individual polluters and incidents, and is not instrumental to combatting pollution in general.5

2

Personal injury, damage to private property, and pure economic loss of third parties – even if consequential – are not covered;6 private claims continue to find their most important basis in the Environmental Liability Act of 1990.7

3

Polluters are required to inform the authorities about incidents that adversely affect the environment,8 must take all necessary steps to limit or avert damage to natural resources,9 and restore as far as possible the original situation 1

2

3 4 5 6

7 8 9

Gesetz zur Umsetzung der Richtlinie des Europäischen Parlaments und des Rates über die Umwelthaftung zur Vermeidung und Sanierung von Umweltschäden (Umweltschadensgesetz, USchadG) of 10 May 2007, BGBl I, no. 19, 666. Directive 2004/35/CE of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage, Official Journal (OJ) L 143, 30.4.2004, 56–75. § 13(1) USchadG. § 2 no. 1 USchadG. § 3(4) USchadG. See D. Greinacher, Bahnbrechend Neues oder alles wie gehabt? – Umsetzung der Umwelthaftungsrichtlinie in deutsches Recht, Produkthaftpflicht International (PHi) 1/2007, 2 ff. Umwelthaftungsgesetz (UmweltHG) of 10 December 1990, BGBl I, 2634. § 4 USchadG. § 5 USchadG.

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at their own expense.10 A schedule identifies the occupational activities which fall within the scope of the Act.11 Examples include the handling, storage and disposal of waste,12 the authorised use of water resources,13 and the handling, storage, use, or transport of hazardous substances.14 The statute establishes a no-fault regime, but does not apply to environmental damage and imminent threats of such damage caused by armed conflict,15 exceptional, inevitable and uncontrollable natural phenomena,16 or situations which fall within the scope of a number of specific international agreements.17 The Umweltschadensgesetz is linked to other core environmental statutes, in particular the Environmental Protection Act,18 the Water Resources Act,19 the Act on Genetic Engineering,20 and the Soil Protection Act,21 each of which defines specific types of environmental damage in greater detail. The more protective regime will prevail in case of an overlap. While supplementing the existing environmental liability rules rather than creating a completely new regime, the Act will serve as an important default mechanism and could in the future lead to a higher level of intervention by public authorities especially in the area of long-term restorative measures. The insurance industry has yet to develop a workable response to the new situation.22

4

2. Gentechnikgesetz Following heated public debates, the Federal Government in August 2007 initiated legislation aimed at amending the Act on Genetic Engineering.23 Core elements of the proposal include the exemption of particular types of GMOs from the scope of the regulatory regime established by the GenTG,24 a stream10 11 12 13 14 15 16 17 18

19

20

21

22

23

24

§ 6 and 9 USchadG. Anlage 1 USchadG. No. 2 Anlage 1 USchadG. No. 3–6 Anlage 1 USchadG. No. 7 and 8 Anlage 1 USchadG. § 3(3) no. 1 USchadG. § 3(3) no. 2 USchadG. § 3(3) no. 3–5 USchadG. Gesetz über Naturschutz und Landschaftspflege (Bundesnaturschutzgesetz, BNatSchG) of 25 March 2002, BGBl I, 1193 (as amended). Wasserhaushaltsgesetz (WHG) in der Fassung der Bekanntmachung vom 19. August 2002, BGBl I, 3245 (as amended). Gesetz zur Regelung der Gentechnik (Gentechnikgesetz, GenTG) of 20 June 1990, BGBl I, 2066 (as amended). Gesetz zum Schutz vor schädlichen Bodenveränderungen und zur Sanierung von Altlasten (Bundes-Bodenschutzgesetz, BBodSchG) of 17 March 1998, BGBl I, 502 (as amended). See J. Sons, Das Umweltschadensgesetz und die Umweltschadensversicherung, PHi 3/2007, 86 ff.; Greinacher, PHi 1/2007, 10. Entwurf eines Vierten Gesetzes zur Änderung des Gentechnikgesetzes, Drucksache des Bundestages 16/6814 of 24 October 2007 and Drucksache des Bundesrates (BR-Dr) 535/07 of 10 August 2007 (RegE GenTG). The Bill was renamed after further parliamentary debate and is now under review in the second chamber as “Gesetz zur Änderung des Gentechnikgesetzes, zur Änderung des EG-Gentechnik-Durchführungsgesetzes und zur Änderung der Neuartige Lebensmittel- und Lebensmittelzutaten-Verordnung” of 25 January 2008, BR-Dr 52/08. § 2(1) and 2a (new) RegE GenTG.

5

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Jörg Fedtke

lined application procedure for the free-range use of low-hazard GMOs,25 and the encouragement of private agreements concerning cross-over fertilisation between neighbouring properties.26 Suggestions to further limit access of interested third parties to the restricted sections of the GMO location register27 and, more importantly, plans to change the rules on joint and several liability (both included in the first draft of the Bill) were dropped.28

6

The Federal Government is fighting an uphill battle in its attempts to relax restrictions on the use of GMOs which have characterised German law over the past decade. Public opinion and the scepticism of many leading experts concerning the safety, in particular, of genetically modified crops make this a politically sensitive issue. The current regime – based on nuisance29 rather than tort law – comes very close to strict liability. The reform proposal, which has yet to find the approval of the second legislative chamber, could thereby be the thin end of the wedge for the supporters of a more liberal regime as the Bill leaves untouched the general liability rules but reduces the overall ambit of the statute. Whatever the final outcome of this particular battle, the fight over the commercial use of GMOs is sure to go into its next legislative round in the very near future.

B. CASES 1. Bundesgerichtshof (BGH), 5 October 2006, JZ 2007, 364: Personality Rights; Post-mortem Right to One’s Name30 a) Brief Summary of the Facts

7

The plaintiffs are the heirs of the actor Klaus Nakszynski, better known as Klaus Kinski, who died in 1991. They sought to stop registration and use of the internet domain name “klaus-kinski.de” by the defendants for the purposes of promoting an exhibition about the deceased, and – in this litigation – claim compensation of the cost of warning the defendants about any such future use of Kinski’s name. b) Judgment of the Court

8

The Court acknowledges that Klaus Kinski, himself, would have had a claim resulting from the infringement of the right to his name under § 823(1), 12 BGB. His heirs do not. While the right under § 12 BGB ceases to exist with the death of an individual, the claim can potentially flow from an infringement of Kinski’s post-mortem personality right,31 parts of which are inheritable and 25 26 27 28

29 30 31

See § 8, 9 and 12 (new) RegE GenTG. See § 16b (new) RegE GenTG. So-called Standortregister. See the press statement of the Federal Ministry of Education and Research of 8 August 2007 at: http://www.biosicherheit.de/de/aktuell/579.doku.html. See § 906 BGB. Case 1 ZR 277/03 (LG Berlin). Postmortaler Persönlichkeitsschutz.

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protected under § 823 BGB. Commercial interests fall within the protective scope of this right, subject, however, to a careful balancing with contravening interests such as artistic freedom and freedom of speech. A second, and in this case crucial, limitation follows from the fact that the post-mortem personality right can only be invoked for up to ten years after the death of an individual. The Bundesgerichtshof thus draws an analogy to § 22 Kunsturhebergesetz, which expressly limits the protection of the right to one’s image to that period. c) Commentary

The Bundesgerichtshof developed the notion of commercially valuable and inheritable aspects of a post-mortem right to one’s personality several years ago in an attempt to curb their exploitation by third parties.32 This approach sought to circumvent restrictions on the rights of heirs to claim compensation directly for infringements of a deceased’s personality right – restrictions based on the argument that the dead could not feel satisfaction, and that an award in money (designed to grant such satisfaction) could therefore not lie with the heirs either. This approach involved the risk of strengthening the general right of personality at the expense of important contravening legitimate interests such as that of society to discuss aspects of the deceased’s life without undue restrictions. This decision now steers clear of that danger by limiting the length of time that heirs can intervene. The Court itself emphasised that a wide range of different timeframes had been discussed in academic literature, ranging from 30 to as much as 70 years. This judgment puts the protection of commercially exploitable post-mortem personality rights on par with the legislative decision to offer protection to the image of deceased individuals for only a decade. This does strike an appropriate balance between, on the one hand, the interests of heirs to limit the commercial use of what will often be a close relative’s name and, on the other, the general interest of society in an unrestricted discourse involving well-known public figures.

9

2. BGH, 22 May 2007, JZ 2007, 1154: Psychiatric Injury33 a) Brief Summary of the Facts

The plaintiff is the employer of a police officer (P1) who witnessed a horrific head-on collision between two vehicles on the way back home from his night shift, and a second officer (P2) who arrived at the scene moments later. All passengers involved in the crash – a single driver (T, client of the defendant insurance company) who drove against the traffic, and a family of four – were killed. P1 suffered a whiplash syndrome when his car hit a road barrier in an attempt to avoid the debris. He then apparently tried to rescue the passengers trapped in the wreckage, but was forced to abort the attempt when a fire broke out. Both P1 and P2, who was on duty and secured the site, were treated for 32

33

BGHZ 143, 214 of 1 December 1999, confirmed by the Federal Constitutional Court in Entscheidungen des Bundesverfassungsgerichts (BVerfGE) Neue Juristische Wochenschrift (NJW) 2006, 3409 (Marlene Dietrich). Case VI ZR 17/06 (OLG Zweibrücken).

10

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Jörg Fedtke

“posttraumatic” stress disorder. P1 was unable to perform his duties for several months after the event; P2’s working capacity remains permanently reduced. The plaintiff claims compensation of all medical and other costs resulting from the injury of the two officers. The court of first instance dismissed the claim in full. The plaintiff was successful on appeal only as far as further compensation for the whiplash syndrome is concerned. b) Judgment of the Court

11

The Bundesgerichtshof confirmed that the plaintiff is not able to claim compensation for the costs caused by the “posttraumatic” stress disorder suffered by P1 and P2. This is the case even if the condition of the two officers is severe enough to actually constitute an illness within the meaning of § 823(1) BGB, for the harm suffered by P1 and P2 does not fall within the protective scope (Schutzbereich) of § 823(1) BGB, 7(1) StVG.34 Both officers performed their official duties on occasion of the traffic accident. Their highly commendable attempts to save the passengers are not sufficient to create the relationship of close proximity between the victim of a psychiatric injury (nervous shock) and the tortfeasor. While P1’s whiplash syndrome was a direct consequence of T’s violation of road traffic rules, both policemen suffered shock not (1) as victims directly involved in the accident; or (2) as close family members (parents, children or spouses) of primary victims; or (3) by having been provoked into a dangerous but ultimately reasonable rescue action. They are instead merely coincidental witnesses of an accident, the consequences of which they have to bear as part of the general risks of life. c) Commentary

12

This judgment of the Bundesgerichtshof stays well within known territory of its nervous shock jurisprudence35 while answering in the negative the question whether coincidental witnesses can claim damages for psychiatric injury. The BGH thus clarifies an issue already raised years ago.36

13

The fact that one of the officers involved in the incident suffered not only nervous shock but also bodily harm in the course of a sequence of interlinked events makes this case both interesting and difficult. In dealing with his two injuries, the Court draws a line between the first part of the accident (the crash, in which P1 was directly involved) and its immediate aftermath (the rescue attempt). P1 suffered a nervous shock in the latter phase and (while clearly not a family member) is considered a mere bystander because the Court felt that T’s action had not provoked him into attempting to save the passengers. This is open to criticism, however, bearing in mind that German law – unlike other systems – establishes a general duty to come to the aid of persons in distress (§ 323c of the Federal Criminal Code). Until the vehicles were engulfed by fire, 34 35

36

Road Traffic Act (Strassenverkehrsgesetz). For cases concerning nervous shock of close family members see BGH NJW 2001, 1431; BGH Versicherungsrecht (VersR) 2005, 1238; and BGH VersR 2007, 803. See BGH VersR 1986, 240.

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P1’s attempt to save the victims must thus be regarded as a perfectly reasonable and, indeed, foreseeable reaction to the accident caused by the defendant’s client. Further doubts about the Court’s approach to “uninvolved” bystanders follow from new medical evidence, which increasingly puts in question the distinction between physical injuries and psychologically induced conditions. Current wisdom in respect to the latter is to exclude claims in principle but to allow very limited exceptions (especially when close family members are affected). The main argument in favour of this restrictive approach, the fear of opening the floodgates, has today lost some of its force as knowledge about the causes, symptoms, and consequences of nervous shock is much more advanced than it was when the problem first appeared in courtrooms years ago. An additional difficulty in this case is, finally, caused by the second shock victim, P2. The Court chose to deal with both officers in the same way, while P2 reached the scene of the accident at a later stage and, more importantly, while on duty. Apart from invoking their police training as a further reason to treat the psychological consequences of witnessing an accident as a “normal” risk of daily life, the BGH did not focus on the professional training of the two officers. This opened the way to avoid dealing more fundamentally with the status of rescuers (i.e. doctors, fire fighters, or policemen) but may have muddied the waters in the case at hand by tilting the balance against a partial recognition of the claim with respect to the injuries suffered by P1.

14

3. BGH, 17 April 2007, DAR 2007, 454: Minors in Road Traffic37 a) Brief Summary of the Facts

The plaintiff car driver had been standing at a road junction for a very short period of time and was assessing the situation for oncoming traffic when the 8-year-old defendant cyclist ran into her vehicle. The view of the defendant was obstructed by a roadside hedge, though he must have seen the plaintiff at a distance of about 20m. He was riding his bicycle at high speed and may not have been paying adequate attention to the traffic situation. The plaintiff sought to recover damages of about € 1,400 caused by the impact. The court of first instance dismissed the claim in full. The plaintiff was awarded 80% of the amount on appeal.

15

b) Judgment of the Court

The Bundesgerichtshof annulled this decision upon further appeal and referred the case back to the Landgericht Bayreuth. The decision of the legislator to exclude in traffic accidents the liability of young children aged between seven and ten, guided by new scientific evidence about their limited ability to grasp complex traffic situations and act accordingly, often under intense time pressure, merits only very few exceptions. One of these exceptions are legally parked cars, which were in past cases damaged by young cyclists or skateboarders. These situations must, however, be distinguished from the decision 37

Case VI ZR 109/06 (LG Bayreuth).

16

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Jörg Fedtke

at hand. Both parties are in fact part of a complex traffic situation even if the vehicle of the plaintiff was indeed stationary seconds before the impact and (possibly) when it appeared within view once the defendant had passed the hedge. A car halting briefly in the course of the normal stop-and-go of traffic can create similar difficulties for inexperienced children and is part of the dangers which the legislator had in mind when reforming the law in 2002. The Court was, moreover, not willing to entertain the argument that the particular child in question was not in fact overwhelmed by the situation but caused the accident due to unrelated factors. c) Commentary

17

The current § 828(2) BGB, introduced as part of a larger reform project more than five years ago, excludes the delictual responsibility of young children in the event of negligently caused accidents with motorised vehicles and trains. This privilege does not apply if damage is caused intentionally.38 These changes, as pointed out by the Court, stem from new scientific findings on the development of children. They take into account that minors under the age of ten are generally unable to recognise and respond to the special dangers resulting from traffic situations due to their limited physical and psychological abilities.39 Features of young children such as playfulness, the natural urge to experiment and explore their environment, spontaneous actions as well as lack of concentration frequently lead to traffic accidents, and it is these which the lawgiver wanted to address.40 As a consequence, motorists and operators of trains have had to bear additional financial burdens – both as victims (when declined recovery) and as tortfeasors (when declined a reduction of claims on the basis of a minor’s contributory negligence). The legislator believed that these problems could to some extent be limited, first, by a wider application of § 829 BGB (a hitherto largely dormant provision establishing a duty of tortfeasors privileged under § 827 and 828 BGB to compensate for equitable reasons) and, second, a spreading of the loss via first party vehicle insurance. Both scenarios do not seem to have materialised in practice. Court decisions granting relief based on § 829 BGB remain exceptional while many motorists shun the higher cost of first party insurance because of the limited value of their (used) vehicles. The plaintiff in this case will in all likelihood have to shoulder the damage herself – hence her attempt to limit through restrictive interpretation the scope of § 828(2) BGB. The BGH was, however, right in distinguishing previous decisions involving legitimately parked cars from brief stops in what often remain very complex traffic situations. Apart from the difficulty of establishing whether a vehicle was in fact stationary or still moving in a particular case, there can hardly be any doubt that the situation in question falls squarely within the ambit of the privilege as envisaged in 2002. The underlying problem (vividly highlighted by this protracted litigation over € 1,400) is political. To burden many drivers with the cost of a policy which (for good reasons) helps young children may not be entirely fair even if it is accepted 38 39 40

Art. 2 no. 4 SchadÄndG-E. SchadÄndG-E (explanatory section), 11. SchadÄndG-E (explanatory section), 16 and 26.

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(as in Germany) that motorised traffic is inherently dangerous. The alternative would be to require parents to take out third party insurance for their children (an idea that no political party would propose at present), to compensate the damage caused by negligent children out of the public purse, or to offer some form of tax reduction for the victims. The Bundesgerichtshof was, finally, also right in resisting the attempt of the plaintiff to show that the accident was not really caused by inexperience or the complexity of the particular situation. The age limit intends to provide a clear guideline in cases of this kind, and avoids a difficult – if not impossible – reconstruction and assessment of the child’s abilities and actions at the critical point in time. 4. BGH, 7 November 2006, JZ 2007, 641: Information of Patients I41 a) Brief Summary of the Facts

The plaintiff had to undergo fairly rare and difficult intestinal surgery, which led to complications involving several additional operations, lengthy treatment in intensive care, and extensive rehabilitation measures. The defendant, at the time chief physician at the hospital, performed the initial operation but did not personally inform the plaintiff of its potential risks. This was done by one of the regular duty ward doctors, who was certainly experienced but had never performed this particular type of surgery himself. The plaintiff maintains that she was not adequately informed prior to the surgery, and claims compensation for pain and suffering in the range of € 75,000. The lower courts dismissed the claim in full without considering in any detail whether the defendant was obliged to warn the plaintiff of the dangers that eventually materialised or whether she had given hypothetical consent to what was in effect an inevitable operation. This outcome was based on the assumption that the defendant had, in any case, properly delegated his legal duty to inform the plaintiff to the ward doctor, who in turn was sufficiently qualified to perform the task. This was deemed sufficient in the absence of any indications that the ward doctor would not discharge his duties appropriately.

18

b) Judgment of the Court

The Bundesgerichtshof reiterates in strongest terms the duty of every doctor to ensure that patients have been adequately informed about the risks prior to the commencement of a particular treatment. The doctor actually performing the surgery can therefore not escape liability even if he relied on someone else to explain the risks to the patient. Delegation of this duty is permissible but will not automatically exculpate the surgeon, who has to put in place, review, and record effective control mechanisms to ensure that the required information is properly administered in practice. The defendant, who submitted, first, that he routinely checks every patient’s file prior to surgery in order to verify that written consent is indeed given and, second, in over ten years never had any reason to question the professionalism of this particular ward doctor, has not complied with these strict standards. This is particularly true in the light of the unusual difficulties posed by the kind of operation in question, which the ward doctor had at that 41

Case VI ZR 206/05 (OLG Schleswig).

19

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point in time not yet performed himself. The defendant should thus have developed and enforced a special protocol covering complex operations, or discussed the plaintiff’s procedure with the ward doctor prior to surgery. The BGH returned the case to the court of appeal (OLG Schleswig) for clarification as to what – if any – more particular organisational steps were taken by the defendant. c) Commentary

20

This case, together with the following decision of 27 March 2007, shows the high standards established by the Bundesgerichtshof in the area of informed consent. Explaining to the patient in detail the risks of a particular treatment is part and parcel of a doctor’s regular duties, and though delegation is possible and – in today’s modern hospital environment – practically inevitable, this duty continues to rest with the staff member actually performing the surgery. This judgment thus deals with the difficult balance between division of labour in the incredibly complex world of larger medical facilities and the individual responsibility of the person actually dealing with a patient somewhere down the line. The legal context is § 831 BGB, and here in particular the duty of the principal to choose carefully and supervise adequately anyone designated to act on his behalf. The strict interpretation of this provision in medical liability cases will, furthermore, require meticulous documentation. On balance, the case suggests that doctors dealing with more difficult operations might be better off, both in terms of time and risk management, if they prepare their patients themselves. 5. BGH, 27 March 2007, MedR 2007, 653: Medical Malpractice; Information of Patients II42 a) Brief Summary of the Facts

21

The plaintiff, who has been suffering from epilepsy since early youth, was for many years treated as an outpatient in a specialised medical facility operated by the first defendant. In 1989 he declined neurological surgery suggested by his doctor, the second defendant, which might have reduced the number of seizures he was experiencing (between four and ten per month). Two years later he agreed to try an investigational drug developed in the United States. This new substance had already been approved by health agencies in other European countries but neither the U.S. Food and Drug Administration (FDA) nor the German Bundesinstitut für Arzneimittel und Medizinprodukte had yet authorised its general use. The drug was in fact still being clinically tested in the facility of the first defendant. The plaintiff was not involved in these tests. The German health agency approved the substance less than three months later, subject, however, to a warning in the package insert that any possible long-term effects on the visual system had not yet been investigated, and that patients were advised to have their eyes monitored at monthly intervals.

22

The plaintiff experienced difficulties with his vision six months later and sought treatment in a specialised eye clinic. The defendants were aware of this 42

= Juristenzeitung (JZ) 2007, 1104. Case VI ZR 55/05 (OLG Karlsruhe).

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development and also received the final report of the clinic, which concluded that the plaintiff’s eye condition was probably the result of medication related to his epilepsy. The plaintiff was then again treated in the facility of the first defendant. Treatment with the epilepsy drug was terminated a few weeks later following further tests. It was not resumed despite a subsequent request of the plaintiff to that effect. The plaintiff argues that his – now permanently – deteriorated eyesight, which led to the loss of his job, was caused by the epilepsy drug, and that he was at no point informed about possible negative side-effects. He maintains that he would not have agreed to the treatment had he known from the outset that the substance had yet to be approved by the health authorities. Finally, he claims that the second defendant should have terminated the treatment as soon as the first difficulties with his vision became apparent. He claims damages for pain and suffering (€ 35,790), loss of income (€ 65,942), and compensation of any future loss caused by his treatment with the drug. The lower courts dismissed the claim.43

23

b) Judgment of the Court

The Bundesgerichtshof held that the defendants were obliged to monitor the plaintiff very closely for any possible side-effects of the drug, and that the treatment should have been terminated as soon as the first difficulties with the patient’s eyes became apparent. This would have included, first, an initial eye test (in order to detect any subsequent deterioration) and, according to the information provided by the producer of the drug and the conditions set by the German medical authorities upon approval of the substance, regular (monthly) check-ups. The Court acknowledges the difficulties in assessing possible risks related to non-approved drugs, and concedes that doctors should be allowed to weigh the benefits of a particular treatment against its possible negative sideeffects. In the light of the very severe consequences in this case (the condition diagnosed by the eye clinic included the risk of complete, sudden, and permanent blindness) and the limited knowledge available about the drug at the time, the defendants should, however, have opted for an immediate end of the treatment as soon as they had received the clinic’s report. Their failure to do so amounts to medical malpractice. The Court of Appeal (OLG Karlsruhe) will have to determine the gravity of this mistake as the final outcome of the case may well depend on the burden of proof. If the causal link between treatment and injury remains uncertain, a grave error would shift the burden of proof to the defendants.

24

The defendants were, furthermore, obliged to inform the plaintiff about the risk of as yet unknown side-effects at the outset of the treatment. The Court establishes a high standard for this information in the case of non-approved drugs, as their use for the treatment of regular patients in effect amounts to a clinical

25

43

LG Offenburg, Case 3 O 490/94 of 11 July 1995 and OLG Karlsruhe, Case 13 U 134/95 of 2 February 2005.

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test which would under German law require not only written consent but also constant updates about any newly emerging risks. c) Commentary

26

The result reached by the Bundesgerichtshof is certainly appropriate both in terms of the malpractice aspect of the case and the duty to provide patients with as much information about investigational drugs as is possible under the particular circumstances. The case is thus in line with a set of recent decisions on similar issues,44 though the fact that the plaintiff requested that his treatment be continued despite the severe and by then very obvious negative side-effects (possibly a reason for the lower courts to decide the case the other way) would have merited greater attention. More importantly, however, the Bundesgerichtshof may have missed an important point in giving doctors a margin of appreciation when it comes to the use of non-approved drugs. The German Pharmaceutical Act45 establishes restrictive rules for the treatment of patients with such substances. This regime must be distinguished from the “off-labeluse” of approved drugs, where doctors use substances to treat patients with symptoms different from the ones initially envisaged by the pharmaceutical producer. The case at hand falls within the first category since the plaintiff was treated precisely for the condition that the drug was designed to improve. The defendants thus violated a protective statute and could have been held liable under § 823(2) BGB without the need of the courts to dwell upon difficult questions of medical malpractice and informed consent.

27

That said, it is worthwhile noting that exceptional situations (in particular life threatening conditions) can justify the use of investigational drugs under German and EC law.46 This was not the case here, of course, but a recent decision of the U.S. Supreme Court not to hear a case concerning access of cancer patients to non-approved developmental drugs shows that the problem can easily arise in a different context.47 6. BGH, 17 October 2006, JZ 2007, 637: Road Traffic; Method of Compensation48 a) Brief Summary of the Facts

28

The parties were involved in a traffic accident which damaged the plaintiff’s vehicle. The plaintiff initially claimed the difference between the cost of its replace44 45

46

47

48

See, e.g., BGHZ 168, 103 (Robodoc). Gesetz über den Verkehr mit Arzneimitteln (AMG) of 12 December 2005, BGBl I, 3394 (as amended). See § 21(2) no. 6 AMG, Art. 83 of Regulation (EC) No. 726/2004 of the European Parliament and of the Council laying down Community procedures for the authorisation and supervision of medicinal products for human and veterinary use and establishing a European Medicines Agency, OJ L 136, 30.4.2004, 1–33. Abigail Alliance for Better Access to Developmental Drugs et al v. Andrew von Eschenbach, Commissioner, Food and Drug Administration, et al, Case 07-444 (petition denied on 14 January 2008). Case VI ZR 249/05 (LG Braunschweig).

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ment and the remaining value. The defendant met the request, upon which the plaintiff abandoned an earlier action. He is now claiming the cost of repair, which is approximately € 3,800 greater than the payment already received. The court of first instance allowed the claim in full; the court of appeal dismissed the action. b) Judgment of the Court

The Bundesgerichtshof emphasises that restitution in kind can take two forms, repair and replacement, both of which are – in principle – interchangeable. In both cases, the victim is limited to necessary measures; restitution should not result in enrichment; and the cost of repair may not substantially exceed the cost of replacement if – as here – the damage amounts to a total loss. Within these limits, and subject to prescription, the plaintiff is, however, free to choose the method of compensation until the pre-accident situation is restored in economic terms. The plaintiff can therefore move from one regime to the other – i.e. repair the vehicle and claim the difference in cost – even if he has already demanded and received the (potential) cost of replacement.

29

c) Commentary

When should the books be closed after an accident involving total loss? By adopting a narrow definition of what amounts to “successful” restoration, the Bundesgesrichtshof is willing to stretch out quite considerably the process of restoring – in economic terms – the original state of affairs. Payment of the money needed to replace a vehicle falls short of this aim if the victim later changes his plan to replace and chooses to repair. The only fixed outer limit is prescription, which takes years.

30

This approach will not please the insurance industry, which meets the bulk of such claims and has an understandable interest to regulate the damage as quickly and efficiently as possible. The approach of the BGH will also have an effect on the tortfeasor, who will often want to move on rather than be confronted with a longer period of uncertainty as to the precise extent of the damage even if he has handed matters over to his insurer. More important, however, is the potential tension between this liberal approach to the specification of material loss and the more conservative rules concerning the compensation of pain and suffering. Once specified, a higher demand for the latter will only be entertained in exceptional cases involving a high degree of uncertainty with respect to the condition of the victim. That said, damaged cars are probably more predictable than damaged human beings, and may thus require a less rigid regime.

31

7. BGH, 11 January 2007, JZ 2007, 686: State Liability for Slow Administrative Action49 a) Brief Summary of the Facts

The plaintiff is a bank which financed the development of private homes. The local court responsible for the property register in the area took 20 months to 49

Case III ZR 302/05 (OLG Schleswig).

32

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Jörg Fedtke

process the necessary (routine) applications. Due to this delay, caused by high work pressures, the plaintiff was not able to invoice the sales price for the properties, and claims lost interest in the range of € 457,000. The court of first instance dismissed the claim on the basis of prescription. The court of appeal, while reducing the amount of compensation, found for the plaintiff. b) Judgment of the Court

33

The Bundesgerichtshof confirmed, in principle, the approach of the court of appeal, and referred the case back for further clarification of factual questions. The conditions of both § 839 BGB (liability for breach of an official duty) and Art. 14 Basic Law (compensation for quasi-expropriation) could be fulfilled. Neither of the two claims is barred by prescription.

34

The most important aspect of the judgment addresses the state’s responsibility to allocate public authorities, in this case the judiciary, the resources necessary to perform their designated functions within a reasonable amount of time. But is this responsibility a “duty incumbent upon [the official] in relation to a third party” (i.e. the plaintiff) as required by § 839 BGB? Previously, the Bundesgerichtshof distinguished administrative bodies on the lower tiers of the system from those on the central level, and always stopped short of holding that the latter perform their duties directly vis-à-vis the citizen. It is at this point that the judgment takes an important new turn and expands the scope of § 839 BGB. Policy considerations such as the budgetary situation of the public body in question, or its ability to raise the necessary funds, can play a role. More importantly, legislative bodies continue to enjoy a non-justiciable prerogative in deciding on public expenditure. This does not, however, limit the ability of the courts to review the question whether funds allocated to particular parts of the administration – now on any level – have been used in a way that ensures that the plaintiff’s applications were processed within a reasonable time frame. This inquiry includes the president of the court holding the public register in question, the presidents of the superior courts on the Landgericht and Oberlandesgericht levels, and, finally, the relevant regional ministry of justice. The delay in dealing with the plaintiff’s applications can also amount to a special burden of the individual (Sonderopfer) provided that it is not a general phenomenon but rather a problem which only affects particular public authorities or courts. The state would, however, only be liable to pay equitable compensation under this alternative heading. c) Commentary

35

This important decision by the BGH highlights a problem often encountered in administrative practice but rarely pursued successfully in court: lengthy procedures which are due to overburdened public authorities and which can, as in this case, cause considerable financial loss.

36

Cases of this kind confront plaintiffs with four core difficulties. First, they are usually unable to prove that their application was not processed within a reasonable amount of time due to a lack of manpower or other administrative

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resources – and not because of a host of additional questions which apparently require further investigation and, thus, cause delay. Second, they lack the insight into administrative structures necessary to show that additional financial resources were available and could have been used to remove the administrative bottleneck in question. Third, the lack of manpower or other resources will hardly ever be the fault of a single official (as required by § 839 BGB). In this case, the person in charge of the application actually did work to the best of his abilities and processed them strictly in sequence of the incoming date. Finally, the distribution of resources by central public authorities and budgetary decisions of the legislator have thus far been regarded as non-justiciable. In combination, these four hurdles have in practice provided public authorities with a powerful protective shield that citizens have rarely managed to pierce. This decision of the BGH, though certainly a welcome sign that the temporal aspect of administrative procedures may come under closer judicial scrutiny in the future, stops short of what many experts regard as a long overdue reform of state liability in Germany – exchanging the individual fault of a particular public servant by the wider concept of “organisational” fault (Organisationsverschulden). While the burden of proof in this case is now on the defendant state to show that the particular officers charged with the adequate allocation of resources on all levels have done everything possible to avoid the bottleneck, this remains unsatisfactory. Where the delay is undisputed and unreasonable, as in this case, compensation should be forthcoming regardless of the cause. That said, the main hurdle that citizens seeking redress currently have to overcome remains in place and will in all likelihood also frustrate the plaintiff in the further course of this litigation: the reluctance of German courts to second-guess budgetary decisions of the legislator. This core issue – which reappears on the European level in the guise of legislative inactivity in defiance of a Member State’s duty to act – will require a political rather than a judicial solution.

37

8. Bundesverfassungsgericht (BVerfG), 24 January 2007, JZ 2007, 1046: Punitive Damages; Service of a U.S. Lawsuit50 a) Brief Summary of the Facts

The plaintiff is a German company with various foreign subsidiaries. A former senior employee of its Puerto Rican subsidiary filed a lawsuit in the United States against its Puerto Rican, U.S., and Mexican subsidiaries, as well as the plaintiff in Germany, for damages and punitive damages ($ 11,114,500) based on age discrimination and unfair dismissal. This lawsuit was served on the plaintiff in Germany through the process created by the Hague Convention of 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters. This procedure was challenged by the plaintiff.

38

The company maintained that the American lawsuit was obviously ill-founded and filed solely for the reason of pressurising the plaintiff into settling the

39

50

Case 2 BvR 1133/04.

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matter out of court. The OLG Frankfurt am Main held that § 13 of the Hague Convention, invoked by the plaintiff, could offer protection only in limited circumstances. Among these are fundamental inconsistencies between foreign law and German legal principles, such as disproportionately high and completely unjustified demands. The OLG Frankfurt am Main did not consider these conditions to be fulfilled in the case at hand. b) Judgment of the Court

40

The Bundesverfassungsgericht declined to hear the admissible but unfounded individual constitutional complaint in full court.

41

The Hague Convention is a constitutionally valid limitation of the general right to freedom guaranteed by Art. 2(1) of the Basic Law. The limited scope of § 13 of the Convention, which allows signatory states to refuse compliance with a request for service only if their sovereignty or security are at risk, is justified by the aim to provide efficient and reciprocal legal support between nations. Germany will not shield its citizens from their responsibilities under foreign law even if parts of this law are at odds with the German legal order. Detailed scrutiny of foreign lawsuits on the basis of German law would, moreover, run counter to the respect accorded to foreign law, and substantially delay or jeopardise the procedure established by the Hague Convention.

42

§ 13 of the Convention is not, however, dead letter law. It prevents the service of lawsuits which obviously contradict fundamental principles of the rule of law. Neither punitive damages nor pre-trial discovery as such fall foul of this standard. The service of lawsuits which aim to impose incalculable punitive damages or class actions with an indeterminable number of plaintiffs and prejudicial media coverage may, however, require intervention by German courts if they clearly constitute the abuse of a legal right. This is not the case here. c) Commentary

43

A string of high profile cases dealing with the service of U.S. lawsuits to German companies have over the past years caused considerable debate in this country.51 Typically, plaintiffs seek what Germans would regard as excessive damages, often pursued in the form of class action litigation. German courts initially met these lawsuits with considerable reservation but have now – as demonstrated by the present case – modified their approach. This is very much in line with legal developments across Europe, where class actions, in particular, are finding increasing support in a number of systems. Sweden, Spain, Portugal, the United Kingdom, Austria, Denmark and Finland have thus either enacted modifications of Rule 23 of the U.S. Federal Rules of Civil Procedure or are currently contemplating such legislation. The mere fact that a claim could threaten the existence of a company should, similarly, not bar the service 51

See BVerfGE 91, 140 (= NJW 1994, 3281); BVerfGE 91, 335 (= JZ 1995, 716); BVerfGE 108, 238 (= JZ 2003, 956); and BVerfGE Zeitschrift für Wirtschaftsrecht und Insolvenzpraxis (ZIP) 2005, 2128.

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of foreign lawsuits to German multi-national enterprises. The amount claimed is not subject to limits under German law, and should thus not play a role under the rules of the Hague Convention either. German courts should thus abandon their protective stance altogether. Companies engaging in activities abroad must learn to accept that the advantages of outsourcing and investment in foreign markets go hand in hand with the risk that a host system might offer a less favourable legal environment.

C. LITERATURE 1. G. Wagner, Nachbarhaftung für gentechnische Immissionen, VersR 2007, 1017–1034 Gerhard Wagner in this contribution addresses a topic which has for some years now been subject to substantial controversy in Germany – the regulation of genetically modified crops. Farmers raising crops from GM seed licenced for circulation are subject to private law rules which protect the property of their neighbours.52 Contaminated crops of neighbouring farmers are thus part of their immovable property until the point of harvest. Such farmland is also protected by the general provisions of tort law,53 but only within the limits of special rules which oblige the owner to tolerate a certain (albeit limited) level of outside interference. Whether GMOs constitute such an interference with land (nuisance) was in question for some time. The issue was clarified in 2005 by the introduction of § 36a of the Act on Genetic Engineering.54 Wagner argues that this provision, which has again been attacked both by critics and supporters of GM farming, in fact creates a fairly workable regime within the constraints of what the author feels are, in essence, irreconcilable interests.

44

The author sets out the basic principles of liability for contamination of crops by GM farming. According to § 906(1) BGB, interference which does not adversely affect a neighbouring piece of land or which affects it only marginally must be tolerated by its owner or authorised user,55 and is thus not illegal within the scope of § 823 ff. BGB.56 Neither tort nor property law (nuisance) will offer compensation. If land is used in a way which is customary in that particular region57 and does impact substantially on a neighbouring piece of land, cross-fertilisation is again not illegal within the meaning of § 823 ff. BGB58 and must be accepted by the neighbour under the condition that the negative effect cannot be prevented by economically reasonable measures within the context of the particular activity (in this case agriculture). § 906(2) BGB will

45

52 53 54 55 56

57 58

§ 903 ff. BGB. § 823 ff. BGB. Gentechnikgesetz (GenTG). So-called Duldungspflicht. BGHZ 90, 255 ff.; 92, 148 ff.; O. Jauernig in: O. Jauernig (ed.), Bürgerliches Gesetzbuch (11th ed. 2004) § 906 no. 8. So-called ortsübliche Nutzung. BGHZ 117, 110 ff.; Jauernig (fn. 56).

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then provide equitable compensation.59 Only if land is not used in a way that is customary or if (substantial) interference can be prevented with economically reasonable measures will the neighbour be able to demand the termination of existing interferences60 and/or apply for an injunction.61 Any damage caused to crops or farmland must then be compensated on the basis of tort law or in an analogous application of § 906(2) BGB.62

46

These rules of property law are open-ended and thus require a considerable amount of interpretation. Wagner explains that § 36a GenTG provides the necessary guidance for the application of § 906 BGB to GM crops by, first, establishing a standard for what is to be regarded as “substantial” interference; second, by defining what measures can reasonably be expected in order to avoid the disturbance of non-GM farmers; third, by clarifying the notion of regional custom; and, finally, by addressing the problem of multiple causes. He concludes that § 36a GenTG should be retained in its current form. Any legislative change, if indeed pursued, would first require a political decision to change more substantially the current compromise between the promotion of GM agriculture and the protection of traditional farming methods. The article thus adds an important dimension to the current debate surrounding the 2007 reform proposal of the Federal Government.63 2. W. Schneider, Haftungsfragen im Zusammenhang mit der Verkehrssicherheit von Bäumen, VersR 2007, 743–760

47

The topic of this article may seem a little unusual for non-German readers. Liability for the safety of trees is, however, a much discussed item of German tort law, both in the area of private liability as well as the liability of public bodies. German highway authorities were thus recently told by a number of higher courts across the country to check the safety of trees alongside public roads twice a year (instead of only once) in order to meet the duty of care (Verkehrssicherungspflicht) owed to drivers.64 These cases provide a good practical example of the financial effect of court decisions on public budgets. The City/State of Hamburg, for example, has an estimated 245,000 trees along its public roads and highways. At an annual cost of over € 35,000 per 10,000 maintenance checks,65 the requirement of a second inspection would land the municipality with an additional bill of roughly € 850,000. The authority might, of course, decide simply not to comply with this higher standard of “double inspection” and choose, instead, to accept the risk of having to pay out damages to injured victims. Economically, this is a viable alternative policy since 59 60 61 62

63 64

65

So-called Ausgleichsanspruch. So-called Beseitigungsanspruch. So-called Unterlassungsanspruch, § 1004 BGB. Jauernig (fn. 56) § 906 no. 9. These general rules also apply to non-licenced GMOs (in addition to the special liability regime of the Gentechnikgesetz), see § 37(3) GenTG. See no. 5 and 6 above. OLG Düsseldorf VersR 1992, 467 ff. and VersR 1997, 463 ff.; OLG Brandenburg OLGR 2002, 411 ff.; OLG Hamm VersR 2003, 1452 ff. BGH VersR 2004, 877 ff. See H. Baumgarten, Baumkontrolle in Städten und Gemeinden, in: D. Dujesiefken/P. Kockerbeck (eds.), Jahrbuch der Baumpflege (2004) 171.

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the risk of liability is, in most cases, fairly low. A recent decision of the BGH on this point, dealing with a car damaged by a falling tree branch, thus obliged the “negligent” local authority to pay £700 as damages.66 Schneider, a senior judge at the Higher Court of Appeal Munich, provides a careful analysis of this economic background and the tensions that can exist between safety considerations (reinforced by the potential liability of both private and public land owners) and environmental interests. In the absence of legislation, the courts are left with the problem of finding a coherent and just balance between these concerns. The author sets out in detail the case law on a wide range of very specific situations and provides an update on the positions held in academic literature. If anything, this contribution is thus an excellent example of the differences between the restrictive approach to the liability of highway authorities in some systems – e.g., England – and the very detailed casuistry found in Germany.

48

3. J. Pietzcker, Rechtsprechungsübersicht zur Staatshaftung, AöR 2007, 393–472 This substantial publication by Jost Pietzcker provides a very comprehensive analysis of German case law in the area of state liability. The author covers two particularly relevant topics – involvement of private actors in the fulfilment of public duties (which includes, inter alia, towing of vehicles, activities of rescue services, highway maintenance cases, and foster parents) and the violation of statutory duties by public authorities (Amtspflichtverletzung). Pietzcker rightly stresses that the development of German state liability law has been predominantly driven by judges rather than the legislator. His work is, consequently, a detailed survey of recent important decisions and older cases which help explain the current position that German courts take on a wide variety of state liability issues.67

49

4. Bibliography of Selected Books and Articles General: D. Medicus, Gesetzliche Schuldverhältnisse (5th ed. 2007); G. Schlegelmilch (ed.), R. Geigel, Der Haftpflichtprozess (25th ed. 2007/2008).

50

Anti-discrimination: K. Adomeit/J. Mohr, Kommentar zum Allgemeinen Gleichbehandlungsgesetz (2007); R.J. Bährle, Das Allgemeine Gleichbehandlungsgesetz in der arbeitsrechtlichen Praxis (2007); J. Bauer/B. Göpfert/S. Krieger, Allgemeines Gleichbehandlungsgesetz (2007); S. Herms/J. Heyn/G. Meinel, Allgemeines Gleichbehandlungsgesetz (2007); R. Koch, Versicherung von Haftungsrisiken nach dem Allgemeinen Gleichbehandlungsgesetz, VersR 2007, 288–300; W. Rühl/M. Schmidt/H.P. Viethen, Allgemeines Gleichbehandlungsgesetz (2007); U. Rust (ed.), Allgemeines Gleichbehandlungsge-

51

66 67

BGH III ZR 225/03 of 4 March 2004. For older surveys of German case law in the area, published by members of the Federal Supreme Court’s Third Senate, see S.E. Rinne/W. Schlick, NJW 2004, 1844 ff., 1918 ff. and NJW 2005, 3330 ff.

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setz (2007); B. Steinkühler, Allgemeines Gleichbehandlungsgesetz (2007); G. Thüsing, Arbeitsrechtlicher Diskriminierungsschutz (2007); G. Thüsing/K. von Hoff, Private Versicherungen und das Allgemeine Gleichbehandlungsgesetz, VersR 2007, 1–10.

52

Armed conflict: S. Baufeld, Die schadensersatzrechtliche Stellung ziviler Opfer von militärischen Operationen, JZ 2007, 502–509.

53

Causation: K. Bitterlich, Elements of an autonomous concept of causation in European Community law concerning liability, Zeitschrift für Vergleichende Rechtswissenschaft 2007, 12–39.

54

Damage: S. Hacks/A. Ring/P. Böhm, Schmerzensgeldbeträge (25th ed. 2007); K. Hellweg, Der Schaden, looseleaf commentary (updates include 2007); A.E. Kendel, Maßnahmen zur Regulierung des Erwerbsschadens bei Selbständigen und Freiberuflern, zfs 2007, 372–374; J. Kraayvanger, Eigene Arbeitsleistung als ersatzfähige Vermögensaufwendung, MDR 2007, 566–570; G. Küppersbusch, Ersatzansprüche bei Personenschäden (9th ed. 2006/2007); G. v. La Chevallerie, Nutzungsausfallentschädigung für ältere Pkw und Oldtimer, zfs 2007, 423–428; F. Pardey, Die nichteheliche Lebensgemeinschaft im Versicherungs- und Verkehrsrecht, zfs 2007, 243–248 (Part I) and 303–311 (Part II); B. Pauge, Vorteilsausgleichung bei Sach- und Personenschäden, VersR 2007, 569–579; F. Roland/A. Richter, Rechtsprechungstendenzen beim Ersatz des Fahrzeugschadens, SVR 2007, 53–55; H. Schulz-Borck/E. Hoffmann, Schadensersatz bei Ausfall von Hausfrauen und Müttern im Haushalt (7th ed. 2007); U. Staab, Fiktive Schadensberechnung nach Sachverständigengutachten bei konkreter Ersatzbeschaffung und Restwerterzielung, VersR 2007, 925–927.

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Environmental liability: B. Becker, Das neue Umweltschadensgesetz (2007); M. Wischott, Naturwissenschaftlich-technische Aspekte des Umweltschadensgesetzes, Haftpflicht international – Recht und Versicherung 2007, 11–16.

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Employment: H. Diehl, Entgeltfortzahlung des Arbeitgebers nach Unfall seines Arbeitnehmers im Straßenverkehr und Regress gegen Drittschädiger, zfs 2007, 543–550.

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Freedom of speech: R. Schaub, Äußerungsfreiheit und Haftung, JZ 2007, 548–556.

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Medical liability: A.W. Bender, Dokumentationspflichten bei der Anwendung von Blutprodukten, MedR 2007, 533–537; O. Dopheide, Der grobe Behandlungsfehler – eine Beweislastverteilung nach Kollektiven? VersR 2007, 1050– 1054; M. Gehrlein, Kompaktwissen Arzthaftungsrecht (2007); P. Gödicke/K.P. Purnhagen, Haftungsgrundlagen für Schmerzensgeld bei der klinischen Prüfung von Arzneimitteln, MedR 2007, 139–143; A. Hausch, Beweisprobleme bei der therapeutischen Aufklärung, VersR 2007, 167–174; D. Hart, Arzthaftung wegen Behandlungs- und Aufklärungsfehlern im Zusammenhang mit einem Heilversuch mit einem neuen, erst im Laufe der Behandlung zugelasse-

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nen Arzneimittel, MedR 2007, 631–633; C. Katzenmeier, “Heilbehandlungsrisikoversicherung“ – Ersetzung der Arzthaftung durch Versicherungsschutz? VersR 2007, 137–143; T. Klindt, Produktsicherheitsgesetz (2007); A. Koyuncu, Das Mitverschulden in der Produkthaftung am Beispiel des Patientenmitverschuldens in der Arzneimittelhaftung, Haftpflicht international – Recht & Versicherung 2007, 42–53; B. Kreße, Ärztliche Behandlungsfehler durch wirtschaftlich motiviertes Unterlassen, MedR 2007, 393–400; H.J. Kullmann (ed.), Arzthaftpflicht-Rechtsprechung, looseleaf commentary (updates include 2007); H. Strücker-Pitz, Ausweitung der Arzthaftung für Schmerzensgeld bei Schwerstschäden, VersR 2007, 1466–1469; M. Zach, Rechtsprobleme der zahnärztlich-implantologischen Behandlung, MDR 2007, 931–937. Multiple tortfeasors: C. Kruse, Haftung bei alternativer Kausalität nach § 830 BGB, ZGS 2007, 135–139.

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Pain and suffering: H. Diehl, Aktuelle Probleme des Schmerzensgeldes im Verkehrsrecht, zfs 2007, 10–15.

60

Personality rights: U. Andryk, Nur Schall und/oder Rauch – Zum Recht des Künstlernamens, AfP 2007, 187–192; H. Ehmann, Zum kommerziellen Interesse an Politikerpersönlichkeiten, AfP 2007, 81–85; W. Grunsky, Persönlichkeitsrecht und Verbandsautonomie bei der Dopingbekämpfung, SpuRt 2007, 188–192; J. Helle, Privatautonomie und kommerzielles Persönlichkeitsrecht, JZ 2007, 444–453; S. Seelmann-Eggebert, Im Zweifel gegen die Meinungsfreiheit? AfP 2007, 86–91.

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Product liability: C. Frick/P. Kluth, Produktbeobachtung – Umfang, Reaktion und Kostentragung, Haftpflicht international – Recht und Versicherung 2007, 206–215; H.J. Kullmann/B. Pfister/K. Stöhr/G. Spindler (eds.), Produzentenhaftung, loosleaf commentary (updates include 2007); T. Mühlbauer, Die Besonderheiten der Produkthaftpflicht luftfahrttechnischer Betriebe unter besonderer Berücksichtigung der Rechtsprechung, VersR 2007, 184–187; N. Reich, A.G.M. COS.MET oder: Wem dient das EU-Produktsicherheitsrecht? VuR 2007, 410–415.

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Road traffic: C. Auer/H. Krumbholz, Das HWS-Trauma: Kausalzusammenhang aus biomechanischer und juristischer Sicht, NZV 2007, 273–279; R. Balke, Die Beeinträchtigung der Haushaltsführung in der nichtehelichen Lebensgemeinschaft, SVR 2007, 16–17; S. Benz/K. Sieger, Schmerzensgeld im Verkehrsunfallprozess, SVR 2007, 335–337; W. Castro, HWS-Distorsion und Erforderlichkeit eines Sachverständigengutachtens, SVR 2007, 451; A. Diederichsen, Die Rechtsprechung des BGH zum Haftpflichtrecht, DAR 2007, 301– 315; H. Diehl, Unfälle von Kindern im Straßenverkehr, DAR 2007, 451–453; L. Haertlein, Materielles Recht im Prozess – Ersatz des Unfallersatztarifs, JZ 2007, 68–78; K. Himmelreich/M. Klimke, Kfz-Schadensregulierung, looseleaf commentary (updates include 2007); J. Jahnke, Versorgungsschaden in der nicht-ehelichen Lebensgemeinschaft nach einem Unfall, NZV 2007, 329–337; A. Rebler, Verkehrssicherungspflichten an öffentlichen Straßen, SVR 2007,

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129–137; H. Schirmer, Die nichteheliche Lebensgemeinschaft im Versicherungs- und Verkehrsrecht, DAR 2007, 2–12; S. Schröder, Straßenverkehrssicherungspflicht: Straßenbäume, SVR 2007, 333–334; L. Ullmann/A. Pfütze, Aktuelle Rechtsprechungsübersicht zum Fahrzeugschaden im Haftpflichtfall, DAR 2007, 622–626.

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Sports: T. Wilms, Schadensersatz für Verletzungen im Fußballsport – zwischen fairer Härte und rücksichtslosem Foul, JR 2007, 95–99.

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State liability: P. Itzel, Neue Entwicklungen im Amts- und Staatshaftungsrecht, MDR 2007, 689–695; C. Schieble, Öffentliche Warnungen vor unsicheren Verbraucherprodukten: Behördliche Befugnisse und Haftungsrecht, VuR 2007, 401–410; J.P. Terhechte, Zum Amtshaftungsanspruch bei Organisationsmängeln innerhalb der dritten Gewalt, DVBl 2007, 1134–1143.

XI. Greece Eugenia Dacoronia

A. LEGISLATION 1. Law 3557/14.05.20071, Amendment of the P.D. 237/1986, which Codified L. 489/1976 on the Obligatory Insurance of Civil Liability for Car Accidents L. 489/1976, as codified with the P.D. 237/1986, has introduced the obligatory insurance of civil liability for car accidents. The regulations of the said codified law, based on the European Convention on the same subject, signed in Strasburg on 20 April 1959, ratified in Greece with L. 4141/1961, together with the regulations of the Ministerial Decision K4/585/1978 on “the general terms of the insurance policy that covers civil liability for car accidents” constitute the regulatory field mainly for the relations between the insurer and third parties that have sustained damage. As L. 2496/1997, that has replaced the provisions on insurance of the Commercial Law and regulates matters of the insurance contract that arise in the relationship between insurance enterprises and insured, also applies in addition to the regulations of L. 489/1976, the need arose for a harmonisation of the provisions of the said law (489/1976) with the provisions of L. 2496/1997.

1

Among the innovations of the new law are the joint and several liability of the insurers of both the towed vehicle and the one that is towing it, as well as the exemption from the insurance coverage of damage caused by a driver who violated the law, the substitution to the insurance relation, the extension of the prescription period of the third parties’ claims against the insurers to five years from the day of the accident, and the extension of the period within which the insured has to declare the accident to the insurer from three to eight days.

2

Regarding the substitution to the insurance relation, in case of two insurance contracts being in force in parallel for the same vehicle, the first insurance relationship ceases to exist and only the last insurer is liable against the third parties that sustained damage (art. 5 § 3 of above L.). This may happen when the

3

1

Kodikas Nomikou Vimatos (KNoV) 2007, 926–939.

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ownership of the car has been legally transferred and the new owner insures the car with a new insurer, though, according to the law, the first insurance remains in force until its expiry. 2. Law 3585/4/5.07.20072: Protection of the Environment, Insurance related to Agriculture and other Provisions

4

One of the aims of the Law is to provide a simple procedure for the exercise of civil claims related to agricultural offences, introducing the possibility of submission of a claim even in the Agriculture Police.

5

In particular art. 50 of the Law provides that: 1. In case of torts related to agriculture, those sentenced as perpetrators or participants for the same act are jointly and severally liable for the payment of damages.

6

2. Especially for harm caused by animals, bees or birds, the master or the person who exploits these animals, even if he is not criminally liable according to art. 39 of the Law, is always civilly and jointly liable with the tortfeasor.

7

3. The claim is exercised by an application which is filed either in writing at the time of the preliminary proceedings in the Agriculture Police or orally in court before the beginning of the evidence procedure by a declaration which is recorded in the record of proceedings.

8

4. The application is addressed either against the person criminally liable or only against the person civilly liable, as long as the latter has completed his eighteenth year of age, and it is heard even if the applicant does not appear in court.

9

5. In case of damage caused by animals, birds or bees, the summons also names the above mentioned civilly liable person. A copy of the summons is served, in addition to the accused, also to the civilly liable person calling him to appear in court.

10

6. The court passes its judgment on the claim for damages immediately after the sentence of the accused by the same court decision. The application for damages in this case cannot be referred to civil courts.

11

7. If there is no opposite declaration of the person who has sustained the damage, the court is obliged to verify the amount of damage and to adjudicate it by the same decision. In this case the person who has sustained the damage is entitled to have recourse to the civil court which is in charge of the remainder of his claim, if he considers that he has been partially compensated.

2

KNoV 2007, 1451–1472.

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B. CASES 1. Areios Pagos 1190/1.06.20073: Concurrence of Contractual and Tortious Liability a) Brief Summary of the Facts

The plaintiff bought rolls of cloth of varying quality from the defendant at an agreed total price of 31,430,000 Italian lira (€ 15,590.94). However from the cloth sold and delivered to the plaintiff, five rolls (259 metres) of woollen cloth, destined for the fabrication of jackets for men, for which the plaintiff had paid to the defendant the amount of 6,836,625 Italian lira (€ 3,418.93), presented substantial defects due to poor workmanship in fabrication. The plaintiff used 155 metres from the 259 metres of the above mentioned defective cloth and produced 90 jackets, whereas the remaining 104 metres were not used because of their defectiveness. Sixty of these 90 jackets were sold but they were returned due to their defective cloth. From these jackets only 15 could be resold at a price of GDR 10,000 (€ 29.35) each. The Court of Appeal decided that, due to the negligence of the defendant in submitting the cloth to all necessary controls in order to guarantee its fitness for the use for which it was destined before placing it on the market, the plaintiff sustained damage amounting to GDR 2,010,000 (€ 5,899) in total and moral harm amounting to GDR 100,000 (€ 293,47). The Court of Appeal reversed the decision of the Court of First Instance which, though it rejected the claim in substance as being time-barred, had considered the action legal regarding its main basis (contractual liability) and not legal regarding its auxiliary basis (tortious liability).

12

b) Judgment of the Court

The Greek Areios Pagos 1 June 2007, No. 1190 held that, as derived from art. 561 GCC as it stood prior to its amendment by art. 1 of L. 3043/2002 and applied to the case because of the year the contract was entered into, and art. 522 § 1 GCC, in case of a sale of a thing described by class, if the thing has a defect of which the seller at the time of its delivery to the purchaser was aware of but fraudulently concealed, the purchaser, instead of the remedies of reversal, or reduction of the purchase price or replacement of the defective object, may ask for damages for non-performance. An object is defined by class when, regardless of whether it is fungible or not, it is described by the general elements of the category to which it belongs, as well as when according to the will of the contracting parties it is determined as such by elements other than the ones of the category. An object that has not yet been produced at the conclusion of the contract may be an object described by class. Furthermore, the Court noted that a breach of contract alone does not constitute a tort. Although it constitutes an illegal act, the consequences of the breach are regulated not by the provisions on torts, but by the provisions on non-performance of contractual obligations (impossibility of performance, debtor’s default, performance unduly performed, etc.). Nonetheless, it is possible for an event to meet the preconditions of both a 3

Elliniki Dikaiosini (EllDni) 48, 1106 ff.

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contractual breach and of a tort, in which case it is subject to multiple evaluation and examined according to different criteria. According to the prevailing view in case law, the culpable (out of intent or negligence) prejudicial act or omission which constitutes the contractual non-performance and generates the contractual liability of the debtor may also establish tortious liability when, even without the contractual relationship, such act or omission would be in itself unlawful, as being contrary to the general duty of not culpably provoking damage to somebody else, a duty imposed by art. 914 GCC (AP 967/1973 in full bench). In particular in case of a sale of a thing defined by class, which at the time of its delivery to the purchaser has a defect that the seller fraudulently concealed, the purchaser may base his claim for the damage causally linked with the defect on art. 561 GCC as well as on art. 914 GCC. It derives from art. 914 GCC that fault, which is a precondition of tortious liability, encompasses both intent and negligence. The Court concluded from the foregoing that when the two liabilities concur and therefore two different claims are established, the restriction stemming from the law as to the contractual liability, as in art. 561 GCC, which requires fraudulent concealment of the defect in order for the contractual liability of the seller to be established, does not apply to tortious liability, as otherwise the recognition of tortious liability, apart from the contractual liability, would lack its practical significance for the creditor. It thus confirmed the decision of the Court of Appeal which, based on the provisions of tort, had adjudicated the amount of GDR 2,010,000 (€ 5,898.75) as pecuniary damage and the amount of GDR 100,000 (€ 293,470) as moral harm. c) Commentary

14

According to Greek law4, the violation of a contractual obligation as such generates only an obligation to pay damages and not an additional obligation for compensation for moral harm. In case, however, the violation of the contractual obligation constitutes at the same time – and independently from the existence of the contract – a tort (concurrence of contractual and delictual obligation), the provisions of tort (art. 914 ff. GCC) may apply, in which case, provided that moral harm is sustained, compensation for such moral harm may be asked for. This will happen e.g. if the ill-execution of the contract offends other legally protected goods of the creditor (such as his personality) and entails damage, other than the object of the contract.

15

The mere non-execution of the obligations of the contract as such cannot provoke moral harm and, accordingly, no relevant compensation can be granted according to the Greek legislator, who has opted for a system where compensation for moral harm is exceptionally recognised and only where it is specially provided by law5.

16

The Court of Appeal and the Court of Cassation considered in the present case that the mere negligent non-execution of the contract constituted at the same 4 5

See, among others, M. Stathopoulos, Law of Obligations, General Part (2004) § 8, no. 66, 444. See Stathopoulos (fn. 4) no. 64, 442 f.

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time a tort as this behaviour of the debtor was contrary to the general duty not to culpably provoke damage to somebody else, a duty imposed by art. 914 GCC; thus, the provisions of art. 914 ff. GCC (including the provision of art. 937 GCC providing for a longer prescription period than the one provided in the sales chapter) apply and damages plus compensation for moral harm can be adjudicated. I am unsure as to whether these decisions are in line with the above mentioned intent of the legislator. 2. Areios Pagos 195/05.02.20076, 196/05.02.20077: Civil Liability of Press; Offence to One’s Personality; Compensation for Moral Harm a) Brief summary of the Facts

Areios Pagos 195/05.02.2007, 196/05.02.2007: In June 2000 the plaintiff at the age of three attended courses at a private kindergarten. At the beginning of July 2000 it was discovered that twenty-three children aged between 2–5 years were found positive in the Mantoux test (infection of tuberculosis). Furthermore, it was discovered that the childminder, who was a trainee in the kindergarten, was the person who had infected the children. The plaintiff is one of the infected children. These children followed a course of treatment for nine months under the observation of special doctors of the hospital. During the treatment as well as before this treatment, the plaintiff could not infect others with tuberculosis because young children with a positive Mantoux result cannot contaminate others with tuberculosis. As a result the plaintiff associated with other children in the neighbourhood and continued to attend courses at the private kindergarten. Because of complaints of parents many private TV stations presented this matter. On 26 July 2000 a private national television station, in its central news bulletin, presented this matter under the title “Tuberculosis in a kindergarten” by showing shots of five children including the plaintiff playing in a room in the kindergarten. What is more, the TV station presented the name of the kindergarten. As a result of the presentation of his image in the TV station not only has the child’s personality been offended but his communication with the other children in the neighbourhood, in the kindergarten and in general his communication with his entire social and relative environment was also negatively affected because they were afraid that they would be contaminated. An action for compensation of the moral harm of the child was filed.

17

b) Judgment of the Court

Areios Pagos 5 February 2007, No. 195 and 196 held that, according to art. 57 and art. 59 GCC, the image of a human being belongs to the elements (honour, private life, secrecy, etc.) that encompass the right to the personality. Offence of any of these elements constitutes an offence of the whole notion of personality; the image of a human being does not belong to the public but only to the person represented, so taking a photo of the person or broadcasting someone’s 6 7

Published at NOMOS. Published at NOMOS.

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image without his consent constitutes as such an offence to the personality. An offence at the same time of the secrecy of his private life or of his dignity is not required. Regarding television broadcasts, art. 8 § 2 of the P.D. 100/2000, which has incorporated Directive 97/36 EC, stipulates that broadcasts of minors who are in a difficult situation are, as a principle, prohibited and are allowed only by way of exception and only after the written consent of the person who exercises the parental care has been given if such broadcasts are necessary to inform the public and do not provoke pain or harm to the personality of the minor. A minor who has been contaminated with a serious illness is also in a “difficult situation”, according to the Court, even if the illness is not obvious from his appearance. c) Commentary

19

It is a common ground8 that, in the field of private law, the provisions for the protection of the personality (art. 57–59 GCC) constitute, together with other provisions of the law, such as the provisions on torts (art. 914 ff. GCC), the provisions of L. 1178/1981 on civil liability of the Press, of L. 2328/1995 on Media, of L. 2472/1997 on the protection of personal data, the boundaries of the journalists’ freedom in their research for information. Whenever a good of the personality collides with this freedom of the Press, a comparison of the endangered legal goods and interests to the right to collect information by the media is necessary, with the ultimate aim being not to offend the core of the right to personality, i.e. the value of the human being. 3. Athens Court of Appeal 825/14.02.20079: Offence of Personality of a Legal Person – Compensation for Moral Harm a) Brief Summary of the Facts

20

The plaintiff, a trade union association of the defendant bank, alleged in its action that, though legally formed and existing, it was excluded by the administration of the bank in the negotiations for the signature of the collective contract of work for the years 1997–2003, and in the participation in the bank’s Councils and committees. Last but not least the defendant bank excluded the plaintiff from certain grants to which the plaintiff was entitled as a trade union association, though the bank gave the same grants to another trade union association within the bank. The personality of the plaintiff corporation has been offended through this illegal and faulty behaviour of the organs of the defendant bank. This offence was due, according to the plaintiff, to the fact that the bank gave the employees the impression that the plaintiff was an ineffective trade union, in the process of being wound up, unable to safeguard certain privileges for its members, marginalized from the administration of the defendant and a trade union whose proposals and requests were being ignored. Consequently the plaintiff asked for a monetary compensation of € 2,000,000 for its moral harm. 8 9

See I. Karakostas, Media Law (3rd ed. 2005) 198. EllDni 48, 941–953.

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b) Judgment of the Court

The Court of Appeal of Athens 14 February 2007 No. 825 ruled that, as derived from the provisions of art. 57, 59 and 914 GCC in case of an illegal offence of the personality, the person who has been offended has the right to ask for damages and compensation for moral harm as long as the person who has offended his personality was at fault. Also the legal person has a right to its personality, to the reputation, faith and other incorporeal goods that are attributed to it. The satisfaction of its moral harm may consist in the payment of a monetary amount, in a publication or in anything else dictated by the circumstances. According to the provisions of art. 216 GCCP, in order that the moral harm is repaired, the offended legal persons have to mention that their commercial faith, professional reputation, and, generally, their commercial future, have been offended through the illegal offence of their personality. These facts have to be proved, as the moral harm of a legal person does not concern an internal feeling, which does not need proof due to the fact that it is traced in the internal world and is perceived through human logic. The moral harm of a legal person has a material substance. As a result, the Court of Appeal, after taking into consideration all the facts and in particular the importance of the offence, the degree of the fault, the way and duration of the offence, the principle of proportionality introduced by art. 25 § 1 of the Greek Constitution [AP 43/2005 (in full session) EllDni 46, 1649; AP 132/2006 EllDni 47, 740; AP 1462/2005 EllDni 47, 148] and the social and economic status of the litigant parties, considered that the amount to be adjudicated as moral harm must be € 15,000. This amount was judged as reasonable after weighing the above elements (art. 932 GCC).

21

c) Commentary

It is well established in theory as well as in the jurisprudence10 that also a legal entity can sustain moral harm when aspects of the personality also appropriate to a legal person, such as the reputation, commercial credibility, or the name of the legal entity are offended. In the decision here commented it is mentioned that – contrary to the moral harm of a physical person, which has not to be proven, as referring to an internal feeling – the moral harm of a legal person has a material substance and has to be proven.

22

4. Areios Pagos 1227/04.06.200711: Civil Liability of Doctors a) Brief Summary of the Facts

On 21 March 2001, 36-year-old A was given a general anaesthetic for the removal of a cyst from her left ovary. Because of the choice of this method of anaesthetic by the doctors, it was considered necessary to insert an intratrachean tube (windpipe) in order to secure her breathing function during the 10

11

See Ap. Georgiades in: Ap. Georgiades/M. Stathopoulos, Civil Code, art. 932, no. 13; P. Kornilakis, Law of Obligations, Special Part I (2002) § 106 8, 649; Stathopoulos (fn. 4) no. 73, 448, where also the relevant jurisprudence is noted. Not published.

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anaesthetic and the surgery. The tube was made of silicon and was sharp at the edge, causing thus, because of the ineptitude of the anaesthetists in inserting it, the rupture of the trachea and the death of A. The anaesthetists acted grossly negligently and in violation of the commonly recognized rules of medical science, as from their specialization and, according to the teaching of the medical science, they should and could have avoided this rupture. The plaintiffs, close relatives of A, asked for compensation for pain and suffering from the doctors and the hospital. b) Judgment of the Court

24

The Greek Areios Pagos 4 June 2007, No. 1227 ruled that art. 298, 299, 330 sent. b, 914 and 932 GCC also apply to tortious liability of doctors for a harm caused by them when rendering their medical services. This liability, as far as certain (special) issues are concerned, is governed by art. 8 of L. 2251/1994 “on the protection of consumers”. It derives from the provisions of this article that also medical services fall into its ambit of application, as doctors who provide them act independently, they are not subject to specific suggestions or instructions by the receiver of the services (the patient), but have the initiative and the discretion to determine the way of providing their services. For the establishment of tortious medical liability an illegal and culpable provocation of damage is required. These two presuppositions (illegality and culpability) simultaneously concur according to the theory of “the double function of negligence”, that is the consideration of negligence to be both a type of fault and a type of illegality. Therefore, if, while exercising a medical act, the rules and principles of medical science and experience or/and the obligations of care of the average prudent doctor of the tortfeasor’s specialization, which stem from the general duty of providence and care, are violated, then the said behaviour is illegal and simultaneously culpable. In light of the reversal of proof that is established regarding fault and illegality, the victim bears the burden of proving the rendering of services, the damage sustained and the causal link between the damage and the rendering of services in general, and not the specific act or omission which brought about the detrimental result. On the other hand, the doctor who provided his services must prove either that there was no illegal and culpable act on his part or that there is no causal link to connect the damage with his illegal and culpable act or that there is a reason to exclude or limit his liability, in order to exonerate himself from liability. This regulation on the subject matter of proof and the allocation of the burden of proof also applies in regard to the joint and several liability of several doctors for the same damage, as derived from art. 8 of L. 2251/1994 and from art. 6 § 10 of same L., which applies by analogy to the liability of the provider of services according to art. 8 § 6, combined with art. 481 ff., 926 and 927 GCC, which also apply by analogy. Consequently, in regard to the joint and several liability provided by art. 926 sent. 1a GCC, the victim has to prove: a) the rendering of medical services to him by the “common act” of several doctors, b) the damage he sustained and c) the causal link between the damage and the rendering of services in general; he is not obliged to prove the specific act or omission of each of the doctors who caused the detrimental result. To be exonerated from

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liability towards the victim, each of the doctors must prove either the legality of his own act or the lack of fault on his part or the lack of causal link between his own act and the damage. c) Commentary

This decision of the Court of Cassation is to be praised, as it presents in a very clear and analytical way the legal frame for the civil liability of doctors. Doctors render services and therefore their liability is governed by art. 8 of L. 2251/1994 “on the protection of consumers” as regards certain issues. As to fault and illegality, the reversal of proof is being established, thus obliging the doctor to prove that there is no illegal and culpable act on his part, or that there is no causal link to connect the damage with his illegal and culpable act or that there is a reason to exclude or limit his liability if he wishes to be exonerated from liability. The reversal of proof also applies in case of joint and several liability of several doctors; to be exonerated from liability towards the victim, each of the doctors must prove either the legality of his own act or the lack of fault on his part or the lack of causal link between his own act and the damage.

25

5. Areios Pagos 1226/04.06.200712, 1362/11.06.200713: Vicarious Liability of Medical Centres for the Liability of Doctors a) Brief Summary of the Facts

Areios Pagos 1226/04.06.2007: Same facts as AP 1227/04.06.2007 (see above no. 24).

26

Areios Pagos 1362/11.06.2007: A had to undergo surgery because of a rupture of a cerebral artery. As a result of a fault of the doctor who undertook the surgery, A died. The said doctor offered his medical services at the defendant private medical centre, using its operating theatres, machines and facilities, as well as its personnel (doctor, nurses). The Court of Appeal judged that not only the doctor but also the medical centre was liable towards the close relatives of the deceased and had to pay monetary compensation for their pain and suffering according to art. 922 GCC, as between the medical centre and the doctor a loose dependence existed permitting the characterization of the doctor as an auxiliary person and of the medical centre as the principal when providing medical services. This loose dependence was justified, according to the Court, by the fact that the said doctor rendered his services at the medical centre using all its above mentioned facilities. The Court of Cassation confirmed the decision of the Court of Appeal.

27

b) Judgment of the Court

Areios Pagos 1226/04.06.2007, 1362/11.06.2007: The Greek Areios Pagos held in both decisions that, as derived from the provisions of art. 922 GCC in com12 13

Theory and Practice of Civil Law (EfAD) 2008, 60 ff. Not published.

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bination with the provisions of art. 299, 330 sent. b, 914 and 932 GCC in case of the death of a person due to tortious behaviour of the auxiliary person, the liability of the principal for reparation of the pain and suffering of the members of his family presupposes: a) a relation stemming from art. 922 GCC; b) an illegal and faulty behaviour on the part of the auxiliary person which is causally connected with the resulting death and c) an internal causal relation between the above mentioned behaviour and the execution of the service assigned to the auxiliary person. A relation between the principal and the auxiliary person exists when, in the frame of a juridical or another relationship between these two persons, the principal appoints the auxiliary person to perform a function and the latter is subject to the control or at least to the general instructions of the principal. Thus, this special relationship may also exist in case of a contract for independent services. In particular, in case of medical services rendered by a doctor at a medical centre, this relationship derives from the provisions of art. 922 GCC and art. 24 of obligatory L. 1565/1939 regulating “the Code for the exercise of medical profession” that, for establishing the liability of the medical centre as the principal, it suffices that the said medical centre gives general instructions to the doctor as regards the place, time and conditions of his work in the medical centre, i.e. that at least a loose dependence of the doctor on the centre exists; specific instructions cannot be given to the doctor for the exercise of his profession, as the doctor is obliged, when exercising his medical duties, not to follow such instructions but to act only according to the fundamental principles of medical science, i.e. its teachings and the experience gained from those teachings.

29

Areios Pagos held further in its decision 1226/04.06.2007 that, as a consequence of the above, if out of a negligent act of the doctor while exercising his duties death occurs, the relatives of the deceased have a claim for pain and suffering against the medical centre where the doctor was providing his services. The liability of the medical centre is strict and is justified from the fact that the medical centre takes advantage of the services of the doctor widening its field of business activities; consequently, it is reasonable that the medical centre bears the liability for the risks from the activity of the auxiliary. The principal (medical centre) cannot be exempted from its liability if it proves that no fault (negligence) has been committed in the choice of the auxiliary (doctor) or in the instructions given to him, nor even if it proves that the doctor worked on his own initiative within the field of the principal’s activity. c) Commentary

30

In a note14 under the decision of Areios Pagos 1226/04.06.2007, Elisabeth Poulou stresses that the Court of Cassation follows the consistent Greek jurisprudence on the subject matter, according to which, even when a contract for rendering independent services exists between the doctor and the hospital, the doctor is an auxiliary performer of the private hospital according to art. 922 GCC. 14

EfAD 2008, 61 ff.

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In order to establish this special relationship, Areios Pagos persists in the element of dependence of the auxiliary performer on the principal as a precondition for the liability. However, due to the fact that the principal of the hospital does not have special knowledge which would have permitted him to exercise substantial control during the technical exercise of the profession of a doctor, the decision, following the related jurisprudence, mentions that the principal’s general orders to the doctor as regards the place, time and conditions of the doctor’s work are sufficient in order that the principal of the hospital is characterized as the principal.

31

The commentator argues that the doctor enjoys, in the exercise of his profession, scientific independence as far as the choice of the method of diagnosis of illness and of the therapy of the patient is concerned, being obliged to comply with the instructions of the hospital only as far as they concern the organizational field of his activity; as a result and according to the criterion of dependence, only for tortious acts of the doctors in this specific field of activity should the hospital be liable as the principal.

32

According to the commentator, it is obvious that, if the notion of dependence is understood in the way the court understands it and this is strictly followed, there can be no auxiliary-principal relation between the hospital and the doctor for the fault committed during the exercise of his profession. The application of the element of dependence may lead to unacceptable results because either it narrows the field of application of art. 922 GCC or it unreasonably broadens it. As a result it might be better to use the element of the integration of the auxiliary performer in the field of the professional or social activity of the principal, as proposed rather recently by scholars. The integration is certified by lots of criteria that do not have to co-exist all together; the existence of only one of them suffices in order that the liability of the principal is established. Especially in case of doctors who provide independent services in private hospitals, their integration in the field of activity of those hospitals would exist from the fact that the doctor uses the organization of the hospital.

33

In conclusion, it is obvious that, in cases of small hospitals which have elementary equipment and where the doctor performs only simple operations using his own personnel, the characteristics of this special relation (auxiliary-principal) might not be found. The doctor is not integrated in the almost non-existent organization of the hospital, which rather provides him only with “hotel” services.

34

6. Areios Pagos 1168/31.05.200715: Vicarious Liability of Employers for the Liability of Building Contractors a) Brief Summary of the Facts

On 30 November 2000 the appellant, a builder, was seriously injured while pouring concrete for the construction of a building due to the improper position 15

Published at NOMOS.

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of the pump used. The accident caused the appellant dizziness from concussion and serious injury to his right leg. The appellant lodged a claim for damages for pain and suffering in the amount of € 219,970 against the owner of the building, the contractor of the work, the project engineer, the company producing the concrete, the owner of the special vehicle, the operator of the pump and the insurance company. b) Judgment of the Court

36

The Greek Areios Pagos 31 May 2007, No. 1168 held that, according to art. 914 and 932 of GCC and art. 1 and 16 of L. 551/1915, the monetary compensation for moral harm or pain and suffering is owed also in case of workers’ accidents when the conditions for tortious liability are met. The provisions of art. 16 § 1 of above mentioned L. 551/191516 refer to damages for property damage and not to monetary satisfaction for moral harm or pain and suffering. There is no provision in the above mentioned law regulating this kind of monetary satisfaction, hence, the general provisions apply (Areios Pagos 1117/1986 (in full bench)). Accordingly, in order that the employee asks for monetary satisfaction for moral harm for an accident which occurred in the course of his work, the special negligence which is required for the observance of the safety conditions according to art. 16 § 1 of L. 551/1915 is not required. Any negligence in the meaning of art. 914 GCC of the employer or his auxiliary performers that contributed to the occurrence of the accident suffices (Areios Pagos 1380/2001, 1185/1993, 73/2007 NoV 55, 1149). The Court of Cassation further held that, in order that art. 922 GCC on vicarious liability applies, a person (principal) must have appointed or used another person (auxiliary performer) in a position or occupation (being permanent or not) for the principal’s professional, financial or other interests. In particular, as far as building contractors are concerned, from the combination of the provisions of art. 922, 681, 688–691 GCC, it derives that, as long as the contractor is not dependent on the employer, he is not considered to be in a relation stemming from art. 922 GCC and as a result the employer is not liable for the fault and unjust acts of the contractor or the auxiliary performers employed by him during the carrying out of the work. In case that the employer has retained the management and guidance of the carrying out of the work, the contractor is considered as an auxiliary performer as long as he obeys the employer’s orders (Areios Pagos 1592/1998).

37

The Greek Areios Pagos also noted that, although according to the provisions of art. 8 § 5 and 26 § 9 of obligatory L. 1846/1951 on social insurance not only the contractor or sub-contractor who appoints and pays the persons who are insured is considered as the employer at building works, but also the master of the work, the latter is considered as a “fictitious employer” exclusively and only for the application of the above mentioned law i.e. for the payment of social insurance contributions and not as a person who is strictly liable for the 16

According to L. 551/1915, the prejudiced person in an accident is entitled to file an action for full damages only if the accident is due to dolus of the employer or his auxiliary performers or if it happened at a workplace where the provisions of laws, or decrees or regulations on the employees’ safety conditions had not been abided by.

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payment of monetary satisfaction for moral harm due to the injury of a person related to the contractor through an employment contract (cf. Areios Pagos 1117/1986 (in full bench), Areios Pagos 1417/1991). Furthermore the Greek Areios Pagos held that, as derived from art. 2 § 1, 5 § 1 and 10 § 1 of L. 489/1976 and art. 4 of L. 3950/1911, in case of car accidents, the liability of the driver and of the insurance company, according to L. 3950/1911 or art. 914 ff. GCC, presupposes that the accident is caused “during the operation” of the car. The Court noted that the accident caused by the operation of a machine, such as the pump of a concrete mixer which is firmly attached to a specially modified car is not regarded as an accident caused by the operation of the car according to the aforementioned provisions. This is owed to the fact that the damage caused by such a machine is not connected to the typical risks of the car, given that in such a case what is crucial is the operation of the machine which is adapted to the car, while the characterization of the car as such is of no importance.

38

c) Commentary

The present decision, as well as the decisions 73/200717, 1045/200718 and 1122/200719 of the same Court, follow the well established jurisprudence, according to which workers who sustain damage at work may seek damages for moral harm, even if the accident cannot be attributed to an intention on the part of either the employer or its auxiliaries or even if the provisions on the safety of the workers at work are not violated.

39

The Court of Cassation further clarifies with this decision that there must be no confusion between art. 8 § 5 and 26 § 9 of L. 1846/1951 on social insurances on the one hand, which, for the payment of the social insurance contributions characterise also the master of the work as “employer” of the persons used by the contractor and art. 922 GCC on the other, which presupposes the fulfilment of certain criteria and in particular the existence of a dependence on the master of the work or at least an integration in the field of the activity of the master of the work, in order that vicarious liability exists20.

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7. Areios Pagos 1385/13.06.200721, 1155/30.05.200722, 1156/30.05.200723: Illegal Work – Claims Deriving from Art. 928 and 929 GCC a) Brief Summary of the Facts

Areios Pagos 1385/13.06.2007: A, an Albanian citizen, died after a car accident. A’s wife and children sought compensation for loss of maintenance and 17 18 19 20 21 22 23

Nomiko Vima (NoV) 55, 1149. Published at NOMOS. Published at NOMOS. See among others, Stathopoulos (fn. 4) § 7, no. 65, 393 ff. Not published. Not published. Not published.

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for pain and suffering. A was working in Greece without a valid work permit and the issue which arose was whether this fact prevents his wife and children from seeking compensation for loss of maintenance.

42

Areios Pagos 1155/30.05.2007, 1156/30.05.2007: The plaintiff, a foreign worker from Northern Epirus (Albania) was injured when her motorbike crashed into the car of the defendant. As a result she was unable to work as a cleaner and domestic help in several houses for 18 months and filed a claim against the car owner and the insurance company for loss of profits. The defendants alleged that she was not entitled to such damages as she did not hold a valid work permit. b) Judgment of the Court

43

The Greek Areios Pagos 13 June 2007, No. 1385 ruled that, as derived from the provisions of art. 1389, 1390, 1485, 1488 § 2 GCC and art. 23 § 1 of L. 1975/1991, according to which the provisions of art. 14 § 2 and 18 § 2 GCC are applicable in this case, in case of continuous performance of work in Greece by a foreigner who does not have a work permit and is not a citizen of a European Union country, his wife and children have the right of maintenance if the conditions of art. 1389, 1390, 1485 and 1489 GCC are met. The right of maintenance is estimated on the basis of the income the foreigner acquires from his work, even though this employment contract is void, as contrary to the prohibitive public order provision of art. 23 § 1 of above mentioned L. 1975/1991. Accordingly, on the basis of art. 928 sec. b GCC (which applies according to art. 26 GCC), in case of death of the said foreigner because of a delictual act, his wife and children have the right to seek compensation from the person bound to make reparation for the loss of maintenance which the victim would have provided them, given that, in the usual course of events, the latter would have continued to work (AP 3/2004 (full bench)). The Court of Cassation overruled the decision of the Court of Appeal, which had decided the opposite.

44

The Greek Areios Pagos 30 May 2007, No. 1155 and 1156 held that, as derived from art. 914, 929 and 298 GCC, in case of an illegal and culpable detriment to the body or health, damages comprise not only the positive prejudice, i.e. the reduction of property, but also the lost profit (lucrum cessans). The legal definition of “lost profit”, which is a legal notion, is provided by art. 298 GCC, where the anticipation of earnings is not exclusively connected to one and only cause of acquisition, e.g. to a valid employment contract or to the possession of a work permit as regards foreign workers who are not citizens of a Member State of the European Union. According to art. 298 GCC, lost profit is deemed to be what could have been expected as probable according to the usual course of events or the special circumstances and which the victim, a foreign employee with no work permit, would have obtained even by virtue of a forbidden, due to the lack of the permit, employment contract on the basis of art. 904 GCC even if the tort had not taken place. In order for art. 929 GCC to be applied, the actual possibility of the victim to obtain earnings by virtue of an employment contract, either valid or null, and accordingly the claim which arises thereof,

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suffice. Although the Court acknowledged that the acquisition of profit must not stem from a cause that is contrary to the law or bonos mores, i.e. from a violation of a legal prohibition concerning the activity itself, it stressed that this is not the case as regards the undertaking of work by a foreign worker who lacks the relevant administrative work permit (AP 3/2004 in full bench). c) Commentary

The new tendency of the jurisprudence, developed with the decision 3/2004 of the Court of Cassation (in full bench)24, by which, contrary to the till then jurisprudence25, it was held that the existence of a valid work permit is not necessary for claims deriving from a tortious act, is confirmed with the commented two decisions and shows the path the Greek Court of Cassation will follow in other such cases.

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8. Areios Pagos 1141/23.05.200726, 1261/06.06.200727: Notion of the Term “Family of the Victim” in Art. 932 GCC a) Brief Summary of the Facts

AP 1141/23.05.2007: On 4 January 2000, a motorbike collided with a public bus. As an outcome of the accident, which was due to the bus driver’s negligent behaviour, the motorbike’s driver passed away. The accident was also due to the negligent behaviour of the motorbike’s driver at a percentage of 20%. The plaintiff had cohabited with the 27-year-old driver of the motorbike since 1996 in terms of free cohabitation and claimed pecuniary compensation for moral suffering, as belonging to the family of the victim. She invoked that she had cohabited with the victim and that the latter had intended to marry her; in addition to this there was a witness in the court of first instance who confirmed their intention to get married. The Court of Appeal, reversing the decision of the Court of First Instance, adjudicated the amount of € 55,000 to the plaintiff considering her as a fiancée though also accepting their cohabitation.

46

AP 1261/06.06.2007: In 1999 a three-year-old child died after a car accident. At the moment of his death his mother was pregnant and gave birth to a boy 47 days after the accident. The Court of Appeal held that the foetus was not entitled to any compensation for pain and suffering for the loss of his brother because, due to the existence of his other three elder brothers aged 7, 6 and 4 years respectively, of one younger brother aged 16 months at that time as well as of the birth of two other brothers later, in 2001 and 2003 respectively, he would not feel, according to the usual course of events, pain for the death of his brother that took place before his birth. The Court further held that, in order to define the amount to be paid as pain and suffering to the other close relatives

47

24

25

26 27

For a summary of the decision AP 3/2004 (in English) see E. Dacoronia, Greece, in: H. Koziol/ B.C. Steininger (eds.), European Tort Law 2004 (2005) 337, no. 35–38. For AP 375/2003 (in English) see E. Dacoronia, Greece, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2003 (2004) 223 f., no. 38–45. EllDni 48, 1023 f. Published at NOMOS.

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of the deceased (mother, brothers, grandparents) the concurrent fault of the father of the deceased child i.e. the insufficient exercise of his parental duty of supervision should be taken into consideration. b) Judgment of the Court

48

The Greek Areios Pagos was once again faced with the notion “family of the victim” in art. 932 GCC and reiterated with its decision 23 May 2007, No. 1141 that the said notion is not specifically defined in the aforementioned provision, because the legislator did not wish to delimit the boundaries of an institution which, by nature, is unavoidably subject to social differentiations over the course of time. However, the said term is construed as including the closest relatives of the deceased who suffered from his loss, irrespective of whether they cohabited with him or not. In any case, it is a matter of fact, judged by the lower courts, whether the said persons, who are as a rule entitled to compensation for pain and suffering, had indeed been closely connected with the deceased. Should it be ascertained that no ties of love and affection existed between them and the deceased, no compensation for pain and suffering is adjudicated (AP 21/2000 in full bench). It follows from the foregoing that the victim’s fiancée is included in the term “family of the victim”, but the person who merely cohabited with the deceased, having no intention to conclude marriage in the future, is not. Neither does the law provide for compensation for pain and suffering to the cohabiting partner of the deceased nor can art. 932 GCC be applied by analogy. Engagement, as provided by art. 1346 GCC, being the contract for future marriage, concluded by the reciprocal promise of the future spouses to celebrate it, is distinguished from the mere proposal to marriage, from the negotiations to marriage or from love affairs. The element of the reciprocal promise for the future celebration of marriage distinguishes the engagement from the free union – cohabitation, where not only have the parties agreed not to conclude marriage, but they have consciously chosen instead to live beyond its frame. It thus quashed the decision of the Court of Appeal.

49

The Greek Areios Pagos 6 June 2007, No. 1261 held that, according to the provisions of art. 35 and 36 GCC in combination to art. 298 and 299 GCC, the monetary compensation due to pain and suffering is a kind of damages which aims at the moral consolation and psychic relief, as far as this is possible, of the members of the family of the deceased through the payment of a reasonable amount of money for the acquisition of other goods. In this way the said persons are given support so as to counterbalance the negative psychological situation they find themselves in as the result of the delict and to overcome or at least feel the pain and suffering to a lesser degree. This monetary satisfaction is awarded when the member of the family of the victim could be, at the time of the death, sentimentally influenced by the event. This fact is judged by the court according to the provisions of common experience on the basis of real events. However the court can restore not only the present but the future moral harm or pain and suffering for the same reason that it may restore the future property damage. As a result, from the time of the filing of the action (art. 69 GCCP), monetary satisfaction may also be awarded to the foetus if it is born

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alive, for the pain and suffering which is certain that the foetus will feel in the usual course of events when it reaches an age when it can be influenced by the external environment and feel the lack of the family member who died. As, however, the existence or not of the pain and suffering is judged in each particular case on the basis of the particular facts and conditions, e.g. the kind of the offence, the intensity of the psychical pain, the age of the person who alleges that he/she has felt the grievance, etc.28, the Court of Cassation confirmed the decision of the Court of Appeal, which had held that this particular foetus was not going to feel pain and suffering for the lack of his brother, who died before his birth, due to the fact that he had in total six siblings (three older ones aged 7,6 and 4 at the time of the accident and three born later) and, as a consequence, he should not be awarded any monetary satisfaction.

50

c) Commentary

Areios Pagos 1141/23.05.2007: In this decision the Court of Cassation also confirms its well established jurisprudence, according to which and contrary to the view of Greek scholars, the person who merely cohabits with the deceased, having no intention to conclude marriage in the future, does not belong to the “family of the victim” according to art. 932 GCC29. The Court of Cassation, following its old fashioned position on the subject matter, stresses that, for somebody considered as a fiancé and part of the “family of the victim” in the meaning of art. 932 GCC, a reciprocal promise for the future celebration of marriage should have been exchanged; a mere proposal to marry, love affairs or negotiations for marriage do not suffice for someone to qualify as a fiancé.

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Areios Pagos 1261/06.06.2007: With this decision the Court of Cassation also confirms its position of the last years, according to which, foetuses can be compensated for the future pain and suffering which they will experience, according to the usual course of events, when they grow up and reach an age when they will feel pain for the loss of their relative30.

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9. Areios Pagos 163/26.01.200731, 1045/15.05.200732, 1261/06.06.200733: Criteria Used by the Court in Adjudicating an Amount as Moral Harm or Pain and Suffering a) Brief Summary of the Facts

Areios Pagos 163/26.01.2007: Due to the fault of motorcyclist A, who changed the course of his motorcycle without using his indicator to signal the change of 28 29

30

31 32 33

See Stathopoulos (fn. 4) no. 72, 447. For more details (in English) see E. Dacoronia, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2006 (2008) no. 57, 58. For more decisions (in English) see E. Dacoronia, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2005 (2006) 326, 327, no. 68, 70. Chronika Idiotikou Dikaiou (ChrID) Z/2007, 602 ff. Published at NOMOS. Published at NOMOS.

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direction, and to the fault of the driver B of the car which was following – B was drunk and exceeding the legal speed limit – the two vehicles collided. As a result of the crash, C, a 21-year-old student, co-rider of the motorcycle, died. C’s close relatives (parents, sister and grandparents) sought compensation for pain and suffering. The defendant insurance company alleged that the Court of Appeal in adjudicating € 70,000 as pain and suffering, on the one hand, inadmissibly took into consideration the social and economic status of all the parties (including the insurance company itself as well as the driver of the motorcycle and its owner, who were not parties of the action) and, on the other hand, violated the principle of proportionality (art. 25 § 1 of the Greek Constitution).

54

Areios Pagos 1045/15.05.2007: On 28 March 2002, A was working as a member of a team for the maintenance of the railway line. On the same day a tamping machine for the maintenance of the turnouts was put on circulation on the lines. The said circulation was not mentioned on the working timetable of the 28 March 2002 because there had been frequent changes in the planning of the machine and as a result the particular course of the machine was uncertain. When the driver of the machine saw the warning sign, he started to hoot in order to warn any driver or pedestrian of the arrival of the machine. At that time A and one of his colleagues were using a machine (JACKSON) which is very loud and because of the wind, which was extremely strong that day, they could neither hear the machine approaching nor see it coming, because they were looking in the opposite direction. When the driver of the machine saw the two workers he continued to hoot without, however, reducing the speed of the machine although he knew that, because of the use of the JACKSON machine, the two workers could not hear anything and due to this they could not react. When the distance between the machine and the two workers was 80 metres, the driver tried to stop the car but because of the speed of the machine, which was normal according to the circumstances (55–60 km/hour) and to the incline of the line (13/100), the machine did not stop in time. As a result A was seriously injured and died. The head of the team responsible for the maintenance of the railway line had neither asked, although he had to and could have, for the line to be cleared nor put a worker in the previous station in order to warn the other users of the line of the works. Due to the head of the team’s failure to take the necessary safety measures, the death of A was caused. The relatives of the dead worker sought compensation for pain and suffering.

55

Areios Pagos 1261/06.06.2007: See above no. 47. b) Judgment of the Court

56

The Greek Areios Pagos 26 January 2007, No. 163, held that the Court of Appeal, by saying that it took into consideration for the adjudication “the social and economic status of all the parties”, meant all the parties involved in the action filed and not all the parties involved in the accident. Moreover, the Court of Cassation held that the Court of Appeal did not take into consideration the social status of the insurance company as, according to it, only natural persons can have a social status.

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According to all three decisions, the courts of substance, when exercising their discretion to determine the extent of non-pecuniary damages according to art. 932, take into consideration factors such as the fault of the tortfeasor, the concurrent fault of the beneficiary, the conditions of the accident, the extent of the bodily harm and its consequences, the social and economic status of the parties. In particular for the insurance company that is held liable to pay compensation for pain and suffering, however, the Greek Areios Pagos 26 January 2007, No. 163, held that if an insurance company is held liable to pay compensation for pain and suffering, its economic status is not taken into consideration in determining the amount of damages to be paid, as the insurance company is liable in its capacity as a guarantor. The Greek Areios Pagos 15 May 2007, No. 1045 held, among others that, as the eventual concurrent fault of the victim is co-evaluated with all other elements, the amount of compensation to be adjudicated after its final determination must not be reduced once again in proportion to the percentage of such fault. The Greek Areios Pagos 6 June 2007, No. 1261 ruled that the concurrent fault of the victim is taken into consideration even if the victim due to his age (for example if he is a minor aged 10) has no capacity to commit a delict. The concurrent fault of the beneficiary of the monetary compensation, e.g. the concurrent fault of the plaintiff – the father who did not sufficiently exercise his duty of supervision over the deceased under-aged child – is also taken into consideration. In such a case the concurrent fault of the father or mother is taken into consideration for the reduction of the monetary compensation of other beneficiaries (such as brothers, grandparents) as well.

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c) Commentary

According to art. 932 GCC, the Court can adjudicate a reasonable amount of money as moral harm or pain and suffering. The Court, when defining this amount of money, should take into consideration the kind of the offence, the importance of the harm sustained, the conditions under which the tort took place, the degree of fault of the tortfeasor, the eventual concurrent fault of the victim, the economic and social status of both the tortfeasor and the victim, and in particular that of the victim, the penalty eventually imposed on the tortfeasor, the special personal status of the victim (age, sex, professional capacities, etc.) and the behaviour of the tortfeasor after the commitment of the tort, etc.34.

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The above are repeated with the aforementioned decisions of the Court of Cassation; their importance however lies in the fact that: a) the first decision mentions the factor which is not taken into consideration (the economic status of the insurance company) when determining the amount to be adjudicated, b) the second decision underlines that, as the concurrent fault of the victim is taken into consideration in the determination of the extent of “reasonable” compensation, the amount of compensation decided by the Court as “reasonable” should not be reduced once again in proportion to the percentage of the

59

34

For the relevant jurisprudence see, among others, Georgiades (fn. 10) no. 22; Kornilakis (fn. 10) 652 f.; St. Paterakis, Monetary Compensation for moral harm (2nd ed. 2001) 320 f.; Stathopoulos (fn. 4) no. 75, 450 f.

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victim’s concurrent fault, and c) the third decision determines that the concurrent fault of the victim is co-evaluated, even if the victim is a minor; in such a case the lack of supervision on the part of the parent is also co-evaluated not only for the reduction of the monetary compensation to be adjudicated to the latter but also for the reduction of the amount to be adjudicated to other members of the family of the victim. However, concerning the plea of concurrent fault of the legal representative, invoked against the under-aged victim, Areios Pagos 5 February 2007, No. 195 and 19635 decided that such a plea is illegal because, according to the provisions of art. 330 and 922 GCC, in case of damage deriving from a tort, the person who suffers the damage does not bear the consequences of the concurrent fault of his legal representative due to the fact that the obligatory rules of law are not addressed to the under-aged person but to his legal representative. As a result, if the person who suffers the direct damage is a minor and his legal representative files an action for damages in the name and on the account of the under-aged person, the plea of the defendant for concurrent fault of the legal representative is illegal. 10. Areios Pagos 163/26.01.200736, 195/05.02.200737, 196/05.02.200738: Non-pecuniary Damages and the Principle of Proportionality a) Brief Summary of the Facts

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Areios Pagos 163/26.01.2007: See above no. 53.

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Areios Pagos 195/05.02.2007, 196/05.02.2007: See above no. 17. b) Judgment of the Court

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Areios Pagos 163/26.01.2007: The Court of Cassation held that the judgment of the lower courts as to the extent of non-pecuniary damages is based on consideration of facts and, therefore, is not subject to the control of the Supreme Court. Neither can the said judgment be reviewed on the ground that the principle of proportionality, introduced as a legal rule by art. 25 § 1 of the Constitution, is violated. The Court clarified that the judiciary, when examining whether the principle of proportionality has been abided by, is confined to an examination of the constitutionality of the law provision, and more particularly to an examination of whether the legislative restriction of a constitutionally protected right observes the principle of proportionality. Therefore, the control as to the observation of said principle concerns, on the one hand, the constitutional provision, which protects a right and, on the other, the legislative provision which restricts it. Apart from the above frame, the courts are not vested with the authority to directly apply the principle of proportionality when exercising their judiciary power in cases brought before them, but only to apply the relevant law provision. Consequently, a court decision that has not defined in a particular case the reasonable compensation of art. 932 GCC does 35 36 37 38

For the facts of AP 195/2007 and 196/2007 see above no. 17. ChrID Z/2007, 602 ff. Published at NOMOS. Published at NOMOS.

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not contravene the principle of proportionality, but is wrong and will be subject to control by the permissible judicial means, according to the rules set by the article itself and within the frame that is stipulated by the provisions governing judicial remedies (AP 1670/2006). Areios Pagos 195/05.02.2007, 196/05.02.2007: The Greek Areios Pagos 5 February 2007, No. 195 and 196 dealt with matters regarding the extent of nonpecuniary damages adjudicated according to art. 932 GCC. After reiterating that the extent of non-pecuniary damages, according to art. 932 is determined by the courts of substance, Areios Pagos considered whether the judgment of the said courts is subject to the control of the Supreme Court on the ground that the principle of proportionality is violated. The issue is whether the principle of proportionality, as provided by art. 25 of the Greek Constitution, can constitute a ground for cassation (art. 559 no. 1 and 19 GCCP), so that the judgment of the lower courts as to the extent of non-pecuniary damages can be reviewed, or whether proportionality is a principle of interpretation to be taken into consideration when interpreting and applying a rule of substantive law or a rule of procedure. In this last case the principle of proportionality does not constitute a ground for cassation, but presupposes the existence of a cassation ground for the violation of a rule of law, during the examination of which it will be judged whether the principle of proportionality has been violated. The Court held that the matter raised is of general interest and falls under the competence of the Full Bench, to which it was referred.

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c) Commentary

Though the A΄ Division of the Court of Cassation with its decision 132/200639 had held that the principle of proportionality constitutes a rule of substantive law, which is directly applied by the Courts of substance, and the violation of which creates the grounds for cassation of either art. 559 no. 1 or art. 559 no. 19 GCCP, the D΄ Division, with a number of decisions40, among which the here commented decision no. 163/2007, held that the courts are not obliged to apply the principle of proportionality in every case but they control its application only while checking the constitutionality of a law.

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In view of the above, with the here commented decisions no. 195/2007 and 196/2007 as well as with the decision no. 918/200741, the issue was referred to the full bench of the Court of Cassation, and the relevant decision is expected with great anticipation.

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40 41

For AP 132/2006 and the discussion it generated (in English) see E. Dacoronia (fn. 29) no. 37 ff. The tendency reflected in this decision is criticized by St. Paterakis, Issues of Moral Harm from Torts Committed via the Media, EllDni 48, 14 f., who mentions that this approach will cause great problems and will burden the Court of Cassation with many court actions. See AP 634/2007, ChrID Z/2007, 974; 1255/2007 not published. ChrID H/2008, 31 ff., followed by a very interesting commentary note of E. Nezeriti.

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11. Areios Pagos 996/09.05.200742: Prescription a) Brief Summary of the Facts

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As a result of the careless driving of their drivers, two cars collided on the outskirts of Thessaloniki in 1995 and A, a passenger in one of the cars, was seriously injured. According to the Court of Appeal of Thessaloniki, A, due to the crash, presented lesions, haemorrhaging in many parts of his body and hemiplegia in his left side. Furthermore from 6 June 1995 to 21 July 1995 A had been treated in a hospital of the national institute of rehabilitation of disabled persons in Athens where, due to the constant bad condition of his health (he experienced such problem with his balance that he was unable to sit upright), the doctors recommended he be treated in a special centre in England, where he was treated from 13 November 1995 to 2 September 1996. On 21 January 1997 A was re-examined in hospital and the doctors ascertained that he was not able to care for himself and needed permanent care by another person. Furthermore according to all expert opinions from 1997 his health had deteriorated. Apart from his initial action, A filed two new actions in the years 2000 and 2003 respectively asking for further damages because of the unforeseeable deterioration of his health. The defendants objected by alleging that his claims were prescribed and that the plaintiff did not prove the unforeseeability of the damage. b) Judgment of the Court

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According to the Greek Areios Pagos 9 May 2007, No. 996, the claim of the injured third party against the person bound to make reparations is subject to a two-year (art. 7 of L. 3950/1911) or a five-year (art. 937 GCC) prescription period, depending on which provision it is based, while the claim against the insurer is subject to a two-year prescription period (art. 10 § 2 of L. 489/1976). Furthermore, as derived from the combination of art. 247, 251, 298, 914 and 937 GCC, in case of a tort, a claim for damages is born as to the whole damage, positive or lost profit, present or future, provided that it is foreseeable according to the usual course of events and that it can be judicially pursued. The five-year prescription of the said claim commences as to the whole damage from the moment the injured party acquired knowledge of the first detrimental consequences and of the person of the tortfeasor. On the contrary, it derives from art. 10 § 2 of L. 489/1976 and art. 241 GCC that the two-year prescription period of the claim against the insurer starts to run the day after the accident, while it is of no importance if and when the victim acquires knowledge of the damage. The aforementioned two-year prescription period, however, starts to run the day after the accident only where the damage of the victim is from the outset foreseeable and does not apply where the damage is from the outset unforeseeable, as is the case of an unpredictable, according to medical data, deterioration of the victim’s health. The general provisions of the GCC as to suspension (art. 255 ff. GCC) and interruption (art. 260 ff. GCC) of prescription apply to the above-mentioned prescription periods. Should an action be 42

Not published.

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filed for only part of the claim for damages, its notification to the defendant interrupts the prescription period only as to the said part and as to this part only lis pendens is created (art. 261a and 221 § 3 GCCP). It is not required for the commencement of the prescription period that the victim can define the exact extent of the detriment or the amount of damage sustained or the future damage, as long as the future damage is causally connected with the detrimental event and the victim has knowledge of that connection. Future damage is restored only if it is certain to occur and its extent can be determined, not if it is merely possible or hypothetical. Finally, in case the plaintiff alleges that his claim has not been time-barred because the damage was unforeseeable, this allegation does not constitute a counter-objection to the objection of the defendant alleging prescription but a negation of the objection. This means that the burden of proof lies with the defendant who has to prove that the damage was foreseeable from the beginning. c) Commentary

Greek theory also dealt this year with other issues on prescription and in particular with the issue of whether the extension of the prescription period according to art. 268 sent. a GCC also applies to future damage, the compensation of which had not been sought in the initial action (see infra no. 84, the presentation of the article of Eugenia Dacoronia on these issues).

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12. Areios Pagos 23/11.06.200743, 24/11.06.2007, 25/11.06.2007, 29/11.06.200744 (all in full bench): Issue of a Cheque without Provision; Payment by a Previous Legal Bearer and Endorser of the Cheque a) Brief Summary of the Facts

Areios Pagos 23, 24, 25, 29/11.06.2007: The defendants, in their capacity as legal representatives of company N issued a cheque to the order of the plaintiff for the amount of GDR 2,364,050 (€ 6,937.78). The plaintiff endorsed the cheque to bank A as a pledge. Bank A presented the cheque to the paying bank B in due time, but no payment was made because there were no available funds in the account of the drawer. It has to be mentioned that the said cheque which was not honoured was one of thirty nine (39) cheques totalling GDR 116,059,050 (€ 340,598.83) that were issued by the defendants and not honoured at the time of payment for lack of funds. As a result, the plaintiff – being the previous legal bearer and endorser of the cheque – paid the amount of the cheque to bank A after a relevant recourse and filed an action against the defendants. The Court of Appeal confirmed the decision of the Court of First Instance, according to which the plaintiff is directly prejudiced from the illegal act of issuing a cheque without provision and is entitled to damages and pecuniary compensation for moral harm. The defendants appealed before the Supreme Court. 43 44

EllDni 48, 1008 f. = NoV 55, 1852 ff. = ChrID Ζ/2007, 935. Dikaio Epicheiriseon kai Etaireion (DEE) 10/2007, 1083.

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b) Judgment of the Court

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Areios Pagos 11 June 2007, No. 23, 24, 25 and 29 (full bench) once again dealt with the controversial matter of whether, in case a cheque is issued without provision, the claim for damages according to art. 914 GCC also exists in favour of a previous legal bearer and endorser of the cheque who paid the amount of the cheque to the legal bearer after a relative recourse. The Court held that, as derived from art. 914 GCC, the illegal character of the act and the causal link between the detrimental event and the damage are placed among the preconditions of tortious liability. It noted that the issue of a cheque without provision is also illegal according to art. 79 § 1 of L. 5960/1933, as replaced by art. 1 of L. 1325/1972. It derives from this penal provision of art. 79 of L. 5960/1933, which aims at protecting not only public but also private interests, combined with art. 297, 298 and 914 ff. GCC, that whoever issues a cheque without provision and thus illegally and culpably provokes damage to another, is obliged to pay damages. The claim for damages, according to art. 914 GCC ff., concurs with the claim from the cheque according to art. 4047 of L. 5960/1933 and it is up to the beneficiary to choose the claim he prefers. Not only the bearer of the cheque at the time it is presented for payment (last bearer) but every endorser who paid the amount of the cheque to the legal bearer after a relative recourse is entitled to damages, given that the latter is the one who sustains the damage from the non-payment of the cheque and his damage is owed to the illegal behaviour of the drawer and is causally connected to it. The same also applies where the bearer of the cheque transfers it to another as a pledge, in which case the pledgee is entitled to present the cheque for payment, by exercising his own right which derives from the deed (art. 1255 GCC). If, however, the cheque is not honoured when presented for payment and the pledger pays it, thus re-acquiring the deed, the pledger is the one damaged by the non-payment. The Court noted that the right of recourse of the last bearer against the drawer and the previous endorsers is provided by the provisions of L. 5960/1933 (art. 44) to any endorser of the cheque who paid it. The opposite view, i.e. that only the last bearer of the cheque is entitled to damages, cannot derive from art. 79 § 5 of L. 5960/1933, together with art. 4 § 1 of L. 2408/1996, because no element can support the opinion that the term “bearer” in the aforementioned provision is used as meaning the last bearer only. Consequently, any previous legal bearer of the cheque, who paid the cheque after a relevant recourse, is deemed to be a “bearer” according to art. 79 § 5 of L. 5960/1933. In addition, the said provision has already been replaced by art. 15 § 3 of L. 3472/2006, which explicitly now states that a penal complaint can be lodged not only by the legal bearer of the cheque but also by the previous legal bearer and endorser of the cheque, who paid the amount of the cheque to the legal bearer after a relevant recourse. To dissolve any relevant dispute, it was also added in the aforementioned provision that the previous legal bearer is also entitled to damages according to the provisions of the GCC on torts (art. 914 ff.). The opinion that the previous legal bearer or pledger of the cheque is not entitled to damages according to art. 914 GCC would lead to non-equitable results that cannot be deduced from the purpose of the law; the drawer of the cheque would benefit despite the fact that, through

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his wilful conduct, the institution of cheque is diverted from its legal function and its credibility as an ex lege means of payment is diminished. The fact that the above mentioned persons (previous legal bearer and pledger) have the right of recourse against the drawer or the previous legal bearers does not lead to a different conclusion, given that the protection provided by the relevant provisions may be in the particular case ineffective. The Court concluded from the foregoing that even prior to the replacement of art. 79 § 5 of L. 5960/1933 by art. 15 § 3 of L. 3472/2006, the debtor who pledged the cheque and paid it and thus became its bearer again, is entitled to damages against the drawer, as being directly infringed by the illegal and culpable act of the latter, according to the provisions on torts. c) Commentary

As Prof. E. Perakis also notes in his note under the decision 29/200745, the full bench of Areios Pagos (Civil division), over the last five years, has dealt several times with the controversial issue of whether, in case a cheque is issued without provision, the claims for damages according to art. 914 GCC also exist in favour of a previous legal bearer and endorser of the cheque who paid the amount of the cheque after a relevant recourse46. The holding of the above mentioned four decisions is exactly the opposite of the holding of the earlier decision 30/2003 and 18/2004 on the subject matter and signalises a change in the jurisprudence47. It has to be noted, however, that the said decisions were issued after the legislator passed L. 3472/2006, which amended art. 79 § 5 of L. 5960/1933 on cheques and expressly solved the issue in favour of the previous legal bearer.

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13. Areios Pagos 1661/29.06.200748: Contract of Financial Leasing; Direct and Indirect Damage a) Brief Summary of the Facts

A, a company limited by shares, lessee of a car under the system of financial leasing, filed an action against the Auxiliary Fund for damages amounting to € 21,857 for the decrease in the commercial and technical value of the car. The decrease of the value was due to the collision of the car with another car. The driver of this latter car was found exclusively liable for the collision. The Court of Appeal, reversing the decision of the Court of First Instance, held that the plaintiff, being the user and not the owner of the car, is not entitled to damages for the decrease of the value of the car.

45 46 47

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DEE 10/2007, 1084. For a presentation of the problem (in English) see Dacoronia (fn. 29) no. 4–6. This new tendency of the jurisprudence is being on the one hand criticized by J.P. Markou, An end in the strictness of the concepts of the law governing cheques? EllDni 48, 971–975 and on the other approved by Ath. Athanassas, Every previous legal bearer of a cheque without provision has a right to damages, EllDni 48, 976–981. DEE 12/2007, 1325–1327.

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b) Judgment of the Court

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The Greek Areios Pagos 29 June 2007 No. 1661 overruled the above decision of the Court of Appeal by holding that the legal position of the lessee in a financial leasing resembles the position of the buyer who has acquired ownership. Consequently in case of damage or total destruction of the thing due to the fault of a third party, the lessee who is in possession of the thing, is entitled to file a claim for damages and not the lessor who is merely the owner. c) Commentary

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I. According to the legal opinion given by Prof. I. Spyridakis on this case49, while it was pending before the Court of Cassation, only direct damage can be restored in the Greek legal system with the exception of art. 928 and 929 GCC, according to which, third parties who have sustained an indirect damage, are entitled to damages. In the traditional case of a lease of a movable thing, a direct damage for the decrease of the commercial and technical value of the thing is sustained only by the owner of the thing, who also has a relevant claim. This is not the case however in financial leasing, where the lessee sustains a direct damage because of the said decrease of value as the beneficiary of: a) the conditional right for the acquisition of ownership and b) the right to sublease. For the same decrease of value also the lessor sustains a direct damage as the owner of the thing. In order to avoid multiple court actions, the lessee may file an action for both his own damage and the damage of the lessor; in such a case, how the amount of damages to be adjudicated by the court is to be distributed is a matter of settlement between the two parties (lessor and lessee).

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II. In an approving note on the decision50 Vasileios Oikonomidis mentions that it is the first time that the Court of Cassation deals with the issue of whether the lessor or the lessee in a financial leasing (regulated by the l. 1665/1986) is entitled to damages in case of damage of the movable (car) because of a traffic accident. He notes that the Court of Appeal, in its overruled decision 3759/2006, was consistent with a string of decisions of the Court of Cassation according to which, and after interpretation of art. 297, 298, 914, 936 and 974 GCC, it derives that the person who uses and exploits a thing on the basis of a legal relation is entitled to damages for repairing the thing that has been damaged because of a tortious behaviour. The said person, however, is not entitled to damages for the decrease of the commercial value of the thing; the relevant claim belongs only to the owner of the thing. These decisions, however, did not tackle the issue of financial leasing and of the position of the lessor and the lessee regarding damages in case of a tort. The commentator finds the decision of the Court of Cassation on the issue convincing, as the legal position of a lessee in a financial leasing resembles the position of the owner and he gives grounds for that. In his concluding remarks he points out that this decision of the Court is in total harmony with the economic aims targeted with the modern forms of contracts and the needs of the contracting parties. 49 50

DEE 12/2007, 1268 ff. DEE 12/2007, 1327–1329.

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C. LITERATURE 1. Ast. Georgiades, Law of Obligations (Sakkoulas Eds., Thessaloniki 2007) The author deals, among other issues, with obligations stemming from tortious acts. After analysing the concept of tortious act in the general provision of art. 914 GCC, he presents special issues of torts, referring to the defamatory spreading of news, the neglect of supervision, the damage caused by animals, the fall of a building or other work. He also includes a chapter on damages for harm to one’s body or health or for death.

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2. K. Christakakou-Fotiadi/N. Koumoutzis/A. Geraki, Civil Liability for Car Accidents, Dikaio kai Oikonomia (P. N. Sakkoulas Eds., Athens 2007) With this book the authors attempt to systematically present the tendency of the Greek jurisprudence in the field of civil liability for car accidents and of the insurance of such liability.

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3. K.G. Karagiannis, Indemnification in Case of Illegal Use of a Person’s Image (Ant. N. Sakkoulas Eds., Athens-Komotini 2007) The author presents a typology of court cases on the illegal use of a person’s image. His research leads him to the conclusion that there is a tendency in the Greek jurisprudence: a) not to adjudicate damages in particular regarding loss of profit and b) to deal with these issues only in the frame of pecuniary compensation for moral harm, a tendency that he criticizes.

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The final conclusion of the author is that for the illegal use of a person’s image there is a lacuna of the Greek law as regards the basis for granting damages for lost profit (i.e. for the non-payment of remuneration for the consent of the use of the image). As in this field there is no equivalent regulation to that in art. 65 par. 2 sent. b of L. 2121/1993 on the protection of intellectual property (payment of the double of the usual or legal remuneration for the granting of the consent), this lacuna can be filled with the application of the said provision, by analogy, also to cases of the illegal use of one’s image, as he considers that these are similarities of the two systems (one for the protection of intellectual property and one on the protection of offences to the personality) in this particular provision for the calculation of damages, though he approves the negative position of the jurisprudence consisting in the non-transposition of the provisions for the protection of intellectual property to other kinds of offences of the personality. Though the author finds that this proposed solution is de lege lata possible, he closes his monography by stating that there is an urgent need for the legislator to create a system for the protection of those rights of the personality that have a financial nature.

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4. A.P. Mikroulea, Civil Liability of Banks in the Context of Payment Transactions and Funds Transfers (Ant. N. Sakkoulas Eds., AthensKomotini 2007)

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In the second chapter of the book the author deals with the issue of whether delictual liability can be a satisfactory basis for the liability of a correspondent bank against a client when funds are not correctly transferred and as a result damage is sustained. To answer this question the author presents the scientific discussion in Greece and especially in Germany, where it has been proposed that the delictual basis has to prevail in order to avoid the abuse of the law of contracts by making use of the concept of “contracts with a protective scope for third persons, not parties to the contract” when damage has been sustained that needs to be covered. The author’s conclusion on this issue is that irrespective of whether the theory of contracts with a protective ambit for third persons applies or whether the delictual liability based on the violation of the general obligation of care and providence (combination of professional liability and the principle of trust as elements of the delictual liability) applies, the protection of patrimony of third persons is a sine qua non prerequisite of a legal system which responds to economic reality. 5. Ph. Doris, Issues of Civil Liability from a Historical – and LawComparative View, ChrID Z/2007, 673–681 (Prepublication from the Honorary Volume for K. Kerameus)

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Prof. Doris tries to show with this article the importance of basic legislative choices for the allocation of the burden of damage to the person who has caused it (or to a wider circle of persons) instead of allocating this burden to the person who has sustained the damage. In order that the substance of these choices is understood, a historical and legal survey from a comparative perspective of the grounds of civil liability and of the evaluating criteria used to justify the choice of such grounds in each legal order is needed.

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Some of the basic issues addressed in this study are: a) the insufficiency of the act and the attitude of the tortfeasor as a basic criterion for his civil liability, b) the aims targeted with each ground of civil liability, c) the importance of good faith for establishing not only pre-contractual but also contractual or tortious liability, i.e. liability for violating the obligations of care and providence under certain circumstances. 6. E. Dacoronia, Issues from the Extension of the Prescription Period in Case of Confirmation of the Claim by a Judgment not Subject to Appeal According to Art. 268 sent. a GCC, ChrID Z/2007, 104–113 (Prepublication from the Honorary Volume for K. Kerameus)

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The author, after a short presentation of the grounds (securing of transactions and of the law) justifying the institution of prescription of claims and of the European perspective of the regulation of art. 268 GCC (cf. art. 14: 202 of PECL) deals with two special issues that arise when applying art. 268 sent. a GCC: the issue of whether the final, non-subject to appeal, decision that con-

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firms the whole right for damages must be issued within five years from the first damage in order that the prescription period for future foreseeable damage, not sought with the action filed, is also extended to twenty years and b) of whether the above mentioned provision also applies to the prescription of claims against the State. With regard to the first issue, and by examining the opinions of both scholars and jurisprudence, the author arrives at the conclusion that if the right to damages in general has been confirmed in a final decision, non-subject to appeal, and issued on an action by which damages for damage of a certain period are sought, the person entitled to damages has the right to file another action later and claim damages for the damage of a future period, even if at the moment of the filing of the new action, the five-year prescription period of art. 937 GCC has elapsed. The reason for this is, according to the author, that the res judicata, created by the final decision for the whole right to damages, also covers all future foreseeable damage, which, in any case, could not be quantified at the time of the filing of the initial court action, on which the final decision has been issued.

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As regards the issue of whether art. 268 sent a GCC also applies to claims against the State, the author, after a thorough presentation of the legislative provisions that apply to the prescription of claims against the State and the relevant jurisprudence, arrives at the conclusion that, as after 1944 there has been a special, explicit provision, according to which claims against the State confirmed with a final decision, non-subject to appeal, are subject to a fiveyear prescription that starts from the moment the decision is no more subject to appeal, there is no field for the application of art. 268 sent. a GCC and for the extension of the prescription period to 20 years.

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7. St. Gerasimou, A Holistic Approach of the Law on the Basis of the Protection of the Environment, Perivallon kai Dikaio (PerDik) 1/2007, 45–51 This article presents the central role that the protection of the environment plays in the evolution and shaping of concepts and rules of Greek law. As far as the Law of Obligations is concerned, the provisions governing environmental protection contributed to the broadening of the field of application of delictual liability and of risk liability. In particular the notions of illegality and damage have been broadened. The notion of illegality must now be judged from the result of the human behaviour and the notion of damage now also includes environmental damage, meant as the harm caused by the degradation of the urban and environmental acquis.

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Also, under the influence of the rules for the protection of the environment, the theories of causa adequata and of the protective aim of the rule apply in combination, thus contributing to the evolution and adjustment of the Law of Obligations to the modern social need for the protection of the environment.

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8. St. Paterakis, Issues of Moral Harm from Torts Committed via the Media, EllDni 48, 1–15

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The author, Vice-President of the Court of Cassation, deals in this article with the proliferation of offences to the personality via the media, with the related modern dangers of the information society and with the difficulty in compensating moral harm. Then the jurisprudence of the European Court of Human Rights related to the right to the personality and the right of the Press is presented and considered as a precedent to be taken into consideration when adjudicating compensation for moral harm, followed by the tendencies of the relevant jurisprudence of the Greek civil courts. The author then, after enumerating in his final remarks the factors the Court has to take into consideration in order to arrive at a just solution in case of offences to the personality through the Press and the other media, concludes by stating that the decision of the European Court of Human Rights of 24 June 2004 (von Hannover v. Germany), i.e. the decision of Caroline of Monaco v. Germany, leads to a wider protection of the private life against the interventions of the media, without at the same time introducing an excessive restriction of the media, and should obligatorily be taken into consideration, as a precedent, when the Greek courts adjudicate compensation for moral harm in cases of torts committed via the media. 9. N.P. Tsokanas, The European Union Directive on Environmental Liability and the Fate of the 1993 Lugano Convention of the Council of Europe, PerDik 2/2007, 223–227

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The author compares the European Union Directive 2004/35/CE on Environmental Liability and the 1993 Lugano Convention. He considers that the Directive presents positive elements but it seems to set aside the Lugano Convention. The author attempts to find the reasons for this and he arrives at the conclusion that, though the Lugano Convention offers a greater degree of protection, it seems highly improbable that it will be put into force. He then estimates that the Directive and the field of protection it offers will be judged soon and that one important advantage is that, in comparison to other international texts, it leaves the EU Member States free to regulate the details of the minimum environmental protection that is required.

XII. Hungary Attila Menyhárd

A. LEGISLATION 1. Act no. IX. of 2007 on Proclamation of Accession of Hungary to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage of 1992, to the Protocol of 2003 on establishing an International Oil Pollution Compensation Supplementary Fund and to the Protocol of 1992 to the International Convention on Civil Liability for Oil Pollution Damage With this Act the Republic of Hungary implemented the international conventions on establishing compensation funds for compensating international oil pollution damage as well as the Convention on Civil Liability for Oil Pollution Damage (CLC). The implemented conventions have been adopted under the auspices of the International Maritime Organization (IMO).

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2. Act no. XXIX. of 2007 on Amending Environmental Liability Legislation The provisions of the Act amend the existing legislation on environmental protection and environmental liability. The main aim of the Act implements Directive 2004/35/EC of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage (OJ L 143, 30.4.2004, 56–75).1 One of the most significant features of this legislation may be the implementation of the concept of environmental damage per se in private law liability as well, which is provided in Art. 2.2. of the Directive. Art. 2.2. of the Directive provides that under “damage” shall be understood a measurable adverse change in a natural resource or measurable impairment of a natural resource service which may occur directly or indirectly. Even if the Act no. LIII. of 1996 on the Protection of the Nature defines damage not only as the actual damage (damnum emergens), the lost profit (lucrum cessans) and the costs of the remedial measures, but also 1

B.A. Koch, European Union, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2004 (2005) 595 f.

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the non-pecuniary damage resulting from the reduction of quality of the nature or worsening of the living conditions of individuals or group of individuals in society, this definition of damage rests on the traditional concept of material and immaterial damage to persons (§ 81 (1)). As a result of the amendment, § 4 point 13. of the Act no. LIII. of 1995 on the General Rules of Environmental Protection (Environmental Protection Act) defines environmental damage as a measurable, significantly adverse change, occurring directly or indirectly in the environment or in natural resources and the significant, measurable impairment of a natural resource service occurring directly or indirectly, respectively. This new provision of the Environmental Protection Act extends the criminal, civil law and public law liability provided already in the Act for such environmental damage as well. This amended legislation implementing the Directive brings a new concept of damage in Hungarian tort law reaching beyond the traditional definition of damage covering actual damage, lost profit and costs of loss avoidance or restoring the original state. The impacts of implementing the concept of environmental damage per se are not yet clear in Hungarian law.

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This new legislation has reformulated § 102 of the Environmental Protection Act as well. This section of the Act, in its amended form, now establishes – until the contrary is proved – the joint and several liability of persons who, following the occurrence of environmental damage, owned, possessed or used the immovable where the activity damaging or endangering the environment had been pursued. The owner may exempt himself from liability by specifying the actual user of the immovable and by proving without a doubt that he himself shall not be liable. If users of the environment establish an economic organisation in order to merge their former similar or complementing activities, this new economic organisation shall – in the scope of duties and obligations regarding environmental protection – be deemed as the legal successor of these users and this economic organisation shall be jointly and severally liable with the users establishing it under the Environmental Protection Act. As a case for “lifting the corporate veil,” the liability of members (shareholders) and managers of a company passing a resolution or taking measures while they knew or they should have known that, by executing or implementing them the company would cause environmental damage, shall be joint and several and unlimited in case of liquidation of the company in so far as the company did not perform its obligations to provide compensation and to restore the environment to its original state. Members (shareholders) and managers of the company who refrain from passing the resolution or taking the measures, who voted against the resolution, or who protested against taking certain measures shall be exempted from liability. 3. Act no. CLIX. of 2007 on Re-insurers

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The Act provides special statutory regulation covering the activity of insurance companies who provide re-insurance services. The legislation aims at implementing the European Union legislation on re-insurance and implements the requirements of Directives regarding this field of insurance services. The

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Act regulates the activity of re-insurance companies in general; stipulates the preconditions of gaining permission to provide reinsurance services; states the obligations of re-insurance companies on reporting; defines special requirements for the management of re-insurance companies; establishes the preconditions of granting permission to acquire membership rights and shares in such companies; fixes financial preconditions for this activity and special rules for accounting, provides the regulatory frames of the institutional background for supervising the activity of re-insurance companies, and provides special rules on confidentiality. The Act provides regulations for the public and administrative law of re-insurance and does not focus on civil law aspects of providing re-insurance services.

B. CASES 1. BH 2007 no. 6 (Supreme Court, Legf. Bír. Pfv. III. 21.147/2005 sz.): Relevant Date for Establishing the Amount of Non-Pecuniary Damages a) Brief Summary of the Facts

While a court procedure was pending between the parties for termination of a contract of maintenance between them, the defendants – deciding not to wait for the court order – forced the plaintiffs to leave the apartments where they lived under the contract. The defendants’ behaviour was quite aggressive (they themselves removed all of the plaintiffs’ belongings from the apartment). The plaintiffs were shocked by this behaviour and they submitted a claim seeking compensation for the non-pecuniary loss they suffered as a result of the defendants’ unlawful and shocking conduct.

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b) Judgment of the Court

The Court established that the plaintiffs suffered psychic damage and they now require regular therapeutic treatment as a result of the shock caused by the defendants’ aggressive and unlawful behaviour. The Court awarded to the four plaintiffs non-pecuniary damages ranging from HUF 300,000 (approx. € 1,200) to HUF 1,200,000 (approx. € 4,800) in order to compensate the mental damage they suffered. The courts of first and second instances differed in their opinion as to the relevant date for establishing the amount of non-pecuniary damages. The Supreme Court established that the relevant date should be the date of the occurrence of the damage (in this case when the tortfeasors’ conduct had been performed), even if there had been a considerable time gap between the occurrence of harm (the performance of the tortfeasors’ conduct) and the judgment of the court awarding non-pecuniary damages for it. Far-reaching changes in market conditions (i.e. significant changes in the retail price index) may result in a deviation from the principle that the relevant date is the date of the occurrence of the damage. In such a case the relevant date for establishing the amount of non-pecuniary damages may be the date of the judgment. In this case the obligation to pay shall be deemed as being due at the time of the judg-

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ment as well and the defendants shall also be obliged to pay interest for delay according to this due date only. c) Commentary

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The decision confirms a court practice which had already been settled but which had not been reported on previously in such a clear way. This court practice takes as the starting point for the payment of damages to be due the date of occurrence of the damage (provided in § 360 (1) of the Hungarian Civil Code as well) and this makes the date of the occurrence of the damage as the relevant date for establishing the amount of damages as well. Courts may, however, deviate from this principle if changes in market conditions after the occurrence of damage resulted in significant changes in the retail price index. In such cases the courts may take the date of judgment as being relevant for establishing the amount of damages. Following this deviation principle, courts shall order payment of interest only for the time period beginning with the judgment because it is assumed that in the corrected amount of damages the court already took account of the loss the plaintiff suffered as a result of the delay in payment as well, generally compensated by awarding interest. The Court in this case restricted this deviation principle to cases of significant changes in market conditions declaring that a considerable time gap itself does not warrant a correction of the relevant date (and due date of payment) for fixing the amount of non-pecuniary damages. This deviation principle shall not be applied for reducing the amount of damages on the ground that the plaintiffs demanded damages only a considerable time after suffering the damage creating a time gap between the occurrence of damage and the judgment by their own conduct. This deviation principle shall not be used as a means to punish the victim for a delay in demanding compensation. 2. BH 2007 no. 7 (Supreme Court, Legf. Bír. Pfv. VIII. 20.522/2006 sz.): Scope of Vicarious Liability of the Agent; Contributory Negligence of the Victim a) Brief Summary of the Facts

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The plaintiff was the client of the defendant insurance company. A man – known to the plaintiff and his wife from their former contracts concluded with the defendant as the employee authorized to act on behalf of the defendant – called the plaintiff and his wife by phone and asked them if they would be interested in a new long-term investment product. He told them that if they decided to buy this product and to invest a large amount on the very same day, they would be provided with a holiday as a gift. The plaintiff expressed his interest and went to the defendant’s office where he met the man offering them the product. There he agreed to invest in the product offered to them and as a first investment actually paid HUF 1,000,000 (approx. € 4,000) to this man whom he believed to be an employer having the power to act on behalf of the defendant, as he had before. The man received the money and acknowledged the receipt, noting that this was a payment for an “employers’ saving programme with 30%.” The man promised to tie up the money for a one year period. A few

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days after this, when the plaintiff wanted more information on this specific product from the defendant, he was told that no such product had ever been offered by the defendant. The plaintiff claimed from the defendant the repayment of the sum that he paid to the man whom he believed had acted on behalf of the defendant. He established his claim on the provisions of the Hungarian Civil Code making the employer vicariously liable for damage caused by the employee and making – in case of agency – the principal jointly and severally liable with the agent acting for him. The defendant pleaded that the man acting on their behalf was their former employee but at the time of accepting the money for a non-existing product he was no longer their employee but an independent contractor of them for whom they should not be liable, because he was acting outside the scope of the authority they gave him. They argued that they should not be liable for an agent acting outside the scope of agency so the provisions of the Hungarian Civil Code making them as principal jointly and severally liable for and with the agent should not be applied in this case. b) Judgment of the Court

The Court decided for the plaintiff. The Court agreed that employers’ vicarious liability was not applicable as the tortfeasor was not the employee of the defendant at the time of causing the damage. The Court, however, agreed that there was a contractual relationship between the tortfeasor and the defendant, and the tortfeasor had acted under this contract as an agent of the defendant. The Court established that liability of the principal for and with its agent shall cover “ultra vires” cases as well, where the agent acted beyond its powers if the conduct of the agent as tortfeasor fell in general within the scope of agency. The Court also established the contributory negligence of the plaintiff on the ground that the plaintiff should have known from the title noted by the man acting for the defendant (“employers’ saving”) that such a product could not have existed in the defendant company. The Court decided that 25% of the loss should be borne by the plaintiff as a result of his own wrongful conduct and ordered the defendant to compensate 75% of the plaintiff’s loss only.

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c) Commentary

According to the regulation of the Hungarian Civil Code on forms of vicarious liability, a principal shall be subject to joint and several liability with his agent for any damage caused to a third person by the agent in this capacity. The principal shall be relieved of liability if he is able to prove that he did not act delinquently in choosing, instructing, and supervising his agent (i.e. if culpa in eligendo was not established). In respect of permanent agency, moreover, if the principal and the agent are an economic organization, the Court shall be entitled to apply the regulations governing the liability for damage caused by employees in the relationship between the aggrieved person and the principal (§ 350). According to § 348 of the Hungarian Civil Code, if an employee causes damage to a third person in connection with his employment, the employer shall bear liability vis-à-vis the victim unless it is otherwise provided by law. The underlying policy of this solution in the Hungarian Civil Code is the idea that the agent and the employee are primarily acting in the interests of

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the employer. The basis of the difference between the employer/employee and the principal/agent relationship (which is a question of legal qualification of the legal relationship according to its content) is the permanent character of the employment relationship and the incidental one of the agency. For this reason the Civil Code provides the possibility to apply the rules of employers’ liability to cases where agency has a permanent character.

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The Court relied on these provisions deciding the case and established that the fact that the agent is acting “ultra vires” shall not exclude the possibility of establishing that the agent acted under the scope of the agency. Thus, “ultra vires” acting of the agent in itself does not mean that the agent acts outside the scope of agency and the principal may be held liable for “ultra vires” conduct of the agent as well. 3. BH 2007 no. 47 (Supreme Court, Legf. Bír. Pfv. III. 20.956/2006 sz.): Liability of Hospital for Failure in Diagnosis a) Brief Summary of the Facts

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The plaintiff, being pregnant and attending the regular medical examinations, had been diagnosed as having hypertension, oedema and her foetus showed abnormal values for heart rhythm and in utero activity (NST). She had to stay in the defendant hospital in order to monitor the final phase of pregnancy until childbirth. She went through the examinations ordered by the generally accepted protocols and normal professional knowledge but no imminent danger to the foetus was discovered. Some days before the expected date of childbirth, the heart of the foetus stopped and the plaintiff had to give birth to her baby who was already dead. The cause of death of the foetus in utero was that its umbilical cord had been wound five times around its neck, thus putting the umbilical cord under pressure. This had prevented an adequate oxygen supply to the foetus, which was strangled. It was clear that an ultrasound diagnosis could have shown the condition of the umbilical cord and the danger of the foetus being strangled but the plaintiff did not undergo an ultrasound test while staying in the defendant hospital. The plaintiff claimed pecuniary and non-pecuniary damages from the defendant. She alleged that an ultrasound test could have prevented the death of the foetus and as the defendant’s doctors failed to do this test, they caused the death of the foetus and her loss emerging from giving birth to a dead foetus and not having the child. She claimed that the defendant shall be liable for the failure of its doctors in diagnosis. The defendant hospital pleaded that the plaintiff went through all the tests which are, in general, professionally accepted as those necessary in such cases and neither the medical protocols nor the professional literature (textbooks and professional articles) suggest making ultrasound test in such cases. This allegation was strengthened by the professional experts ordered by the courts. The defendant argued that the court could not establish that they did not act according to the generally expected requirements if, according to professional expertise, they did not make a mistake.

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b) Judgment of the Court

The Court decided for the plaintiff and established the defendant’s liability for pecuniary and non-pecuniary damages vis-à-vis the plaintiff. The Court did not accept the argument that the fact that the defendant’s doctors fulfilled all of their duties provided by the professional protocols should necessarily prevent courts from establishing their fault and the liability of the defendant. The Court declared that fault shall be deemed as a legal concept and courts shall not be prevented from establishing fault even if the tortfeasor did everything according to general professional standards if it shall be established that the tortfeasor failed to act according to the standard of generally required conduct.

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c) Commentary

At the heart of Hungarian tort law regulation there is the basic rule of liability: according to § 339 (1) Hungarian Civil Code, if someone unlawfully causes harm to another person, the tortfeasor is obliged to pay damages, unless (s)he proves that (s)he acted as is generally expected under the given circumstances. With this special measure of “generally expected behaviour under the given circumstances” the Civil Code has been enacted under the influence of the theory of fault-based liability with a special objectivized measure putting the basis of accountability somewhere between subjective and objective liability. This concept of objective fault is very wide open to judicial risk allocation. In medical tort cases it is not yet clear what kind of role professional protocols should play in establishing or denying fault. This decision makes it clear that compliance with professional protocols in itself does not prevent the courts from establishing the fault of the tortfeasor and, consequently, liability of the defendant.

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4. BH 2007 no. 48 (Supreme Court, Legf. Bír. Pfv. VIII. 20.327/2006 sz.): Liability for Non-Compliance with Pre-Contractual Duty to Cooperate a) Brief Summary of the Facts

The plaintiff as insured entered an insurance contract with the defendant insurance company which the plaintiff thought incorporated a special element of liability insurance for packaging services. As the plaintiff had been liable for a loss that should have been covered with this special form of liability insurance, he asked the defendant to pay compensation to the victim. The defendant denied paying compensation arguing that this special form of liability insurance could not have been incorporated in the insurance contract because special formal requirements fixed in insurance regulation had not been met. The plaintiff submitted a claim asking the court to oblige the defendant to pay compensation either on the ground that the risk was covered with the liability insurance concluded between them or – if that had not been the case – on the ground that, as the defendant was aware of the fact that the plaintiff believed there was liability insurance for package services incorporated in the insurance contract, the defendant should have informed the plaintiff that this was not the case. As the defendant failed to inform the plaintiff that a special risk was not

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covered by the insurance the plaintiff needed, according to the defendant’s actual knowledge as well, the defendant infringed its duty to cooperate provided by special provisions (e.g. § 205) of the Civil Code and shall be liable for this in tort. b) Judgment of the Court

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The Court decided for the plaintiff. The Court established that, as the agreement of the parties did not cover the special liability insurance for packaging services, the defendant could not be obliged to pay compensation under the insurance. The Court, however, established that, as the defendant was aware of the fact that the plaintiff wanted insurance coverage for this type of risk as well, the defendant was obliged to inform the plaintiff that the insurance contract they finally concluded – in absence of failure of compliance with special statutory formal requirements – did not contain this particular liability insurance element. As the defendant failed to comply with this duty, the Court found the defendant liable in tort according to the general rule of liability (§ 339 of Hungarian Civil Code). c) Commentary

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The case concerns liability for culpa in contrahendo which is covered in Hungarian tort law by the general rule of liability (§ 339 Civil Code). The Court established in this decision that a party may be held liable also for failing to conclude a contract, which may contribute to the diminishing boundaries between tort and contract. The Court did not address the problem whether a difference should be made in determining the amount of damages if the defendant is liable in tort instead of in contract, or how the concept of damage shall be assessed in tort compared to contract. From the published decision it can be understood that the Court did not make such a distinction: the Court held the defendant liable in tort for the same damage they would have found it liable in contract. 5. BH 2007 no. 84 (Supreme Court, Legf. Bír. Pfv. III. 21.242/2006 sz.): Professional Liability and Medical Malpractice a) Brief Summary of the Facts

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The plaintiff gave birth to three healthy children in the defendant hospital. The doctors in the defendant hospital assisting the childbirth ordered a Caesarean section as a surgical intervention. During the surgery the doctors accidentally cut the urinary bladder of the plaintiff. At the final stage of the surgery they sewed the bladder – making a mistake again – onto the womb. This twofold damage to the plaintiff’s urinary bladder resulted in a permanent damage to the health of the plaintiff who lost a great part of her ability to retain urine. The plaintiff claimed for pecuniary and non-pecuniary damages from the defendant for her permanent health damage and the loss of 26% of her working ability as a result of the health damage. The defendant pleaded that such injury to the bladder is a normal risk of such surgery and from this it follows that their doctors complied with the requirement of the

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general standard of conduct. In the absence of fault they should not be held liable. b) Judgment of the Court

The Court decided for the plaintiff and awarded pecuniary and non-pecuniary damages to the plaintiff. The Court held that only cutting the urinary bladder was a normal risk of such a surgical intervention – for which the defendant should not be held liable – but not the sewing of the urinary bladder onto the womb. The Court established that the defendant’s doctors failed to comply with the general professional duty of care and this establishes the defendant’s liability.

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c) Commentary

The decision fits into the court practice relating to medical malpractice cases. The decision also suggests that, even if certain injuries were to be deemed as normal risks of a surgical intervention, the doctor may and should be liable for this if he (she) was – according to the general standards of required duty of care – negligent by performing the surgery and causing the injury.

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6. BH 2007 no. 226 (Supreme Court, Legf. Bír. Pfv. III. 22.409/2006 sz.): Compensation for Damage Caused by Operating Mobile Phone Transmission Towers a) Brief Summary of the Facts

At a distance of approximately 220 metres from the plaintiffs’ plot of land, the defendant built a transmission tower as a part of the mobile phone network which it operated. The plaintiffs proved that, as a result of erecting the transmission tower so close to their property, the value of the plot of land owned by them decreased. The defendant pleaded that operating a mobile phone network is an activity which serves the public interests and on this ground they were allowed to erect the tower there and, as they acted under statutory permission in the general interest of the public, their conduct should not be deemed as unlawful.

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b) Judgment of the Court

The Court decided for the plaintiffs and awarded pecuniary damages. It was established in the decision that the plaintiffs had to tolerate the existence and operation of the transmission tower as an intervention to their property as this had occurred under statutory permission in the public interest. This does not mean, however, that the plaintiffs shall not be entitled to compensation for damage from the defendant. The Court declared that a statutory permit itself did not make causing damage lawful under private law even if the permitted activity was carried out in the public interest. This being the case, the plaintiffs should be entitled to compensation according to the provisions of the Civil Code.

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c) Commentary

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In Hungarian tort law regulation, legal theory and practice, there seems to be a sharp border between administrative law regulation and civil law. This border is established on the autonomous concepts of unlawfulness and fault in tort law that are independent from administrative regulation. From the autonomous concept of unlawfulness in tort law it follows that, even in the absence of an infringement of a statutory provision, the tortfeasor may be held liable in tort and, on the other hand, the compliance of the tortfeasor’s conduct with a statutory provision or an administrative permission in itself does not prevent the tortfeasor from being held liable. However, the violation of a statutory provision may play an important role in the qualification of the damage. If the qualification of the damage is important from the point of view of establishing the applicable regime (e.g. whether the liability is strict or fault-based), the violation of a specific regulation would be indicative for the courts. The border between administrative law and private law concerning delictual liability means that the lawfulness of the tortfeasor’s conduct in public and administrative law does not mean that it shall be deemed as lawful in tort law as well. The lawfulness of the tortfeasor’s conduct in public law in itself does not permit one to cause damage to others.2 Compliance with statutory or individual permission makes the tortfeasor’s conduct lawful in public law but does not make it lawful in tort law. The permission itself does not constitute exemption for the tortfeasor from civil law liability. The compliance with a statutory or individual permit does not mean that the tortfeasor’s fault could not be established. The required standard of conduct implies acting under statutory or individual permission but is not restricted to that. The required general duty of care may go beyond the preconditions, the existence and the compliance with a statutory or individual permit. 7. BH 2007 no. 230 (Supreme Court, Legf. Bír. Pfv. III. 20.714/2006 sz.): Liability of Natural Gas Provider a) Brief Summary of the Facts

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The plaintiff’s property was damaged as a result of a gas explosion. The explosion was caused by natural gas which had leaked out of a damaged pipeline on his land. The defendant gas supplier company, accepting that their task is the maintenance of the pipelines as well as the supply of gas, pleaded that, in the scope of maintenance of gas pipelines, the general rule of fault-based liability should be applied and in the course of maintenance they acted in compliance with the general standard of required conduct. Therefore, they should not be held liable. b) Judgment of the Court

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The Court decided for the plaintiff establishing that the strict liability of gas suppliers (§ 345 of Hungarian Civil Code) shall cover the liability of the gas 2

E.g., BH 1999, no. 449 (Supreme Court, Legf. Bír. Pfv. I. 23.084/1998. sz.); BH 2000, no. 244 (Supreme Court, Legf. Bír. Pfv. X. 21.156/1999. sz.).

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supplier for maintenance of the gas pipeline as well. The defendant could only have been relieved from liability by proving that the cause of damage fell outside the scope of their activity and was unavoidable. Proving compliance with the general standard of duty of care in itself was not enough. c) Commentary

The decision defines the scope of strict liability under § 345 of the Hungarian Civil Code (as a special form of liability for damage caused by especially dangerous activities) which also covers the activities of gas suppliers.

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8. BH 2007 no. 301 (Supreme Court, Legf. Bír. Gfv. XI. 30.293/2006 sz.): Liability of Operator for Dangerous Activities a) Brief Summary of the Facts

The plaintiff, growing flowers on an industrial scale, had some of his flower plants damaged as a result of the dispersal of chemicals from an airplane that had been ordered by the defendant from a company specialized for such kind of activities. The plaintiff sought compensation from the defendant. He argued that the dispersal of chemicals from airplanes should be deemed as an especially dangerous activity covered subject to strict liability according to § 345 of the Hungarian Civil Code and as the company performing this activity acted under a contract with the defendant and as the company acted under the order of the defendant, within the frame of the contract between them, the defendant as operator of the dangerous activity should be liable for damages.

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b) Judgment of the Court

The Court found the defendant as operator of an especially dangerous activity (dispersal of chemicals from the air) liable under § 345 of the Hungarian Civil Code (liability for especially dangerous activities).

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c) Commentary

The decision confirms well settled court practice that in such cases not the one who actually performs the activity but the one who orders it and in whose interests the performance of the activity was should be held as operator of the especially dangerous activity. This practice extends the concept of operator to persons primarily gaining an advantage from a certain activity and makes them liable under the strict liability regime for harm caused to other persons.

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C. LITERATURE 1. Miklós Boronkay, A káronszerzés tilalma az új Polgári Törvénykönyvben (Prohibition of Enrichment on Damage in the New Hungarian Civil Code) Polgári Jogi Kodifikáció 2007/6, 22–27 It is a general principle of Hungarian tort law theory and practice that one should not be enriched as a result of the damage one suffers. This principle

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is not an explicit rule in the Civil Code but follows from the prohibition of unjustified enrichment and the concept of damage. It is suggested that this prohibition of enrichment as result of incurring damage shall be formulated in the Civil Code. The author argues against this solution showing that this principle may be supported by the court practice as well. 2. Orsolya Csapó, A környezeti károkért való felelősség kérdése az Európai Unióban (Environmental Liability in the European Union) Iustum Aequum Salutare III. 2007/3, 139–157

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The author addresses the problem of environmental liability regulation and practice on the European level. She presents the complexity, importance and heterogeneity of this field of European Union legislation. She criticises the slow pace of development, the uncertainties in law and the absence of effective prevention. 3. Antal Hámori, Kártérítési felelősség a fogyatékossággal való születés miatt? (Damages for Wrongful Birth?) Magyar Jog 2007/2, 92–100

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The practice of the Supreme Court – at least so far – supporting claims for non-pecuniary damages in wrongful birth cases even in the child’s own name is strongly criticised from a moral point of view and under a social value based approach. The author also argues for rejecting wrongful birth claims in general and expresses the view that birth (life) cannot be held as damage. 4. Máté Julesz, Felelősség az emberi környezetet veszélyeztető magatartásokért I. (Liability for Endangering Human Environment I) JURA 2006/1, 90–110

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The author attempts to provide a comparative analysis of environmental liability in the context of the regulation of foreign legal systems, historical development and court practice, without arriving at any conclusions (the article is the first part of a longer article). 5. Tibor Kiss, Nem vagyoni kár vagy sérelemdíj (Non-Pecuniary Damages and Compensation for Pain and Suffering) Jogtudományi Közlöny 4-2007, 164–172

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The problem of non-pecuniary damages and the suggestion to replace them with indemnity compensation as a sanction for an infringement of personality rights is one of the questions of the re-codification of the Hungarian civil law which is most often discussed. The theoretical starting point of this idea is that awarding non-pecuniary damages is a special sanction when personality rights have been infringed. This means that the infringement of personality rights would be a necessary precondition of awarding non-pecuniary damages and to replace this sanction with the indemnity compensation would not lead to great difficulties in the court practice. According to the Principles and Proposals for the New Hungarian Civil Code, the introduction of indemnity compensation, which is a direct form of compensation for any violation of personality rights, would make the category of “compensation for non-pecuniary losses” super-

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fluous. Even if there may be some doubts whether indemnity compensation for pain and suffering would really be able to fill the role of non-pecuniary damages, the idea of this attempted change seems to be widely accepted. This view is supported by the author who is also in favour of introducing this special form of compensation for sanctioning a violation of personality rights. 6. László Kovács L., A bírói felelősség a polgári eljárásjogban és azon kívül (Liability of Judges In and Outside Civil Procedure) Magyar Jog 2007/11, 658–668 The author reveals the tendency in tort law and in social developments in Hungary promoting the extension of liability to fields that have been relatively immune so far from liability problems such as professional liability including liability of judges. He argues that although this extension may be a natural tendency, the preventive function of tort law should prevail and tort law should not induce risk avoidance behaviour in judicial activity.

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7. Bernadett Prosszer, A nem vagyoni kártérítés jelene és jövője (The Present and Future of Non-Pecuniary Damages) Polgári Jogi Tudományos Diákkör Évkönyve (ELTE ÁJK, Budapest 2007) 317–331 The author approaches the problem of non-pecuniary damages from the point of view of private law re-codification. She analyses the case-law and concludes that the new form of indemnification for pain and suffering that should replace non-pecuniary damages as a sanction of infringement of personality rights may be a good idea as, with this system, the legislators seem to have been able to harmonise the interests and policies that underlie court practice in this respect.

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8. Dániel Szabó, A Ptk. 339.§ (1) bekezdésének látszolagos módosítása a kontinentális jogfejlődés tükrében (The Apparent Modification of § 339 (1) of the Hungarian Civil Code in the Mirror of Continental Legal Development) Polgári Jogi Kodifikáció 2007/6, 25–27 The author analyses the intended amendment of a basic rule of liability in the new Hungarian Civil Code according to which a new rule would be included in the regulation explicitly providing that causing harm shall be deemed as unlawful except if it is provided otherwise in the law. He concludes that such an amendment would not be necessary as the flexible system built up on general clauses in the new regulation also provides a proper ground for the court practice.

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9. Péter Vajda, A környezeti károkért való felelősség (Liability for Environmental Damage) Polgári Jogi Tudományos Diákkör Évkönyve (ELTE ÁJK, Budapest 2007) 143–163 The author provides an analysis of environmental liability in Hungarian law in the context of developments in international and EU law. He concludes that even if civil law is able to provide proper measures of environmental liability, the emphasis should be put on the application of preventive measures.

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XIII. Ireland Eoin Quill

A. LEGISLATION 1. Personal Injuries Assessment Board (PIAB) (Amendment) Act 2007

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This Act introduces two new sections in respect of costs to the PIAB Act 2003 for cases that go on to a court hearing. Where a claimant has rejected the PIAB assessment (or is deemed to have done so) and the defendant has accepted the assessment (or is deemed to have done so), the claimant cannot recover costs if the amount awarded by the court, or accepted by the claimant in settlement negotiations, does not exceed the PIAB assessment. This rule does not apply to the acceptance of money paid into court by the defendant, or offered under the rules of court or as part of a formal offer under sec. 17 of the Civil Liability and Courts Act 2004.1 Furthermore, the new provisions give the court discretion to require the claimant to pay some or all of the defendant’s costs, where the award or settlement does not exceed the accepted assessment. Neither of these provisions is applicable in respect of a defendant that has not accepted the PIAB assessment, even if there is a co-defendant that has made such an acceptance. These provisions effectively place an accepted PIAB assessment on a similar footing to a lodgement into court, at least in respect of the accepting defendant.2 The second new section provides that in a taxation of costs, any costs incurred during the PIAB stage of the process can only be allowed on the conditions specified in the PIAB Act 2003. With respect to discretionary decisions, such as recovery of legal fees, a Circuit Court (IECC) registrar, a 1

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Sec. 17 of the 2004 Act provides the trial judge with a discretion as to costs, allowing for consideration of the terms offered in settlement and the reasonableness of the parties’ conduct in the making of formal offers. Such offers are separate from other lodgements or offers under the rules of court. The existing rules of court already govern the question of costs in respect of lodgements and offers under the rules of court. See generally H. Delany/D. McGrath, Civil Procedure in the Superior Courts (2nd ed. 2005) chap. 16 (lodgements and offers) and chap. 21 (costs). It has been noted, however, that the provision may operate harshly against minors and may even be unconstitutional on that account; S. Gilhooly, Unnatural Influence on Government? (2007) 101 (7) Law Society Gazette (Gaz) 18. In the case of lodgements in cases involving minors, sec. 63 of the Civil Liability Act 1961 allows for application to a judge to decide whether to proceed to trial or accept the lodgement; if the award at trial does not beat the lodgement, the trial judge retains a discretion as to costs and may still grant costs to the minor. There is no equivalent provision in the new PIAB legislation.

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High Court (IEHC) taxing master, or judge will exercise the discretion. This may lead to a clarification of circumstances in which legal fees are recoverable for the PIAB element of the process, as the PIAB currently operates a general policy of refusing them.3 In another minor statutory amendment, the respondent’s fees have been increased from € 900 to € 1,050.4 The PIAB Annual Report 2006 was also published during 2007.5 According to the report 5,573 assessments were made in 2006 and 8,500–9,000 were projected for 2007 (down from the 10,000 projected for 2007 in the 2005 annual report). Approximately 60% of the assessments were accepted and the report asserts that many of the remaining 40% were eventually settled for the same amount, though no evidence is provided in support of this. The report adds little to the overall picture in respect of the new process compared to the previous year and it will take some considerable time before the full operating potential of the board is achieved (approximately 25,000 claims per year). It will also take some time before court decisions emerge on the rejected claims, to give a clearer picture of the relationship between PIAB awards and judicial awards.

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2. Safety, Health and Welfare at Work (General Application) Regulations 2007 (SI 299/2007) These regulations provide detailed rules on workplace safety, implementing the general principles set out in the Safety, Health and Welfare at Work Act 2005. The regulations replace the bulk of the Safety, Health and Welfare at Work (General Application) Regulations 1993 and a large number of other Statutory Instruments on occupational safety, many of which pre-dated the Safety, Health and Welfare at Work Act 1989, but had not been replaced in the new scheme of regulation introduced by that Act.6 The new regulations continue the process of implementing EU health and safety Directives in Irish law and replacing the older, sector specific approach to occupational safety that preceded the 1989 Act with a comprehensive scheme of regulation across all employments. The 2005 Act and the 2007 regulations are a reinvigoration of the process begun by the 1989 Act and do not involve any significant change of conceptual approach, but they do strengthen much of the detail of worker protection. The leading work on occupational safety, G. Shannon, Health and Safety Law and Practice,7 has been updated to deal with the raft of new legislation in this field and chapter 6 deals specifically with the 2007 regulations, providing extensive treatment of the key features of the new rules. Rather than being a completely new set of regula3

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Some limited changes to the PIAB’s approach to costs have been effected as a result of judicial review applications against the board; vulnerable claimants may now recover legal costs and in some cases medical report costs above the standard € 150 set by the PIAB can be recovered, see S. Gilhooly, Oops, They Did it Again (2007) 101 (10) Gaz 14. Personal Injuries Assessment Board (Fees) (Amendment) Regulations 2007; Statutory Instrument (SI) 869/2007, effective from 1 January 2008. Available at www.piab.ie (see the forms & publications section; last accessed 22 January 2008). Part X and the Twelfth Schedule to the 1993 regulations, governing notification procedures for accidents and dangerous occurrences, are not repealed by the 2007 regulations. (2nd ed. 2007).

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tions, the 2007 provisions restate many of the prior provisions, but with suitable amendments and refinements to bring them into line with current needs to improve levels of safety. For example, the 1993 provisions on ventilation required employers to take steps to ensure sufficient fresh air in enclosed workplaces, the new provision states that the employers shall ensure that sufficient fresh air is provided. With respect to temperature, the provision requiring adequate temperature has been supplemented by the provision of specific minimum temperatures for sedentary work and an obligation to make available to employees a means of measurement. In total, there are 175 regulations and ten schedules, covering workplace conditions, equipment, electricity, work at height, noise and vibrations, sensitive risk groups, safety signs, first aid and explosive atmospheres. While civil liability for injuries resulting from breach of the regulations is not expressly addressed, either in the principal Act or in the regulations themselves, occupational safety legislation is historically an area where Irish courts have been willing to permit such claims under the tort of breach of statutory duty.

B. CASES 1. Shortt v The Commissioner of an Garda Síochána (Irish Police), Ireland and the Attorney General (AG) IESC, 21 March 2007, [2007] IESC 9: Miscarriage of Justice; Quantum of Damages8 a) Brief Summary of the Facts

4

The plaintiff was convicted of drug related offences on foot of perjured testimony of police officers and spent 27 months in jail. The unlawfulness of his conviction was vigorously denied for a considerable period of time, causing him to lose his first appeal to the Court of Criminal Appeal. The totality of his ordeal, from initial arrest to his ultimate vindication by the Court of Criminal Appeal certifying a miscarriage of justice, was approximately ten years beginning when the plaintiff was in his late fifties and ending when he was in his late sixties. There were, additionally, a number of other minor complaints, related to heavy-handed police tactics during the investigation of the plaintiff’s premises. The plaintiff suffered a loss of personal liberty, damage to reputation, and disruption of family life, leading to significant psychological and physical suffering, including the development of a heart condition. Liability in the civil action, based principally on sec. 2 of the Criminal Procedure Act 1993 for the miscarriage of justice, was conceded and the hearing in the IEHC was confined to quantification of damages.9 The plaintiff was awarded € 1,923,871, consisting of € 1,356,221 in pecuni8

9

The cases reported here are available on the Irish Courts Service judgments database, http:// www.courts.ie/Judgments.nsf/Webpages/HomePage?OpenDocument&l=en and on the British and Irish Legal Information Institute website, http://www.bailii.org/. The IEHC decision is analysed in E. Quill, Ireland, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2005 (2006) no. 32–35. There are several other cases arising out of similar police misconduct; see, for example Frank McBrearty & Company Ltd. v The Commissioner of an Garda Síochána & Others [2007] IEHC 373. The overlap between tort claims and compensation for a miscarriage of justice are considered in G.P. Byrne, Malicious Prosecution After Shortt and Malicious Use and Abuse of Civil Process (2007) 25 Irish Law Times (ILT) 127.

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ary losses to his business; € 12,650 in legal fees related to the criminal charges; € 500,000 in non-pecuniary damages since the date of the first charge (used as the start date for the miscarriage of justice claim); € 5,000 for suffering prior to the date of the first criminal charge (for the common law claims); and, finally, € 50,000 in exemplary damages. The plaintiff appealed the award. b) Judgment of the Court

The Supreme Court (IESC) upheld the appeal in part and increased the award to € 4,623,871. The awards for pecuniary losses, legal fees and the € 5,000 for the period prior to the initial charge were all upheld. The non-pecuniary damages from the date of charge were raised to € 2.25 million (comprising both ordinary and aggravated damages) and the exemplary damages award was increased to € 1 million. The Court found that the appropriate basis for assessment for the miscarriage of justice was that set out in respect of claims for breach of constitutional rights in Conway v INTO,10 comprising ordinary compensatory damages for the harmful effects of the wrong, aggravated damages for the heightened feelings of hurt arising out of the behaviour of the defendant, both in the commission of the wrong and subsequently, and exemplary damages to censure the wrongdoer’s conduct over and above its damaging effects on the plaintiff. While each would normally be calculated separately, the Court found that the considerations relevant to the two categories of compensatory damages – ordinary and aggravated – were so closely interwoven, that a global award for both should be made and that it should expressly be stated to include an aggravated element. The Chief Justice (CJ), Mr. Justice Murray stated that the ordinary compensatory damages should be “far in excess” of the IEHC award, but did not specify how much of the € 2.25 million this was. On the issue of exemplary damages, the Court emphasised that the vicarious nature of the state’s liability had no bearing on its obligation to pay for the abuse of state power by individuals acting on its behalf and that quantification was at the court’s discretion as a measure of public disapproval, independent of the compensatory award.

5

c) Commentary

Given the suffering of the plaintiff over a protracted period, it is difficult to argue with the level of the award when the case is viewed in isolation. However, in light of prior jurisprudence on the various heads of damages involved, the decision is extraordinary and raises serious fundamental questions about quantification. Looking first at the non-pecuniary damages, while the IESC did not precisely state how much of the € 2.25 million was for “ordinary” compensation and how much was for aggravating factors, it must be assumed that the bulk of the award was for “ordinary” compensation. This assumption flows from the fact that previous practice shows that in the rare cases where an aggravated damages award is made, it tends to be significantly smaller than the “ordinary” compensatory damages.11 So, if the “ordinary” compensatory damages 10 11

[1991] 2 Irish Reports (IR) 305, 317 per Finlay CJ. See FW v British Broadcasting Corporation [1999] IEHC 145 (€ 75,000 general damages and € 15,000 aggravated damages); Daly v Mulhern & the Motor Insurers’ Bureau of Ireland (MIBI)

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in this case can be assumed to amount to at least € 1.5 million, then it greatly exceeds the upper limits previously placed on awards in respect of the most serious wrongs. Awards in respect of catastrophic personal injuries and serious sexual abuse in particular compare very poorly with this award; the level of suffering in such cases must come close to that in the present case, yet the damages awarded for such injuries are significantly lower.12 Direct comparison of suffering between differing kinds of harm is not possible, but a relative scale of values, with a rational prioritisation of the rights and interests affected by tortious wrongdoing can be attained. The present case suggests a significant imbalance between various types of harm in the current state of the law.13 Mr. Justice (J) Hardiman in Shortt (Geoghegan and Fennelly JJ concurring) did look at some comparisons to other cases in setting the level of compensation for non-pecuniary loss, specifically a more limited false imprisonment case and a serious defamation case.14 This shows some support in principle for the idea of a relative scale of values, but does not fully explore the range of values reflected in tort claims. It is to be hoped that either the courts in subsequent cases, or the legislature, will re-evaluate damages levels for non-pecuniary losses so as to implement a more rational scale of values across the spectrum of interests affected. It is also worth noting that, despite the size of the total award, there was no global review of the award – a practice undertaken in personal injury cases to curb the size of awards.15

7

The difference of approach in the IEHC and IESC on the inclusion of aggravated damages is also worth noting. Clearly in principle the facts are suited to

12

13

14

15

[2005] IEHC 140, noted by Quill (fn. 9) no. 29–31 (€ 35,000 general damages and € 10,000 aggravated damages); Connellan v St. Joseph’s Kilkenny [2006] IEHC 119 (€ 250,000 general damages and € 50,000 aggravated damages). Exceptionally, in Philp v Ryan [2004] 4 IR 241, the aggravated damages accounted for half of the € 100,000 awarded; the actual harm suffered in the circumstances was limited as the plaintiff had a terminal illness (which was not caused by the tort) and the aggravating circumstances were particularly objectionable. Also where personal rights are violated, but little actual harm results, the aggravated damages may be the principal vindication; e.g. Whelan v Madigan [1978] Irish Law Reports Monthly (ILRM) 136, where two plaintiffs each received £ 300 in aggravated damages, but only £ 88 and £ 48 each in damages for the consequences of the wrong. The most favourable view of personal injuries damages, from a plaintiff’s perspective, places a limit of approximately € 400,000 on non-pecuniary damages (without aggravated damages); McEneaney v Monaghan County Council [2001] IEHC 114, noted by E. Quill, Ireland, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2001 (2002) at no. 51–53; the highest award for sexual assault to date was € 350,000 in Nolan v Murphy [2005] 2 ILRM 81, noted by Quill (fn. 9) no. 6. This argument is developed more fully in E. Quill, General Damages and Relative Values in Irish Tort Law (2007) 2 (2) Quarterly Review of Tort Law (QRTL) 1. In Myles v McQuillan [2007] IEHC 333 Quirke J has also acknowledged that the tariff for personal injuries cases may need to be reviewed in light of the decision in Shortt. As the issue had not been argued by the parties, he was not in a position to explore the matter further. The false imprisonment case was Walshe & Bedford v Fennessy & Others [2005] IESC 51, where the second named plaintiff was awarded € 100,000 in respect of 40 hours detention on suspicion of IRA membership; the defamation case was de Rossa v Independent Newspapers [1999] 4 IR 432, where £ 300,000 (€ 381,000) was awarded to a politician for allegations of anti-Semitism, support for communist oppression, involvement in serious crime and support for others so involved. Reddy v Bates[1983] IR 141; Cooke v Walsh [1984] ILRM 208; Sinnott v Quinnsaworth [1984] ILRM 523.

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such an award, based on the rationale underlying this head of damages.16 The IEHC only refused to make such an award because the factors normally taken into account in awarding aggravated damages had already been taken into consideration in assessing the non-pecuniary compensatory damages. The IESC’s approach, using a global sum due to the interwoven nature of the factors affecting both heads is not really conceptually different; rather, it is a semantic difference formally recording the fact of an aggravated element in the plaintiff’s suffering. Ireland’s foremost tort scholar, Professor William Binchy characterises the distinction between aggravated and ordinary compensatory damages, as drawn by the IESC in this case, as “artificial and unconvincing”.17 The real difference between the two courts is the quantum assessed as a composite total for all the relevant considerations. The IEHC’s assessment was necessarily constrained, given the jurisprudence on upper levels of damages in other cases, and Finnegan P’s use of defamation as the closest comparison was understandable and probably more reflective of a proportionate scale of values than the IESC’s figure. In fact this reporter even suggested that the IEHC award was at risk of being struck down for being too high. The IESC, having greater latitude because of its position in the judicial hierarchy, was able to engage in a radical departure on quantum that was not really open to the IEHC. The Court addressed a number of aspects of the law in respect of exemplary damages. First, although awards of both aggravated and exemplary damages are rare in the same case, there is no principled objection in light of the difference in their objectives, with the former addressing particular effects of the defendant’s behaviour on the plaintiff and the latter marking public censure of the defendant’s behaviour beyond the harm caused to the plaintiff.18 Secondly, the Court emphasised that, in respect of state liability, punishment and deterrence had no meaningful application, but a focus on making a public example of the wrongdoing was a relevant consideration in assessing the appropriate level of damages. Professor Binchy notes that too close an examination of the various components of the rationale might make the law unduly technical at the expense of individual justice.19 Thirdly, the IESC rejected the view from an earlier IESC decision that the amount of exemplary damages should generally be a fraction of the compensatory damages.20 The actual amount awarded here 16

17

18

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20

B.M.E. McMahon/W. Binchy, Law of Torts (3rd ed. 2001) [44.08]; E. Quill, Torts in Ireland (2nd ed. 2004) 518–9; J. Healy, Principles of Irish Torts (2006) [13.35] ff.; Law Reform Commission (LRC), Consultation Paper On Aggravated, Exemplary and Restitutionary Damages (1998) 5 and [7.43] ff. (available at http://www.lawreform.ie/publications/data/lrc97/lrc_97.pdf last accessed on 14 March 2008); see also E. Quill, Ireland, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2003 (2004) no. 9–13. W. Binchy, Damages Awards after Shortt v An Garda Síochána: New Questions (2007) 2 (3) QRTL 20, 22. McMahon/Binchy (fn. 16) [44.09] ff.; Quill (fn. 16) Torts in Ireland 519 ff.; Healy (fn.16) [13.39] ff.; LRC (fn. 16) chap. 7; see also Crofter Properties Ltd. v Genport Ltd. [2005] 2 ILRM 262; [2005] IESC 20. Binchy (2007) 2 (3) QRTL 20, 25. In McIntyre v Lewis & Dolan [1991] 1 IR 121 the terms punitive and exemplary were treated as interchangeable and the IESC resisted any minute examination of a technical nature; McCarthy J at 138 and O’Flaherty J at 139; see also LRC (fn. 16) 5. This view was expressed by O’Flaherty J in McIntyre v Lewis & Dolan [1991] 1 IR 121, 141.

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is significantly higher than any previous award of such damages, but this is hardly surprising or unreasonable in light of the exceptionally serious nature of the wrong. One further point to note in respect of exemplary damages is that Murray CJ refers to vindication of plaintiff’s rights as part of the purpose of such damages. In principle, the compensatory damages should vindicate the plaintiff’s rights; in practice, compensation may fall short of total vindication. Thus, the Chief Justice may be correct. However, there is a danger that such an approach will blur the line between compensatory and exemplary damages – a line which is already blurred in earlier case law, which notes that aggravated and exemplary damages may in practice serve equivalent purposes in individual cases.21 2. Hayes v The Minister for Finance IESC, 23 February 2007, [2007] IESC 8, [2007] 1 ILRM 442: Police Liability; Road Traffic Accident a) Brief Summary of the Facts

9

The plaintiff was a pillion passenger on a motorcycle that was being pursued by police because the driver was detected driving at excessive speed. The pursuit ended with the motorcycle crashing into another vehicle, resulting in serious injuries to the plaintiff. The plaintiff sued the state on the basis that the police were responsible as concurrent wrongdoers for causing the accident; the action was successful in the IEHC and the defendant appealed.22 b) Judgment of the Court

10

The IESC allowed the appeal and overturned the IEHC judgment, ruling that the trial judge was incorrect in drawing an inference from the facts that the police driver was in breach of the duty of care owed to the plaintiff. c) Commentary

11

At first glance, a decision turning on the correct inference to be drawn from the facts would appear to be of little significance to the development of legal principle. However, the decision is the only modern Irish authority articulating the civil responsibility of the police in the conduct of vehicle pursuits and a finding of liability could have placed severe constraints on the ability of the police to fulfil their proper function. Two features of the pursuit led the IEHC to find the pursuit negligent; one was the absence of any radio reports of any other crime in the vicinity at the time; the second was the dangerousness of the pursuit itself, based on high speed on the open road and weaving through traffic in an urban area. On the first issue, the IESC held that all that was required for the commencement of a pursuit was that the police have reasonable grounds for doing so; placing a precondition of radio reports of another crime would undu21

22

Kennedy & Arnold v Ireland [1987] IR 587, 594 per Hamilton P; LRC (fn. 16) also notes the overlap between the two categories ([1.06] and [7.46]) and acknowledges the vindicatory aspect of exemplary damages ([1.07] and [7.29]). Unreported IEHC 17 February 2004; noted by E. Quill, Ireland, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2004 (2005) no. 17–20.

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ly constrain the police. Consonant with comments in the 2004 report, the IESC also noted that failure to pursue would condone and reward the dangerous behaviour of those fleeing from justice. On the specifics of the pursuit, the IESC rightly noted that the pursuit was not a single seamless event, but rather went through at least three phases, where different levels of behaviour by the police were called for. The open road phase, prior to reaching a built up area, was where the highest speeds were attained (100mph/160kph); although the speed was high, it was not unduly dangerous and the police remained a good distance back from the vehicle. The second phase was through the town (though this could be subdivided between the circumvention of the police roadblock at the outskirts and the pursuit through the town itself). A greater degree of care was required at this point. The IESC did not specifically comment on whether the standard was complied with in this phase, but merely noted that the accident did not occur at this point. It is submitted that the facts do not disclose any unduly dangerous behaviour by the police in this phase. The third and crucial phase was after the exit from the town, on a narrow country road, when the police knew there was a further roadblock ahead; the IESC noted that the police vehicle did not pass 50mph/80kph during this period and remained behind an articulated truck for much of it, allowing a significant gap to develop between them and the motorcycle. The police were rightly held not to have been in breach of duty at this point. One final point of note was a dictum by Kearns J that even if the police had been negligent, the behaviour of the driver was a novus actus interveniens, breaking the causal connection to the plaintiff’s injury. This may be correct in respect of any negligence in the earlier phases of the pursuit, but cannot be correct in respect of the final phase. If there had been negligence at this point, then erratic behaviour by the motorcyclist, leading to an accident would be one of the eventualities that the duty is designed to guard against and so, could not be an intervening cause such as to sever the causal connection between the breach and the injury.23 3. Devlin v The National Maternity Hospital IESC, 14 November 2007, [2007] IESC 50: Organ Retention; Psychiatric Injury a) Brief Summary of the Facts

The plaintiff’s daughter died and a post-mortem was carried out by the defendant hospital. Organs were removed and retained without the plaintiff’s consent. The plaintiff suffered post-traumatic stress disorder and instituted proceedings against the defendant. Those proceedings were dismissed by the IEHC and the plaintiff appealed.

23

Breslin v Corcoran & MIBI [2003] 2 ILRM 189, 198 per Fennelly J, though the IESC misapplied the principle in that case, see Quill (fn. 16) Ireland, no. 14–17; even self inflicted harm does not break the causal connection if it comes within the range of consequences that the defendant had a duty to guard against; see Bank of New Zealand & Another v New Zealand Exchange Ltd. & Another [2008] New Zealand Court of Appeal (NZCA) 25, no. 117; Corr v IBC Vehicles Ltd. [2008] United Kingdom House of Lords (UKHL) 13; the Court of Appeal (EWCA) decision in Corr is analysed by U. Connolly, Corr v IBC – A Basis for Civil Liability for Employee Suicide? (2007) 2 (3) QRTL 16.

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b) Judgment of the Court

13

The IESC dismissed the appeal and affirmed the order of the IEHC. The principles applicable to negligently inflicted psychiatric harm set out in Kelly v Hennessy were applied.24 The fourth of those principles requires the plaintiff to show that the injury resulted from the perception of injury or risk of injury to oneself or another person. The injury in this case resulted from the communication of information in respect of the retention of organs after the child was already dead and so did not result from the perception of an actual or apprehended injury to the plaintiff’s daughter and so the relevant criterion was not satisfied. An extension of the conditions for recovery on grounds of public policy was rejected as “[a]ny such development would give rise to uncertainty in the law of liability generally and to potentially unforeseeable repercussions.” c) Commentary

14

The issue of organ retention is part of a broader historical problem, which has been the subject of two enquiries.25 Fortunately, changes in practice since 2000 make recurrence of such cases far less likely in the future. The result of this case is disappointing, as it reduces the prospects for any accountability for a clear failure by the hospital to consider the impact of its conduct on the families of deceased children. The decision represents a very narrow interpretation of the prior cases on negligently inflicted psychiatric harm and is inconsistent with some aspects of them and so may add to, rather than remove, uncertainty in this area. The IESC, in Fletcher v Commissioners of Public Works,26 held that the Kelly principles, while well suited to one off catastrophes, were not applicable to all categories of claim for negligently inflicted psychiatric harm. In the context of an employment relationship, it used the more general three part test for a duty of care set out in Glencar Explorations plc and Andaman Resources plc v Mayo County Council (No 2).27 Arguably the prior relationship between the plaintiff and hospital would justify inclusion of the present case under the broader approach without unduly extending the bounds of liability for psychiatric injury.28 The current decision now casts doubt over some types of claim, especially ones arising out of stress. Stress does not always involve a fear of injury; neither does it necessarily involve the sudden appreciation of 24 25

26

27

28

[1995] 3 IR 253. Madden Report, http://www.dohc.ie/publications/madden.html accessed 9 January 2008. The government felt unable to publish an earlier report (the Dunne Report) following legal advice, see http://www.dohc.ie/press/releases/2005/20050504.html accessed 9 January 2008. [2003] 2 ILRM 94, noted by P. Handford (2003) 11 Tort Law Review (Tort L Rev) 61; Quill (fn. 16) Ireland, no. 4–8; R. Byrne/W. Binchy, Annual Review of Irish Law 2003 (2004) 526 ff. [2002] 1 IR 84; [2002] 1 ILRM 481, noted by Quill (fn. 12) no. 3–5; R. Byrne/W. Binchy, Annual Review of Irish Law 2001 (2002) 554 ff. The three parts being proximity, reasonable foresight and public policy. The broader approach has been used in a number of occupational stress cases, such as McGrath v Trintech Ltd. [2005] 4 IR 382; Maher v Jabil Global Services Ltd. [2005] IEHC 130; Quigley v Complex Tooling and Moulding [2005] IEHC 71; See also M. Bolger, Claiming for Occupational Stress, Bullying and Harassment (2006) 3 Irish Employment Law Journal (IELJ) 108. See P. Handford, Psychiatric Injury in Breach of a Relationship (2007) 27 Legal Studies (LS) 26.

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events (another of the requirements of the Kelly principles). It is now unclear whether a court should follow Kelly or Fletcher. If the case does not involve an employment relationship, then the decision in Devlin weighs in favour of following Kelly, but the facts may involve a prior relationship and suggest that a comparison to Fletcher is more appropriate (e.g. a school and pupil). The decision in Gray v Ireland, discussed below, is also difficult to reconcile with this judgment. 4. Fitzpatrick v White IESC, 15 November 2007, [2007] IESC 51: Medical Negligence; Informed Consent a) Brief Summary of the Facts

The plaintiff, a professional musician, had an operation to correct a squint in his left eye for cosmetic reasons. The named defendant was the nominee of the hospital where the procedure was performed. While the operation was carried out with due care, the plaintiff subsequently suffered slippage of the medial rectus muscle behind the left eye, causing the eye to turn outwards in addition to leaving him with double vision and headaches. These effects were partly rectified by a later operation. Muscle slippage is a rare, but known, complication of the type of surgery the plaintiff was undergoing. He alleged that he received no warning of this risk and that, had he been warned, he would not have undergone the surgery. The IEHC found that a warning had been given and that, in any event, the plaintiff would have undergone the operation irrespective of whether a warning was given.29 The plaintiff appealed to the IESC. He accepted that the trial judge’s finding of primary fact that a warning had been given was not open to appeal, but argued that the warning was given so late and under such pressured circumstances that it was insufficient and, consequently, legally invalid. The warning was given to the patient 30 minutes before the operation, when he was in a hospital gown in a bed on a ward, but not yet sedated.

15

b) Judgment of the Court

The IESC dismissed the appeal and affirmed the order of the IEHC. While the Court found that it was undesirable that a warning should be given at a late stage, particularly where there were various opportunities to give the warning earlier, the plaintiff in this case was not prejudiced by the lateness of the warning. The evidence demonstrated that he was capable of making a clear and rational decision at the time. In the circumstances, the warning was found to be sufficient to discharge the hospital’s duty. In consequence, the causal question did not require consideration, but the court noted, obiter, that it was satisfied with the trial judge’s ruling on the issue and would have upheld it had the warning been found to be inadequate.

16

c) Commentary

The decision is noteworthy because it addresses the timing, rather than the content of the warning in determining its legality. The decision does not definitive29

[2005] IEHC 479.

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ly determine the balance between subjective and objective determination of the validity of consent. The particular decision against this plaintiff was based on a lack of prejudice based on the subjective level of comprehension and lucidity which emerged on the evidence. It does not tell us how the courts would react in cases where a reliable subjective understanding cannot be demonstrated, though it does offer some hints. The indication that the circumstances under which the warning was given were undesirable suggests that a breach of duty might be found where there is doubt about the patient’s comprehension of the risk. The inclusion of the subjective understanding of the patient in the standard of care inquiry is at odds with the general principle espoused earlier in the judgment that the “reasonable patient” test is the correct one to determine whether the warning given meets the obligation of reasonable care. Perhaps it would have been better if the subjective comprehension of the plaintiff was treated as a causal issue, rather than as a facet of breach. The same result could have been achieved by stating that the warning fell below the standard of reasonable care, due to the time and circumstances of its delivery, but the lack of any subjective prejudice to the plaintiff in assessing the risk and undertaking the procedure severs any causal connection between the breach and the harm. This would be consistent with the causal principle endorsed by the Court – that an inadequate warning is not a cause of the harm if a reasonable patient, on being properly informed of the risk, would have undertaken the procedure anyway; however, this objective assessment can be displaced by a subjective analysis where there is credible evidence providing a reliable picture of what this particular plaintiff would have done.30 The Court has not, as yet, addressed the more difficult question of the patient who would have deferred the procedure.31 5. Gray v The Minister for Justice Equality and Law Reform, Ireland and the AG IEHC, 17 January 2007, [2007] IEHC 52: Privacy; State Liability; Psychiatric Harm a) Brief Summary of the Facts

18

AG, PG and their five children moved from Dublin to live in a small seaside town in the south west of Ireland in 1995. In February 1999 they agreed to temporarily provide accommodation for AG’s nephew on his release from prison, where he had served a lengthy sentence for rape. In early April 1999 the police visited the house and following that visit the nephew returned to Dublin. The family were then contacted a number of times by local journalists and others, including friends of one of the children; press photographers showed up at their home and a series of stories were run over the course of approximately a week about the presence of a convicted sex offender in the town. The family returned to Dublin; for six months they had to reside in single bedroom bed 30

31

This approach has been emerging in the IEHC, see Geoghegan v Harris [2000] 3 IR 536 and Winston v O’Leary [2006] IEHC 440. Chappel v Hart (1998) 195 Commonwealth Law Reports (CLR) 232; Chester v Afshar [2005] 1 Law Reports, Appeal Cases (AC) 134 noted by K. Oliphant, England and Wales, in: H. Koziol/ B.C. Steininger, European Tort Law 2004 (2005) no. 4–11.

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and breakfast accommodation, living mainly on fast food; they spent the following six months in a two-roomed apartment, before finally being housed in a local authority house on a permanent basis. PG suffered from post-traumatic stress disorder (PTSD), which gradually reduced in intensity until she fully recovered in early 2006. The plaintiffs instituted proceedings against the state alleging negligence and violation of their constitutional rights to privacy and peaceful enjoyment of their home. An allegation of assault and battery was also made by FG, the eldest son, in respect of the police visit to the house. b) Judgment of the Court

Quirke J found that there was sufficient evidence to infer that the police had leaked the information to the press about the whereabouts of AG’s nephew and in consequence were in breach of obligations owed to the plaintiffs, for which the state was liable in damages. Based on the IESC decision in Ward v McMaster32 and the IEHC decision in Hanahoe v Hussey,33 a duty of care in negligence was established, breach of which entitled the plaintiffs to damages. Based on the IEHC decision in Kennedy and Arnold v Ireland and the AG,34 unlawful interference with the constitutional right to privacy was held to be actionable and, while this right is a qualified one, there were no circumstances in this case which justified the disclosure of the information on public policy grounds. There was insufficient evidence to sustain the allegation of assault and battery. Consequently the police disclosure “comprised a violation of the constitutionally protected right enjoyed by each of the plaintiffs to privacy and the peaceful enjoyment of their home.” AG was awarded € 15,000 “for the upset, distress, inconvenience and disruption of his life” caused by the breach of duty; PG was awarded € 50,000 for personal injury and FG was awarded € 5,000 as his level of “inconvenience, upset and disruption” was less intense than his father’s and suffered for a shorter period.

19

c) Commentary

The decision in favour of the plaintiffs is certainly justified. However, the reasoning in the judgment raises several conceptual problems. First, the decision on liability in negligence relies on a formulation of duty expressly rejected by the IESC.35 A duty can still be justified under the current approach; the police are certainly in a proximate relationship to the plaintiffs when gathering and disclosing information about them; harmful consequences are a reasonably foreseeable consequence of disclosure and it is fair, just and reasonable that the police are under a legal obligation to exercise care with respect to such sensitive information. The second, more fundamental, problem with a negligence action is the concept of actionable damage – the first and third plaintiffs did not suffer any injury and a recognised injury is a core element of a negligence claim. Unless the violation of the privacy right of itself constitutes a sufficient 32 33 34 35

[1988] IR 337. [1998] 3 IR 69. [1987] IR 587. Glencar Explorations plc v Mayo County Council [2002] 1 IR 84; see fn. 27.

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injury, no action in negligence should lie; recognition of privacy violation as an injury for the purpose of negligence would be a significant extension of the law and there is no indication that Quirke J believed himself to be embarking upon a new conceptual development. The second plaintiff did suffer a recognised injury – PTSD – but did not suffer it in a manner which satisfies the criteria in Kelly v Hennessy. Specifically, it did not result from a sudden shock and it is doubtful whether any perception of possible other injury was sufficiently immediate or central to the trauma to qualify under the requirement discussed earlier in Devlin v National Maternity Hospital. Thus, while a finding of liability in negligence in respect of the second plaintiff is conceptually justifiable and compatible with the approach of the IESC in Fletcher v CPW, it is inconsistent with the subsequent approach of the IESC in Devlin. While Quirke J cannot have anticipated the IESC decision that would follow some ten months later, future courts may have to address the incompatibility of the two approaches.

21

A discrete claim for breach of constitutional rights is available in Irish law, where common law protection of the right is absent or inadequate.36 The Kennedy and Arnold decision clearly established the availability of such an action against the state for violation of privacy; there is also growing support for the availability of such an action against private persons.37 The claims of the first and third plaintiffs are difficult to accommodate under existing torts and so can be justified under this approach. The fact that interference with the plaintiffs’ occupation of property was caused might suggest private nuisance as an appropriate cause of action, but the defendant’s behaviour did not arise out of the use of neighbouring property and, so, does not fit the normal parameters of that tort. In any event, the invasion of privacy should be actionable per se, and not dependent on proof of interference with some other right or interest. The claims cannot be accommodated within the nominate torts, because they do not satisfy the established requirements. Trespass is unavailable as there is no physical contact to support a battery claim; any apprehension of harm is not sufficiently immediate to support an assault claim and the interference with liberty is indirect and so cannot sustain a false imprisonment claim. Defama36

37

Hanrahan v Merk, Sharp and Dohme Ltd. [1988] ILRM 629; W v Ireland (No. 2) [1997] 2 IR 142; McDonnell v Ireland [1998] 1 IR 141. Such claims are treated as quasi-torts in Irish law, see McMahon/Binchy (fn. 16) [1.09] ff.; Quill (fn. 16) Torts in Ireland, 352 ff.; Healy (fn. 16) [1.16] ff. The classification of the causes of action in Gray is considered further in D. Kelleher, A Very Private Affair (2007) 101 (5) Gaz 24, 27. For more general treatment of privacy claims in Ireland, see R. Slattery, Protection of Privacy Interests in Ireland: The Common Law, The Privacy Bill 2006 and the Privacy Injunction (2007) 14 Commercial Law Practitioner (CLP) 159. There were two recent successful privacy claims against private defendants; one in the IEHC, Sinnott v The Carlow Nationalist, Irish Times 27 January 2007, see R. Byrne/W. Binchy, Annual Review of Irish Law 2006 (2007) 540 (newspaper printing a picture in which a sports participant’s genitals were visible, € 6,500 awarded), and one in the IECC, see the Irish Times 14 November 2007 (landladies using electronic surveillance on tenants, a total of € 115,000 awarded to 10 plaintiffs). In Domican v Axa Insurance Ltd. [2007] IEHC 14 an unwanted communication with the plaintiff was not a sufficient interference with privacy, but Clarke J expressed no principled objection to a horizontal privacy claim.

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tion is not available, because the information was truthful and injurious falsehood is unavailable both because of the truth of the information and a lack of ensuing harm. An action on the case, a somewhat forgotten element of the armoury of the common law, used to forge new causes of action, might be a suitable way of accommodating the claim. It is submitted that either the action on the case or a constitutional claim is a more satisfactory approach than the solution in English law to use the equitable action for breach of confidence as a means of privacy protection.38 Constitutional claims do not coexist concurrently with common law claims, so there is a technical deficiency in Quirke J upholding the constitutional claim alongside the negligence claim in respect of the same wrong. The status of claim for interference with the right to peaceful enjoyment of the home in the present case is unclear; it is expressed as an adjunct to privacy in the judgment and is not discretely considered as a distinct right. Certainly, such a constitutional right might exist, but the precise manner of its protection through existing torts, such as private nuisance, or through the development of a tort of harassment,39 or through the constitutional action remain to be considered and developed. The level of damages awarded is relatively low, given the degree of disruption suffered by the family. Given the award in respect of the third plaintiff, the family’s total award could have been increased by a modest amount had the other four children been included as plaintiffs. The award to the second plaintiff, in respect of PTSD, is in keeping with other Irish awards for psychiatric injury, but in general these compare poorly to other personal injury awards.40

22

6. Byrne v Ryan IEHC, 20 June 2007, [2007] IEHC 207: Wrongful Birth; Vicarious Liability41 a) Brief Summary of the Facts

The plaintiff underwent an unsuccessful sterilisation operation at a hospital, of which the defendant is a nominee. The operation was carried out on 16 December 1999; on 30 March 2000 the plaintiff discovered that she was approximately three months pregnant, having gone to an accident and emergency unit with severe abdominal pain. During her care at the defendant hospital (where the sterilisation had been carried out), some doubt arose as to whether the plaintiff had been pregnant at the time of the sterilisation operation; while the consultant treating her eventually came to the conclusion that she was not 38

39

40 41

Campbell v Mirror Group Newspapers Ltd. [2004] 2 AC 457, noted by Oliphant (fn. 31) no. 24–29; Associated Newspapers v HRH Prince of Wales [2007] 2 All England Reports (All ER) 139, noted by K. Oliphant, England and Wales, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2006 (2008) no. 37–39; Ash v McKennitt [2007] 3 Weekly Law Reports (WLR) 194. Clarke J, in Domican v Axa Insurance Ltd. [2007] IEHC 14 and Dunne J, in O’C v The KLH & Anor [2006] IEHC 199, have expressed conflicting views on a tort of harassment; the former in favour of and the latter against an independent tort of harassment. See Quill (2007) 2 (2) QRTL 1, 7–8. Noted by Dr. C. Craven, Byrne v Ryan: Pregnancy and Children and Limitations on Recoverability for Actionable Wrongs (Part 1) (2007) 2 (3) QRTL 1; E. Keane, Rearing an Unexpected Child: A Compensatory Matter? Forthcoming Irish Jurist (Ir Jur).

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and that the sterilisation operation had failed, no clear note to that effect was recorded on her chart and she was not clearly informed of this at any stage during her care through the pregnancy. As a result, the plaintiff took no steps to address her fertility after the birth of the child and became pregnant again within four months. After the birth of that child she had a second sterilisation operation, which proved successful. The plaintiff sued the hospital for damages in respect of the pain, suffering and inconvenience of the two pregnancies, childbirth and the second sterilisation; she also sought to recover associated medical costs and the cost of rearing the two healthy children. The hospital denied vicarious liability for the surgeon’s negligence, as it did not have sufficient control to satisfy the established test for vicarious liability. If found liable, the hospital argued that damages should not include the cost of raising the children, but conceded that damages would be payable for the “pain suffering and inconvenience of pregnancy and childbirth” and for the second sterilisation procedure. b) Judgment of the Court

24

Kelly J held that, irrespective of the nature of the relationship between the hospital and the doctors providing treatment, there is a primary duty on the hospital to provide proper care for patients and this is not discharged simply by appointing qualified persons to perform the necessary tasks, but requires that the hospital remain responsible for the manner of performance by such persons. This duty applied both to the surgery and the obligation to inform the patient of the failure of the sterilisation operation. Even if this were not so, a hospital was vicariously liable for doctors employed as part of its staff, despite the fact that the relationship did not conform to the control model in other vicarious liability cases. On the extent of liability, Kelly J rejected the claim for the cost of raising the children, citing public policy grounds, based on the House of Lords (UKHL) decisions in McFarlane v Tayside Health Board 42 and Rees v Darlington Memorial Hospital NHS Trust,43 rejecting the view of the High Court of Australia (HCA) in Cattanach v Melchior.44 € 90,000 was assessed as compensation for those heads of loss conceded by the defendant,45 with Kelly J reserving his opinion on whether pregnancy and childbirth could properly be regarded as injuries for which compensation should be payable. c) Commentary

25

The approach taken by Kelly J places the question of whether the cost of rearing a healthy child is actionable damage within the framework of the duty of care inquiry and rejects the claim on grounds that it is not fair, just or reasonable to impose liability on the doctor or the hospital. The alternate approach, 42 43

44 45

[2000] 2 AC 59. [2004] 1 AC 309, noted by P. Cane (2004) 120 Law Quarterly Review (LQR) 189 and K. Oliphant, England and Wales, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2003 (2004) no. 34–41. [2003] HCA 38; (2003) 215 CLR 1. The breakdown of the award was € 45,000 in respect of the first child, € 35,000 for the second and € 10,000 for the second sterilisation operation.

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taken by the HCA in Cattanach and rejected by Kelly J, is more consistent with the general principles of torts; this approach considers the damage as consequential to a clear breach of duty and, therefore, falling under the principles of remoteness of damage. The general rule of remoteness in negligence cases is that foreseeable types of loss are recoverable and plainly the financial cost arising from the birth of a child is a readily foreseeable consequence of the negligent performance of a sterilisation.46 The view, expressed by Lords Gill and Millet in McFarlane and cited by Kelly J, that the benefits of the child outweigh the loss is also of dubious value, as it uses an emotional benefit to offset a pecuniary loss; normally only pecuniary benefits are set off against pecuniary losses and non-pecuniary benefits are set off against non-pecuniary losses.47 The case taken by this plaintiff’s husband also failed.48 His claim was more clearly one for pure economic loss and the rationale used by Kelly J, within the duty of care concept, has clearer application to that case. A broader issue that is not addressed, however, is whether the interference with family rights and autonomy should be regarded as an actionable wrong for interference with constitutional rights.49 The issue of whether pregnancy and childbirth can be regarded as actionable harm was conceded, so the case does not establish any precedent on the issue. The tenor of the judgment suggests that Kelly J may have been inclined to reject such a claim had it been contested.50 On the issue of the hospital’s liability, both of the theories advanced by Kelly J are supported by authority. A hospital’s vicarious liability for doctors in full time service is often cited as an exception to the control test ordinarily employed to determine the sufficiency of relationship for vicarious liability in tort.51 However, the concept of a non-delegable primary duty owed directly by the hospital to the patient and based on its undertaking to provide care, which was preferred by Kelly J, is a conceptually more satisfactory explanation.52 46

47

48 49

50

51 52

Keane Ir Jur.; L.C.H. Hoyano, Misconceptions About Wrongful Conception (2002) 65 Modern Law Review (MLR) 883; E. Adjin-Tettey, Claims of Involuntary Parenthood: Why The Resistance? in: J. Neyers/E. Chamberlain/S.G.A. Pitel, Emerging Issues in Tort Law (2007). Even T. Weir, The Unwanted Child (2000) Cambridge Law Journal (CLJ) 238, expressing support for the outcome in McFarlane, acknowledges that “the reasoning is uneasy” and that orthodox tort principles favour recovery in full. Keane Ir Jur. Lord Gill was the trial judge in the Outer House of the Court of Session (Scotland); Lord Millet’s opinion was in the House of Lords. Byrne v Ryan [2007] IEHC 206. Keane Ir Jur. In Rees, the House of Lords allowed £ 15,000 general damages to the parents as a “conventional sum” in respect of the loss of autonomy involved. This was based in part on the view of Lord Millett in McFarlane. See also D. Nolan, New Forms of Damage in Negligence (2007) 70 MLR 59, 77 ff. He expressly cited Lord Gill, who had also rejected this aspect of the claim in McFarlane at first instance. The reasoning cited by Kelly J from Lord Millet on the benefits outweighing the burdens was also used by Lord Millet to dissent from the majority on liability for pregnancy and birth. For detailed discussion of whether pregnancy and birth constitute physical injury, see Nolan (2007) 70 MLR 59, 71 ff.; C. Witting, Physical Damage in Negligence (2002) CLJ 189, 192 ff. McMahon/Binchy (fn. 16) [43.22], Quill (fn. 16) Torts in Ireland, 498. See R. Stevens, Torts and Rights (2007) 117 ff.; both Kelly J and Stevens cite Lord Justice (LJ) Denning (as he then was) in Cassidy v Ministry of Health [1952] 2 Law Reports, King’s Bench (KB) 343, 363 (EWCA) in support of this principle.

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The latter approach would ensure a hospital’s responsibility to the patient even where there was a clear lack of employment relationship with the negligent doctor, such as where a visiting doctor is allowed to carry out a procedure on a patient. While such cases may be rare, it would be better to ensure that the patient is properly protected, rather than risk liability turning on technical aspects of the relationship between the hospital and the medical personnel treating the patient. 7. Walsh v Jones Lang Lasalle Ltd. IEHC, 24 January 2007, [2007] IEHC 28: Negligent Misstatement; Disclaimer a) Brief Summary of the Facts

27

The defendant, a large and well-known firm of auctioneers, advertised a commercial property for sale. The brochure stated the floor area to be 23,057 square feet. The plaintiff purchased the property in reliance on the brochure without checking the measurements for himself. The price paid by the plaintiff was IR£ 2,342,000 (approx € 2,974,000), a rate of approximately € 129 per square foot. It later transpired that the actual size of the property was 21,248 square feet, a difference of some 1,817 square feet from that represented. Thus, the plaintiff had paid significantly more for the property than its value and, furthermore, the rental income that could be generated was significantly less than he had anticipated. The plaintiff sued for the economic loss, alleging a negligent misstatement by the defendant. The defendant denied that it owed a duty to the plaintiff, as the brochure contained a disclaimer that required purchasers to verify relevant information for themselves and that the plaintiff either wholly caused or at least contributed to his own loss by not having the property independently examined (or doing so himself). b) Judgment of the Court

28

Quirke J held that the disclaimer was ineffective, as it was not sufficiently clear and prominent to warn of the possibility of grossly inaccurate information that was presented in such a precise and prominent way as the measurements. Such disclaimers were understood within the property business as covering minor inaccuracies only. Based on evidence of the actual practice within the business of commercial property sales in Dublin at the time, he accepted that it was usual for purchasers to rely on measurements provided by reputable auctioneers such as the defendant and that such measurements would determine rental value and this in turn would influence the purchase price. Consequently, applying the criteria set out in Wildgust v Bank of Ireland,53 he held that the defendant had a sufficient relationship of proximity with the plaintiff; that the plaintiff’s reliance on the representation was reasonably foreseeable and that it was fair, just and reasonable to impose a duty of care on the defendant. The degree of inaccuracy clearly indicated a failure to discharge the duty of reasonable care. Damages were assessed on the basis of the diminution of value of 53

[2006] 1 IR 570; E. Quill, Ireland, in: H. Koziol/B.C. Steininger, European Tort Law 2006 (2008) no. 6–10.

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the premises rather than on the diminution of rental income and the plaintiff was awarded € 350,000. c) Commentary

Despite the fact that negligent misstatement claims have been accepted in Ireland for over 40 years, this is one of the few cases to turn on the interpretation of a disclaimer and is the first to reject the application of an express disclaimer contained in the document that contained the misrepresentation. As misstatement cases are conceptually based on a voluntary assumption of responsibility, they generally embrace the view that the defendant can avoid the imposition of a duty by disclaiming such duty, without devoting much if any attention to what constitutes a legally valid disclaimer. The disclaimer is mentioned as an integral facet of the duty enquiry, rather than being treated under the stringent requirements applicable to allegations that a plaintiff has waived liability. The decision of Quirke J is the first in a tort case to evidence the judicial scepticism of such clauses that is relatively commonplace in respect of exclusion clauses in contracts and is to be welcomed. His approach in accepting the clause as valid in respect of minor inaccuracies, but construing it as insufficiently clear and prominent to apply to the facts that arose is reminiscent of the famous dictum of Denning LJ in Spurling v Bradshaw54 and sets a fair balance between the respective interests of the parties. It should serve as a caution to persons giving specialist advice or information that tortious obligations cannot be lightly avoided. Many judgments and commentaries on the duty, by focusing on voluntariness, often create the mistaken impression that the imposition or otherwise of a duty is dependent on the subjective determination of the maker of the statement and that they can displace a duty with any kind of disclaimer. This judgment highlights the fact that the objective effect conveyed by the maker of the statement is at the core of determining whether the law will impose a duty and that attempts by makers of statements to distance themselves from legal responsibility for the effects of such statements will be subjected to a searching enquiry by the courts. The decision has been criticised for not holding the plaintiff responsible in part by way of contributory negligence.55

29

8. O’Neill v Dunnes Stores IEHC, 21 February 2007, [2007] IEHC 33: Liability for Injury to Rescuer a) Brief Summary of the Facts

The plaintiff, a customer at a shopping centre, was injured when giving assistance to the defendant’s security guard in detaining a suspected shoplifter. He was approached in the car park by a cleaner asking for help to deal with a robbery, he went to the back of the building and found the security guard struggling with a man. He helped the guard to detain the man until the police ar54

55

[1956] 2 All ER 121, 125 suggesting that some exclusion clauses were so onerous that they should be on the front of the document in red ink with a red hand pointing to them, to properly alert the other party. G. Byrne, Negligent Misrepresentation: Recent Developments in English and Irish Law (2008) 2(4) QRTL 22, 27.

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rived. Before the police had taken custody of the man, his accomplice returned with a motorcycle chain and struck the plaintiff in the face with it. The plaintiff instituted proceedings against the store. b) Judgment of the Court

31

Kelly J found the defendant liable and awarded the plaintiff € 81,201.56 The defendant was found to have inadequate security personnel on duty on the evening in question; whereas the store normally had three security guards, there was only one guard on duty on this particular evening, despite the fact that the store was open late. The security guard was also left with inadequate available means of communication; whereas he would have had a two-way radio to communicate with other security personnel had they been on duty, he only had a mobile phone to contact other staff members on this occasion. Furthermore, while the security guard should have observed the suspects and waited for the police, rather than intervening directly to detain them, his breach of the store’s security protocol did not bring his behaviour outside the scope of his employment. Consequently, the defendant was vicariously liable for his negligence in contributing to the risk of injury to the plaintiff. c) Commentary

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Cases on injuries to rescuers are rare in Irish law; the principal authority is the IESC decision in Phillips v Durgan,57 which established that if a person negligently creates a situation of danger with a reasonably foreseeable possibility of a rescue attempt, then that person owes a duty of care to the rescuer in respect of reasonably foreseeable injuries incurred during the rescue. The assistance offered to the security guard in this case clearly comes within that principle, though Philips was not cited; the plaintiff relied exclusively on a renowned passage from the judgment of Cardozo J in Wagner v International Railroad Company.58 Fortunately, Kelly J’s approval of the passage cited is in keeping with the IESC’s approach in Phillips. The recognition and protection of persons providing voluntary assistance has been addressed more generally by the LRC Consultation Paper on Civil Liability of Good Samaritans and Volunteers,59 which proposes the introduction of a statute restricting the liability of such persons for injuries they cause to cases involving gross negligence on their part. The reiteration of the protection of rescuers as plaintiffs by Kelly J in the present case is in keeping with the spirit of the protective attitude expressed by the LRC.

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57 58 59

€ 40,000 for pain and suffering to date; € 10,000 for pain and suffering in the future; € 28,000 for loss of income and € 3,201 for agreed special damages. [1991] ILRM 321, relying on the House of Lords decision in Ogwo v Taylor [1988] AC 431. [1921] 232 New York Court of Appeals Reports (NY) 176. LRC CP 47-2007, see also The Report of The Taskforce on Active Citizenship (2007), a report to the Government, (last accessed 14 April 2007) available at http://www.activecitizen.ie/ UPLOADEDFILES/Mar07/Taskforce%20Report%20to%20Government%20(Mar%2007).pdf.

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C. LITERATURE 1. N. Cox, Defamation Law, First Law (2007) This is the first comprehensive text on Irish defamation law since Marc McDonald’s Irish Law of Defamation. (2nd ed. 1989). Like McDonald’s work, the present volume presents an excellent statement of this complex branch of legal practice along with a clear exposition of its underlying theoretical framework and incisive critical appraisal. It includes all the major case law from Ireland and a great deal of comparative material from the intervening period, to bring the reader up to date with the latest principles and ideas in this field. In particular it deals with important developments, such as Internet communications (2.10 ff), public interest speech (chapter 9)60 and the relationship between defamation and human rights (chapter 13).

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2. V. Corbett, The Haystack in the Hurricane – The Right to One’s Own Image (2007) 2(1) QRTL 1 The author examines the legal protection afforded to persons, particularly celebrities, in respect of the commercial exploitation of their image or other facets of their persona. It compares the development of the action for appropriation of personality in the USA with the protection afforded in Ireland and England through the tort of passing off and goes on to assess the proposals for further protection in the Privacy Bill 2006 in Ireland.61 The article also explores the conceptual grounding for the protection of one’s image and argues that it should be developed in Ireland as part of personal privacy and dignity and not as a facet of property, which can place undue constraints on competition creativity and freedom of expression in the development of popular culture.

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3. R. Ryan/D. Ryan, Asbestos Litigation and the Requirements of The Negligence Action: New Developments in Irish and English Law (2007) 2(3) QRTL 10 The authors critically analyse the UKHL decision in Rothwell v Chemical and Insulating Co. Ltd.62 denying liability for the development of pleural plaques after negligent exposure to asbestos. On a comparison with recent Irish case law on policy considerations in respect of the imposition of a duty of care and on the definition of damage in negligence claims, the authors conclude that such an action in tort would be likely to fail in Ireland also. On consideration 60

61

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This issue is also addressed in N. Cox, Public Interest Reporting and Defamation Law: Recent Irish Developments (2007) 2 (2) QRTL 20 and D. Byrne, The Public Interest Defence in Irish Defamation Law: Leech v Independent Newspapers (2007) 12 Bar Rev 166. The Privacy Bill 2006 formed part of a package with the Defamation Bill 2006 for general reform of media coverage of public affairs. Despite the subsequent change of government, the Defamation Bill was passed by the Senate on 11 March 2008. The Minister for Justice and Law Reform in the subsequent government expressed the intention to continue with the Defamation Bill, but to postpone the Privacy Bill in light of the establishment of a voluntary Press Council, Irish Times, 12 November 2007. [2007] UKHL 39; [2007] 3 WLR 877. Cf. K. Oliphant, England and Wales, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2007 (2008), no. 5 ff.

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of the dicta from Rothwell on possible contractual liability, they note that this avenue may prove more fruitful for plaintiffs, despite the tentative nature of the statements of the Law Lords on the issue. 4. E. O’Dea, Causation and the “Loss of Chance” Doctrine in Medical Negligence Cases (2007) 12 Bar Rev 86

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The author analyses the English cases on this topic and notes the uncertainty of the position in Ireland. She goes on to argue in favour of the development of liability for loss of a chance of recovery in medical negligence cases in Ireland and is critical of the all or nothing approach of traditional causal principles, as they fail to vindicate patients’ rights and fail to impose any sanction in respect of clear breaches of duty where a probable causal connection to harm cannot be sufficiently demonstrated. 5. R. Slattery, Passing Off: From Mythbusters to Miss World and Domain Names to Dr. Martens – Recent Case Law (2007) 14 CLP 240

37

The author conducts an extensive review of recent Irish and English cases on the tort of passing off, highlighting the resurgence of the tort in recent years. He notes that, as the cases all involve applications for interlocutory injunctions, the substantive merits of the claims are not examined; nonetheless, some trends are emerging, such as the rise in claims related to domain names and the heightened vigilance of courts in both jurisdictions in respect of fraud in the marketing of products and services. 6. P. Fahy, Liability of Pension Scheme Advisers – The Irish and Common Law Position (2007) 14 CLP 121

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The author explores the possible liability of persons giving advice in respect of pension scheme investments for economic loss to the scheme or its members. He notes that liability may be in contract, under breach of fiduciary duties or in tort, by way of negligent misstatement. Differences of interpretation in the application of misstatement principles between Irish and English courts are highlighted, noting that Irish courts are more likely to impose liability, despite the superficial similarity of legal principles. The author also warns of the danger of generating a conflict of interest, by a person simultaneously advising both the sponsoring employer and the trustees of the scheme. 7. R. Ryan/D. Ryan, Vicarious Liability of Employers – Emerging Themes and Trends and Their Potential Implications for Irish Law (2007) 4 IELJ 3

39

The authors provide a general review of recent Irish and English cases on vicarious liability and note the expansive interpretation favoured by the courts in many of the cases, particularly in respect of the range of wrongful behaviour of workers for which employers are expected to take legal responsibility.

XIV. Italy Emanuela Navarretta and Elena Bargelli

A. LEGISLATION 1. Legge (Law, L.) 24 December 2007, no. 244 (Legge finanziaria 2008), art. 2 subs. 446–449 (Collective Claim for Damages – Consumer Protection)1 Art. 2 subs. 446–449 is included in the statute containing the financial dispositions on the State budget for 2008. Subs. 446–449 introduce in the Italian legal system a new remedy in favour of consumers, that is the collective claim for damages (often named “class action”). Subs. 445 states that this remedy is in line with the European Community guidelines, aiming at raising the level of consumer protection. This latter disposition inserts a new article in the Consumer Code (art. 140bis) where the collective claim is located.

1

In essence, the collective action allows consumers’ associations and other associations held as “representing adequately the consumers’ collective interests” to bring an action before the Tribunal located in the town where the enterprise is based. The action aims at ascertaining consumers’ right to damages or restitution based on contracts stipulated according to art. 1342 CC (standard form contracts), or deriving from enterprises’ torts, unfair commercial practices, anti-competitive acts (art. 140bis subs. 1 Cons. C.). However, the collective action is subject to two requirements: on the one hand, it can take place when standard form contracts or enterprises’s torts violate the rights of several consumers; on the other hand, it merely aims at assessing the claim for damages and, therefore, the consequent judgment is declaratory (art. 140bis subs. 1 Cons. C.).

2

Individual consumers who intend to avail themselves of the effects of the collective judgment are entitled to join the action by a written request. Moreover, consumers are also entitled to intervene in the consequent trial in order to bring individual claims for damages or restitution (art. 140bis subs. 2 Cons. C.).

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1

For a comment see M. Bove, Azione collettiva: una soluzione all’italiana lontana dalle esperienze straniere più mature, Guida al diritto (Guida dir.) 2008, 11 ff.

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4

The action brought by the consumers’ association and the subsequent adhesion or intervention of individual consumers interrupt the prescription period.

5

The new art. 140bis subs. 4 Cons. C. establishes the content of the judicial statements. If the claim brought by the consumers’ association is upheld, the court must provide the guidelines according to which the money award due to the individual consumers joining the action or intervening in the trial must be calculated. If the alleged proofs allow, the judge may also determine the minimal money award due to each consumer. Within sixty days since the notification of the judgment, the enterprise must establish the money award to be given to each consumer and notify the consumer of this proposal. If the consumer accepts the proposal in any form, it becomes a document of execution.

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Finally, art. 140bis subs. 5 Cons. C. allows consumers who neither joined the action nor intervened in the trial to bring an individual claim for damages or restitution. As a consequence, the collective action does not exclude individual claims for damages.

B. CASES 1. Cassazione (Italian Supreme Court, Cass.) 19 January 2007, no. 1183: Punitive Damages2 a) Brief Summary of the Facts

7

The son of the plaintiff fell from a motorcycle and died. The helmet he was wearing did not protect him because of a product defect. Therefore, the plaintiff sued the firm which produced the helmet (an Italian producer, the Fimez s.p.a) before the American Court of Jefferson County (Alabama) and obtained $ 1,000,000 as compensation for damage.

8

Afterwards the court asked the Court of Appeal of Venice to recognise and enforce the American judgment. The court, however, did not enforce the judgment. In particular, the Court of Appeal reasoned that the American judgment did not explain how it had calculated the damages and which kind of losses were compensated under the judgment. Moreover, the court of Venice stressed that the amount of damages awarded by the American court was disproportionately high in comparison with the average damages allowed by Italian courts in similar cases, and considered that the plaintiff had also obtained a high sum of money award from the tortfeasor. On the basis of all these circumstances, the court of Venice argued that the damages granted by the American court had a punitive function. On the basis of the argument that punitive damages violate internal public policy, the court drew the conclusion that they could not be enforced in the Italian legal system. 2

Danno e responsabilità (DR) 2007, 112, with footnote of P. Pardolesi, Danni punitivi all’indice?

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The plaintiff appealed to the Supreme Court, arguing, on the one hand, that the lack of motivation and the high amount of damages did not prove that the purpose of the award was punitive and, on the other hand, that punitive damages are in any case not prohibited under Italian law.

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b) Judgment of the Court

The Supreme Court examines the arguments of the appealed decision. First, the Cassazione denies its competence in evaluating the factual circumstances on which the judgment is based. The Supreme Court, however, avails itself of the power to review the legal rationale of the Court of Appeal decision and subsequently comes to the conclusion that it was correct. Having upheld the arguments of the Court of Venice’s decision, the Cassazione rejected the appeal.

10

Contrary to what the claimant put forward as his second defence, the Supreme Court states that Italian tort law merely serves compensatory purposes, excluding any punitive function. In the Cassazione’s view, this statement applies to pecuniary and non-pecuniary losses as well. Although the topic “punitive damages” is complex and highly disputed, the answer of the Supreme Court is rather curt. While the claimant mentioned the penal clause and the pain and suffering as evidence of punitive damage in Italian law, the Court denied that these examples are correct. It argues that, on the one hand, the penal clause has no punitive function, but rather aims to prevent litigation as regards the amount of damages for breach of contract; on the other hand, that pain and suffering is calculated in accordance with the gravity of the personal injury or the violation of the personality rights, and, therefore, has primarily a compensation purpose.

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c) Commentary

This is the first time that the Supreme Court explicitly deals with the question of whether punitive damages are allowed in Italian law. This is a topical subject throughout Europe.3 The answer of the Italian Supreme Court is negative: punitive damages are against internal public policy.

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The question whether deterring harmful behaviour is one of the purposes for awarding damages is a classical topic of tort law literature. However, the debate on “punitive damages” is relatively recent, since it concerns a form of award born in the US legal system. It is worth underlining that the availability of punitive damages is highly disputed also in the American courts and in academic debate. It is said that several rationales and different cases are encompassed under the rubric “punitive damages”.4 In brief, their essence con-

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3

4

G. Broggini, Compatibilità di sentenze statunitensi di condanna al risarcimento di «punitive damages» con il diritto europeo della responsabilità civile, Europa e diritto privato (Europa dir. priv.) 1999, 479 ff.; E. D’Alessandro, Pronunce americane di condanna al pagamento di punitive damages e problemi di riconoscimento in Italia, Rivista diritto civile (RDC) II (2007) 383 ff. See G. Calabresi, The Complexity of Torts – The Case of Punitive Damages, in: M. Stuart Madden (ed.), Exploring Tort Law (2005) 333 ff.

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sists in the highly disproportionate amount of money awarded in comparison with the extent of the loss suffered by the victim.

14

The availability of punitive damages in the Italian system is controversial, since it contradicts the traditional view of tort law, according to which the assessment of damages primarily serves a compensation purpose, and the money award must consequently be calculated in accordance with the losses suffered by the victim.

15

Some commentators have criticized the present decision of the Supreme Court to the extent that it denied too vehemently that liability rules may achieve goals other than compensation. According to this opinion, the judgment underestimates the complexity of tort law and its variety of functions.5 Even if the widespread opinion holds that compensation is the main purpose of liability rules, some authors emphasize that deterrence can also play a role in tort law. In fact, there are several Italian statutes which seem to allow compensation in order to achieve punitive goals, since they introduce ways of calculating damages which take into account the gravity of the wrongdoer’s conduct or the profit made by him/her. For example, the recent art. 125 D. lgs. (Statute drafted by the Government according to the guidelines of Parliament) 10 February 2005, no. 30 (“codice della proprietà intellettuale”: Intellectual Property Code) provides that, in case of violation of intellectual property, the compensation due to the victim is calculated taking into account also the advantages gained by the wrongdoer and the pain and suffering caused to the injured party. Also the recent statute on liability for illegal tapping (Law 21 February 2006 no. 102, art. 4)6 is held as achieving a punitive purpose.

16

According to another view, the opinion of the Supreme Court is convincing, and punitive damages cannot be allowed.7 2. Tribunale di Messina 5 April 2007: Punitive Damages8 a) Brief Summary of the Facts

17

An ex-wife obstructed the relationship between the child and the father (her former husband), and did not fulfill the judicial statements on custody. The father asked for the application of the sanctions provided by art. 709ter of the Procedural Civil Code (CPC).9

5

6

7

8

9

G. Ponzanelli, Danni punitivi: no grazie, Foro it. (FI) 2007, 1461 ff.; P. Pardolesi, Danni punitivi all’indice? DR 2007, 1126 ff. See E. Bargelli, Italy, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2006 (2008) 300 f. P. Fava, Punitive Damages e ordine pubblico: la Cassazione blocca lo sbarco, Corriere giuridico (CG) 2007, 498 f. Famiglia e diritto (Fam. Dir.) 2008, 60 ff., with comment by E. La Roa, Il nuovo apparato rimediale introdotto dall’art. 709ter C.P.C. I danni punitivi approdano in famiglia? For an overview see Bargelli (fn. 6).

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b) Judgment of the Court

The court upholds the claim. It applies art. 709ter CPC, and, therefore, orders the mother to pay both a fine of € 2,500, and a sum of € 10,000 as compensation for damages to the minor. The court argues that art. 709ter 2) and 3) CPC, allowing damages to the other parent and to the child in case of violation of the judicial statement on parental custody, provides a type of punitive damages. The court draws the conclusion that the claim for damages according to art. 709ter CPC does not serve a compensation purpose, and, therefore, is not subject to the general requirements stated by art. 2043 and art. 2059 CC (proof of wrongfulness; proof of pecuniary or non-pecuniary loss). The court quotes the traditional opinion, according to which punitive damages are not allowed in Italian law. However, it reasons that this opinion is not valid with regard to art. 709ter CPC, since it is a new rule introduced by L. no. 54/2006, acknowledging the English and American approach to parental custody. In particular, the damages award provided by this law would aim at discouraging the violation of judicial dispositions on custody, and, therefore, serve deterrence and punitive functions.

18

c) Commentary

The present decision confirms that the statement of the Supreme Court described above (supra no. 6 ff.) is controversial in Italian law. In fact, there are fields of tort law where the traditional compensation function disappears or is hardly recognizable. The debate on punitive damages will definitely remain a “hot” issue in the Italian system.

19

3. Cass. 4 June 2007, no. 12429: Personality Rights of Corporations – Non-Pecuniary Losses10 a) Brief Summary of the Facts

In 1994 three corporations (s.p.a. Raiola, s.p.a. SOA International Container Terminal, s.p.a. Iria) applied for a loan of ITL 40 billion (approx. € 20 million). However, the loan was denied. In fact, the largest of the mentioned corporations (Iria s.p.a.) was included in the list of the defaulting parties held by the Centrale Rischi della Banca d’Italia (an institution whose aim is to collect information concerning debtors in default), as a consequence of the report of the Banca d’America e d’Italia (now Deutsche Bank) regarding an overdue ITL 2 million (approx. € 1,000). However, the report ultimately proved to be false. The corporation assumed that the false information violated its personality right, and, therefore, sued the Deutsche Bank for ITL 25 billion (approx. € 12 million) in damages, this amount including both pecuniary and non-pecuniary losses.

20

The Tribunal and the Court of Appeal of Napoli rejected the claim, arguing that the plaintiffs neither proved the causal link between the false information and the denial of the loan, nor the amount of the losses suffered. In particular,

21

10

In Guida dir. 2007, 14 ff.

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the Court of Appeal reasoned that, while an injury of the personality rights (honour, reputation) of physical persons would be sufficient to claim damages, in case of violation of professional reputation, the victim must prove which pecuniary losses derived from the wrong according to art. 2043 of the Italian Civil Code (CC). In the present case, the plaintiffs failed to prove that they had incurred pecuniary losses from the circulation of the false information. Moreover, in the opinion of the Court, the false information the bank made public concerned a low amount, and, therefore, their conduct could not cause a real damage.

22

The corporations appealed to the Supreme Court on the basis of two main grounds.

23

On the one hand, they argued that, having proved the injury of reputation, they were entitled to obtain damages. Contrary to what the Court of Appeal stated, they put forward the argument that the injury of personality rights is a damage in re ipsa. Moreover, corporations, institutions and non-profit making organizations are entitled to claim damages for violation of personality rights, while the appealed decision seemed to deny this possibility.

24

On the other hand, they challenged the argument that the low amount of default the bank falsely reported did not result in any damage. b) Judgment of the Court

25

In response to the first ground of appeal, the Supreme Court considers the evolution of damages for non-pecuniary losses in Italian tort law. Contrary to what seems to be the Court of Appeal’s opinion, the Supreme Court holds that corporations as well as natural persons are entitled to claim non-pecuniary damages, a doctrine in line with its previous decisions (Cass. 2367/2000, 12951/1992, 742/1991).

26

Moreover, the Supreme Court stresses that the appealed decision misinterpreted art. 2043 CC (that is the general tort rule), being based on the doctrine stated by the decision 184/1986 of the Constitutional Court, which, however, was overruled by subsequent judgments of the Cassazione and the Constitutional Court. In particular, this doctrine allowed art. 2043 CC to compensate for pecuniary as well as non-pecuniary damage, and held art. 2059 CC as a residual and restrictive rule regarding pain and suffering (pecunia doloris). Furthermore, this doctrine put forward the view that the mere violation of a fundamental right was enough to claim damages (danno in re ipsa).

27

Conversely, the present decision refers to its judicature (Cass. 8827/2003, Cass. 8828/2003), according to which, art. 2043 CC applies to damages for pecuniary losses, while art. 2059 CC allows compensation for pain and suffering as well as non-pecuniary damages, which consist in the violation of fundamental rights having constitutional relevance. Cass. 8827/2003 and 8828/2003 affirmed the following three statements. Firstly, the concept “non-pecuniary damage” is not restricted to pain and suffering, but includes every violation of

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a fundamental right. Secondly, the constitutionally-oriented interpretation of art. 2059 CC aims at filling a gap in tort law. Finally, compensation for damage deriving from the violation of fundamental rights is not barred by the criminal requirement literary stated by art. 2059 CC. The present decision dwells upon the first statement. In stating that compensation for damage is allowed in case of a violation of fundamental human rights, Cass. 8827 and 8828/2003 referred to natural persons. Therefore, the Supreme Court deals with the question whether the violation of corporations’ personality rights deserves full compensation. The Cassazione outlines that, after decisions 8827 and 8828/2003, the only precedents concerning damages for injury to corporations’ personality rights have taken place in the area of pecuniary awards for excessively long trials. In particular, Cass. 13163/2004 and the following decisions affirmed that, in case of excessively long trials, the only nonpecuniary loss suffered by the victim consisted in the pain and suffering, even if the party involved was a corporation. This statement was strongly influenced by the decisions of the European Court of Human Rights (ECHR).

28

The present decision arrives at the conclusion that the violation of corporations’ personality rights may give rise to compensation for damage, provided that these rights have features corresponding to those of recognized human personality rights. As a consequence, corporations would be entitled, for example, to claim damages for the violation of the right to exist as a juridical person, as well as the rights to identity, name, image and reputation. Compensation for such damage is based on art. 2 Const., which grants the inviolable human rights inside the communities where human personality rights are developed. In the Supreme Court’s view, corporations are the social projection of the natural persons acting by means of them. Therefore, it would be contradictory to allow compensation for damage deriving from the violation of fundamental human rights while denying it in case of violation of corporations’ personality rights.

29

The Supreme Court continues, stressing that the violation of a protected right does not automatically imply compensation for damage. In particular, the Supreme Court refuses the theory of “in re ipsa damage”, according to which, the injury to a protected interest implies in itself a compensable damage. The judges emphasized that compensation requires in any case the proof of consequent-damages (danni-conseguenza), that is losses deriving from the wrongful event according to the causal link.

30

With respect to natural persons, the right to one’s image consists of two aspects: a) the opinion one has of himself/herself and b) his/her reputation. This twofold standard applies also to corporations, even if some adjustments are required. The first aspect concerns the reputation which the corporation enjoys among its employees. Reputation in this sense is ruined by the false information concerning the corporation’s conduct. The bad reputation is likely to negatively influence the conduct and the way the corporation’s physical members act, which may cause consequent-damage. This damage is purely non-

31

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pecuniary and is independent from any economic effects of the same violation. As regards the second aspect, the violation causes the loss or the worsening of the corporation’s reputation among the public.

32

In the present case, the report to the Centrale Rischi della Banca d’Italia concerning IRIA s.p.a’s false default represents an injury to the image of the plaintiff, while the consequent-damage consists in the lost or worsened reputation the corporation will have among the people having access to the data bank.

33

The Court concludes that the appealed decision did not follow the doctrine above mentioned. As a consequence, it upheld the first ground of the appeal.

34

As regards the second ground of appeal above mentioned,11 the Supreme Court draws the conclusion that the reasoning of the Court of Appeal was wrong. The judges argue that being included in the defaulting parties’ data bank because of a low amount of default does not exclude damage; on the contrary, it injures the reputation of the corporation even more, since it leads people to believe that IRIA s.p.a. is not able to pay off even minimal debts. To conclude, the Cassazione reasons that factual circumstances such as the low amount of default or the length of the stay in the data bank does not exclude an injury to the reputation, but must be taken into account in measuring the money award to be given to the victim, which could consequently be reduced. c) Commentary

35

The present judgment cannot be adequately understood without being compared with the doctrine provided by the important decisions of the Supreme Court 8827 and 8828/2003. As stressed in the Italian Report 2003,12 these decisions provided new guidelines on the interpretation of art. 2059 CC regarding non-pecuniary losses. They claimed that the restriction provided by this disposition according to its literal interpretation (the award of damages for nonpecuniary losses is only allowed if another legal provision expressly states it) does not apply to the violation of fundamental human rights recognized by the Constitution. This doctrine admitted damages for non-pecuniary losses in case of violation of personality rights, but, in doing so, it seemed to protect only natural persons. The present decision reinterprets the cited doctrine, and specifies that it refers also to personality rights of corporations. As a consequence, the decision 12429/2007 represents a further step toward the spreading of liability rules in the field of non-pecuniary losses.

36

Furthermore, the Supreme Court does not uphold the opinion according to which the violation of corporations’ personality rights may cause pain and suffering (pretium doloris) to their managers.13 Conversely, it affirms that this 11 12

13

Retro, no. 20. E. Navarretta/E. Bargelli, Italy, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2003 (2004) 266 ff. See, among the most recent essays, D. Vittoria, Il danno non patrimoniale agli enti collettivi, RDC 2007, 539 ff.

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type of injury gives rise to non-patrimonial damage, that is a loss or worsening of reputation, which affects the behaviour and the way the company directors act. 4. Cass. 27 June 2007, no. 14486: Pain and Suffering Following the Killing of a Pet14 a) Brief Summary of the Facts

A horse was killed as a consequence of a car accident. The owner was personally injured as well. He sued the wrongdoer for pecuniary and non-pecuniary losses. In particular, he claimed also the non-pecuniary damage deriving from the death of the horse. Since the basic courts denied his claim, the plaintiff appealed the decision before the Supreme Court.

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b) Judgment of the Court

The Court does not concede the claim, and confirms the appealed judgment. The Court refers to its doctrine, according to which compensation for non-pecuniary losses is allowed in case that a legal disposition provides for it, and in case of violation of fundamental human rights recognized by the Constitution. The Court argues that the death of the horse does not represent an injury to the constitutionally protected sphere of feelings. In any case, the Court denies that a damnum in re ipsa can be awarded, and, therefore, states that the plaintiff should have proved the an and the quantum debeatur as well.

38

c) Commentary

The Supreme Court confirms the doctrine stated by Cass. 8827 and 8828/2003, which bars compensation for non-pecuniary losses in case that neither a legal provision allows it nor the violation of a fundamental human right is involved.15 The Supreme Court confirms also that no award is conceded if the proof of a consequential loss is absent (theory of danno consequenza versus theory of in re ipsa damage).

39

5. Cass. 16 October 2007, no. 21629: Causal Link16 a) Brief Summary of the Facts

After an accident during a dive, the plaintiff was brought to a hospital, where the physician held that the hyperbaric chamber was not necessary and suggested the plaintiff return home. However, during the night he collapsed again and, therefore, he was brought again to the hospital, where he was put in the hyperbaric chamber. After several weeks, when he was discharged from the hospital, he had a disability level of 60% and had to undergo rehabilitation. 14

15 16

DR 2007, 36 ff., with comment by R. Foffa, Il danno non patrimoniale per l’uccisione di un animale d’affezione. Supra no. 35. DR 2007, 43 ff., with comment by R. Pucella, Causalità civile e probabilità: spunti per una riflessione.

40

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As a consequence, he sued the physician and the health service, claiming that the physician omitted to admit him immediately to the hospital and to subject him to the adequate medical treatment. Claiming that the physician was extremely negligent, he sought compensation for damage. While the Tribunal dismissed the claim, the Court of Appeal upheld it. The defendants appealed to the Supreme Court, arguing that the plaintiff had failed to prove the causal link between the delay in the beginning of the hyperbaric chamber treatment and the disability. b) Judgment of the Court

41

The Court rejects the claim.

42

The Court starts by quoting the three main doctrines provided by the Supreme Court with regard to the causal link in criminal law. One of them holds that the omission is considered the cause of a harmful event if it significantly increases the risk of the harmful event taking place. In other words, this opinion requires that, after the omission, the harmful event has “relevant and significant probability of taking place”. This theory was the most widespread until 2002, when the Plenary Session of the Supreme Court upheld the other doctrine, according to which the causal link in criminal law could not be reduced to a statistic evaluation, but nevertheless required “a great level of rational believability”.

43

The Supreme Court argues that these doctrines apply to criminal responsibility, but not to civil tort law, where the causal judgment should be less severe. The Court observes that the causality issue is still highly controversial in Italian tort law. Furthermore it underlines that the present case involves the “material” causal link issue, that is the question of how to ascertain the causal link between the conduct/omission of the wrongdoer and the harmful event. It adds also that this evaluation has nothing to do with the concept of “foreseeability”, but is based on an objective probabilistic judgement. The Court concludes that the causal link in tort law generally requires a simple “more probable than not” evaluation. In comparison with the “ordinary”’ causal link, the Court places the loss of chance on an imaginary descending scale, and defines it as a loss of the possibility of achieving a result.

44

As a consequence, the Court reasons that the appealed decision correctly applied this line of thought. In fact, the Court of Appeal held that the defendant’s omission was a concurrent cause of the plaintiff’s personal injury on the basis of the “more probable than not” argument. c) Commentary

45

The present decision aims to provide guidelines for future cases concerning the causal link in tort law, as its developed theoretical framework shows.

46

This decision is important since it states that the rules on the causal link which have developed in criminal law may not apply to tort law. As the Plenary Session of the Supreme Court rejected the “increase of the risk” theory and upheld

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the “great level of rational believability” doctrine in 2002,17 the question arose, whether this doctrine should apply also to tort law.18 In 2004 the Supreme Court expressed the opinion that the rule stated by the Plenary Session of the Supreme Court in 2002 could be “exported” to tort law.19 Nevertheless, in 200520 and in 200621 the Supreme Court stated that the notion of the causal link developed in criminal law was not consistent with the purposes of tort law. As a consequence, a further and clearer remark from the Supreme Court appeared necessary. The present decision aims to settle the controversy and, arguing that crimes and torts are deeply different wrongs, develops an autonomous concept of the causal link in tort law. 6. Cass. 2 February 2007, no. 2305: Anti-Competitive Agreements – Compensation for Damage22 a) Brief Summary of the Facts

After the AGCM (Autorità Garante della Concorrenza e del Mercato, Authority for the Competition and the Market) declared that several insurance companies had agreed upon the amount of the car insurance policies, which amounts to an anti-competitive agreement, a consumer sued one of these companies, claiming for damages. In particular, he claimed the difference between the premiums he would have paid if the market had worked perfectly and the premium which he actually paid. The Court of Appeal of Napoli upheld the claim and, according to an equity evaluation, granted the plaintiff 20% of the sum he had paid. The insurance corporation, however, appealed before the Supreme Court. According to the first ground of appeal, the company argued that the consumer merely alleged the declaratory judgment of the AGCM, failing to prove the injury of an individual and specific entitlement, as well as the consequent pecuniary loss. Secondly, the company criticized the appealed decision for having failed to consider its defence that the price increase was not due to the anti-competitive agreement, but to other factors. Thirdly, the company put forward that the Court of Appeal made a mistake in calculating damages according to the equity standard of evaluation. In fact, art. 2056 CC allows the court to avail itself of the equity standard if the amount of damages cannot be exactly proved. According to the defendant, however, this would not be the case, since the plaintiff omitted to prove both an and quantum debeatur. Fourthly, the company censured the appealed decision since it rejected the defence of prescription. 17

18

19 20 21 22

Cass. SS. UU. 10 July 2002, no. 30328, 2003 Cassazione penale, 1175, with comment by R. Blaiotta. See, for example, M. Bona, Il nesso di causa nella responsabilità civile del medico e del datore di lavoro a confronto con il decalogo delle Sezioni Unite sulla causalità omissiva, RDC II (2003) 384 ff. Cass. 4 March 2004, no. 4400, FI 2004, I, 1403. Cass. 31 May 2005, no. 11609, DR 2006, 3, 269, with comment by M. Capecchi. Cass. 19 May 2006, no. 11755, DR 2006, 1238. DR 2007, 755, with comment by G. Afferni, Risarcimento del danno da intesa anticoncorrenziale and M. Carpagnano, Una pietra sopra. Commento alla sentenza della Corte di Cassazione n. 2305/2007 in tema di private enforcement.

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b) Judgment of the Court

48

As regards the first ground of appeal, the Supreme Court refers to the decision of its Plenary Session no. 2207/2005, which entitled the consumers to sue for damages deriving from the violation of the antitrust legislation (L. no. 287/1990). In particular, the Plenary Session of the Supreme Court stated that this legislation, whose rationale is to ensure market competition, aims at protecting both enterprises and consumers. On the basis of this doctrine, the Supreme Court argues that the anti-competitive agreement injured a protected interest – that is, freedom of contract as a consequence of a competitive market. According to the Cassazione’s view, the violation of this interest represents a wrongful injury, which is a necessary requirement in order to grant the victim compensation for damage (see art. 2043 CC). In fact, the Supreme Court stresses that, according to the most recent and convincing doctrine, the “wrongfulness” requirement does not imply the violation of a subjective right, but only that of a protected interest. Therefore, the Supreme Court comes to the conclusion that the appealed decision is correct in this respect.

49

As regards the causal link between the anti-competitive agreement and the injury suffered by the consumer, the Supreme Court refers again to the decision of the Plenary Session no. 2207/2005. On this basis, it comes to the conclusion that the contract between the insurance company and the consumer represents the final step as well as the main purpose of the process begun with the anticompetitive agreement. As a consequence, the Cassazione states that the causal link between the anti-competitive agreement and the damage can be inferred by presumption. In particular, it can be argued that the increase in the premium and the consequent higher cost for consumers are linked to the prohibited agreement according to a probabilistic way of reasoning. In this respect, the damage suffered by the consumer consists in the loss of the chance to obtain cheaper insurance policies.

50

The Supreme Court comes to the conclusion that, in order to gain compensation for damage, the consumer must produce the insurance policy and the declaratory judgment of the AGCM. This proof can be enough to achieve damages by means of a presumptive reasoning. Nevertheless, the insurance company is allowed to prove that the anti-competitive agreement did not cause any damage. In the present case, evidence was brought by the insurance company, but the Court of Appeal wrongly omitted to evaluate it. Therefore, the Supreme Court upheld the second ground of appeal.

51

As regards the third ground of appeal concerning the quantification of damages, the Supreme Court argues that the equity standard of evaluation was allowed in this case. However, the Court of Appeal wrongly calculated the percentage of loss on the basis of the pre-tax premium instead of its net amount. Therefore, it partially upholds also this ground of appeal.

52

As regards the fourth ground of appeal, the Supreme Court moves from the assumption that, according to art. 2947 CC, the prescription time for tortious claims (five years) starts from the moment in which the harmful act was com-

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mitted. The Supreme Court, after having quoted its precedents, interprets this disposition in the sense that the prescription time does not start when the tortfeasor committed the wrongful act, but from the moment when the damage, having been externalized, has become perceivable or could be recognized by the victim according to normal diligence. Then the Cassazione applies this doctrine to the present case, and, therefore, comes to the conclusion that the prescription time began when the consumer was informed that there had been an anticompetitive agreement, which presumably caused the increase of the premium. However, the judges stress that establishing this moment does not lie within their power, but is a decision to be made by the Courts of Appeal or the Tribunals. Therefore, the Supreme Court upheld also the fourth ground of appeal, and sent the case back to the Court of Appeal.

53

c) Commentary

In 2005 the Plenary Session of the Supreme Court allowed consumers to sue the companies which had been party to an anti-competitive agreement if this had resulted in a price increase. The same decision, however, stated the jurisdiction of the Court of Appeal as judge of first instance, and, as a consequence, burdened the consumers with the costs of a trial before a regional court, whose judgment can be appealed only before the Cassazione.23

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The present decision goes further and reduces the consumers’ burden of proof. According to the Cassazione’s line of thought, consumers are entitled to obtain damages, provided that they simply bring both the AGCM’s judgment declaring the anti-competitive agreement, and the contract s/he entered into with one of these enterprises. Conversely, the proof of the concrete loss s/he suffered is not necessary. According to one opinion, this doctrine could increase the risk that the illegality of the wrongdoer’s conduct in itself becomes sufficient to grant compensation for damage, without regard to the losses which actually occurred.24

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C. LITERATURE 1. G. Avanzini, Responsabilità civile e procedimento amministrativo (Cedam, 2007) This book deals with the subject of the liability of the public administration for harm caused to citizens – one of the most disputed problems in Italian tort law until the seminal decision no. 500/1999 of the Plenary Session of the Supreme Court, which finally admitted the availability of tort law rules in case of illegal acts of the public administration. The present volume largely focuses on the question whether citizens may claim for damages in case of violation of pro23

24

Cass. SS. UU. 4 February 2005, no. 2207 Europa dir. priv. 2005, 435 ff., with comment by C. Castronovo, Sezioni Unite più che antitrust. Afferni (fn. 22) 767 f.

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cedural rules. The author proposes the idea that fairness and good faith, which play a relevant role as guidelines for private law relationships, may apply also to the public administration’s conduct. 2. C. Castronovo, La nuova responsabilità civile (3rd ed., Giuffré, 2006)

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The third edition of the volume “La nuova responsabilità civile”, the result of long years of study by the author, deals with several tort law subjects. In particular, the first chapter analyses the Italian tort liability rule (art. 2043 CC) with regard to wrongfulness, and sets it in a European perspective. The second chapter explores recent developments in tort law with regard to the following topics: personal injuries and violation of personality rights, pure economic losses, State liability, and liability rules introduced by recent statutes. The third chapter deals with fault and strict liability. The fourth chapter treats insurance law as a way of compensating damage alternative to liability rules. The fifth chapter, “The Boundaries of Tort Law”, focuses on the interactions of contract and tort liability. The sixth chapter analyses the types of responsibility introduced by the European Union Directives: product liability, environmental liability, and liability of services providers. Finally, the seventh chapter deals with the topic of restitution in kind. As this brief description of the content shows, the volume focuses on Italian tort rules; however, it deeply reflects the European culture and attitude of the author, and, therefore, it is particularly interesting also for foreign readers. 3. G. Christandl, La risarcibilità del danno esistenziale (Giuffré, 2007)

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The author is a passionate supporter of the theory of “existential damage” (danno esistenziale), proposed by some Italian scholars from the University of Trieste (see P. Cendon – P. Ziviz (ed.), Il danno esistenziale, Giuffré, 2000). In the first part the author collects Italian courts’ judgments and scholars’ opinion, and aims at showing that the theory of existential damage is fully convincing and even totally triumphant; in the second part he describes the evolution of non-pecuniary losses in the German legal system. Finally, he condenses in a few words the similarities and the differences between these two systems with regard to compensation of “existential” damage. 4. R. De Matteis, Responsabilità e servizi sanitari (Cedam, 2007)

59

The author deals with the problem of medical liability when the physician is an employee of a health service. This tort law problem is considered as a part of the general topic of health protection as a duty of the State. The first part deals with the several types of public and private health services, and explores also the questions regarding the qualification of contracts between the patient and these services. In the second chapter the author explores the evolution of Italian case law as regards the regime of physicians’ liability toward patients. In particular, she focuses on the evolution of the qualification of medical liability, formerly qualified as tort responsibility, but more recently defined as “contractual liability”. The third and fourth chapters analyse several topics concerning the liability of the health services on the one hand and the responsibility of physicians (with special regard to the fault issue) on the other hand.

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5. F. Farolfi, Rischio e preposizione (Cedam, 2007) The present book deals with the vicarious liability of employers for wrongful acts of servants. In the Italian Civil Code this type of liability is regulated by art. 2049. The first chapter of the book offers a historical overview of the employers’ responsibility for harmful conduct of servants; the following chapters are focused on the requirements stated by art. 2049 CC in order to ascribe the liability to the employers. In particular, art. 2049 CC requires: firstly, that servants acted under the employers’ order (second chapter); secondly, that the damage was caused during work-time (third chapter); thirdly, that a tort was committed (fourth chapter).

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6. M.A. Mazzola, Responsabilità civile da atti leciti dannosi, in: Diritto Privato Oggi, series edited by P. Cendon (Giuffré, 2007) This book collects judicial decisions and literature concerning cases in which the harmful act lacks wrongfulness (harmful lawful act), but a money award is granted. Examples are given by the Italian Civil Code (act committed under necessity, self-defence, etc.) as well as by statutes (law no. 89/2001 on the reasonable length of a trial).

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7. G. Ponzanelli (ed.), Il risarcimento integrale senza il danno esistenziale (Cedam, 2007) The book collects several essays of different authors dealing with the topic of non-pecuniary losses in Italian law after the revirement stated by Cass. 8827 and 8828/2003. These contributions devote special attention to case law, and set it in its theoretical context as well. In particular, the first part of the book (p. 11 ff.) focuses on showing that the concept of “existential damage” (danno esistenziale) as put forward by some Italian scholars and courts is superfluous. In fact, in the opinion of the authors, this type of non-pecuniary loss does not fill a gap in Italian tort law, since other means of protecting personality interests are available. The second part of the book (p. 259 ff.) contains essays of foreign contributors, aiming at showing that existential damage is a peculiar feature of Italian tort law, and does not exist in the main European legal systems (common law, French, German and Spanish law).

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8. R. Pucella, La Causalità incerta, in: F.D. Busnelli/S. Patti/V. Scalisi/P. Zatti (eds.), Studi di Diritto Privato (Giappichelli, 2007) The present book aims at making a contribution to the theoretical debate on the causal link in tort law. In the first chapter it deals with the problem of ascribing responsibility in case that the harmful event is the consequence of a plurality of causes, that is of human conduct and natural events (for example, a previous illness of the victim who suffered personal injuries). In the second chapter the author explores the topic of the loss of a chance. In the third chapter the author puts forward the opinion that, in case that several causes provoke the harmful event, the liability of the wrongdoer must be reduced in proportion to his/her causal contribution. The last chapter briefly refers to the problem of “mass torts”.

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Emanuela Navarretta and Elena Bargelli

9. V. Scalisi, Danno alla persona e ingiustizia, Rivista diritto civile 2 (2007) 147 ff.

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The author deals with the “wrongfulness” issue, with particular regard to nonpecuniary losses. He starts from considering the decisions of the Supreme Court no. 8827 and 8828/2003. On the one hand, he appreciates these precedents inasmuch as they allow compensation for non-pecuniary losses if a fundamental human right is violated, thus widening the availability of a tort law remedy to protect personal interests. On the other hand, he criticizes their line of thought, leading to an exclusion of compensation in case of injury of personal interests lacking constitutional rank. He proposes the opinion that the same concept of wrongfulness should apply to pecuniary and non-pecuniary losses. 10. M.A. Sella, La responsabilità civile nei nuovi orientamenti giurisprudenziali, 1, 2 (Giuffré, 2007)

65

The two volumes aim at offering a comprehensive overview of the judicial practice and the literature in the entire field of tort law. The volumes are divided into chapters corresponding to the main topics of tort law notions such as that of harmful event, causal link, fault, damage, joint and several liability, injury of personality rights, injury of property rights, environmental damage, liability for defective products, and State liability. 11. M. Serio, Studi comparatistici sulla responsabilità civile (Giappichelli, 2007)

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This short handbook aims at providing an overview of Italian tort rules, and comparing them with English law. Some pages of the first chapter deal also with French and German tort law and the Principles of European Tort law. 12. B. Tassone, La ripartizione di responsabilità nell’illecito civile. Analisi giuseconomico e comparata (Jovene, 2007)

67

The author deals with the several legal rules concerning the apportionment of liability among concurrent wrongdoers in Italian law as well as in comparative law. He avails himself of the law and economics method.

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The main aim of the book is to prove that the joint and several liability rule, which is traditionally held as serving corrective justice, should not be considered the only solution in case of multiple tortfeasors. This reasoning would apply in Italian law and in comparative law as well. In particular, the author traces four different models which could work as alternatives to joint and several liability (for example, proportionate liability). He argues that in specific legal fields these alternative solutions would be more efficient and would offer more deterrence than the traditional rule of joint and several liability.

XV. Latvia Agris Bitāns

A. LEGISLATION 1. Patent Law (Patentu likums) Latvian Herald (Latvijas Vēstnesis) No. 34 (3610) 27 February 2007 On 15 February 2007 the Latvian Parliament adopted the new Patent Law, which replaced the previous Patent Law adopted on 30 March 1995. This statute is effective from 1 March 2007.

1

Besides harmonisation to European legislative acts1, the present statute brings new possibilities and conditions for legal protection against patent infringement.

2

Firstly, while a person shall be liable for infringement of a patent if he has performed acts with the patent without the consent of the owner of the valid patent (part 1 art. 62), the law does not require an obligation to prove the fault of the infringer as was determined by part 2 and 3 art. 41 of the previous Patent Law2. The claimant (the patent owner or the holder of the license) is only obliged to prove the fact of the patent infringement (part 1 art. 63).

3

Secondly, clear and precise criteria regarding when the holder of the licence (not only the exclusive licence holder) has a right to submit a claim against the infringer has been determined. In addition to the patent holder, the holder of

4

1

2

Such as the Convention on the grant of European Patents (European Patent Convention) of 5 October 1973, Directive 98/44/EC of the European Parliament and of the Council of 6 July 1998 on the legal protection of biotechnological inventions, Official Journal (OJ) L 213, 30.7.1998, 13–21; Directive 2004/27/EC of the European Parliament and of the Council of 31 March 2004 amending Directive 2001/83/EC on the Community code relating to medicinal products for human use, OJ L 136, 30.4.2004, 34–57; Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights, OJ L 157, 30.4.2004, 45–86. Art. 41: Liability for patent infringement. (2) Liability for patent infringement may arise only in the event that the fault of the infringer is proved. (3) It is the obligation of the aggrieved party (the patent owner or the holder of the exclusive license) to prove the fact of the patent infringement and the fault of the infringer.

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the licence is entitled to submit a claim if he has the prior consent of the patent holder. Moreover, the Law allows the holder of the exclusive licence to initiate civil proceedings independently from the patent holder if he/she does not submit a claim after the holder of the exclusive licence has invited him/her to do so (part 2 art. 63). In any case the patent holder maintains the right to enter the civil proceedings initiated by the licence holder and claim damages for infringement (part 3 art. 63).

5

Thirdly, the present statute provides more extensive legal remedies for patent infringement. Any claimant is entitled generally to claim both pecuniary and non-pecuniary damages for patent infringement (part 1 art. 64). Compensation for pecuniary loss and non-pecuniary loss will be determined according to the Civil Code (general principle), and the court should take into account the unfair profit gained as a result of patent infringement (part 2 art. 64). Moreover, if it is impossible to establish the amount of damage suffered by the patent holder, then damages equal to the potential licence fee could be awarded (part 3 art. 64).

6

The Law has retained the obligation to bring an action against a patent infringer within a period of three years from the date when the aggrieved party discovered, or should have discovered, the fact of patent infringement (part 1 art. 67). The Regional Court of Riga has been determined as the court of first instance with jurisdiction over patent disputes (part 2 art. 65). 2. Amendments to the Law on Trademarks and Geographical Indications (Grozījumi likumā “Par preču zīmēm un ģeogrāfiskās izcelsmes norādnēm”) Latvian Herald (Latvijas Vēstnesis) No. 33 (3609) 23 February 2007

7

On 8 February 2007 the Latvian Parliament adopted amendments into the Law on Trademarks and Geographical Indications, which is effective from 1 March 2007. As result of harmonisation to European legislative acts3, the present statute brings new possibilities and conditions for legal protection against trademark infringements.

8

The first significant amendment is related to the possibility for liability to be established not only for infringements which have already been performed but also for preparing to do so (potential infringement) (part 1 art. 28). This should prevent possible infringements even before they are actually performed. A court can determine the actions of the defendant or other intermediary persons as preparing to infringe a trademark and, therefore, legal remedies can be applied.

9

Secondly, the Law determines clear and precise criteria regarding when the holder of the licence (not only exclusive licence) has a right to submit a claim against the infringer. In addition to the trademark owner, the holder of the licence is en3

Such as the First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks, OJ L 40, 11.2.1989, 1–7, Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights, OJ L 157, 30.4.2004, 45–86.

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titled to submit a claim if he has the prior consent of the trademark owner. Moreover, the licence holder does not need the consent from the trademark owner to submit a claim if such rights are granted by the licence or if he does not submit a claim after being invited in writing to do so by the licence holder (part 2 art. 28). In any case the trademark owner maintains the right to enter the civil proceedings initiated by the licence holder and claim damages for the infringement. Thirdly, art. 281 now provides more extensive legal remedies for trademark infringement. Any claimant is entitled generally to claim pecuniary and nonpecuniary damages for trademark infringement (part 1 art. 281). Compensation for pecuniary loss and non-pecuniary loss will be determined according to the Civil Code (general principle), and the court should take into account the unfair profit gained as a result of the trademark infringement (part 2 art. 281). Moreover, if it is impossible to establish the amount of damage suffered by the trademark owner, then damages could be awarded as a lump sum equal to the amount of royalties or fees which would have been due if the infringer had requested authorisation to use the trademark (potential licence fee) (part 3 art. 281). Similar remedies are available in cases where geographical indications are infringed (part 3 art. 43).

10

Fourthly, the Law has retained the obligation to bring an action against a trademark infringer within a period of three years from the date when the aggrieved party discovered, or should have discovered, the fact of trademark infringement (part 5 art. 28). The Regional Court of Riga remains the court of first instance with jurisdiction over trademark disputes (part 2 art. 28).

11

3. Amendments to the Law on Designs (Grozījumi Dizainparaugu likumā) Latvian Herald (Latvijas Vēstnesis) No. 33 (3609) 23 February 2007 On 8 February 2007 the Latvian Parliament adopted amendments into the Law on Designs, which is effective from 1 March 2007. As a result of harmonisation to European legislative acts4, the present statute brings new possibilities and conditions for legal protection against design infringements.

12

The first significant amendment is related to the possibility for liability to be established not only for infringements which have already been performed but also for preparing to do so (potential infringement) (part 3 art. 48).This should prevent possible infringements before they actually occur. A court can determine actions of the defendant or another intermediary person as preparing for design infringement and, therefore, legal remedies can be applied.

13

Secondly, the Law determines clear and precise criteria regarding when the holder of the licence (not only the exclusive licence) has the right to submit a claim against the infringer. In addition to the design patent holder, the holder

14

4

Such as Directive 98/71/EC of the European Parliament and of the Council of 13 October 1998 on the legal protection of designs, OJ L 289, 28.10.1998, 28–35 and Directive 2004/48/EC.

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of the licence is entitled to submit a claim with the prior consent of the design patent holder. Moreover, the licence holder does not need the consent from the design patent holder to submit a claim if such rights are granted by the licence or if the right holder does not submit a claim after being invited to do so by the licence holder (part 4 art. 48). In any case the design patent holder maintains the right to enter the civil proceedings initiated by the licence holder and to claim damages for infringement.

15

Thirdly, art. 481 now provides more extensive legal remedies for design infringement. Any claimant is entitled generally to claim pecuniary and nonpecuniary damages for design infringement (part 1 art. 481). Compensation for pecuniary loss and non-pecuniary loss will be determined according to the Civil Code (general principle), and the court should take into account the unfair profit gained as a result of the design infringement (part 2 art. 481). Moreover, if it is impossible to establish the amount of damage suffered by the design patent holder, then damages could be awarded as a lump sum equal to the amount of royalties or fees which would have been due if the infringer had requested authorisation to use the design (potential licence fee) (part 3 art. 481).

16

Fourthly, the Law allows an additional ground for claims for design infringement based on the Copyright Law, legislative acts on unfair competition or other legislative acts (part 6 art. 48). 4. Amendments to the Copyrights Law (Grozījumi Autortiesību likumā) Latvian Herald (Latvijas Vēstnesis) No. 33 (3609) 23 February 2007

17

On 8 February 2007 the Latvian Parliament adopted amendments into the Copyrights Law, which is effective from 1 March 2007. As a result of harmonisation to European legislative acts5, the present statute brings new possibilities and conditions for legal protection against copyrights and the infringement of neighbouring rights.

18

First, the present statute provides an extensive list of legal remedies regarding the infringement of copyrights and neighbouring rights. Part 1 art. 69 grants to the holders of copyrights and neighbouring rights, organisations that admin5

Such as Council Directive 91/250/EEC of 14 May 1991 on the legal protection of computer programs, OJ L 122, 17.5.1991, 42–46; Council Directive 92/100/EEC of 19 November 1992 on rental right and lending right and on certain rights related to copyright in the field of intellectual property, Council Directive 93/83/EEC of 27 September 1993 on the coordination of certain rules concerning copyright and rights related to copyright applicable to satellite broadcasting and cable retransmission, OJ L 248, 6.10.1993, 15–21; Council Directive 93/98/EEC Official Journal L 290, 24/11/1993 p. 0009–0013, of 29 October 1993 harmonizing the term of protection of copyright and certain related rights; Directive 96/9/EC of the European Parliament and of the Council of 11 March 1996 on the legal protection of databases, OJ L 77, 27.3.1996, 20–28; Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society, OJ L 167, 22.6.2001, 10–19; Directive 2001/84/EC of the European Parliament and of the Council of 27 September 2001on the resale right for the benefit of the author of an original work of art, OJ L 272, 13.10.2001, 32–36; Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights, OJ L 157, 30.4.2004, 45–86.

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ister their economic rights on a collective basis and representatives of other subjects on copyrights and neighbouring rights the following rights: 1) to require the person who illegally used the object of the copyright or neighbouring right to recognise their rights; 2) to prohibit the use of their works; 3) to require the person who illegally used the object of the copyright or neighbouring right to restore the status to that prior to the infringement of these rights and that the illegal activity be stopped or that the creative work not be threatened; 4) to require the infringer to cease activities which are deemed as preparing for the illegal use of the object of the copyright or neighbouring right; 5) to require the person who illegally used the object of the copyright or neighbouring right to compensate both pecuniary and non-pecuniary losses to the subject of the copyright or neighbouring right; 6) to require that the counterfeiting copies be destroyed; 7) to require intermediaries whose provided services have been used in order to infringe the rights of the holders of a copyright and of a neighbouring right, or who have made it possible to perform such an infringement, to perform the necessary measures to prevent the infringer from performing such infringements. If the intermediary does not carry out the necessary measures, the holders of a copyright and of a neighbouring right or their representatives have the right to bring an action against the intermediary. Secondly, the new art. 691 now entitles any claimant to claim pecuniary and nonpecuniary damages for the infringement of a copyright or neighbouring right (part 1 art. 691). Compensation for pecuniary loss and non-pecuniary loss will be determined according to the Civil Code (general principle), and the court should take into account the unfair profit gained as a result of the trademark infringement (part 2 art. 691). Moreover, if it is impossible to establish the amount of damage suffered by the copyright or neighbouring right owner, then damages could be awarded as a lump sum equal to the amount of royalties or fees which would have been due if the infringer had requested authorisation to use the copyright or neighbouring right (potential licence fee) (part 3 art. 691).

19

B. CASES 1. Senate of the Supreme Court, 28 February 2007 No. SKC-976: Determination of Fault in a Road Accident a) Brief Summary of the Facts

The limited liability company, X, as plaintiff initiated a civil procedure against the defendant – insurance company Y for awarding the full amount of insurance indemnity following a road accident. Despite the fact that the police had established that the driver of the limited liability company Z car was respon6

Published: Jurista vārds, 5 June 2007 No. 23, 476. Also available at http://www.lv.lv/index. php?menu_body=DOC&id=158187&print=on.

20

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sible for the road accident, the insurance company Y decided to pay out only 50% of the insurance indemnity, i.e. LVL 1,740.30 (about € 2,500).

21

There was no discussion between the parties that the insurance event (insured risk) is accrued. However, the defendant considered that the plaintiff had contributed to the occurrence of the accident and, therefore, the compensation due should be reduced by 50%, in accordance with the plaintiff’s expertise that fault allocation between drivers involved in the present road traffic accident is 50/50.

22

The court of first instance satisfied the claim for the full amount of insurance indemnity plus statutory interest and the appeal court upheld this claim.

23

The defendant submitted cassation, arguing that the appeal court did not evaluate evidence regarding the fault of the plaintiff driver.

24

The Senate dismissed cassation and upheld the judgment of the court of second instance. b) Judgment of the Court

25

The Senate stated that only institutions authorised by law are entitled to declare a person at fault for a road traffic accident, based on particular legislative acts and procedures. Since the traffic police had declared the fault of the driver of company Z, there is no ground to revaluate the fault of the other persons involved in the road accident.

26

In addition, the Senate provided an interpretation of part 3 art. 337 of the Law on Compulsory Third Party Liability Insurance for Motor Vehicle Owners effective which had been in force until 1 May 2004. The Court stated that the present legal norm provided rights to an insurance company to determine only the liability of the vehicle owner but not fault which is just one precondition of liability for losses. c) Commentary

27

The Senate tried to minimise the lack of consistency between the regulations provided by the new and the older Law on Compulsory Third Party Liability Insurance for Motor Vehicle Owners8. The present statute indeed focuses more on liability rather than fault9, because the purpose of this Law is to protect the 7

8

9

(3) If losses have been caused in a road traffic accident to the property of several owners and thereby caused mutual losses, the insurance company shall compensate the losses within the amount in proportion to the fault of each owner. Short introduction to the new Law on Compulsory Third Party Liability Insurance for Motor Vehicle Owners please see A. Bitāns, Latvia, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2004 (2005) 395 f. Art. 33: Losses Caused to the Property of Several Persons. (3) If losses have been caused in a road traffic accident to the property of several owners and the total amount of losses exceeds the limit of insurer liability, the losses shall be compensated within the amount of the limit of the insurer liability in proportion to the amount of losses of each injured person.

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interests of third persons who have suffered losses in road traffic accidents (art. 2). However, the argumentation that the court is not obliged to evaluate the fault of drivers involved in a road traffic accident if there has been an official declaration of fault by the traffic police can be disputed. Perhaps such a declaration would be sufficient if only an administrative fine were to be imposed but in some cases the amount of pecuniary damages can alternate depending on the degree of the driver’s fault.

28

2. Senate of the Supreme Court, 19 April 2006 No. SKC-26610: Infringement of Photograph’s Copyright; Non-Pecuniary Loss a) Brief Summary of the Facts

The plaintiff initiated civil proceedings against a foodstuffs company which used the plaintiff’s natural landscape photo taken in 1956 on the packing of processed cheese. Since the plaintiff had not concluded any agreement regarding the republishing and use of his work for advertising purposes, the defendant infringed his copyright. The plaintiff demanded compensation in the amount of LVL 25,000 (approx. € 36,000).

29

The court of first instance rejected the claim. The appeal court partly satisfied the claim, awarding LVL 2,000 (approx. € 2,900) as compensation for infringement of the plaintiff’s copyright.

30

Both the plaintiff and defendant submitted cassations. The plaintiff argued that the amount of compensation determined by the court was unreasonably low because, due to the fact that the work is an original work of visual art and that the minimal royalty for alienated original works of visual art could be € 12,500. The defendant argued that there is doubt that the photograph in question is the result of an author’s creative activities. Since this is a photograph of a natural landscape, which is the symbol for a particular region, there is no legal protection under copyright law.

31

The Senate dismissed both cassations and upheld the judgment of the court of second instance.

32

b) Judgment of the Court

The Senate recognized that there is a basis for copyright protection because the particular work complies with the request of the results of an author’s creative activities and protection is granted irrespective of the mode or form of its expression and its value. Moreover the law does not require registration or any other formalities to establish copyright. Therefore the author holds the inalienable moral rights of an author to the inviolability of a work, i.e., the right 10

Published: Jurista vārds, 15 May 2007 No. 20, 473. Also available at http://www.lv.lv/index. php?menu_body=DOC&id=157104&print=on.

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to permit or prohibit the making of any transformations, changes or additions either to the work itself or to its title.

34

The Senate accepted that there had been an infringement of the plaintiff’s copyright and that he is, therefore, entitled to receive compensation the amount of which is to be determined by the court according to art. 511 of the Civil Code. However, since a re-assessment of the compensation amount is not the responsibility of the Senate, there is no ground to change the decision. c) Commentary

35

The present decision shows the unsatisfactory court practice when applying art. 5 of the Civil Code12. By simply refusing to review how reasonable court judgments are, the Senate continues not to evaluate the quality of decisions taken. The court should specify the principles of law which were applied in arriving at the judgment, as well as the reasons which led the court to hold that such a judgment meets the sense of justice.

36

Moreover the Senate as third and final instance is under an obligation to review and control the implementation of general principles. The Senate should demand that the court sets out in more detail the arguments of justice and principles of law serving as a basis for the judgment passed. 3. Riga Regional Court, 9 February 2007 No. C04381306 (C-2211/12)13: Invasion of Privacy as a Result of Publication of Recorded Telephone Conversation; Non-Pecuniary Loss a) Brief Summary of the Facts

37

The plaintiff (journalist) initiated a civil procedure against the Republic of Latvia represented by the Ministry of Finance, the State Revenue Service, and the Finance Police for invasion of privacy and compensation of non-pecuniary loss to the amount of LVL 300,000 (approx. € 430,000). The plaintiff claimed that personal and professional telephone conversations that she had were published by several mass media including the internet from 7 September 2006. According to public information tapped conversations were organised by the Finance Police within an investigation and had been accepted by a Supreme Court judge.

38

Since such private and professional conversations and information gained from such tapped conversations are classified information (state secret), the state should keep such recorded telephone conversations confidential. Moreover the present information concerns personal data, which is legally protected by the state. Therefore such information should not be available to the public. 11

12

13

5. Where a matter is required to be decided at the discretion of a court or on the basis of good cause, the judge shall decide the matter in accordance with a sense of justice and the general principles of law. For more comments regarding the implementation of art. 5 of the Latvian Civil Code, please see Bitāns (fn. 8) 403 f. Published: http://www.tiesas.lv/index.php?id=2325.

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However, audio records of the tapped phone conversations and their abstracts were published in the mass media and in the internet. Therefore, the Republic of Latvia is liable for this invasion of privacy and the non-pecuniary damage suffered by the plaintiff.

39

The court of first instance partly satisfied the claim: by awarding LVL 100,000 (approx. € 143,000) as compensation for invasion of privacy and non-pecuniary loss. The State Revenue Service as defendant submitted an appeal but the Supreme Court has failed to set a date for the court hearing.

40

b) Judgment of the Court

The court agreed with the plaintiff that such public distribution of tapped private and professional phone conversations can be deemed an invasion of the plaintiff’s privacy. Since the state has an obligation to keep all tapped phone conversations which are recorded during an investigation confidential, the state institutions neglected this obligation. Therefore, the state is liable for a violation of human rights.

41

The court pointed out that the defendants had failed to prove that the plaintiff’s tapped private and professional phone conversations had been published by a third party and not by them. Moreover it was proven that the Finance Police had provided false information (ground) to the Supreme Court in order to obtain permission to tap the phone conversations.

42

Accordingly, such behaviour is recognisable as an invasion of privacy which caused the plaintiff non-pecuniary loss. The court specified that the amount of LVL 100,000 (approx. € 143,000) would be justified as compensation for the invasion of privacy and non-pecuniary loss.

43

c) Commentary

This is the first civil case where the court has declared the state liable for an invasion of privacy as the result of publishing tapped private and professional phone conversations.

44

The amount of compensation for the non-pecuniary loss is surprisingly high compared to existing court practice. However, the court did not provide arguments as to why the awarded amount was justified in the present case. The decision of the next level court will show if this case indicates a new tendency for the recognition of personal rights or if it is just an exception.

45

C. LITERATURE 1. Kaspars Balodis, Ievads Civiltiesībās (Introduction to Civil Law) (Zvaigzne ABC, 2007) The present book is the first comprehensive monograph on introductory topics of civil law for legal studies after Latvian independency. The monograph ex-

46

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plains the place of civil law in the legal system and provides a comprehensive analysis of legal concepts common to all sub-branches of civil law.

47

The author reviewed such important institutions in all branches of civil law such as the legal transaction, subjects of civil law, subjective rights adhering to the subjects of law, as well as objects of civil law. Balodis attempts to provide answers to a number of complex legal problems in the Latvian Civil Code. His research is based not only on Latvian legal doctrine and the practice of Latvian courts but also takes into account foreign and European civil law developments. His explanations of the concepts of civil law in the German, Austrian and Swiss legal doctrines will be very educational for students. It should be mentioned that the book combines both theoretical and practical approaches where the author uses some practical examples to explain the fundamentals of civil law.

48

Part One of the monograph explains the place and role of civil law as private law in the legal system. The author points out the principle of private autonomy as one of the main characteristics of civil law. Therefore, freedom of contract as an expression of individuals’ private autonomy is logically the next issue. However, the author does not forget that private autonomy does not mean absolutely unlimited freedom.

49

Besides classical civil law branches such as the law of obligations, inheritance law, family law and property law, Balodis also describes the special branches of civil law such as commercial law, labour law, intellectual property law, consumer protection law and other branches of special civil law in Latvia.

50

He indicates how important it is to distinguish civil law as substantive (material) law from procedural law. In addition the author devotes attention to the sources of civil law in Latvia, where, in addition to laws and other normative acts adopted by the national legislator, European Union legislation, international law, general principles of law, customary law, jurisprudence of the courts and legal doctrine (legal science) also exist.

51

Part Two of the book deals with subjects and objects of civil law. The author singles out three types of subjects: natural persons, legal persons and commercial partnerships with legal capacity. The subject of legal personality, especially regarding legal entities, is very complicated and requires more research therefore the provided classification could not be recognized as complete. Additionally, the author reviews objects of law which include things (tangible objects) or immaterial goods (including rights) (intangible objects).

52

The author pays special attention in Part Three to issues regarding subjective rights in civil law. He points out subjective rights which provide an individual with the legal possibility to implement his/her interests and secure his/her private autonomy (subject of law). Subjective rights are correctly subdivided into absolute rights and relative rights. Balodis describes the nature of and differences between absolute rights and relative rights.

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The main part of the book is Part Four, where the author examines part of legal obligations – legal transactions. He reviews the definition and essence of legal transactions, including agreements and contracts. Balodis provides a general overview of doctrinal topics such as the concept of an expression of will, types of legal transactions, form of legal transactions, the interpretation of legal transactions, unlawful transactions, defects of will in legal transactions, agency in legal transactions, etc.

53

Last but not least, the final part (Part Five) of the monograph addresses the practically important topic of case resolution in civil law. Since legal conflicts between parties include one party filing a claim against another, he suggests solving legal conflicts by the so-called “claim method” (Anspruchsmethode in German), which allows a systematic and determined approach to ascertaining the validity of the claims brought forward by the participants. The introduction of this method would be very useful for both students and lawyers.

54

2. Kalvis Torgāns, Vairāki zaudējumus (kaitējumu) izraisoši cēloņi (Several causes leading to damage (loss)) Jurista Vārds, 10 July 2007 No. 28, 481 Professor K. Torgāns addresses the problem of a causal link between unlawful behaviour and loss. In general, Latvian legal theory and court practice recognise causality as a precondition for civil liability. However, there is a need to modernise the Latvian Civil Code and to examine the modern understanding of causality. Therefore, lawmakers propose amending art. 1785 to read: “A loss which is too remote from the breach of an agreement is not required to be compensated”.

55

The author generally describes the conditio sine qua non principle and theory of remoteness of damage, concluding that the Latvian Civil Code does not touch on important issues such as remoteness of damage and foreseeability. Torgāns cites examples from many foreign court decisions to illustrate how complicated and deep the causal link issue is.

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The author stresses that it is important to distinguish remoteness of damage from the subdivision of losses into direct and indirect14. Torgāns, by citing additional examples, highlights the necessity of implementing ideas from the European Principles of Tort Law into the Latvian Civil Code.

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1773: A loss shall be considered: direct where it is the natural and inevitable result of an illegal act or failure to act; indirect where it is caused by an occurrence of particular circumstances or relationships; and accidental where caused by a chance event or force majeure.

XVI. Lithuania Herkus Gabartas and Greta Bžozeckaitė

A. LEGISLATION 1. Nesąžiningos komercinės veiklos vartotojams draudimo įstatymas (Law on Prohibition of the Unfair Business-to-Consumers Commercial Practices)1

1

The Law on Prohibition of the Unfair Business-to-Consumers Commercial Practices (hereinafter – the Law) was passed while implementing the Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/ EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No. 2006/2004 of the European Parliament and of the Council (hereinafter – the Unfair Practices Directive)2. The Law prohibits unfair commercial practices by enumerating the types and the cases of the unfair commercial practices as well as by setting the framework of institutions empowered to follow the implementation and application of this legislation. Although the Unfair Practices Directive was to be transposed into national law by 12 December 2007, this national legislation only came into force on 1 February 2008. As a result of its recent enforcement, the practice and the actual impetus of the mentioned legislation is not entirely clear yet.

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One of the novelties of the Law is the establishment of the concept of the “average consumer”, i.e. the consumer, who, when sufficiently informed, is reasonably careful and cautious with regard to his social, cultural and linguistic features. Due to this concept, the unfair commercial practice and its effect shall be measured now according to the entrenched standard of the average consumer. The Law also prohibits such commercial practices that materially distort the economic behaviour of consumers, i.e. appreciably impairs a consumer’s ability to make an informed decision thereby causing a consumer to take a transactional decision that he/she would not have taken otherwise. De1

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Valstybės žinios (Parliamentary Record, VŽ) 2008, No. 6-212, 15 January 2008. Lithuanian legislation can be found at: http://www.lrs.lt. Official Journal (OJ) L 149, 11.6.2005, 22–39.

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ceptive business activity or misleading omission of information to the consumer may also be treated as an unfair commercial practice that is prohibited by the Law. The State Consumer Rights Protection Authority and the Competition Council are the extra-judicial institutions which are in charge of supervision and implementation of the Law. Consumers, state and municipal authorities and consumer associations may apply to the State Consumer Rights Protection Authority asking it to initiate an investigation of the case of a potential unfair business practice. After conducting the investigation, the State Consumer Rights Protection Authority may impose fines up to LTL 1,000–30,000 (€ 290–8.670) or, if any aggravating circumstances occur, up to LTL 100,000 (€ 28,962) to those commercial subjects which have breached the Law. The Law also highlights the judicial procedure for appealing the decision of the State Consumer Rights Protection Authority to the competent administrative court of Lithuania.

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2. Vartotojų teisių gynimo įstatymo pakeitimo įstatymas (Law Amending the Law on the Protection of Consumer Rights)3 The new wording of the Law on the Protection of Consumer Rights (hereinafter – the New Law) significantly improved the legal regulation on the protection of consumer rights. The previous wording of the law (valid until 1 March, 20074) had regulated the protection of consumer rights by merely enumerating the consumers’ rights, some basic requirements for the quality of products or services rendered as well as by setting up the framework of competent extrajudicial institutions.

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In contrast to previous regulation, the New Law is more specific and advanced. It entrenches some new concepts in consumer protection law, such as “financial services”, “durable medium”, “standard unit price of goods”, “means of communication”, “information to the consumer”, “consumer consulting”, “consumer awareness” and “consumer education”. The New Law is based on the principle of fair business practice as the main criterion of valuation of behaviour of retailers and service providers. It emphasizes the importance of consumer consultation as well as the provision of information to consumers about their existing rights. The retailer’s obligation to inform consumers about the goods and the services offered must be given in the national (i.e. Lithuanian) language; furthermore, the obligation to provide all the guarantees and specifications in the state language, together with the proper labelling of the goods and products, is expected to keep consumers well-informed.

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Finally, the New Law clearly states the right of a consumer to claim for pecuniary and non-pecuniary damages incurred due to the breach of his/her rights enshrined in the New Law. The proclamation of a consumer’s right to claim

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VŽ 2007, No. 12-488, 30 January 2007. Lithuanian legislation can be found at: http://www.lrs. lt. The text in Lithuanian can be found at: http://www3.lrs.lt/pls/inter3/dokpaieska.showdoc_l?p_ id=110345&p_query=&p_tr2=.

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non-pecuniary damages is very important because under Lithuanian legislation non-pecuniary damages may be awarded to a claimant only if the law specifically provides for such a possibility5.

B. CASES 1. Lithuanian Supreme Court, 6 February 2007, No. 3K-7-7/2007: No-Fault Liability of Public Bodies; Non-Pecuniary Damages for Excessively Long Pretrial Investigation a) Brief Summary of the Facts

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The plaintiff was working as an inspector in one of the posts of the territorial customs office. In 1998 she was accused in a criminal case of the forgery of official documents while performing her official duties. The plaintiff was suspended from her official duties as an inspector; a search was performed in her house; all her ownership rights to the property were restricted and she was ordered by the court not to leave her residence while the case was under investigation. In 2004 the plaintiff was informed that the criminal case was closed due to the expiry of the statutory limitation term for the criminal liability. The criminal case was rather complicated: criminal acts had been committed in several different states, there were more than 250 indictees in the case. During the six year term several episodes of the case were divided into separate cases and the indictees were put to trial, but this was not the case with the plaintiff.

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The plaintiff argued that there was no proof of any procedural investigation measures to be performed with respect to the plaintiff from 1999 to 2004 when the criminal case was closed. The plaintiff believed that the pretrial investigation was protracted, continuing for an excessively long period of time, thereby violating her right to a quick trial, her right to work and the freedom to possess her property. Due to these violations the plaintiff could not find any proper job and her social insurance contributions were not paid. As a result, she suffered severely over a long period of time with depression, humiliation, deterioration of her reputation, diminution of possibilities to associate with others, i.e., the plaintiff suffered non-pecuniary damage. As a result, the plaintiff claimed LTL 43,323 (€ 12,547) in pecuniary and LTL 50,000 (€ 14,490) in non-pecuniary damages from the Lithuanian Republic, represented by the Department of the Customs Office and the Prosecutor General’s Office.

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The court of first instance dismissed the claim and noted that, according to the data of the pretrial investigation, there was a legal basis for the accusation made against the plaintiff and her suspension from official duties. The court did not consider the pretrial investigation to have continued over an excessively long period of time and to be protracted; the criminal case was voluminous and complicated, and there were no possibilities to finish the investigation sooner. 5

Part 2 of art. 6.250 of the Lithuanian Civil Code. The Lithuanian Civil Code can be found at: http://www3.lrs.lt/pls/inter3/dokpaieska.showdoc_l?p_id=162435.

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The upper court, on the contrary, upheld the claim and awarded the plaintiff LTL 43,323 (€ 12,547) in pecuniary and LTL 15,000 (€ 4,344) in non-pecuniary damages. The court agreed with the plaintiff that the last procedural measures in the mentioned case were performed in 1998, and there was no proof that any investigation with respect to the plaintiff had been carried out from 1999 up to 2004, when the case was closed. The court emphasized that the case ought to have been sent to trial as soon as it was possible after the accusation and that the suspension measures should have been justified for the entire period of the pretrial investigation. The court’s reasoning was based on the fundamental right to hearing within reasonable time (art. 6 of the European Convention on the Protection of Human Rights and Fundamental Freedoms), the presumption of innocence (art. 31 of the Constitution of the Republic of Lithuania) and nofault liability of public bodies (art. 6.272 of the Lithuanian Civil Code). The court agreed that the excessively long pretrial investigation and the application of the suspension measures caused the plaintiff long-term hardship, inconveniences, emotional depression, humiliation, deterioration of her reputation and the diminution of possibilities to associate with others.

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b) Judgment of the Court

The Supreme Court of Lithuania (hereinafter – the Court) partly approved the decision of the appeal court. The Court ascertained that the length of the pretrial investigation (which lasted for 5 years, 10 months and 18 days) was excessively long and not proportionate to the complexity of the case. The defendant was found liable based on the concept of no-fault liability. Notwithstanding the fact that no-fault liability of pretrial investigation officers arises under part 1 of art. 6.272 of the Lithuanian Civil Code only as a result of illegal actions which are expressly listed in the aforesaid law (e.g., due to illegal custody, illegal sentencing, etc.), and that an excessively long pretrial investigation has not been treated (as per wording of the Civil Code) as an omission giving right to claim non-pecuniary damages, the Court nevertheless considered that an excessively long pretrial investigation has a similar effect to those illegal actions which allow a claim for non-pecuniary damages. According to the Court, the remedy available under part 1 of art. 6.272 of the Lithuanian Civil Code (i.e. compensation of non-pecuniary damage) may therefore also be available in cases of omission of pretrial investigation officers. The plaintiff was consequently awarded LTL 15,000 (€ 4,344) in non-pecuniary damages. The amount of pecuniary damages (the amount of non-received income) was reduced from LTL 43,323 (€ 12,547) to LTL 15,000 (€ 4,344) by the Court due to the fact that the pretrial investigation and the consequential suspension from her work were legal.

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The Court noted that national Lithuanian law is not limited to the national legal acts (in this case – the Civil Code), and that international legislation forms an integral part of it. As a result, the legality of the procedural measure according to national law does not necessarily mean the legality of it according to the European Convention on the Protection of Human Rights and Fundamental Freedoms. The Court referred to the practice of the European Court of Human

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Rights stating that the pretrial investigation must be executed as soon as it is possible and that the time period from the charges being brought up to the trial in court must be limited in time. The Court recognized the period in which no procedural measures were executed or were executed for an excessively long period of time, to be an unreasonable protraction of the case.

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The Court recognised that the prosecution institutions had not duly performed their duty to ensure the right to a quick trial. It was noted that no procedural measures were taken from 1999 and that the prosecutors and the lower court had not reacted to the requests of the plaintiff to accelerate the investigation. Furthermore, the prosecution office did not implement its right to separate the case of the plaintiff into a separate criminal case, which would have prevented the unreasonable delay of the investigation against the plaintiff. While being accused for almost six years, the plaintiff suffered from the uncertainty of not knowing when the criminal investigation against her would be ended. Furthermore, her rights to move freely, to possess her property and her right to work were substantially limited. c) Commentary

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To the best of the authors’ knowledge, in this case the Lithuanian court for the first time awarded non-pecuniary damages for an unreasonably long period of criminal investigation. The Court followed the practice of the European Court of Human Rights and its decisions against the Republic of Lithuania – Šleževičius vs. Republic of Lithuania6, Girdauskas vs. Lithuania7, Meilus vs. Lithuania8 and some other important cases of the Court (Wejrup vs. Denmark9; Schumacher vs. Luxembourg10). The novelty of this decision is that an excessively long pretrial investigation may give rise to no-fault liability under part 1 of art. 6.272 of the Lithuanian Civil Code, even though the wording of the said law, in its strictest sense, does not expressly provide for such a possibility.

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This decision was taken by a broadened panel of seven judges (usually, only three judges sit on the panel), and it could form a great impulse for following such a broad interpretation of Lithuanian law in other similar cases. As was noted by the Court, there is even no need for the pretrial investigation to be complete – non-pecuniary damages may be claimed due to the omission of pretrial investigation officers at any time during the investigation. As a result, similar civil cases could appear in future in Lithuanian courts.

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On the other hand, the Court’s reasoning regarding the pecuniary damage (non-received income of the plaintiff) was quite contradictory in this case. On the one hand, the Court recognized that the questions of the suspension from work and the accusation of the plaintiff had been resolved in other administra6 7 8 9 10

European Court of Human Rights case (ECHR) No. 55479/00, 13 November 2001. ECHR No. 70661/01, 11 December 2003. ECHR No. 53161/99, 6 November 2003. ECHR No. 49126/99, 7 March 2002. ECHR No. 63286/00, 25 November 2003.

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tive proceedings in 2002 and that the suspension from work was considered to be legal. Thus, following the principle of res judicata, the Court was bound by the findings of the administrative court that the plaintiff’s suspension from her work was legitimate. The Court nevertheless still awarded the plaintiff pecuniary damages for being forced to leave her job, equal to LTL 15,000 (€ 4,344). It is therefore not clear from the Court’s reasoning when (at which exact time during the period of investigation) the plaintiff’s suspension from work became unjustified. 2. Lithuanian Supreme Court, 26 September 2007, No. 3K-3-351/2007: Evaluation of Non-Pecuniary Damages; Family Connections a) Brief Summary of the Facts

A woman working in a factory died during a huge fire at the factory. The accident happened because the legal entity owning the factory (i.e. the defendant) failed to fulfil its duty to provide safe working conditions for its workers. The defendant compensated the pecuniary losses suffered by the family of the dead woman: it compensated the burial expenses and also paid an allowance, equal to the average salary of the dead woman for one year. However, her two children (the plaintiffs) sued the defendant for non-pecuniary damages, claiming from the defendant LTL 40,000 (€ 11,590) each, because they felt great emotional stress, mental shock and suffered from depression due to the death of their mother.

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The lower court and the court of appeal dismissed the claim of the plaintiffs, and noted that the legal acts of Lithuania do not allow adult children to claim non-pecuniary damages for the death of their parent. Both courts interpreted part 1 of art. 6.284 of the Civil Code of Lithuania as allowing the children of the dead person to be awarded non-pecuniary damages for the death of their parent only in the case they were dependants of the deceased. The plaintiffs in this case were adults, they had their own families and they were not dependant on their mother at the time of her accidental death. The court dismissed the plaintiffs’ claim that the resolution of 15 March 1975 of the European Council of Ministers No. (75)7 established the right of children (even adults) to be awarded non-pecuniary damages for the death of their parent.

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b) Judgment of the Court

The Supreme Court of the Republic of Lithuania (hereinafter the Court) did not approve the decisions of the two lower courts. The Court referred to the constitutional principle of compensation for the non-pecuniary damage suffered by the plaintiffs. The Court interpreted national law in the light of relevant international law – the European Convention for Protection of Human Rights and Fundamental Freedoms, the above mentioned resolution of 15 March 1975 of the European Council of Ministers No. (75)7 and the practice of the European Court of Human Rights. The Court stressed that, according to the above mentioned international law, a plaintiff is entitled to non-pecuniary damages in case of a victim’s death only in the case of the existence of a close, tight,

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sincere and emotionally firm family relationship between the victim and the plaintiffs. According to the Court, art. 6.284 of the Civil Code of Lithuania does not limit the scope of persons who can claim non-pecuniary damages for the death of their close family member.

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The Court listed the persons who are entitled to claim non-pecuniary damages for the death of their family member: firstly, the dependants, whose rights are set by law; and secondly, other family members (e.g. the adult children irrespective of their dependency) if they had a close, tight, sincere and emotionally firm relationship with the deceased prior to the accident (e.g. the decision of the European Court of Human Rights, 12 January 2007 No. 60272/00). The Court stressed that, while arguing this relationship, it must be considered that the blood relation usually corresponds to the fulfillment of the criterion of “a tight and close relationship”.

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Considering the fact that the lower courts did not investigate the above mentioned criteria and having no rights to solve the questions of fact according to the law of Lithuania11, the Court annulled the decisions of the first two courts and transferred the case to the court of first instance to be resolved. c) Commentary

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The case at hand can be considered as a landmark case in Lithuanian jurisprudence regarding the award of non-pecuniary damages for relatives of victims who suffered physical injury or even died. Until this case the Court’s practice on this issue was rather contradictory12. In its famous case from 200513 the Court awarded non-pecuniary damages to parents due to the severe bodily injuries suffered by their new-born babies. However, just a week later the Court issued its new ruling in another case14, in which a parent’s claim for non-pecuniary damages due to the health impairment of a child was dismissed. In its other rulings15 the Court awarded the relatives of a victim non-pecuniary damages but did not establish the sound and unquestionable criteria for awarding non-pecuniary damages in case of the physical injury of a family member. Finally, the case at hand introduced some clarity of the said issue and established clear guidelines in application of the criterion of the close, tight, sincere and emotionally firm relationship of the family member with a victim.

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13 14 15

The Law of the Republic of Lithuania on Courts (http://www.teismai.lt/english/Documents/ The_Law_on_Courts.pdf, the access date 19 January 2008). For comparison see the contradictory cases of the Lithuanian Supreme Court e.g., No. 3K-7255/2005 and 3K-3-225/2005. For further comments, see H. Gabartas/M. Laučienė, Lithuania, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2005 (2006) 402–405. Lithuanian Supreme Court, Judgment No. 3K-3-255/2005, www.lat.litlex.lat. Lithuanian Supreme Court, 25 April 2005, No. 3K-3-222/2005, www.lat.litlex.lat. Lithuanian Supreme Court, No. 3K-3-86/2005, No. 2K-174/2007, No. 2K-201/2007, www.lat. litlex.lat.

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3. Lithuanian Supreme Court, 6 February 2007, No. 3K-3-38/2007: Evaluation of Damages; Future Damages a) Brief Summary of the Facts

The plaintiff was severely injured in a traffic accident in 1978. At the time of the accident, the plaintiff was a student and was attending classes to become a technician of machine engineering. The plaintiff lost 100% of his working capacity and became permanently disabled. In a previous case the court had recognized the other party in the accident – the driver of the public bus – to be responsible for the accident. On the other hand, the court did not award the plaintiff any kind of damages. Although a public transport company was paying him monthly allowances, at the time of this case such allowances were not sufficient to pay for the medication required by the plaintiff. After the accident the plaintiff completed his studies and became a technician of machine engineering. In his application to the court, the plaintiff sought a monthly allowance equal to the average monthly salary of a fully capable worker in the same profession and a monthly allowance for nursing expenses, necessary for a person who has lost 100% of his working capacity.

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The lower court agreed with the plaintiff’s argument that, if the injured person was not working but he was a student at the time of the accident, he has a right to claim an increase in the amount of damages, connected with the injury to his health, up to the amount of the average salary of an individual with a qualification similar to the one the plaintiff has gained. As a result, the court of first instance awarded the plaintiff a monthly allowance equal to the average salary of a technician of machine engineering. The court also acknowledged the plaintiff’s right to receive a monthly allowance to cover his nursing expenses, stating that this allowance should not be lower than a minimal salary set by law.

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The court of appeal partly changed the decision of the lower court. The upper court confirmed the plaintiff’s right to a monthly allowance, equal to the average salary of fully capable workers. The court stressed that the plaintiff was studying at the time of the accident in the hope of gaining employment in his field of study. The accident deprived the plaintiff of the possibility to earn an income and, as a result, the plaintiff lost his future income. The panel of judges agreed that the defendant has to pay the plaintiff damages, equal to the average income of workers with a qualification similar to that which the plaintiff had gained. On the other hand, the court dismissed the plaintiff’s claim for the monthly nursing allowance. It has been recognized that nursing expenses are to be evaluated according to the fact of the expenses actually incurred. The court based its conclusions on art. 6.283 of the Lithuanian Civil Code which describes nursing expenses as the “expenses, connected with the restoration of one’s health”16.

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The Civil Code of Lithuania can be found at: http://www3.lrs.lt/pls/inter3/dokpaieska. showdoc_l?p_id=162435.

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b) Judgment of the Court

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The Supreme Court of Lithuania (hereinafter – the Court) upheld the decision of the upper court. The Court based its decision on art. 6.283 of the Lithuanian Civil Code, according to which the injured person shall be compensated for all his damage incurred because of the injury, including the expenses connected with the restoration of his health. Such expenses are normally awarded to the injured person as the factual expenses incurred by the aggrieved party. The amount of such expenses shall be evaluated according to the real expenses the plaintiff proved he had truly and reasonably incurred. The Court stressed that the amount of nursing expenses can vary over longer periods of time – it can increase or decrease accordingly. If a fixed amount is set for these damages, this could be contrary to the principle of full compensation for a tort. On the other hand, it could also lead to the unreasonable enrichment of the injured person. The Court also emphasized the necessity to prove that the victim reasonably and truly needed the nursing services. In this case, the plaintiff failed to prove his incurred nursing expenses and the Court was not even convinced of the necessity for the plaintiff to engage a caregiver because of his ability to take care of himself (to drive a car, to do sports and to work as a consultant in a company).

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The Court also agreed with the argumentation of both lower courts concerning the monthly allowances for the non-received income. The Court declared that if the plaintiff had finished his studies and had qualified as a technician of machine engineering remaining healthy and fully capable, he would have gained a possibility to work in this profession and would have gained the respective income. In such a case, both courts reasonably and legitimately awarded the plaintiff non-received income, equal to the average salary of fully capable workers in a similar profession. c) Commentary

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In this case, the plaintiff was claiming for the future expenses that are probable and known to be incurred. The possibility of such damages is entrenched in art. 6.249 of the Lithuanian Civil Code17. Lithuanian courts broadly use this way of compensation in the cases of traffic accidents, for example, while evaluating the future expenses of damaged cars, etc. On the other hand, the nursing expenses for a person who was recognized to be 100% disabled were not considered by the court to be “expenses, connected with the recovery of one’s health”. Regrettably, in this case, the Court distinguished only direct expenses and non-received income to form the damages of the plaintiff.

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By taking such a position the Court was not entirely consistent in following the principle of full compensation for the damage related to an injury. In such situation a victim, who wants to be fully compensated, may not claim his fu17

In case of future damage the court can set the concrete amount of damages, periodical allowances or it can oblige the debtor to secure the compensation for the harm incurred – art. 6.249 par. 3 of the Civil Code of Lithuania.

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ture expenses for expected nursing; instead he may do so only after he in fact suffers them and has sufficient proof of such expenses. Such a requirement obviously hinders a victim’s right to compensation by imposing additional difficulties upon him. 4. Lithuanian Supreme Court, 2 May 2007, No. 3K-3-177/2007: Determination of Non-Pecuniary Damage in the Family Relationship a) Brief Summary of the Facts

The plaintiff (a husband) filed a lawsuit in court for divorce stating the fault of both partners. He claimed that the main reasons for the divorce suit being filed were the different characters of both partners and their different approaches to solving problems in the family. In parallel, the defendant (a wife) filed a counter-claim against the plaintiff claiming the fault of one partner – the plaintiff. The defendant indicated that the plaintiff had abused her, had been disloyal and had not contributed to the family needs. Therefore, the marriage broke up because of the fault of the plaintiff. Apart from the other requests, the defendant sought compensation for the non-pecuniary damage she suffered for more than eight years of marriage, equal to LTL 10,000 (€ 2,896).

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The lower courts recognized that the plaintiff was responsible for the break up of the family and the divorce. The court of first instance pointed out that the plaintiff had been prosecuted for committing the criminal act, set in art. 140 of Lithuanian Criminal Code18. In the previous criminal case against him, the plaintiff admitted committing the illegal acts against the defendant. He apologized and paid the defendant compensation equal to LTL 2,000 (€ 580). Relying on such a notorious reputation of the plaintiff, the court of first instance awarded the defendant non-pecuniary damages in the amount of LTL 5,000 (€ 1,450). The court of appeal reduced the amount of the damages awarded because of the fact that there was no other significant proof in the case that the defendant had been injured by the plaintiff on any other occasion. Further, the court noted that the plaintiff had compensated his spouse for the damage he had inflicted and the fact that he was the one to file for the divorce in court.

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b) Judgment of the Court

The Supreme Court of Lithuania upheld the decisions of the lower courts. The Court followed the presumption, set in the Civil Code of Lithuania19 and recognized the plaintiff as responsible for the breakdown of the family. The Court took into consideration the fact that the plaintiff had abused his spouse and his 18

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Art. 140 establishes liability for causing physical pain and a deterioration to one’s health. The Criminal Code of Lithuania can be found at: http://www3.lrs.lt/pls/inter2/dokpaieska. showdoc_l?p_id=163482. Par. 3 of art. 3.60 of the Lithuanian Civil Code sets the presumption of fault for the breakdown of the family, when one of the family members (i) was charged for an intentional criminal act (ii) was unfaithful to his/her spouse (iii) abused his/her spouse and other family members or (iv) left the family and did not take care of the family for more than one year. The Civil Code of Lithuania can be found at: http://www3.lrs.lt/pls/inter3/dokpaieska.showdoc_l?p_id=162435.

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family as well as used physical and emotional violence against them (this was proved by the above mentioned criminal case and the written promise of the plaintiff not to hurt the defendant any more, which was given as evidence in the civil case).

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The Court emphasized that the non-pecuniary damage connected to the divorce can be the mental experiences of the spouse, the physical and emotional pain the spouse had suffered, the inconveniences, humiliation, and diminution of reputation connected to the illegal and immoral acts of the other spouse. The Court noted that the defendant had ill-treated the plaintiff over a long period of time and, as a result, caused the defendant emotional pain and suffering. By evaluating the previous compensation to the defendant of LTL 2,000 (€ 580), the Court presumed the compensation assigned by the court of appeal, equal to LTL 5,000 (€ 1,450) to be sufficient and reasonable. c) Commentary

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Par. 2 of art. 3.70 of the Civil Code of Lithuania has established one’s right to claim non-pecuniary damages in case of divorce due to the fault of the other spouse since 200120. This case is very important for awarding the spouse nonpecuniary damages in the event of divorce. The presumption of fault set in art. 3.60 of the Civil Code promoted such an outcome in the case. With regard to the fact that the acts of violence within a family case are quite hard to prove and it is subsequently difficult to evaluate the amount of the damage to be compensated, this case could form a very important precedent for the further development of compensating non-pecuniary damage in family law cases.

C. LITERATURE 1. Solveiga Cirtautienė, Trečiųjų asmenų teisės į neturtinės žalos atlyginimą sutrikdžius nukentėjusiojo sveikatą arba atėmus gyvybę (An Analysis of Lithuanian Legal Regulation and Court Practice on Compensation for Non-Pecuniary Damage Suffered by Third Persons in Cases of Health and Fatal Injuries) Jurisprudencija, No. 2(92), 2007, 84–92

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In this article the author analyses the right to compensation for non-pecuniary damage suffered by third persons who are connected to a victim in a family relationship in case of damage to health or the death of a victim. The author discusses the main principles in European countries for compensating nonpecuniary damage to family members of victims, the rules of the European Principles of Private Law and the main problems of Lithuanian law and court practice when compensating non-pecuniary damage suffered by persons who experienced substantial mental stress or shock following the death or injury of their family members. 20

The new Civil Code of Lithuania entered into force on 1 July 2001, and replaced the old Civil Code of Lithuania (1964).

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The author stresses the need of contemporary society not only to secure the life and physical health of a person, but also stresses the aim of securing the spiritual and psychological comfort of individuals. Such an approach would conform to European practice and would widen the limits for awarding nonpecuniary damages to third parties in case of health and fatal injuries.

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The German, Dutch, Austrian, British and Italian law limits the right of third parties to claim non-pecuniary damages only to cases when the emotional distress suffered can be medically recognized as a mental illness. On the other hand, French, Belgian and Portuguese law regulates such situations notably liberally – there is no need for the third person to prove the emotional distress or the existence of a close relationship to the victim. This results in a number of plaintiffs claiming and being awarded non-pecuniary damages in cases of physical injury or death. The author arrives at the conclusion that the Principles of European Tort Law21 also regulate compensation for non-pecuniary damage quite liberally.

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The author reviews the Lithuanian court practice in awarding non-pecuniary damages to third persons in case of injury or death of their family members and shows the inconsistency of such cases in the Lithuanian Supreme Court. On the one hand, the Court awarded compensation to the parents of the babies severely burnt in a state hospital22, on the other hand it rejected the claims in several similar cases by alleging the non-pecuniary damage to be purely personal23. Consequently, the author argues that there is a need to define the model for compensation of non-pecuniary damage to third persons in Lithuania. The author suggests acknowledging the right to compensate third persons for nonpecuniary damage only in case of injury to health or death. When determining the amount of non-pecuniary damages, the form and the level of guilt of the defendant should be established. Finally, the criteria for persons, who are entitled to non-pecuniary damages in case of injury or death of their close relatives, should also be clarified.

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2. Pavelas Ravluševičius, Neturtinės žalos atlyginimo klausimai Europos Bendrijos ir Lietuvos darbo teisėje (Issues Relating to Non-Material Damage in European and Lithuanian Labour Law) Jurisprudencija, No. 5(95), 2007, 32–38 In this article the author examines non-pecuniary damage and the compensation for it in the legal relationship regulated by labour law. The author reviews the law of the European Union and the national Lithuanian law, discusses the 21

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European Group on Tort Law (ed.), Principles of European Tort Law: Text and Commentary (2003). Lithuanian Supreme Court, 18 April 2005. For further comments of the case see: H. Gabartas/M. Laučienė, Lithuanian Supreme Court, 18 April 2005: Medical Negligence; Determination of Non-Pecuniary Damages, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2005 (2006) 402 ff. See cases: Lithuanian Supreme Court, 25 April 2005, No. 3K-3-222/2005 and Kaunas Regional Court, 19 April 2006, No. 2-251-230/2006.

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necessary conditions for compensating non-pecuniary damage and finally, examines the practice of the European Court of Justice and the national courts of Lithuania.

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Firstly, the author comes to the conclusion that the law of the European Union does not regulate the compensation of non-pecuniary damage. A person who suffers non-pecuniary damage for the breach of Union law can claim damages in national court applying national rules for compensating this damage. On the other hand, art. 250 of the Lithuanian Labour Code24 entrenches one’s right to be awarded compensation for non-pecuniary damage in labour relationships. Although the Labour Code of Lithuania does not provide the further terms and conditions for non-pecuniary damages, the common principles of law and the Code Civil are applied in such cases, upon the condition that both parties are in a labour relationship.

41

The author emphasizes the general conditions for applying liability for nonpecuniary damage incurred. Unlawful actions are described as the breach of the Labour Code of Lithuania, secondary laws, acts of the local government, labour contract or the collective agreement. Causality must be established between the unlawful actions and the damage incurred, which can be asserted as direct and indirect. The fault that forms a subjective condition for the liability may be realised in the form of intention or negligence.

42

The non-pecuniary damage shall not be presumed under the laws of Lithuania. The victim and third parties claiming non-pecuniary damages have to prove the damage incurred. Furthermore, a third party shall be awarded non-pecuniary damages only in exceptional cases. The author states the basic criteria used when determining the amount of damages, i.e. the length of time in which the parties have been in a labour relationship, the disciplinary penalties imposed on the employee, the circumstances of infringement of rights of the employee, the fault of the offender, the consequences incurred, as well as the main principles of justice, reasonableness and good faith as per Lithuanian civil law.

43

By referring to the concrete cases of the European Court of Justice regarding non-pecuniary damages, when the amounts of non-pecuniary damages determined by the Court were relatively small or even symbolic25, the author stresses the choice of the European regulation to designate this important and exclusive question for the national jurisdiction.

24

25

VŽ, 26 June 2002, No. 64-2569. The Lithuanian text can also be found at: http://www3.lrs.lt/ pls/inter3/dokpaieska.showdoc_l?p_id=169334. See judgments of the European Court of Justice 11 April 2006, No. T-394/03 and Cwik/European Commission.

Lithuania

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3. Vitalija Tamavičiūtė, Valstybių narių atsakomybė privatiems asmenims dėl nacionalinių teismų veiksmais padarytos žalos (State Liability for Individuals for the Damage Incurred by Acts of National Courts) Jurisprudencija, No. 7(97), 2007, 74–81 The author of the article examines the principle of state liability of individuals for the damage incurred as a result of acts of national courts, elaborated by the precedent of the European Court of Justice in the Francovich26 case. The mentioned principle filled the loophole in the Treaty of the European Union regarding protection of individuals. The author accentuates the exceptional role of the national courts in protecting rights of individuals – the national courts are obliged to apply the European law and to ensure that the rights of individuals shall be ensured.

44

Up to the Francovich case, state liability for the breach of European law was limited by two principles: non-discrimination and adequacy. Since Francovich, the national courts and the European Court of Justice base their decisions on the international principle for state liability for the breach of international agreements and art. 10 of the European Community Treaty, entrenching the obligation for the Member States to introduce all possible common and special measures in order to secure the fulfillment of the obligations under European law.

45

Three conditions for establishing state liability were distinguished: (i) the breached legal norm was intended to entrench rights of individuals; (ii) the breach can be considered to be sufficiently intense, and (iii) the incurred damage was determined and assessed. Furthermore, the author analyses the concept of “evident breach” that tightened the application of the state liability principle. While determining the evident breach, the courts should evaluate the clarity and exactitude of the breached legal norm, the fault of the offender and especially the fact of the court intention to apply to the European Court of Justice.

46

By pointing out the main features of the institution of state liability for breaching European law, the author stresses its suitability as a tool for filling the loophole in the system of protecting individual rights under European law.

47

4. Renata Volodko, Neturtinės žalos dydžio nustatymo sveikatos sužalojimo bylose ypatumai remiantis Lietuvos teismų praktika (The Peculiarities of Determining Non-Pecuniary Damages in Cases of Health Injury) Teisė 2007, No. 63, 116–131 The article investigates and analyses the peculiarities of the assessment of the extent of non-pecuniary damages in cases of health injury of a person on the basis of valid legislation, the practice of Supreme Court of Lithuania and other courts as well as legal doctrine.

48

The author emphasizes that the institute of non-pecuniary damage is quite a novelty in Lithuanian legislature and court practice as a result of the long

49

26

ECJ joined cases C-6/90 and C-9/90, Francovich [1991] ECR I-5357.

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and strict Soviet legal regulation. The concept of non-pecuniary damage was introduced after the old civil code of Lithuania was changed and later, the new one was adopted. As a result, there are no concrete and direct guidelines for determining the concrete amounts of non-pecuniary damages, awarded by courts to persons who suffered a health injury. Furthermore, the author notes the inequality of various values whose breach results in the payment of nonpecuniary damages (e.g., on the one hand, the law recognizes the right of political parties to be awarded non-pecuniary damages for a breach to its reputation and, on the other hand, it does not recognize an individual’s right to be compensated for suffering stress and emotional disturbance in case of injury to his close relative). The New Civil Code considered the problems caused by inconsistency and incompleteness of the internal law, the experience of foreign countries in awarding non-pecuniary damages and the international recommendations in the above mentioned sphere of regulation (e.g. Resolution No. (75) 7 adopted by Committee of Ministers of the Council of Europe on 14 March 1975 on compensation for physical injury of death).

50

By reviewing the Lithuanian court practice, which is at the moment in an ongoing developmental process, the author distinguishes and discusses the main criteria for determining the amount of non-pecuniary damages set by Lithuanian courts and legal acts. The extent and the nature of the injuries suffered were distinguished as the first and the main criteria for determining the limit for compensation. The more pain and suffering a person experiences, the greater the amount of compensation which is determined by the court. The second common criterion is the percentage of the lost working capacity. The greater this percentage, the greater the amount of compensation. The form and the degree of fault of the defendant (that is, in some cases, e.g. in medical negligence cases, very strict) are also usually very important criteria, which determine the amount of compensation. The author also disputes the criterion of evaluating the material situation of the defendant, which is commonly used by the courts of Lithuania and which, in the author’s opinion, breaches the two constitutional principles as well as the original principle of corrective justice determined since the times of Aristotle. Finally, the author stresses the importance of principles of justice, reasonableness and good faith while evaluating the totality of all the above mentioned criteria and converting the pain and suffering of the plaintiff into monetary compensation. 5. Romualdas Drakšas/Regina Valutytė, Valstybės atsakomybės pagal privataus asmens ieškinį principo samprata ir įgyvendinimo sąlygos (The Concept of State Liability upon the Claim of the Private Individual and Conditions for Implementing it) Justitia 2007, No. 2(64), 67–76

51

Up to the Francovich27 case, the European Court of Justice (“the Court”) had usually stressed the importance of seeking compensation in case the state breaches its obligations under the law of the European Union. However, the 27

ECJ C-6/90 and C-9/90, Francovich [1991] ECR I-5357.

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Court had pointed out that the compensation always had to be sought according to the national measures, since the European legislation did not offer any mechanism in case of the above mentioned breach. On the contrary, in Francovich, the Court recognized an additional method of protecting individuals’ rights – it is the right of an individual to apply to a national court with a claim directly based on the EC Treaty in case the Member State had breached its obligations under EU law. The authors of this article discuss the outcomes and the reasons for this recognition and also argue if the principle of state liability for the breach of EU law can be called a “constitutional” principle. The authors distinguish three constitutional bases for the above mentioned principle to be recognized as “constitutional”. Firstly, this principle derives from the “spirit”, aims and the whole structure of the EC Treaty, as a document, granting rights and obligations not only to the Member States, but also to their nationals. Secondly, the principle also originates from art. 10 of the EC Treaty, and the principle of effectiveness, entrenched thereto. And thirdly, the principle of state liability also derives from the national principles of one’s right to be compensated for the damage incurred – the key element of any constitutional state. The conditions that lead to state liability towards an individual who suffered damage, are: (i) the breach can be contributed to the state; (ii) the breach of EC law can be considered to be material enough; (iii) the legal norm that was breached was meant to ensure a right to the private individual, and (iv) a direct causal relationship between the breach and the damage occurred exists. By distinguishing the conditions for the state liability principle, the authors widely discuss its application in the Francovich case and the further cases of the Court, and provide further guidelines for the Lithuanian courts to follow in future cases regarding the non-implementation of EU law (if this occurs).

52

XVII. The Netherlands Michael G. Faure and Ton Hartlief

A. INTRODUCTION 1

2007 did not see many exciting evolutions in the field of tort law. A few evolutions are taking place at the legislative or policy level which will be discussed below and as usual there is always a lot to report as far as the evolutions in case law are concerned. In the latter respect we will e.g. refer to evolutions concerning the liability of supervisory authorities resulting from an important decision of the Hoge Raad of 13 October 2006 concerning the insurance company Vie D’Or which we could not discuss in the Yearbook 2006. Traditionally, the Hoge Raad issues many decisions with respect to employers’ liability and this was again also the case in 2007.

B. LEGISLATION AND EVOLUTIONS AT POLICY LEVEL 1. Legislative Proposals

2

In the previous Yearbook we reported on a proposal of the Christian Democratic Party in the Netherlands to enlarge the strict liability of parents for the acts of their children.1 This proposal has not yet been discussed further during the parliamentary proceedings.

3

A proposal has also been launched with respect to liability of public authorities.2 The proposal is to include a compensation arrangement in title 4.5 of the General Act on Administrative Law with respect to compensation in case of 1

2

See M. Faure/T. Hartlief, The Netherlands, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2006 (2008) no. 2. The proposal has been published in a special issue of the review Overheid en aansprakelijkheid 2007/4 which also contains contributions of G.M. van den Broek and C.M.J. Kortmann. See further on this proposal also K.J. de Graaf/A.T. Marseille, Een weg uit de doolhof? Nederlands Juristenblad (NJB) 2007, 2010–2017; J.E.M. Polak, Goede polderoplossing. Maar slot op de toekomst van de bestuursrechtelijke rechtsbescherming, NJB 2007, 2018–2023; T. Barkhuysen, Het consumentenperspectief op het voorontwerp. Enkele kritische vragen, NJB 2007, 2024– 2026 and G.T.J.M. Jurgens, Schadevergoeding als pilot voor differentiatie in het bestuursrecht, Nederlands Tijdschrift voor Bestuursrecht (NTB) 2007, 257–259.

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unlawful decisions of public authorities. The Act also views a possibility of compensation for lawful decisions of public authorities which would cause damage to citizens. The goal of the proposal is to provide a clear division of competence between the civil and administrative judge. Concurrent competences would be avoided as much as possible. Only in case of smaller claims (of an amount below € 5,000) could the plaintiff still choose between an administrative or a civil procedure. The commentators (see the references in the previous footnote) seem to appreciate the good intentions of the drafters, but regret that the proposal would not be able to achieve its ambitious goals. We should also mention that the government launched a proposal that provides a right to employers to obtain compensation for the expenses they would incur for the reintegration of employees into the labour process more particularly after (occupational) diseases or accidents at work.3 We should further mention that a proposal has been launched4 which seems primarily of a procedural nature but also has consequences for the way in which personal injury claims are dealt with in legal practice. It concerns the proposal to allow the judge only to deal with a specific aspect of the tort claim which is disputed between the parties. The goal of this proposal is to avoid negotiations between parties (more particularly the victim and the injurer and their insurers) collapsing simply because parties cannot agree on one (potentially minor) particular aspect. The goal of the procedure is therefore to allow parties to limit their claim to the judge to the disputed issue only. If the judge decided on that disputed issue, negotiations could be taken up again. This (still informal) proposal has been presented for comments to several interested parties. The Dutch Association for the Judiciary5 seems negative; other interested parties are, however, rather positive.6

4

2. Needs of Victims In the previous Yearbook we mentioned that the proposal which had already been introduced many years ago to award a fixed sum to specific descendants or relatives of victims as a compensation for non-pecuniary losses was delayed since the Dutch parliament first wanted to view the results of research that had been ordered by the Minister of Justice to investigate the specific demands of accident victims.7 Meanwhile, the results of this research undertaken by the Free University of Amsterdam have been published.8 The government has taken a formal position as a result of this research and held that apparently victims do not 3 4

5 6

7 8

Documents of the Second Chamber of Representatives 2006/2007, 31087, no. 1–2. The proposal was presented but in fact only launched officially (approval by the Council of Ministers) in March 2008. Nederlandse Vereniging voor Rechtspraak. Also the literature is divided. For example C.J. van Weering (Deelgeschilprocedure voor letsel- en overlijdensschade; noodzaak of overbodige luxe? Nederlands Tijdschrift voor Burgerlijk Recht (NTBR) 2007, 228–232) is rather critical, whereas I.N. Tzankova (De deelgeschillenregeling: een regeling voor een deelterrein, Tijdschrift voor Vergoeding Personenschade (TVP) 2007, 54–56) seems more positive. Faure/Hartlief (fn. 1) 339–340, no. 6. See R.M.E. Huver et al., Slachtoffers en aansprakelijkheid I, Wetenschappelijk Onderzoek en Documentatiecentrum (Scientific Research and Documentation Centre, WODC) (2007).

5

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only seek financial compensation, but also satisfaction of non-pecuniary needs. In this respect not only the notion of justice, but also the recognition by the injurer, the ability to call on the responsibility of the injurer and the need to be able to know what exactly happened as well as the wish to prevent a similar accident in the future seem to play an important role. The government holds that a remarkable conclusion of the research is that victims are less interested in the result itself (compensation or a specific amount), but rather in the way in which this result is achieved. It seems that more particularly the procedure which is followed after the accident can in a positive way contribute to satisfying the needs of victims. On the contrary, this procedure can also have a negative impact in the sense that victims can consider the procedure as a limit on their ability to recover. More specifically, the government holds that the research results do not lead to a fundamental change of tort law or the law of damages. The law already today provides sufficient potential to satisfy other than purely pecuniary needs.9 In this respect the government mentioned various positive elements such as the accusatorial civil procedure, party autonomy and the possibility for the victim to present his own story as well as the formal character of a civil trial and the “rituals” connected to this trial. However, it is recognised that in practice there is an exclusive focus on the financial settlement of the claim rather than on addressing emotional aspects of the personal injury which was suffered. The government therefore suggests improving the procedure by which victims receive compensation and suggests further research inter alia with respect of the effects of a code for the handling of personal injury claims. The research presented so far by the scholars from the Free University of Amsterdam only dealt with one aspect of the handling of personal injury claims. The way in which non-pecuniary losses should be satisfied will be dealt with in further research. For this reason, any proposal for possible legislation in this domain will not be pushed until the outcome of this further research is also known.10 3. Liability of Public Authorities

6

Given recent case law of the Hoge Raad concerning liability of public authorities (which we will discuss below), the government has addressed the question whether public authorities should be able to count on a (limited) immunity from liability.11 Given the way in which the case law so far has handled claims against public authorities, the government does not see any particular reason to limit the liability of those authorities. The reason is that for victims there are still many barriers to take before liability of a public authority can be accepted: often it will be held that liability is denied because the specific aim of the legislation which the authority had to enforce is not to protect third parties or the public authority had a substantial margin of appreciation which reduces the scope of liability as well. Moreover, liability will sometimes be denied because the causal relationship between the wrongfulness by the public authority and the damage suffered by the victim is denied. 9 10

11

Documents of the Second Chamber of Representatives 2006–2007, 28 781, no. 13. See also K.A.P.C. van Wees, Het wetsvoorstel affectieschade in de ijskast, TVP 2006, 124– 128. See documents of the Second Chamber of Representatives 2006–2007, 31 123, no. 1, 1 ff.

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However, the government argues that there is a reason for further research into the particular position of public authorities with supervisory tasks in the financial sector.12 The reason is that many internationally operating large financial enterprises are located in the Netherlands. This, in combination with the fact that in many foreign countries there is either an immunity or financial limit on the liability of public authorities, could lead victims (in case of transboundary services) to examine the possibilities of tort actions against Dutch public authorities with supervisory duties on financial markets. This area will therefore be the subject of further research. Here one notices that the Dutch government in fact follows the same line of reasoning which was also developed a year ago as far as the financial compensation for victims of catastrophes is concerned:13 the basic idea is to limit the pressure on the social budget and place liability more with primary tortfeasors.

7

4. Medical Malpractice It is worth mentioning that the inspection of health care14 presented a rather alarming report concerning shortcomings in Dutch hospitals.15 The government has clearly aimed at a reduction of medical malpractice.16 Notwithstanding the fact that the number of medical malpractice cases in the Netherlands could be substantial, the number of claims is still relatively low. This can be due either to a lack of information on the part of the victims or to problems on the part of health care providers (lacking insurability of the medical malpractice risk). Indeed, as a result of a lack of differentiation of risks (insurers seem unwilling to differentiate between good and bad risks in the medical profession), professional insurers in the Netherlands have largely withdrawn from covering liability risks of hospitals. Hospitals are now covered by two so-called mutuals set up by health care providers themselves (MediRisk and CentraMed). Notwithstanding the development of these alternatives, the coverage of the medical malpractice liability risks remains problematic in the Netherlands in the sense that coverage is limited and premiums are high.

8

C. CASE LAW 1. Wrongfulness A case of the Hoge Raad dealt with the classic question whether a specific behaviour could be considered as wrongful. A student association organized a boat trip on the lakes in the northern province of Friesland. During the trip the 12

13

14 15

16

See on this issue D. Busch, Civielrechtelijke aansprakelijkheid van financiële toezichthouders jegens derden, in: D. Busch et al. (eds.), Onderneming en financieel toezicht (2007) 599 ff. Discussed in our previous contribution to the Yearbook: (see commentary in fn. 7) Faure/Hartlief (fn. 1) 341–342, no. 8–9. Inspectie voor Gezondheidszorg (IGZ) published in Spring of 2007. IGZ, Preoperatief traject ontbeert multidisciplinaire en gestandaardiseerde aanpak en teamvorming, IGZ 2007. See the formal declaration of the current government (Balkenende IV) 2007–2011, appendix to documents of the Second Chamber of Representatives 2006–2007, 31 070, no. 1, 29–30.

9

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420

connection to a gas bottle disconnected as a result of which an explosion took place and the plaintiff suffered personal injury. The disconnection of the gas bottle probably took place because the students, members of the association, were rocking the boat. The liability of the student association is denied basically because what the plaintiff blames the association for (more particularly lack of supervision, etc.) could be attributed to himself as well, being a member of the organizing committee. The decision of the Hoge Raad17 however, still leaves room for the possibility that there could be liability if not the plaintiff (member of the organizing committee) but another member (not involved in the organization at all) had suffered the harm. The decision in that sense clearly shows how the decision concerning the wrongfulness of a certain behaviour is a relative one:18 what normally speaking would be wrongful is not wrongful in this particular case, at least not against this particular victim. 2. Liability for Increased Danger

10

In many previous Yearbooks we already reported on developments in case law concerning the liability for increased danger. A few decisions illustrating this liability can be mentioned: • • •

cases where liability was accepted for a defective structure after persons fell through a glass wall;19 the decision of the Civil Court of Amsterdam in a case of flooding after the breach of a dike in Wilnis where liability on the basis of art. 6:174 of the Civil Code of the public authority20 was denied;21 the decision of the Court of Appeals of ’s-Hertogenbosch where liability on the basis of art. 6:174 of the Civil Code was accepted for the owner of a construction for the release of asbestos components after a fire.22

3. Liability of Supervisory Authorities

11

An important decision has been rendered by the Hoge Raad in the case of the insurance company, Vie D’Or, that went bankrupt with (of course) many unavoidable losses for third parties as a consequence. It was held that supervisory authorities should have exercised their duties with more care in order to prevent this loss. The Hoge Raad, however, held in its decision of 13 October 200623 that the crucial question is not whether, with hindsight, a better decision would have been possible, but whether the supervisory authority, under the circumstances at the time of the decision and with the information at that moment, could reasonably have come to its decision. Advocate-General Timmerman warned in his opinion for the hindsight argument and was in this respect 17 18 19

20 21

22 23

Hoge Raad (HR) 23 February 2007, Rechtspraak van de Week (RvdW) 2007, 228. This was also held by Attorney-General Wuisman in his opinion preceding the decision. Court of Appeals of Arnhem 4 January 2005, Verkeersrecht (VR) 2006, 113 and Civil Court of Utrecht 13 September 2006, Jurisprudentie Aansprakelijkheidsrecht (JA) 2006, 153. The so-called “Hoogheemraadschap”. Civil Court of Amsterdam 29 November 2006, Nederlandse Jurisprudentie Feitenrechtspraak (NJF) 2007, 98. Court of Appeals of ’s-Hertogenbosch 30 January 2007, NJF 2007, 226. HR 13 October 2006, RvdW 2006, 941.

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followed by the Hoge Raad. The Hoge Raad moreover argues that, when a large margin of discretion is available for the supervisory authority, the liability of supervisory authorities should be examined in a cautious way. This point, that a large margin of appreciation of the supervisory authority limits its scope of liability has been criticized by some24 but welcomed by others.25 This position limits the possibilities for victims to hold supervisory authorities liable. However, the Hoge Raad does hold that the supervisory authority should have taken measures to ensure that these are effective and, if this is not the case, it should take other measures.26 In an earlier decision, the liability of supervisory authorities was limited as a result of the relativity requirement (which we also discuss below). In that decision concerning the barge Linda, the Hoge Raad had denied liability since the protection of victims did not specifically fall within the scope of protection of the legislation of which the supervisory authorities needed to monitor the compliance.27 However, increasingly legislation describing the competences of supervisory authorities not only addresses the protection of the general interest, but also views the protection of individual (commercial) interests of citizens. That would as such potentially enlarge the scope of liability of supervisory authorities. However, the decision of the Hoge Raad in the Vie D’Or case makes clear that the Hoge Raad apparently considers it important to keep the scope of liability within foreseeable limits. The case law of the Hoge Raad anyway provides sufficient possibilities to judges who do not wish to hold supervisors liable to deny such a liability. A decision of the Civil Court of The Hague, where liability of supervisory authorities for the explosion of the fireworks factory in Enschede was denied,28 provides a clear illustration of the wide-ranging possibilities the judge has to deny this liability of supervisory authorities, but also of their relatively great willingness to deny this liability in practice.29

12

The case law of the Hoge Raad concerning Vie D’Or of course not only has importance for the liability of the supervisory authority30 but also for profession liability of, for example, the accountant. In that respect the Hoge Raad repeated in the Vie D’Or decision that the civil judge is not necessarily bound to an earlier judgment of a disciplinary board. A finding of violation of profes-

13

24

25

26

27 28 29

30

See for example C.L.G.F.H. Albers, Toezichthoudersaansprakelijkheid. Een blik vanuit het bestuursrecht op Vie D’Or, Aansprakelijkheid Verzekering & Schade (AV&S) 2007, 94–104. Inter alia (i.a.) by B.P.M. Ravels, Kroniek overheidsaansprakelijkheid 2005–2006, AV&S 2007, 126–135. See on this issue equally T. Hartlief, Zicht op toezichthoudersaansprakelijkheid na Linda en Vie D’Or, Weekblad voor Privaatrecht, Notariaat en Registratie (WPNR) 2006, 799–800. HR 7 May 2004, Nederlands Jurisprudentie (NJ) 2006, 281 with case note by J.H. Civil Court of The Hague 13 December 2006, NJF 2007, 40. For this reason the mentioned case of the Civil Court of The Hague was severely criticized by G.E. van Maanen, Overheidsaansprakelijkheid voor gebrekkig toezicht. Weging van argumenten en juridische technieken naar aanleiding van de Enschedese vuurwerkramp, RM Themis 2007, 127 ff. In that particular case it concerned the Insurance Chamber (Verzekeringskamer) that had to control the working of the insurance company.

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sional standards by a disciplinary board should therefore not necessarily lead to a finding of wrongfulness by the Civil Court. 4. The Relativity Requirement

14

As a result of the increasing attention paid to the liability of public authorities, there is also a “revival” of the old doctrine of the relativity requirement.31 The basis of this requirement is that the damage suffered by the victim must fall within the scope of protection of the particular norm that has been violated by the tortfeasor.32 The relativity requirement not only played a role in cases of liability of supervisory authorities like in the Hoge Raad decisions concerning Linda and Vie D’Or, but also in a rather spectacular case concerning an Iranian refugee. After years of procedures she was told that the correct legal status (as refugee) had been withheld but that this does not constitute a tort which leads to liability of the state. The state is not liable for the income that she failed to earn as she was not allowed to work due to the fact that she was not recognized as refugee.33 Advocate-General Spier held, after a detailed examination of the history and scope of the regulation involved, that the claim of the state (in the procedure before the Hoge Raad) that the relativity requirement has not been met should be rejected. However, the Hoge Raad came to a different decision. The Court of Appeals had judged that admitting a refugee to her particular status not only provides primary protection but also grants the possibility to start a new life and obtain a job. The Hoge Raad, however, argues that the status of refugee does allow the refugee to start a new life, but not necessarily to obtain an income. The Hoge Raad holds that the right to work only emerges after the status of refugee has been granted. Moreover, the status of refugee is, so the Hoge Raad holds, only granted for humanitarian reasons and therefore does not protect any material interest. The result is that, when the rules concerning the right of a person to be recognized as a refugee have been violated, this leads in principle to a claim on redress of the situation via the judge, but not on a claim for the compensation of lost income. Redress of the wrong decision is in other words all that the person in that case can obtain. Whether that is really a sufficient satisfaction can of course be doubted.34 Interestingly, Advocate-General Spier had examined the scope of protection of the Act and had nowhere found any sign of such a limited scope of protection as suggested by the Hoge Raad. Moreover, the attitude of the State, holding that its behaviour was wrongful but that this damage should not be compensated can also be criticized. Since the real reasons for the decision of the Hoge Raad are not given, one can only guess what the legal political motives for this decision are. Perhaps the Hoge Raad feared that allowing these claims may lead to a flood of other claims by 31

32

33 34

See in this respect also W.Th. Braams, De Schutznormleer … still going strong, NTBR 2006, 263. In that sense one can argue that the wrongfulness has to be related (relative) to the harm. Hence the reference to the relativity requirement. See our earlier description of this phenomenon in M. Faure/T. Hartlief, The Netherlands, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2004 (2005) 423–425, no. 6–8. HR 13 April 2007, RvdW 2007, 397. See the critical comments by G.E. van Maanen in his case note in JA 2007, 93 and by C.E. Drion, Op de grenzen van het recht, NJB 2007, 1395.

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refugees or the Hoge Raad implicitly found that the refugee should be grateful that finally the official status was granted and should stop being difficult. There is, however, one important correction on this relativity requirement: the tortfeasor can still be held to compensate the victim when the tortfeasor has also violated a social duty of care. When, in other words, the tortfeasor violated a regulatory norm that does not provide a specific protection against the damage as suffered by the victim, liability is still possible if this behaviour would violate an unwritten norm which does provide a protection against the damage as suffered by the victim. The mere fact that a regulatory norm has been violated can assist in judging that the tortfeasor acted against what is on the basis of unwritten norms socially acceptable. This correction of the relativity requirement, named after the former Procurator-General of the Hoge Raad “Correction Langemeijer” has recently again been applied in case law.35

15

5. Employers’ Liability Almost every year we have to report on evolutions concerning the domain of employers’ liability since there is always a lot of case law, also of the Hoge Raad, with respect to this area of the law.36 If one had to summarize the recent case law of the Hoge Raad in this domain, it would be fair to argue that the Hoge Raad seems to have changed its case law in favour of the employer, at least as far as the burden of proof is concerned. This appeared inter alia in a case where a discussion took place between an employee and an employer concerning the question whether a small staircase at a stage was safe or not.37 The Court of Appeals held that the employee who claimed that the stair to the stage was unsafe had to elaborate this point of view and prove this statement further. Advocate-General Spier was of the opinion that the Court of Appeals wrongly held that it would be the duty of the employee to illustrate this further since the employers’ liability of art. 7:658 holds that it is the employer who has to prove that he has taken sufficient care (in casu positioned a safe staircase to the stage). Nevertheless, the Hoge Raad uses a rather generally formulated phrase to leave the decision of the Court of Appeals untouched.

16

Some other decisions of the Hoge Raad deal with the importance of the violation of safety regulation.38 In one of these cases, the employee developed problems to his back after having lifted a heavy oven with three other persons. It is remarkable that the Hoge Raad deduces from a rather vague norm concerning the safe lifting of objects in the safety regulation a very specific norm which would have applied in this specific case. Moreover, the Hoge Raad holds that

17

35

36

37 38

See HR 10 November 2006, RvdW 2006, 1058; JA 20 (2007) 217–250 with case note by M. van Kogelenberg. For an overview of the recent case law see i.a. A.J. Verheij, Kroniek werkgeversaansprakelijkheid, AV&S 2007, 68–74 and A. Kolder, Werkgeversaansprakelijkheid: de Hoge Raad weer op koers? AV&S 2007, 161–171. HR 25 May 2007, RvdW 2007, 503. It concerns more particularly the decisions of the HR of 27 April 2007, RvdW 2007, 459 and HR 13 July 2007, RvdW 2007, 689.

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this rather specific norm for lifting objects would already have applied in 1998, whereas the regulation that formulated such a standard in the building sector was only introduced in 2003.

18

The Hoge Raad also had to deal with the difficult question what to do in case of claims of an employee when his damage was caused as a result of a danger that was also known to the employee and that could have been prevented by adapting his behaviour. This type of reasoning led to a rejection of employer’s liability for a cleaning lady in a hotel on the island of Aruba (legally also a part of the Kingdom of the Netherlands). Advocate-General Spier was of the opinion that the Hoge Raad should reject this type of reasoning since it in fact leads to a situation whereby the risks of generally known dangers are unilaterally positioned with the employee, whereas it is the task of the employer to take into account potential negligence on the side of his employees. The Hoge Raad did not follow Advocate-General Spier in this case and hence denied the employer’s liability.39

19

However, a few months later, the same reasoning (that the claim of an employee should be denied when the danger was known to him and could have been avoided by appropriate behaviour) was rejected by the Hoge Raad.40 It considered a case whereby an employee had suffered damage when leaving a newly built building and was confronted with a difference in level of at least thirty centimetres. By rejecting the reasoning related to generally known dangers in the second case one could hold that after all the view of Advocate-General Spier was ultimately accepted.

20

A decision of the Hoge Raad of 7 December 2007 concerned an employee of Shell Solar Energy B.V. one of whose tasks was to take specific tools from a warehouse where the tools were positioned in boxes on top of pallets. In the warehouse a safe and stable ladder was available that the employee could have used and which was in principle suited to take the boxes from the pallets. However, for unclear reasons, the employee did not use the safe ladder, but another ladder as a result of which the employee lost his balance, fell from the (less safe) ladder and suffered an injury to his knee. The employee held that the employer was liable for the incident. The Court of Appeals held that the employee was aware of the fact that in the warehouse a safe ladder was available and that from the employee a minimal level of care can be expected. The Hoge Raad confirms the decision of the Court of Appeals and in addition argues that the accident did not take place in the workplace itself or during work which would have created specific risks which would require Shell to take additional measures in addition to providing a safe ladder.41 This again shows that ladders and staircases often give rise to questions of employers’ liability, but that in this particular case liability was denied. 39 40 41

HR 2 March 2007, NJ 2007, 143. HR 13 July 2007, RvdW 2007, 689. HR 7 December 2007, NJ 2007, 643. See the discussion by P. Oskam, De veiligste weg: de grens van de zorgplicht van de werkgever bij het ter beschikking stellen van hulpmiddelen, PIV Bulletin 2008/2, 1–4.

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As far as occupational diseases are concerned, the well known problems concerning burnout, repetitive strain injury (RSI) and the so-called organo psycho syndrome (OPS) play an important role.42 Much case law deals with the question when there can be employers’ liability for psychological damage.43 The question inter alia arises whether there is a violation of a norm in the sense of art. 7:658 of the Civil Code, whether there is a recognisable risk of psychological damage with the employee and whether there is a causal link between the employment and the damage.44 Attention is especially given to the question how and when the employer should recognise whether there is a risk that a particular employee may be subject to psychological damage. Some case law holds that when the employee did not make clear that he has or could have (psychological) problems, it can hardly be expected from the employer that he takes specific measures.45 However, the problem with this reasoning is of course that especially employees who do not complain may be more likely to suffer psychological damage or to be victim of a burnout. It is from this perspective that the district judge in Heerlen rather argued in favour of a more active approach of the employer in this respect.46 In the latter perspective, it would hence not suffice that the employer simply wait until the employee signals that specific problems might arise.

21

Finally some case law also deals with employers’ liability for traffic accidents. This is based on art. 7:611 rather than on art. 7:658 of the Civil Code.47 In this respect there are a few recent decisions of Courts of Appeals that are worth mentioning:

22

•

The Amsterdam Court of Appeals decided that there is no employers’ liability on the basis of art. 7:611 for the consequences of a traffic accident that happened at the Dutch National Schiphol Airport with respect to an employee who had been hired from a third party. The reasoning was that since KLM was not the formal employer of the employee, but only the de facto employer there was no formal employment contract as a result of which art. 7:611 of the Civil Code does not apply in this relationship between KLM and the employee who had a formal employment contract with a third employer.48

42

See with respect to RSI i.a. Court of Appeals of Amsterdam 3 May 2007, Jurisprudentie Arbeidsrecht (JAR) 2007, 156 and K. Festen-Hoff, RSI: modeverschijnsel of werkgerelateerde aandoening? Sociaal Maandblad Arbeid (SMA) 2007, 178–187 and see with respect to OPS district judge of ’s-Hertogenbosch, 7 December 2006, JA 2007, 80. An issue we also discussed in M. Faure/T. Hartlief, The Netherlands, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2005 (2006) 430–431, no. 35–37. See on these issues i.a., Court of Appeals of The Hague 27 April 2007, JAR 2007, 177 and Court of Appeals of The Hague 16 February 2007, JAR 2007, 69. The previously quoted decisions of the Court of Appeals of The Hague clearly go in that direction. District Court of Heerlen 1 April 2006, JAR 2006, 108. The difference between these legal bases has been discussed in an earlier contribution to the Yearbooks. See M. Faure/T. Hartlief, The Netherlands, in: H. Koziol/B.C. Steininger, European Tort Law 2002 (2003) 314–315, no. 18, M. Faure/T. Hartlief, The Netherlands, in H. Koziol/B.C. Steininger (eds.), European Tort Law 2003 (2004) 297–298, no. 55–58 and Faure/Hartlief (fn. 32) 434–435, no. 28. Court of Appeals of Amsterdam 24 August 2006, JAR 2006, 238; Sociaal Recht (SR) 2006, 330–332 with case note by M.S.A. Vegter.

43

44

45 46 47

48

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•

• •

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The Court of Appeals of The Hague, however, accepted employers’ liability on the basis of art. 7:611 of the Civil Code in a case of a nurse who, as a result of a slippery road, fell from her bicycle and suffered personal injury.49 The Court of Appeals of The Hague came to a similar conclusion in a case where an insurance broker visited clients by car and (again as a result of a slippery road) drifted from the road and had an accident.50 The Court of Appeals of The Hague, however, rejected employers’ liability in a case where an employee only occasionally used her car for her work and consequently suffered damage.51 However, the Court of Appeals of The Hague seems to suggest that there is a distinction between the situation where an employee has to use the car for the employer on a regular basis and on the other hand the situation where the employee only does so occasionally. Legal doctrine has held that this distinction is not very sharp and can easily be criticized.52 It was held that there is a likelihood that the Hoge Raad would reject such an (artificial) distinction.

An important case of the Hoge Raad of 9 December 2007 deals with the liability of the employer on the basis of art. 6:170 of the Civil Code. According to this provision, a principal is liable for damage caused by an agent to third parties when damage has been suffered as a result of negligence of the agent and the probability of negligence has been increased as a result of the assignment given by the principal to the agent and if the principal had power over the behaviour that constituted the negligent act of the agent. This complicated formulation was applied in a case concerning a staff party which was organized by various corporations of an employer. All employees were invited and the employer himself was present as well. Too much alcohol had been consumed and people sitting at the centre table (among them the employer) encouraged each other to throw oil on the barbeque. After the oil had been thrown on the barbeque, a fire occurred as a result of which a part of the restaurant, the kitchen and the party centre next door burned down with extensive damage as a consequence. The question arose whether the employer was liable for this damage on the basis of art. 6:170 of the Civil Code. The trial court had denied liability on the basis that there was no sufficient relationship between being an employee and the event which was the cause of the damage. The Court of Appeals, however, held the employer liable inter alia based on the fact that the employer himself was present and had been encouraging his employees to throw the oil on the barbeque or had at least not intervened to prevent this negligent behaviour from occurring. The mere fact that also partners of the employees were present did, according to the Court of Appeals, not change anything since such a company party can also be considered in the interest of the employer to encourage 49 50

51 52

Court of Appeals of The Hague 12 January 2007, JA 2007, 68. Court of Appeals of The Hague 26 January 2007, JA 2007, 79. Note that in this case there was not an ordinary accident at work in the sense of an accident which occurred on the way to or from work. That is why the liability was based on art. 7:611 of the Civil Code. Court of Appeals of The Hague 23 March 2007, JA 2007, 101 with case note by H. de Boer. T. Hartlief, Actualiteiten aansprakelijkheids- en schadevergoedingsrecht 2006–2007, NTBR 2008, 38, no. 45.

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the spirit of collaboration within the company. The Hoge Raad confirms the decision of the Court of Appeals and hence the liability of the employer on the basis of art. 6:170 al. 1 of the Civil Code.53 Whether there is a functional relationship between the employment and the negligence depends on the relevant circumstances. The Hoge Raad points in this respect at various elements such as the time and place and the nature of the negligent behaviour. Even though art. 6:170 is not based on negligence but on objective liability of the employer, the Hoge Raad also takes the culpability of the employer into account. A relevant factor to judge the applicability of art. 6:170 is also the fact whether the employees during the negligent behaviour acted as a unity, belonging to the employer. Of course, holding a barbeque is not the essence of the corporate activity of the employer, but it certainly concerned a company outing. The Hoge Raad holds that the functional relationship with the employment can still exist even when (such as in this case) it is not necessary that employees were legally or morally obliged to be present at the barbeque. The Court of Appeals held that there was the required functional relationship between the negligence and the employment since the outing was organized, paid for and facilitated by the employer and it was because of their employment that the employees were present. Moreover, the employees acted as a unity and the party could therefore be considered as being organized in the interest of the employer. The Court of Appeals had also judged that the employer himself (although present) had done nothing to prevent the negligent behaviour and had even encouraged the probability of this behaviour. The Hoge Raad therefore held that the Court of Appeals had correctly motivated the application of art. 6:170 of the Civil Code. The mere fact that the damage occurred outside of the normal time of employment and at a different place than on the premises of the factory had no effect on the question of liability. In this particular case the Hoge Raad comes to a relatively broad interpretation of art. 6:170 and does this apparently also because of the apparent involvement of the employer himself in the wrongful behaviour and because the employees acted as a unity. Probably this may also have consequences for the employers’ liability on the basis of art. 7:658 of the Civil Code.

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6. Traffic Liability Also, the domain of traffic liability has been one on which we could report in almost every Yearbook. In previous Yearbooks we pointed at the so-called 50% rule. This rule holds that, when the owner of a motor vehicle is in principle liable on the basis of art. 31 of the Traffic Act since he cannot call on force majeure but the non-motorized victim is negligent (not being intent or gross recklessness), equity requires that at least 50% of the damage is attributed to the owner of the motor vehicle.54 A recent decision of the Hoge Raad repeated that this 50% rule is not applicable in case of intentional harm or a type of 53 54

HR 9 November 2007, RvdW 2007, 960. See i.a. M. Faure/T. Hartlief, The Netherlands, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2001 (2002) 369–371, no. 38–42.

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recklessness which comes close to intent.55 The case deals with an accident where an asylum seeker had been walking in the dark in the rain on a road where the maximum speed was 80 km per hour. He was hit by a car which came from the back and whose driver apparently had not seen the victim. The Court of Appeals held that in this particular case walking under such circumstances consists of a recklessness which comes close to intent. The plaintiff appealed to the Hoge Raad specifically on this point and held that the Court of Appeals apparently applied an objective approach holding that someone who crosses a badly lit road in the dark without looking at the traffic and even keeps walking on that road knew or at least should have known which risks he was taking. The plaintiff, however, argued that on the basis of earlier case law of the Hoge Raad, the relevant criterion should not be an objective standard, but rather the subjective awareness of the danger by the victim.56 The Hoge Raad holds that, in order for there to be recklessness which comes close to intent, in principle awareness of the danger by the victim is required which has to be proven by the injurer. However, the Hoge Raad continues rather strikingly: in order to prove this awareness, the injurer can suffice with pointing at facts and circumstances from which this awareness can be deduced. As a result, the decision of the Court of Appeals was upheld by the Hoge Raad. The important consequence of this decision is that the Hoge Raad now apparently allows for an objective evaluation of the awareness of the danger in this field of art. 185 of the Traffic Act.

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Commentators to this decision have argued that this decision may have an impact also outside of the field of traffic liability and more particularly for the important area we just discussed: employers’ liability. The fields are comparable in the sense that also for the application of art. 7:658 of the Civil Code it is relevant that this liability can be denied or reduced when the employee had to be aware of the reckless character of his behaviour. Since also AdvocateGeneral Wuisman in his conclusion to the just mentioned case referred explicitly to art. 7:658 of the Civil Code, the Hoge Raad should have been aware of the fact that its decision will also have consequences for the domain of employers’ liability. The consequence would therefore be that perhaps in the future the recklessness of the employee (excluding employers’ liability) will also be judged on the basis of an objective standard, being on the basis of facts and circumstances which could imply such an awareness of the recklessness of the behaviour.57 7. Collective handling of Mass Claims

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In the Yearbook 2005 we discussed the Act of 23 June 2005 with respect to the collective handling of mass claims.58 Meanwhile this Act has been applied by the Court of Appeals of Amsterdam with respect to two important cases. 55 56

57 58

HR 30 March 2007, NJ 2008, 64 with case note by T. Hartlief. This the Hoge Raad held in the so-called Pollemans/Hoondert decision of 20 September 1996, NJ 1997, 198 with case note by P.A. Stein. See Hartlief, NTBR 2008, 36, no. 40. See Faure/Hartlief (fn. 43) 415, no. 3.

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The first application dealt with the so-called Des case and simply contained a request to declare an earlier agreement between the parties binding. The Court of Appeals sustained this request.59 The second case deals with the so-called Dexia case,60 where (after a lot of positive publicity) Dexia had proposed lease contracts to its customers on the basis of which they could lease (often substantial amounts) which they could subsequently use to buy stock on the capital market. This of course occurred in a period where there still was a hausse on the capital market, but as a result of the subsequent crisis, stock prices fell, customers incurred substantial losses and were in some cases not even able to repay their debts. With a (large) part of these customers an agreement was concluded by Dexia which was subsequently endorsed by the Court of Appeals of Amsterdam within the framework of this Act on the Collective Handling of Mass Claims. These cases have meanwhile led to many comments in the literature concerning the application of the Act and the practical problems that arise.61 It is, according to some rather cynical scholars, important to note that this Act concerning the Collective Handling of Mass Claims in fact came into being with the view to dealing with so-called classical disasters (a unique event with many victims suffering personal injury). The Act was not primarily meant to satisfy the needs of victims of (unsuccessful) speculation on the stock market, suffering merely pure economic loss. For now, this Act concerning the Collective Handling of Mass Claims seems to be applied to cases where economic losses are suffered rather than to cases where personal injury damage occurred. This is in part also due to the fact that in some of the cases in the Netherlands where as a result of a unique incident many victims suffered personal injury losses, an agreement with the injurer towards compensation was simply not possible because of the insolvency of the latter.62 8. Causation and Damages In the previous Yearbook we reported on a rather spectacular development in Dutch tort law, being that the Hoge Raad accepted in its decision of 31 March 2006 so-called proportional liability.63 One can now observe several reactions to this case law of the Hoge Raad both in case law of other courts and tribunals and in legal doctrine. As far as case law is concerned, we can point at the decision of the Civil Court of Groningen where the court also applied the proportional approach to a case of medical malpractice liability. The question arose whether damage to a new born child was due to malpractice by the health care provider at birth or due to a natural cause.64 The Court of Appeals of Arnhem also applied a proportional approach in a case of a secretary against a hospital who claimed that she had been the victim of passive smoking as a result of the 59

60 61

62 63 64

See Court of Appeals of Amsterdam 1 June 2006, NJ 2006, 461 and Court of Appeals of Amsterdam 27 July 2006, NJF 2006, 560. Court of Appeals of Amsterdam 25 January 2007, NJF 2007, 266. See i.a. H.M. Veenstra, Uitleg van een collectieve regeling tot vergoeding van massaschade, NTBR 2007, 2–8 and C.J.M. van Doorn, De tweede WCAM-beschikking is een feit: tijd voor een terugblik en een blik vooruit, AV&S 2007, 105–114. See further Hartlief, NTBR 2008, 31, no. 17. See Faure/Hartlief (fn. 1) 347–350, no. 22–26. Civil Court of Groningen 14 February 2007, JA 2007, 131.

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smoking habits of two medical specialists. The woman suffered injury and the Court of Appeals of Arnhem held that the hospital was liable for 50% of the damage.65 The decision is remarkable since the woman already suffered from asthma and would therefore probably have suffered a disability to work even if she had not been a victim of passive smoking. The critical comments to this decision therefore held that the Court of Appeals applies the instrument of the division of burdens too easily.

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The causation issue and the proportional approach of course also play a role in other areas of professional liability. In a recent decision, the Hoge Raad confirmed that, in judging the professional liability of an attorney, the point of view should be that one has to find out what would have happened without the professional negligence. This unavoidably leads to the so-called “trial within a trial”. However, if that is impossible or does not provide certainty, also a loss of a chance approach (which is also a proportional approach) can be applied. The liability of the professional is then based on the loss of the chance for a better outcome if the professional negligence had not taken place.66 Especially in the domain of medical malpractice liability this alternative approach has been applied now for many years in the Netherlands.

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One recalls that in the Netherlands in case of a violation of specific regulations a so-called reversal rule applies.67 Recently the Hoge Raad confirmed that the reversal rule is not applicable in case of a mere violation of an information duty by a physician.68 Interestingly, this approach has been followed by the Hoge Raad as well on the occasion of a violation of information duties by an attorney.69 The general trend seems to be that the Hoge Raad holds that the goal of the information duty is to provide someone with the possibility to make an informed choice, but not necessarily the prevention of damage. That explains why the so-called reversal role does not apply in case of a violation of information duties.70 The fact that the reversal rule does not apply in case of a violation of information duties also provides an important limit on the scope of liability of health care providers. As far as this medical liability is concerned, we should point at an interesting decision of the Court of Appeals of Amsterdam following the wrongful life decision of the Hoge Raad.71 A health care provider had failed in successfully performing an abortion and was confronted with a medical malpractice liability suit. The Court of Appeals holds that not all the costs involved with the birth and the life of the child should be compensated for the 65

66 67 68 69 70 71

Court of Appeals of Arnhem 26 September 2006, JA 2007, 60 with case note by A.L.M. Keirse; SR 2007, 56–58 with case note by C.J. Frikkee. See on this decision of the Arnhem Court also D. Zivkovic, Proportionele aansprakelijkheid voor de blootstelling aan sigarettenrook op de werkplek (Hof Arnhem 26 September 2006), TVP 2007, 38–45. HR 19 January 2007, NJ 2007, 63; JA 2007, 42 with case note by J.L. Brens. See i.a. Faure/Hartlief (fn. 43) 434, no. 46. HR 29 September 2006, JA 2006, 146 with case note by W.R. Kastelein. HR 2 February 2007, NJ 2007, 92; JA 2007, 43 with case note by W.H. van Boom. See also Hartlief, NTBR 2008, 38, no. 48. HR 18 March 2005, NJ 2006, 606 with case note by J.B.M.Vranken. See our discussion of this case in Faure/Hartlief (fn. 43) 421–422, no. 15 and 16.

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simple reason that the mother did wish to have a child (she wanted to have a child but at a later point in time).72 A decision of the Hoge Raad of 21 September 2007 dealt with the compensation of so-called extra judicial costs.73 As we have mentioned in previous Yearbooks, according to art. 6:96 al. 2 of the Civil Code, the tortfeasor (and therefore his insurer) are obliged to compensate also reasonable extra judicial costs incurred to obtain compensation. These extra judicial costs (in practice mostly lawyers’ fees) are therefore also a part of the damages. The question which arose in the case of 21 September 2007 was whether the contributory negligence rule of art. 6:101 (which reduces the duty of the tortfeasor to compensate to the proportion to which the victim contributed to the accident) also applies to extra judicial costs. The Hoge Raad clearly holds in this decision that also extra judicial costs (as all other components of the damage suffered by the victim) are covered under the contributory negligence rule. When the victim’s contribution to the loss is assessed at, for example, 50% (which was effectively the case), the extra judicial costs are also only covered to this percentage. The victim in this particular case argued: I have incurred all my extra judicial costs to obtain 50% of my damages and hence my extra judicial costs should be totally compensated. This reasoning is not accepted by the Hoge Raad who apparently holds that the contributory negligence of the victim is also a cause of the damage and therefore also of the extra judicial costs. The only opening provided by the Hoge Raad would be the situation (also suggested by Advocate-General Wuisman) that the position of the tortfeasor would be clearly unreasonable. In the latter case, it would be possible that this unreasonable attitude of the defendant (and not the contributory negligence) would be the cause of (potentially higher) extra judicial costs. This can be the case, for example, when the defendant (or his insurer) in an unreasonable way refuses compensation or delays the settlement of a claim. When it is this unreasonable attitude that increases the judicial costs of the victim, then it would of course be reasonable (based on equity) that this particular part of the additional extra judicial costs would have to be compensated by the defendant.

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Finally, we should point at a decision of the Hoge Raad of 24 November 2006 concerning the law of damages. A few years ago the Hoge Raad had already held that the award to compensate non-pecuniary losses is “just” an ordinary part of the damage in case of bankruptcy. The Hoge Raad also took this same position in a recent case with respect to the restructuring of debts.74 This was contrary to the opinion of Advocate-General Verkade and also Verheij who wrote a case note to the decision regretting this result.75 However, Verheij rightly holds that when the legislative proposal to reform the compensation for non-pecuniary losses (which we often discussed) comes into effect, this

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73 74 75

Court of Appeals of Amsterdam 18 January 2007, NJF 2007, 224. This is in line with the decision of the Hoge Raad in the so-called wrongful birth case. See in this respect explicitly the case note of Brunner under HR 21 February 1997, NJ 1999, 145. HR 21 September 2007, RvdW 2007, 789. HR 24 November 2006, RvdW 2006, 1106. A.J. Verheij, case note to HR 24 November 2006, TVP 2007, 23–26.

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line of reasoning would also be changed. As a result the non-pecuniary losses would obtain a preferential position and could be kept outside of the hands of the trustee in case of bankruptcy.

D. DOCTRINE 1. Doctrine with Respect to a Few Relevant Evolutions

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In addition to the doctrine we already referred to in footnotes, a few interesting debates took place in 2007 which are worth mentioning. a) Harmonisation

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The review Aansprakelijkheid Verzekering & Schade (AV&S) launched a series in 2007 which is devoted to the Principles of European Tort Law (PETL) created by the European Group on Tort Law.76 The various papers published in AV&S discuss not only the contents of the PETL, but also the relevance of the solutions proposed in PETL in the light of Dutch tort law.77 Moreover, it is interesting to point at the fact that the criticism that had been formulated by others earlier on a European harmonisation of tort law78 has recently been followed by Engelhard.79 b) Enforcement

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Van Boom paid a lot of attention to efficacious enforcement in contract and tort.80 This clearly follows a trend both in legal doctrine and in politics to favour an instrumental use of tort law.81 Van Boom shows that when the goal of legal rules is indeed to motivate citizens and corporate actors to act in a specific way, a lot can still be improved in the contents and structure of private law. In this respect he refers to drastic changes among others in the field of collective action82 and to the introduction of punitive damages in Dutch tort law. 76 77

78

79

80

81 82

European Group on Tort Law (ed.), Principles of European Tort Law (2006). See for example T. Hartlief, PETL: Basic Norm and Liability Based on Fault, AV&S 2007, 49– 55; S.D. Lindenbergh, PETL: General Conditions of Liability, Damage, AV&S 2007, 83–87; J.S. Kortmann, PETL: General Conditions of Liability, Causation ‘In Fact’, AV&S 2007, 151– 157; G.H. Lankhorst, Principles of European Tort Law: Art. 3:201-Scope of Liability, AV&S 2007, 209–214 and I. Giesen, PETL: De ‘Europese’ omkering van de bewijslast, AV&S 2007, 271–276. See i.a. M. Faure/T. Hartlief, Harmonisatie van aansprakelijkheidsrecht in Europa. Iets over de overlevingskansen van de romantische rechtschool van Maastricht, in: L. Cornelis et al. (eds.), Liber Amicorum Tijdschrift voor Privaatrecht en Marcel Storme, Tijdschrift voor Privaatrecht (TPR) 2004, 297–322. E.F.D. Engelhard, Gehele harmonisatie van aansprakelijkheidsrecht is onzin! Oproep tot een batenstudie door niet-juristen, Ars Aequi 2007, 227–229. See W.H. van Boom, Efficacious Enforcement in Contract and Tort, inauguration address Erasmus University Rotterdam (2006) and id., Effectuerend handhaven in het privaatrecht, NJB 2007, 382–391. See in this respect i.a. T. Hartlief, Gij zult handhaven! NJB 2007, 915. See in this respect i.a. W.H. van Boom/M. Loos (eds.), Collective Enforcement of Consumer Law (2007).

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c) Liability of Supervisory Authorities

We already referred to this important topic both when referring to evolutions at the legislative level and to evolutions in case law, more particularly the recent decision of the Hoge Raad in the Vie D’Or case. Also, legal doctrine has dealt with the question whether supervisory authorities should be exposed to the working of tort law or whether a specific regime should be applicable to them. Legal doctrine generally held that there are few reasons either for a statutorily limited liability or for a different treatment of supervisory authorities outside the field of general tort law. It can be feared that any deviation would dilute the preventive effect of tort law.83

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However, recently two law and economics scholars (Dijkstra and Visscher) held that there may be reasons to limit the liability of supervisory authorities who monitor the functioning of financial markets.84 They argue that since as a result of failing supervision by authorities supervising financial markets the damage will usually consist of pure economic loss, there is a danger of overdeterrence by exposing supervisory authorities fully to tort law. This leads to the question whether tort law could have the adverse affect of a “defensive supervision” whereby supervision would only be undertaken to avoid liability of the supervisory authorities. However, in a research study executed by Prof. Cees van Dam for the British Institute of International and Comparative Law (BIICL) it has not been established that supervisory authorities would experience an unreasonable pressure in legal systems where liability of these authorities is widely accepted.85

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d) Wrongfulness

Above, we already indicated that some recent case law deals with the wrongfulness issue. This topic has also been dealt with in legal doctrine. For example, Jansen addressed a study on what he refers to as the subjective element of wrongfulness.86 Jansen argues that, when answering the question whether the injurer violated a duty of care, attention should also be paid to his knowledge and intention. In this respect, he pays specific attention to the difference between wrongfulness and attribution.

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In the previous Yearbook we discussed the so-called “skeeler” decision of the Hoge Raad of 25 November 2005.87 This decision of the Hoge Raad gave rise

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83

84

85

86

87

So T. Hartlief, Toezichthouders: vertrouwen of aansprakelijkheid? in: C. Almeida (ed.), Geschonden vertrouwen, jonge balie congresbundel (2005) 53–61; id., Zicht op toezichthoudersaansprakelijkheid na Linda en Vie D’Or, WPNR 6688 (2006) 799–801. R.J. Dijkstra/L.T. Visscher, Een pleidooi voor beperkte aansprakelijkheid van financieel toezichthouders wegens falend toezicht, Tijdschrift voor Financieel Recht 2007, 140. C.C. van Dam, Aansprakelijkheid van toezichthouders, Wetenschappelijk Onderzoek en Documentatiecentrum (Scientific Research and Documentation Centre, WODC) 2006. K.J.O. Jansen, Het subjectieve element van de onrechtmatigheid, over de structuur van 8.6:162 BW, NTBR 2007, 222–228. NJ 2007, 141 with case note by C.J.H. Brenner. See our discussions of this case in Faure/Hartlief (fn. 43) 418–419, no. 10–11 and in Faure/Hartlief (fn. 1) 342, no. 11.

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to a critical article by Van Boom and Giard.88 They criticise the way in which the judge constructs a particular duty of care and hold that there is very little empirical support for the standard that the judge laid down in the particular “skeeler” decision. They hold that a more structural and nuanced approach to risk assessment is necessary in determining a duty of care, which unavoidably also implies that the judiciary will have to consult disciplines outside of the law. e) Medical Liability

40

Much legal doctrine always deals with the debated issue of medical malpractice liability. For example, Hartlief presented a paper on the occasion of the forty years’ existence of the Dutch Association for Health Law89 whereby he also explicitly addressed to what extent medical malpractice has a special position compared to general tort law.90 Specific problems arise when various health care providers have been involved in a case which eventually leads to medical malpractice. The potential accumulation of liability problems has been discussed by Ten Hoopen.91 In the same issue of the Dutch Law Review (Nederlands Juristenblad) many articles were devoted to health care law and medical liability. Legemaate pleaded inter alia in favour of better information concerning claims that have been filed in the past, since he argues that this can promote the quality of health care and hence the safety of patients. However, he equally argues that prevention of medical malpractice will primarily be reached through instruments other than liability law.92 Also in another publication Legemaate argued that it is important that patients obtain a right of access to information concerning the mistakes committed by health care providers.93 f)

41

Calculation of Damages

A question that has also received attention is how damages should be calculated in cases where serious injury has been inflicted upon babies or very small children. Of course, this can be an issue in case of medical malpractice leading to birth defects, but it is a question that also has importance beyond the medical liability area. Janssen discusses recent pleas of inter alia Barendrecht, Hartlief, Kremer, Nieuwenhuis and Tjittes to change the model of damages in the sense that one should no longer ask what situation would the plaintiff have been in if the tort had not been committed (since it will in practice often be very difficult if not impossible to find out how a baby would have developed without the 88

89 90

91

92

93

W.H. van Boom/R.W.M. Giard, De empirische dimensies van zorgplicht, NTBR 2006, 360– 368. Vereniging voor Gezondheidsrecht. T. Hartlief, De staat van het privaatrechtelijk gezondheidsrecht, in: P.C. Ippel/T. Hartlief/P.A.M. Mevis, Gezondheidsrecht: betekenis en positie, Preadvies voor de Vereniging voor gezondheidsrecht (2007) 53 ff. M.M. ten Hoopen, Medisch- specialistische samenwerking en aansprakelijkheid, in het bijzonder bij operatieve behandeling van patiënten, NJB 2007, 1594–1604. J. Legemaate, Recht op veilige zorg, enkele beschouwingen over de verantwoordelijkheidsverdeling publiek- privaat, NJB 2007, 1577–1581. J. Legemaate, Recht op informatie over fouten van artsen, TVP 2007, 1–4; see on this issue also N. Frenk, De loslippige arts, AV&S 2006, 136.

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tort), but rather ask the question “What now?”. That legal doctrine had therefore asked the question whether it would not be more useful to focus on what type of compensation or measures would be useful to help the plaintiff given his specific situation. Janssen shows himself to be a great opponent of these recent ideas.94 He only agrees with suggestions to base compensation in tort on an abstract approach: the loss of the capacity to earn should be based on an average income to be gained from working within the Netherlands. 2. Proceedings Volumes and Special Issues In addition to the special issue of AV&S concerning the European Principles of Tort Law and the special issues of NJB concerning medical malpractice liability which we already discussed above, we can also refer to the following proceedings volumes and special issues:

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a) Shifts in Compensation from Private to Public Funding and Vice Versa

First of all we can mention a series of books published as a result of a project coordinated by Willem van Boom (University of Rotterdam) and Michael Faure (Maastricht University/University of Rotterdam) dealing with the way in which compensation of accident victims in various areas (medical, environment, catastrophes, and labour) has shifted in various countries from private to public funding and vice versa. The results of this research project (funded by the Dutch Research Council NWO) are laid down in three books:

43

W.H. van Boom and M.G. Faure (eds.), Shifts in Compensation between Private and Public Systems, Tort and Insurance Law, vol. 22 (Vienna 2007);

44

M. Faure and A. Verheij (eds.), Shifts in Compensation for Environmental Damage, Tort and Insurance Law, vol. 21 (Vienna 2007);

45

T. Hartlief and S. Klosse (eds.), Shifts in Compensation Work-Related Injuries and Diseases, Tort and Insurance Law, vol. 20 (Vienna 2007).

46

b) A.L.M. Keirse/R.E. Lubach/E.M. van Orsouw/B.T.M. van der Wiel, Nieuwe risico’s, nieuwe claimgebieden (The Hague 2007)

This volume is the result of the Yearly Symposium of the Association of Personal Injury Lawyers (LSA) who this year paid a lot of attention to evolutions in the U.S. Keirse, inter alia, describes the development of new claims such as those concerning asbestos and smoking and shows that claims that originally seemed unthinkable and therefore without any chance of success only a short time later were accepted as self-evident.

94

See J.F.M. Janssen, De begroting van inkomensschade van babies en peuters als gevolg van aan hen toegebracht ernstig letsel, NTBR 2007, 99–113.

47

Michael G. Faure and Ton Hartlief

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c) J.H. Wansink/N. Frenk/W.J. Hengeveld/A.R.J. Croiset van Uchelen/T. Hartlief, Special Issue of AV&S 2000/5 (2000)

48

In this special issue of AV&S once more the compensation of victims of catastrophes is discussed. Frenk sketches the Dutch approach to mass tort claims; Croiset van Uchelen discusses how agreements can be declared generally binding under the Mass Tort Claims Act; Wansink discusses the direct action in case of damage suffered as a result of catastrophes and Hengeveld discusses how a few recent catastrophes in the Netherlands have been dealt with. The editorial was provided by T. Hartlief. d) C.C. van Dam/C.H.W.M. Sterk/G.M. van Wassenaer, Honderd jaar wegenverkeerswetgeving. De invloed van verkeersarresten op het algemene aansprakelijkheidsrecht, VR 2006, 347–354

49

The journal Verkeersrecht (Traffic Law) devoted a special issue to the hundred year existence of traffic legislation in the Netherlands. One of the contributions in this special issue deals with the influence of case law with respect to traffic on general tort law. The authors (Van Dam/Sterk/Van Wassenaer) show that, for example, as far as the areas of contributory negligence, creating a dangerous situation and causation are concerned, evolutions which were originally restricted to the area of traffic liability also now have an increasing influence on other areas and therefore on the general area of tort law. This is seen as remarkable by some since traffic liability could of course evolve (and to an important extent expand) due to the existence of mandatory liability insurance. The fact that this mandatory liability insurance does not exist in other areas was apparently not a reason not to apply some of the innovative legal solutions from traffic liability case law also to those other areas.95 e) Tijdschrift voor Vergoeding Personenschade (TVP) 2006

50

The review TVP has devoted a special issue to the damage suffered by third parties. It concerns more particularly damage suffered by those who are indirectly victimized as a result of an accident, such as family members, an employer or persons who want to exercise a right of recourse. The normal rule in Dutch tort law is that the entitlement to damages is limited to a relatively strictly defined number of victims and that usually third party damage is therefore excluded.96 These and other issues are dealt with in this special issue of TVP. f)

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Mass tort claims NJB 2007, no. 41

We already addressed the new legislation concerning mass tort claims and the case law in this respect and mentioned that it is striking that this new legislation, 95

96

See also H.J.J. de Bosch/W. Kemper, Wegverkeer en verzekering, VR 2006, 355–359 and T. Hartlief, NTBR 2007, no. 38. See i.a. T. Hartlief, Wie heeft er recht op vergoeding van personenschade? Enkele opmerkingen over afbakening van de kring van gerechtigden in het aansprakelijkheids- en schadevergoedingsrecht, TVP 2006, 98–104.

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which was mainly intended for victims with personal injury damage, seems to be applied mainly to victims suffering financial losses (as in the case of the Dexia lease claim). In particular, the practice of this Mass Tort Claims Act is extensively dealt with in this special issue of NJB. Various authors (among others, Hartlief, Barendrecht, Tzankova, Krans, Giesen and Frenk) deal with several aspects of mass tort claims. Academic analyses are provided, as well as an analysis of some of the practical cases that have occurred in the Netherlands. g) A.S. Hartkamp/C.H. Sieburgh/L.A.D. Keus (eds.), De invloed van het Europese recht op het Nederlandse privaatrecht (Deventer, Kluwer 2007)

The goal of this impressive volume (640 pages) is to provide information on developments at the European level to Dutch lawyers working in the area of private law. Issues such as product liability, etc. that have been extensively dealt with at the European level have now been transposed into national Dutch private law and have thus had an important influence on Dutch private law, including tort law. It is this influence of material European law on Dutch private law that is discussed within the contributions contained in this volume.

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3. Monographs a) W. van Boom/M. Loos (eds.), Collective Enforcement of Consumer Law. Securing Compliance in Europe through Private Group Action and Public Authority Intervention (Groningen, Europa Law Publishing 2007)

Even though this book deals primarily with consumer law, the findings are certainly of importance for the area of tort law as well. Many contributors to the book (Van Boom, Loos, Micklitz, Van den Bergh and others) study the various aspects of the collective handling of consumer claims and deal with the various legal aspects from a comparative perspective as well as with the economic aspects.

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b) C.J.M. Klaassen, Schadevergoeding: algemeen, deel II (Deventer, Kluwer 2007)

This monograph deals with the general principles of damages. The assessment of damages and the various methods are discussed as well as problems of causation. Attention is paid to the proof of the causal relationship as well as to methods of dealing with causal uncertainty.

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4. Dissertations a) I.M. Tzankova, Toegang tot het recht bij massaschade, Dissertation, Universiteit Tilburg (2007)

This dissertation by Ianika Tzankova deals with a topic we already mentioned a few times in this contribution, being the access to justice in case of mass tort claims. Tzankova addresses, from an academic and a practical perspective, problems that potential victims of mass tort claims may experience in enforcing their claims and she examines the strengths and weaknesses of various solutions to improve the situation of victims.

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Michael G. Faure and Ton Hartlief

b) T.F.E. Tjong Tjin Tai, Zorgplichten en zorgethiek, Dissertation (Kluwer, Deventer 2007)

56

This doctoral dissertation by Eric Tjong Tjin Tai deals with various aspects of care, both from a legal and from an ethical perspective. In the legal part of the thesis, Tjong Tjin Tai addresses duties of care both in contractual and in extracontractual liability law. He analyses, explains and attempts to structure the case law of the Hoge Raad with respect to duties of care of various potential tortfeasors, including public authorities. Also duties of care of specific professionals (among others, public notaries) are explicitly addressed. c) M.G.P. Peeters, Compensatie en erkenning voor werknemers met asbestziekten tussen 1978 en 2005. Een rechtssociologisch onderzoek (Compensation and Recognition for Employees suffering from Asbestos related Diseases between 1978 and 2005. A Sociology of Law Approach, Dissertation) (Nijmegen, Wolff Legal Publishers 2007)

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This dissertation by M.G.P. Peeters deals with the compensation and recognition for employees suffering from asbestos related diseases between 1978 and 2005. Peeters discusses the legal aspects as well as the way in which victims of asbestos related diseases have been compensated in practice during the period she examined. 5. Inaugurations a) S.D. Lindenbergh, Alles is betrekkelijk, Inauguration address Erasmus University Rotterdam (The Hague, Boom Jurdische Uitgevers 2007)

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We already briefly mentioned this inauguration in our previous Yearbook.97 Lindenbergh deals with the relationship between a violation of a specific norm and the scope of liability. He holds that one should more clearly address the specific character and contents of the violated norm or the type of liability to relate such to particular findings of liability or also to damages.

E. CONCLUDING REMARKS 59

This contribution showed that once more in the Netherlands there were quite a few evolutions worth mentioning in the domain of tort law even though most of these evolutions originated rather from case law than from the legislator. Even though we mentioned many evolutions, we could of course not provide a comprehensive overview. For example, the domain of the statute of limitations was not discussed in this Yearbook for the simple reason that, if there was any case law of the Hoge Raad, it merely consisted of a confirmation of earlier case law.98 Equally worth mentioning is that Van Dijk wrote a fairly critical article

97 98

Faure/Hartlief (fn. 1) 359, no. 50. See for example HR 26 January 2007, NJ 2007, 77 which is a confirmation of HR 1 April 2005, NJ 2006, 377.

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concerning the way the Civil Code has dealt with the statute of limitations.99 He therefore pleads in favour of a fundamental reform of this domain, at least in the direction of a simplification. Even though there may not have been spectacular evolutions, some (smaller and sometimes greater) steps have been made sometimes in the direction of an expanding of liability and in some cases in the direction of a limitation.100 An important aspect in the evolution of the scope of liability in the Netherlands is undoubtedly the insurability of liability. Many have argued that the enlargement of liability should be judged within the framework of insurability.101 The director of the Dutch Insurers Association held that it is necessary to construct what he referred to as a “task force on liability” to tackle the frictions between liability and insurance and this in the interest of society.102

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Meanwhile, the Hoge Raad seems to have calmed down the emotions at least in the domain of the liability of supervisory authorities since the Vie D’Or decision was not too frightening for public authorities. However, there are undoubtedly new domains in which the Hoge Raad will have to express itself (of course when the occasion is provided through a specific case). Questions arise inter alia concerning the specific scope of the employer’s liability when it is based on art. 7:611 of the Civil Code. Also the question arises whether the Hoge Raad is indeed willing to deduct very specific duties of care more particularly in the area of safety at work from rather vague statutory norms concerning employees’ safety.

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Also, at the legislative level some activity can be expected. As we showed many times in this contribution the handling of mass tort claims in the Netherlands has become a hot issue. It is therefore to be expected that some will try to refine the current legislation with more regulations to facilitate the handling of mass tort claims in the interests of victims. However, in addition to these procedural changes, the question also arises whether the position of victims of “classic” catastrophes like fires, explosions and floodings should also not deserve a better protection, more particularly in those cases where there is a risk of insolvency of the injurer. In that respect the Netherlands is still falling behind compared to countries like Belgium where in many more cases potential tortfeasors are obliged to guarantee their solvency through mandatory insurance or other financial guarantees. It can be expected or at least hoped that in the long run a similar evolution will take place in the Netherlands as well.

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99

100

101

102

Chr.H. van Dijk, Bevrijdende verjaring, een mislukt onderdeel van het BW, NJB 2007, 1044– 1050. See also more generally on the development of liability law in the Netherlands, T. Hartlief, Heeft het aansprakelijkheidsrecht (de) toekomst? in: K. Bernauw et al. (eds.), Aansprakelijkheid, aansprakelijkheidsverzekering en andere schadevergoedingssystemen (2007) 808–865. See for example T. Hartlief, De grillige ontwikkeling van het aansprakelijkheidsrecht met het oog op de verzekerbaarheid van aansprakelijkheid, AV&S 2006, 96–108 and N. Frenk, Utopische wetgeving en verzekerbaarheid, AV&S 2006, 108–117. L. de Boer, Aansprakelijkheidsverzekering moet aan een nieuwe toekomst beginnen, AV&S 2006, 118–120.

XVIII. Norway Bjarte Askeland

A. LEGISLATION 1. Skadeserstatningsloven (Norwegian Act on Compensation) 13 June 1969 no. 26 (skl.) § 1-6; Provision on Liability for Corruption

1

In order to implement the European Council’s “Civil Law Convention on Corruption (4 November 1999)”, a new provision was added to the Norwegian Compensation Act (Skadeserstatningsloven 13 June 1969 no. 26, skl.) and numbered § 1-6. The rule prescribes liability for persons who cause damage by acts of corruption. An act of corruption is defined by a reference to the Norwegian Penal Code (Straffeloven 22 May no. 10 § 276 a) where corruption is described as “claiming or receiving an offer of an undue advantage in the course of one’s employment or appointment”. Correspondingly corruption also arises when one gives or offers an undue advantage in the course of one’s employment or appointment.

2

The ordinary requisites of economic loss and causation between the act of corruption and the loss apply. The provision applies, however, only where negligence or intent is proved.

3

Compensation may also be claimed from the employer of the person who has acted in a corrupt manner. The scope of this liability clause is limited to situations where the corruption occurs in connection with the employee’s work for the employer. The employer may, however, exonerate himself by proving that all reasonable measures have been taken to avoid corruption and that liability of the employer would not be reasonable, all things considered. In the preparatory works of the provision it is suggested that the liability clause may reach further than the ordinary rule of respondeat superior (skl. § 2-1). This may, however, turn out to be more of an academic observation without any practical significance.

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B. CASES 1. Høyesterett (Supreme Court, Hr) 7 May 2007, Rt. 2007, 687: Personality Rights a) Brief Summary of the Facts

Two persons participated in the “reality” TV series “Big Brother”, which involved, the participants being locked up inside a house for several months, continuously being watched by TV-viewers in Norway. The two participants became lovers during the months they spent in the house and ultimately one of them won the competition: Every week, by means of voting, viewers decided which of the participants should leave the house. The last person remaining in the house was declared the winner. After the TV-series, the two participants gave several exclusive interviews that focused on their personal life and they allowed a magazine to cover a holiday trip the two of them went on. For all these activities the couple were paid money. Two years after the end of the TVseries and one year after the couple had stopped giving interviews, a magazine (Se og Hør, “See and Gather”) published three articles on the couple’s personal life. One of the articles claimed that the two of them disagreed on whether they still were a couple or not, and one article claimed that the man had another girlfriend. The two “ex-reality-stars” claimed compensation for infringement of their personality rights.

4

b) Judgment of the Court

The legal basis for the claim was skl. (the Norwegian Compensation Act) § 3-6 which reads that one may be awarded compensation for acts of intrusion into one’s “privatlivets fred” (“the peace of private life”). The court stated that the case concerned the question of how to balance freedom of speech (European Convention on Human Rights, ECHR art. 10) against personal rights (ECHR art. 8). The court then moved on to presenting an interpretation of the von Hannover case (ECHR-2000-593209). The court pointed out that the articles in question by no means were of interest to political discussions within society. The court recognised that persons who have chosen to be a target for the press must tolerate more attention than ordinary people. Nevertheless, the article on whether the relationship between the two plaintiffs was over or not was found to be a breach of the law. Consequently the two plaintiffs were each granted an award of NKR 160,000 (approximately € 20,000)

5

c) Commentary

The decision breaks new ground within Norwegian tort law. It is interesting that the Norwegian Supreme Court is extremely loyal to the ruling in the von Hannover case. This judgment puts quite strong restraints on magazines which report on the lives of celebrities. The message from the court is that the freedom of expression cannot legitimate gossip. It is easy to agree that there should be some restraints on editors when the spreading of unverified rumours regarding people’s private life is concerned. On the other hand, it seems somewhat peculiar that people who have a strong desire to become a celebrity are allowed

6

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Bjarte Askeland

to end their celebrity status whenever they feel like doing so. The reality stars had in one sense exploited the press in order to achieve fame and financial advantages. A principle that would correspond with other tort law figures would be that a person who exposes himself by deliberately choosing a position may have to bear the consequences without any compensation.

7

The magazines had, however, paid good money for the previous exposure of the celebrities. The new articles were, by contrast, published without any fee having been paid to the two reality stars. The judgment provides guidelines for how much exposure these kinds of celebrities must tolerate without being paid. 2. Hr, 19 March 2007, Rt. 2007, 425: Damage a) Brief Summary of the Facts

8

A man, A, tried to place a bet on a horse using the national bookmaker system, “Rikstoto”. Due to incorrect information on how to mark the coupon, the electrical machine that was to process the bet did not accept the coupon. The incorrect information was given on the national bookmaker’s website on the internet. The incorrect information concerned which track the horses would race on, stating that this was to be marked by the symbol “D2” whilst the right marking eventually was found out to be “B”. When this error was discovered, it was too late to register the coupon. Because of this, A’s bet was not registered in time before the horse race took place. The filled out coupon was, however, all correct. Consequently A was deprived of an award of money. Corrected for the price of placing the bet, the lost award was approximately NKR 666,000 (€ 80,000). b) Judgment of the Court

9

The court examined closely whether the type of loss in question fell under the scope of relevant damage. The court’s point of departure was that the loss of profit in case of pre-contractual liability as a rule does not automatically qualify one for compensation. Such loss may only be seen as a protected interest where policy grounds support the claim. In this respect the court pointed to the fact that the betting activity was not an ordinary branch of business life. One important argument against compensation was that the kind of profit in question was very insecure. The chance of winning when betting on horses was said to be marginal. In addition, a potential player may be hindered from betting due to many reasons other than an error on the part of the betting management. Furthermore, the court also put weight on some policy considerations, inter alia whether granting compensation for this kind of loss might encourage attempts at fraud. All in all the court did not find sufficient reasons for granting compensation. c) Commentary

10

The reasoning in the case shows that pure economic loss is compensated only where there are sufficient special reasons to do so. Not every economic loss is worth compensating in the eyes of the law. An interesting feature of the court’s

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reasoning is the more or less clear disregard for the interests of the gambling man. Even though one cannot point to distinct moral reasoning in the case, reading between the lines, the court suggests a distinction between “proper” business activities and gambling. This may have more general consequences for the delimitation of the concept of damage. 3. Hr, 28 November 2007, Rt. 2007, 1665: Employer’s Liability a) Brief Summary of the Facts

While working a night shift at a ship building yard, a security guard set fire to one of the buildings he was supposed to be guarding. The fact that the guard had set the fire was discovered only seven years later. The insurance company who had paid for the damage caused by the fire sued the liability insurer who at the time covered the employer of the security guard. The claim was based on two alternative rules. Firstly, the rule of respondeat superior, see skl. § 2-1 no. 1. Secondly the insurance company was sued on the basis of the contract that the security company had engaged in. The core of the contract was the task of looking after the very buildings that were set on fire.

11

b) Judgment of the Court

Regarding the rule of respondeat superior (skl. § 2-1 no. 1), the court found that the employer was not liable. The court pointed to the very special circumstances of the case: The guard had acted with intent, but not for profit. His motivation was to get attention and recognition in connection with discovering the fire. The court referred to a point in the preparatory works (for skl. § 2-1) where it is mentioned that risks that “are inherent in the employee rather than inherent in the working operations” should fall outside the scope of employment. Furthermore, it was emphasized that, in other cases where an employer has been found liable for intentional harmful acts committed by employees, one has put weight on the preventive effect of placing liability upon the employer. For the kind of damaging act in question, there is very little an employer can do to prevent such harmful acts.

12

The court found, however, that the employer (and the liability insurer) was liable based on the contract on guarding the building. Firstly, the fire had been started in connection with the task that the security company had taken on. Secondly, the object of the harmful act was the very same property that the security company had undertaken to protect. Moreover, if the security guard had omitted to discover a fire due to negligence, they would have been liable for the damage in consequence of their contractual obligations. The security company could not reach a better position when their employee had actually lit the fire. Lastly one pointed out that the company after all had chosen the guard to work for them. Based on these points, the court found that the security company was “the nearest” to shoulder the loss.1

13

1

This is an expression that resembles the German expression where one party is said to be “näher daran” to shoulder the loss or to carry the risk.

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c) Commentary

14

The part of the judgment that concerns the rule of respondeat superior is very interesting. Under Norwegian tort law, there has been a string of cases discussing whether the employer should be held liable for intentional acts committed by their servants.2 The prevailing view has been that the employer has to bear the risk of having dishonest servants where the misdeeds of the employee have a strong connection to their employment functions.3 In the case at hand, the security guard did not commit the act to gain personal profit, rather to gain attention. Hence, the paraphrased part of the preparatory works apparently does not apply to criminal acts of employees, whereas it did come to the fore and played an important role in this case. I fear that the distinction may be very difficult to apply in future cases.

15

As for the contractual basis, one might say that the reasoning is convincing. It is hard to argue that the security company is not responsible for the harm committed to the very object the company was paid to protect. But one may ask whether there is a logical connection between the two parts of the decision. The employer bears no risk for damage caused by his servant’s strange personal constitution, but he bears the risk for such peculiarities whenever there is a contract involved. The result in the case does, however, correspond to the more profound principles of tort and contract law. In general, a party to a contract is more likely to be held liable in contract than in torts. 4. Hr, 12 February 2007, Rt. 2007, 172: Adequate Causation a) Brief Summary of the Facts

16

An electrician, A, who was working on some light arrangements several metres above ground, was injured when the lift he was sitting in fell down. He fell four metres, broke his back and injured his arm. He suffered, however, no damage to his head. At the time of the accident A was 32 years old, lived together with a woman and led an active life, participating in various sports and leisure activities. Among other activities, he played darts at a relatively advanced level. After the accident the man could no longer work as an electrician. For two years he remained too ill to work. Not being able to work as an electrician, he then tried to start his own business, but did not succeed. Hence he had to live from his social security payments. During the years after the accident he developed a severe psychiatric illness and was diagnosed as a paranoid schizophrenic. The medical experts stated that there was a connection between the accident and the illness or the consequences of the illness. b) Judgment of the Court

17

The court found that the insurance company covering labour injuries would be liable according to the Act on Insurance for Accidents at Work (yrkesskadeforsikringsloven 16 June 1989 no. 65, ysfl. § 11), provided that the requisite 2 3

See Norsk Retstidende (Rt.) 1982, 1389; Rt. 1996, 687; Rt. 2000, 211. Rt. 2000, 211.

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causal connection was fulfilled. The court found that the accident was a conditio sine qua non for the illness. The court stated, however, that the causal connection was not proximate (adequate). One pointed to the fact that such physical accidents very seldom result in psychiatric illness. Moreover, it was emphasized that the medical experts did not conclude that the illness stemmed directly from the accident. The illness was a result of the consequences of the accident; the fact that he became unemployed, had to give up his leisure activities and the fact that his recovery programme was not successful. The court also added that the fact that his partner left him also played a part in the development of his illness. This was a cause that was in no way connected to the accident. Consequently A was denied compensation. c) Commentary

The case concerns insurance law, but it is, however, highly relevant to tort law. The core issue of the case is the question of adequacy in case of underlying personal weaknesses of the injured party, the problem of “the thin skull”. Under Norwegian tort law, there have been several cases confirming that psychiatric illness generated by physical injuries may qualify for compensation.4 This is so even where a dominating cause of the illness is the injured person’s genetic psychiatric dispositions. The schizophrenia case, however, puts a limit to the possibility of claiming compensation in such cases. The reasoning connected to the fact that the psychiatric illness was caused by the consequences of the accident will probably be a leading star for similar cases in the future.

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C. LITERATURE 1. Nils Nygaard, Skade og ansvar (Damage and Compensation) (Universitetsforlaget, Bergen 6th ed. 2007) This volume is a comprehensive book on Norwegian tort law that for many years has been very influential on both theoretical discussions and legal practice. Thoroughness both with regard to the search for sources and to theoretical elaboration is a salient feature of this book. Traditionally the author’s way of presenting the culpa norm has been respected and adopted by many scholars and practitioners. Nygaard’s presentation may be explained as an advanced version of the Learned Hand formula. By means of studying court practice, Nygaard has added operational criteria both to the assessment of the risk and to the burden of the preventive measures. In Nygaard’s version of the culpa norm, one must examine the “frequency, character and closeness of the risk” as well as whether the “alternative act was practically and economically feasible” at the “critical point in time” (the point in time of the last chance to avoid damage).

19

Moreover, Nygaard has developed an alternative approach to factual (natural) causation, which challenges the so far prevailing but-for test (conditio sine qua

20

4

See for example Rt. 2001, 320.

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non). Instead of asking the hypothetical question: “What would have happened had the cause not occurred (the but-for test)?”, one should ask the factual question: “Which factor did in fact bring about the harm?” Nygaard has built a whole doctrine around this question, dividing it into three questions: Did the factor occur, did it have the ability to cause the harm and was it this ability that released its potential?5

21

These are only two of the many points where Nygaard has contributed significantly to the theoretical debate within Scandinavian tort law. All general elements of tort law are covered, whereas the author has also provided for special themes such as, for example, liability for automobiles, liability towards patients (malpractice) and lawyers’ liability. Every edition has provided the book with new dimensions and further clarity. This is also true for this new (and sixth) edition, which has several original chapters with new substance in addition to the mere updating of the book. One important improvement of the book is the new version of the chapter on adequate cause (or “proximate cause”). 2. Endre Stavang, Erstatningsrettslig analyse med særlig vekt på eiendomsrett og miljø (Tort Law Analysis with a Special Emphasis on Property and Environment) (Cappelen Akademisk, Oslo 2007) 297 pp.

22

This book is a collection of articles that the author has written over the past ten years. The author’s main field of interest is the economic analysis of tort law, and many of the articles comprise salient elements of law and economics, see for example the article “Explaining welfare based tort law” (161 ff.). Some of the articles also apply law and economics as a tool for rethinking classical themes within tort law, such as the requisite of economic loss and the border between pecuniary and non-pecuniary loss. Other articles focus on special questions in the penumbra of tort law, see for example the articles on tolerance limits and temporal priority in environmental civil liability (225 ff.) and on tort law as an instrument within environmental law (197 ff.). An article of special interest is the article on compensation for reduced exploitation of real estate property (101 ff.). This problem has never before been subject to any thorough analysis within Scandinavian law.

23

The articles are all interesting and represent excellent scholarly work. The author has a personal and original style and the subjects are presented in a pedagogical manner. The author’s ability to integrate law and economics and tort law brings many interesting points.

5

N. Nygaard, Skade og ansvar (6th ed. 2007) 330–333, 342–345.

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3. Erik Monsen, Fradrag ved overvelting ved utmåling av erstatningsog tilbakesøkningskrav (Deduction of Passed on Costs by Assessment of Damages and Restitution Claims) Tidsskrift for Erstatningsrett (Journal of Tort Law, TfE) 2007, 195–232 This article elaborates the problem of loss allocation where someone has paid money on the basis of a wrongful claim or paid a larger sum of money than permitted by the claimant’s legal basis. The focus is particularly on the situation where A wrongfully claims an excessively high price for a good or a service. The claim may be too high because A has been a member of an unlawful cartel or has committed fraud against B. A similar situation occurs where A claims too much in insurance premiums or taxes or in other ways claims money without having sufficient legal basis for doing so. B then passes his loss on to his customers C1, C2, C3 and so on. As a consequence of the payments from his customers, B eventually does not suffer any loss. Only afterwards is it discovered that A had actually claimed excessive prices from B. This situation has sometimes been addressed as the problem of “passing on”.

24

Is A in this situation liable to B or to one or more customers? If A pays B, B actually will obtain an unjust enrichment. This is of course a less satisfactory solution. Hence one may ask: Is there sufficient legal basis for a claim from C against A? The author elaborates these problems in light of a number of existing theories and viewpoints. Classical approaches such as “condictio indebiti” and “compensatio lucri cum damno” are addressed.

25

The author argues that the most sound and just solution would be to grant C a restitution claim against A. In this way B’s original claim against A is subrogated to C. Under Norwegian law there is no distinct authoritative basis for such a solution, but the author nevertheless produces convincing juridical reasoning based on ideas of justice, rationality and consistency within tort law. The author bases his reasoning particularly on other structures of loss allocation and subrogation within Norwegian law.6 The article provides a thorough and enlightening analysis of an interesting problem within modern, current private law.

26

4. Kari Birkeland, Erstatningsansvar for revisorer (Auditors’ Liability) TfE 2007, 4–32 The article elaborates on the question of when an auditor is found liable for not performing his duties satisfactorily. The author describes the various duties of an auditor and comments on decisions which indicate the threshold of liability. Also the question of contributory negligence is addressed.

6

See B. Askeland, Tapsfordeling og regress ved erstatningsoppgjør (Loss Allocation and Right of Recourse in Tort Law) (2006) reported in id., Norway, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2006 (2008) 368 ff.

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5. Bjarte Askeland, Principles of European Tort Law og norsk erstatningsrett (Principles of European Tort Law and Norwegian Tort Law), in: T. Frantzen et al. (eds.), Festskrift til (Essays in Honour of) Helge Johan Thue (2007) 24–37

28

The author compares the Principles of European Tort Law (PETL) (as presented by the European Group on Tort Law in 2005)7 to Norwegian tort law principles. The author holds that the structure of the Principles resembles the Nordic comprehensive approach to the tort law system. The author points to many similarities between the two set of principles. Only a minor number of points are identified as points where PETL departs from the Norwegian solutions. One such point that is especially highlighted is art. 2: 104, the rule on preventive damages. The author argues that this principle actually should be adopted into Norwegian tort law and that such an adoption will fill a gap within Norwegian tort law. Another point of divergence between the two systems is the proposed proportional liability within PETL.8 Concerning this point, the author is reluctant and holds that the solution within PETL does not fit very well with basic elements of Norwegian tort law. The author argues that PETL may have some impact on Norwegian tort law in areas where solutions are doubtful. Such developments may, however, only emerge within boundaries set by the demand for consistency within Norwegian tort law. 6. Erik Monsen, EF-domstolens innvirkning på norsk erstatningsrett (The Impact of the European Court of Justice on Norwegian Tort Law) TfE 2006, 238–258

29

In this article the author shows how the ECJ practice has an impact on Norwegian tort law in various ways. It should be noted that Norway is not a full member of the common market. The nation is only affected by the legal order of the European Union as far as the agreement on the European Economic Area (EEA) provides a legal basis for a duty to implement EC law. The content of the EEA agreement leads, however, to far-reaching duties of implementation. Because of this, it is fair to say that Norway, in practical terms, is in the same position as full Member States when it comes to the impact of the ECJ.

30

In particular, Monsen highlights two areas of impact. Firstly, there have been some Norwegian cases on state liability for wrongful implementation of EC law. In this connection Norway has developed a doctrine of state liability for wrong implementation that is the same as the EC doctrine in this area.9 Secondly, Monsen develops “rettsbeskyttelsesprinsippet” (best translated as “the principle of effectiveness”). By this expression Monsen refers to the principle that the national legal order must establish rules that protect citizens’ rights as established by EC law. The principle applies, for example, where econom7

8 9

See European Group on Tort Law, Principles of European Tort Law, Text and Commentary (2005). See ibid., 46 f. See particularly the case referred to in Rt. 2005, 1365, reported in B. Askeland, Norway, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2005 (2006) 449 ff., no. 20–28.

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ic sanctions are used to safeguard the citizen’s right not to be discriminated against. Even though the discriminated party may not suffer any actual economic loss, the legal order of the EU demands that the nation has established economic sanctions against discrimination in order to prevent violation of the implemented rules. In this way the national tort law, which generally prescribes that compensation requires economic loss, may come under pressure. Monsen shows how similar effects are already present within Norwegian tort law on the basis of cases such as ECJ C-453/99, Courage v. Crehan [2001] ECR I-6297 and ECJ C-253/00, Munoz and Superior Fruiticola SA v. Fumar Ltd and Redbridge Produce Marketing Ltd [2001] ECR I-7289. An interesting point is that Monsen shows how the reasoning of the ECJ is already internalised within the national Supreme Court. A convincing example is presented by reference to Rt. 2001, 1062, a case regarding procurement where the purpose of securing the effectiveness of the EC-rules played a significant part in the court’s reasoning. The article is important due to the fact that it brings to the fore tendencies within Norwegian tort law that so far have not been recognised and articulated on an academic level. The author also presents valuable observations regarding the interplay between EC law and Norwegian tort law. His conclusion is that the profound structures of Norwegian tort law will likely not be affected by ECJ practice. The court practice will, however, play a significant part in tailoring solutions in more detailed questions. An interesting observation presented by the author is that Norwegian tort law for too long has focused on physical damage, whereas the important questions nowadays concern pure economic loss. The application of the “principle of effectiveness” widens the scope of compensation for pure economic loss. Hence there is a need to update tort law theories in this area.

31

7. Peter Lødrup, Oppreisning − et praktisk rettsinstitutt (Compensation for Non-Pecuniary Loss – a Practical Legal Institute) TfE 2006, 211–237 “Oppreisning” is a head of damage that comprises a variety of non-pecuniary losses, such as pain, suffering and bereavement. This kind of damage has a positive statutory legal basis in skl. § 3-5. An important requisite for such compensatory damages is that the act constituting liability was committed intentionally or with gross negligence.

32

The number of court decisions based on “oppreisning” has over the past few years increased significantly. The Supreme Court has also granted higher compensation awards for this kind of infringement. In this respect the Supreme Court has to some extent standardised the level of the awards. Two examples may be mentioned: For rape, the standardised award now is NKR 100,000 (approx. € 12,500). In case of (intentional) homicide, the parents of the victim will be granted NKR 120,000 (approx. € 15,000). The article provides an informative analysis of this development, and refers to some of the most important cases.

33

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8. Filip Truyen, Aksjeanalyse og informasjonsansvar (Share Analysis and Information Liability) Tidsskrift for Rettsvitenskap (TfR) 2007, 85–170

34

This article brings an analysis of the question of when and to which extent a stock market analyzer may be liable for the information he provides. The focus of the article is the following situation: On the basis of the analyzer’s information, a receiver of the information buys shares in a certain company. The information is negligently incorrect and the market value of the share subsequently drops. Does the information receiver in this situation have a claim against the analyzer for the loss connected to the investment? The author elaborates on this question with regard to negligence as a legal basis for liability, adequate causation, assessment of damages, mitigation of loss and reduction of damages. The author also analyzes questions of assumption of risk. Moreover, the difference between the professional analyzer, the amateur analyzer and analyses performed and spread by the press is addressed with regard to thresholds of liability in negligence.

35

The article combines general principles of tort law with the more specialised regime of compensation connected to failed investments. This area has never before been addressed properly within Norwegian legal literature. The article is therefore both enlightening and interesting. On the other hand, whenever profound and general structures within tort law are applied in a new context, there is need for real deep elaboration. At some points in the article a reader may wish that the author had plunged even deeper into the material.

XIX. Poland Ewa Bagińska

A. LEGISLATION 1. Act of 16 February 2007 on the Revision of the Civil Code, Dziennik Ustaw (Journal of Laws, Dz. U.) 2007, no. 80, at 538 – Prescription of Tort Claims The new art. 4421 § 1 kodeks cywilny (Civil Code, KC) provides that a claim for redress of the damage caused by a tort expires after the lapse of three years from the day on which the injured person learned about the damage and about the person obliged to redress it. However, that time may not exceed ten years from the day on which the event that caused the damage occurred. This new general rule shows no real changes.

1

Art. 4421 § 2 KC: If the damage was due to a crime or misdemeanour, the claim for its redress expires after twenty years from the day on which that crime or misdemeanour was committed regardless of when the person who suffered the damage learned about it and about the person obliged to redress it. The new § 2 extended the time of prescription in the cases of crimes or misdemeanours from ten to twenty years. It should be remembered that a civil court decides about the criminal nature of the tortfeasor’s conduct. No criminal court verdict is required.

2

Art. 4421 § 3 KC: In a personal injury case a claim may not expire before the lapse of three years from the day on which the injured person learned about the injury and about the person obliged to redress it. This is a completely new rule. It means that regardless of the lapse of the time a tempore facti, whether ten or twenty years, the claim for personal injury will not be time-barred for three years since tempore scientae. Hence, the absolute periods of ten or twenty years are “suspended” in personal injury cases. Nevertheless, the periods running a tempore facti may prove more convenient for the injured as regards evidence.

3

Art. 4421 § 4 KC: The claims of a minor for redress of the damage stemming from personal injury may not expire earlier than after the lapse of two years

4

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from the day of maturity. This provision protects minors whose parents (custodians) did not manage to file the lawsuit during the prescription period. It will facilitate cases like the one reported at no. 10.

5

The new law entered into force on 24 May 2007. It does not change the interpretation of art. 4498 KC which is a special rule on prescription in the product liability regime and must be construed in conformity with Directive 85/374/ EEC. 2. Draft Act on the Revision of the Civil Code – new art. 446 § 4 KC, Non-Pecuniary Damages to Relatives in Wrongful Death Cases

6

Under current regulation, in the case of a wrongful death, a court may award the closest members of the family of the deceased an appropriate indemnity if his death resulted in a considerable worsening of their living standard (art. 446 § 3 KC). This compensation covers those elements of pecuniary damage that are not taken account of in the award of an annuity. They are considered pecuniary damages in a broad sense, often imperceptible or hardly computable, leading to a substantial deterioration of the economic position of a closest related person. Moral damage arising from the victim’s death, if sought alone, is not compensated. Thus, the claim for compensation for this damage, based on art. 446 § 3 KC is dependent on the existence of some kind of a pecuniary loss, although the courts tend to mix pecuniary and non-pecuniary elements of damage.1

7

In 2007 it was proposed by the Ombudsman, and consequently by the Commission for the Codification of Civil Law, that the relatives of the deceased should have an explicit claim for non-pecuniary loss.

8

The draft art. 446 § 4 KC reads: “In addition, a court may award the closest members of the family of the deceased an appropriate sum of money as compensation for moral harm”.

9

This claim was admissible under the Code of Obligations of 1933 (art. 166 – based on the Swiss regulation and French jurisprudence). However, due to the restrictive interpretation given by the Supreme Court after World War II (albeit strongly criticised by doctrine) and the hostile attitude towards compensating non-pecuniary harm in the socialist regime, the rule was in fact abolished by courts. The Civil Code of 1964 followed this direction in art. 446 § 3. Now, the times have changed and no one questions the need for bereavement claims any more. They would have a great significance in the sphere of traffic liability.

1

Although, in general, mere grief is not to be compensated, a severe mental trauma (e.g. in case of the spouse’s or long-time partner’s death), feeling of solitude, harm (e.g. loss of the mother by a minor) should support a suitable augmentation of the award, because they influence the degree of the decline in the life situation. See E. Bagińska/M. Nesterowicz, Non-Pecuniary Loss under Polish Law, in: W.V.H. Rogers (ed.), Damages for Non-Pecuniary Loss in a Comparative Perspective (2001) 180.

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Compensation of moral harm suffered by the family members and other close persons may be shaped in a different manner. In particular, it may be dependent on the requirements of justice (as was originally proposed by the Commission for the Codification of Civil Law) or even replace the claim based on art. 446 § 3 KC. The government draft filed with the Parliament reflects none of the above concepts. However, the final legal rule remains uncertain.

10

3. Miscellanea Although insurance law is not subject of the report, one should mention a significant revision of the contract of insurance (art. 805–834 KC) by the Act of 13 April 2007 (Dz.U. no. 82, item 557) on the Revision of the Civil Code (entered into force on 10 August 2007). It aims to further harmonise Polish insurance law with EU standards, and to enhance the protection of traffic accidents victims by introducing mechanisms for prompt payments by insurers. Moreover, the liability insurer may not refuse to pay compensation on the grounds of non-payment of the premium.

11

The directives relating to intellectual property law (Dir. 93/83/EEC, Dir. 93/98/ EEC, Dir. 96/9/EC and Dir. 2004/48/EC) were implemented into the Copyright Law, the Industrial Property Law and the Law on the Protection of Databases by the Act of 9 May 2007 (Dz.U. 2007, no. 99, item 662), which entered into force on 24 May 2007. The changes include, inter alia, the claims for compensation for relevant breaches. As a general rule, damages may now be sought either under the general rules of the Civil Code or the claimant may demand a proper sum be paid to him (the double or triple of an appropriate author’s remuneration or a sum equal to the licence fee) – art. 79 of the Copyright Law (2004), art. 287 of the Industrial Property Law (2000) and art. 11 of the Law on the Protection of Databases (2001).

12

B. CASES 1. Sąd Najwyższy (Polish Supreme Court, SN) 10 March 2006, IV CSK 80/05, Orzecznictwo Sądów Polskich (OSP) 1/2007, item 11: Compensation for Non-Pecuniary Loss a) Brief Summary of the Facts

This is a medical malpractice case. Due to the doctors’ negligence the plaintiff, a twelve-year-old girl, was misdiagnosed with kidney cancer. She underwent chemotherapy and the kidney was immediately removed. The actual disease was very rare but could have been diagnosed had further tests been ordered. The plaintiff claimed PLN 186,000 (€ 51,000) for non-pecuniary loss, in addition to PLN 147,000 (€ 40,000) as pecuniary damages and a monthly annuity in the amount of PLN 2500 (€ 685). The Court awarded PLN 80,000 (€ 22,000) for non-pecuniary loss and PLN 3044 (€ 834) for costs of treatment, dismissing the claim for annuity. The Court also established the defendant hospital’s liability for future harm that may occur in connection with the tort. The

13

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award was upheld by the court of appeals and the cassation to the Supreme Court followed. b) Judgment of the Court

14

With regard to the claim for annuity, the Court refers to art. 444 § 2 KC. Pursuant to this provision, if the victim completely or partially loses his/her ability to work or if his/her needs have increased or his/her future prospects have been diminished, he/she may demand an appropriate annuity from the person obliged to redress the damage. Any of the above conditions, whether alone or concurrent with others, constitutes a sufficient ground for the claim. However, according to case law, annuity based on the loss of earning capacity or on the loss of future prospects may not be awarded to a minor. The dismissal of this claim does not preclude the court from establishment of liability for future damage resulting from the same event.2 This court rule has been designed to prevent the prescription of claims. Exceptionally, when a minor’s loss is suffered shortly before the start of employment, and the type of job may be determined (e.g. when a minor has already acquired professional qualifications), he/she may be awarded a temporary annuity. The plaintiff has not proved any of the two grounds for annuity. As concerns the increased needs, as the third ground for that claim, the Court holds that the plaintiff need not bear expenses, such as the cost of special diet or of additional medication. Thus, the claim was properly denied.

15

The award of non-pecuniary damages may successfully be attacked because of a flagrant violation of the criteria established by case law for the evaluation of non-pecuniary loss. Art. 445 KC provides no guidance on the question of what constitutes adequate compensation for non-pecuniary loss. The award of damages is at the discretion of a court, but this does not mean that the court has complete freedom in dealing with this matter. In the assessment of damages, courts must take into consideration all circumstances of the case, in particular the degree of physical and mental suffering. The Court confirms the dominant opinion that damages for non-pecuniary loss serve the purpose of compensation, thus they may neither be symbolic nor excessive in relation to the damage inflicted. Due to their compensatory role, damages for non-pecuniary loss should relate to the injury and take into account all the relevant circumstances, in particular the gravity of pain, duration of disease and permanent effects of the damaging act. The trial court did not take into consideration all of the circumstances that justified the increase of the award. In this case the Court points to the high degree of the doctors’ negligence and to the fact that the hospital did not undertake any steps to alleviate the results of the damage, in particular by providing psychological assistance to the minor plaintiff, who suffered a nervous breakdown.

16

At the same time the Supreme Court emphasizes that the quantum of damages must be reasonable and correspond to the current living conditions of an aver2

SN (7 judges panel) 12 April 1970, III PZP 34/69, Orzecznictwo Sądu Najwyższego (OSN) 12/1970, item 217.

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age member of society. However, the attribution of the size of the award to the current living conditions may not lead to the frustration of the compensatory function of damages for moral harm. It may be treated only as a subsidiary criterion of reducing the non-pecuniary damages. Since the court of appeals misunderstood the relation between the compensatory function and the principle of moderate award for non-pecuniary loss, the Supreme Court changes the verdict and awards the plaintiff PLN 150,000 (€ 41,000). c) Commentary

This is the second case where the Supreme Court expressly undermines the use of the criterion of the “the current living conditions of an average member of society” to determine the award of non-pecuniary damages. Thus, it affirms its position taken in the judgment of 30 January 2004, I CK 131/03, OSN 2/2005, item 40 (reported in Yearbook 2005, no. 2). This new direction of case law is to be applauded.3 The lower courts seem to apply rather selective criteria for the assessment of non-pecuniary loss. In this case they ignored the established case law, according to which moral suffering may well be enhanced by the tortfeasor’s high degree of fault and his insensitive behaviour after the tortious act or by failing to undertake any actions in order to diminish the harm.4 Thus, the Supreme Court correctly emphasized that a high degree of the doctor’s negligence should result in an increased quantum of damages. One should add that, in medical malpractice cases, moral harm may be particularly enhanced by obviously unnecessary procedures leading to the permanent disability or mutilation of a patient, as well as by the loss or reduction of chance to recover or survive.

17

2. SN 6 July 2006, III CZP 37/06, OSN 4/2007, item 56: Liability for Normative Omission a) Brief Summary of the Facts

The city of Warsaw sued the State for compensation for lost profits of approx. PLN 148,000,000 (€ 40,500,000). In the years 2001–2003 the city’s income from municipal transportation was reduced by the claimed sum due to the fact that the statute of 1998 granted students and war veterans a 50% reduction in city transport tickets. The statute also provided that the State Treasury would reimburse the local governments the costs of the statutory rights of citizens to the discounted transportation (art. 12b of the law of 1997 regarding the rules of road transportation of persons, the law of 1997). Another statutory act was to name the public authority responsible for the repayment to the carriers and establish the procedures for transfers. No such act has ever been passed. In fact, in 2002 Parliament repealed art. 12b of the law of 1997. The plaintiff did not recover any of the costs of enforcing the rights of citizens.

18

The legal cause of this action is normative omission. The regional court dismissed the case. The court of appeals filed a preliminary question to the

19

3 4

See also M. Nesterowicz, Note to the above judgment, OSP 1/2007, 68–71. SN 9 January 1978, OSN 1978, item 210.

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Supreme Court in which it asked whether a claim for reparation of the damage incurred by a legislative omission could be brought against the State before 1 September 2004 (the entry into force of art. 417¹ § 4 KC5). It also asked whether a duty to legislate could be inferred from art. 12b of the law of 1997. b) Judgment of the Court

20

Prior to the entry into force of the Polish Constitution of 1997 (17 October 1997), there were no legal grounds for holding the State liable for legislative omissions. After that time and before the revised provisions of the Civil Code introduced the possibility of claiming compensation for damage inflicted through an illegal normative (legislative) omission, the problem of this liability was quite controversial. This Court supports the view that such liability is admissible on the basis of former art. 417 KC read in conjunction with art. 77 sec. 1 of the Constitution.

21

Liability for normative omission may arise only in a situation where there is a legal duty to issue a normative act. The key question thus relates to the possibility of creating a duty to issue a statutory act by another statutory act (that is by an act on the same legislative level). Such duty, and not the mere possibility of action by the Parliament, must be imposed in an unequivocal manner, hence it may not be inferred through the interpretation of the statute by a court. Courts may not interfere with the competence of the legislator through the construction of statutes.

22

The Court interprets art. 12b of the law of 1997 as not to contain such a precise and unequivocal duty to enact a statute. It infers this conclusion partly from the fact that the legislator later repealed art. 12b and partly from the argument that art. 12b had not provided for any guarantee (obligation) towards the municipal carriers for the repayment of the costs of statutory privileges of some social groups. Since the carriers had no right to claim reimbursement, there is no adequate causal relation between the omission to pass the law and the loss suffered by the city. c) Commentary

23

The Court rightly permits, in a general way, a cause of action based on art. 417 KC and art. 77 sec. 1 of the Constitution for normative omissions dating back to the period before 1 September 2004. The judgment is in line with other decisions of the Supreme Court regarding legislative omissions.6 In its case law the Court emphasises7 that liability of the State for losses caused by legislative omissions arises when the rights of individuals, granted unconditionally and 5

6

7

“If the damage resulted from omission to issue a legal act, where there is a legal duty to issue such act, the court hearing the claims for compensation determines the illegality of the omission”. SN Resolution of the Civil Chamber 24 November 2005, III CZP 82/05, OSP 9/2006, item 106, reported in Yearbook 2006, case 2. SN 4 August 2006, III CSK 138/05, OSN 4/2007, item 63.

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unambiguously by the legislator, cannot be enforced due to the failure to pass a relevant normative act. However, one might approach this case from a different perspective, which might lead to a different outcome. From the constitutional law point of view, it is not correct legislative practice to delegate certain elements of a legal norm to another yet-to-be-enacted statutory norm (a norm on the same level in the hierarchy of legal acts). As a rule, the legislator should make references to the already existing norms. A norm that is a sort of a “blanc norm” does not create any rights or duties, but only indicates the way certain rights and duties should be defined. A blanc norm does not create a duty to legislate. However, such legislative practice may not lead to gaps in the legal system; this would be contrary to the constitutional standards of proper legislating process (art. 2 of the Constitution).

24

Consequently, one may argue that the legal basis for the plaintiff’s claim should be legislative wrong rather than legislative omission. In my opinion, art. 12b of the law of 1997 could be read as creating the duty of the State Treasury to repay the costs of the realization by local governments of the statutory rights of individuals to reduced costs of municipal transportation. The right of local governments (carriers) could not be enforced since the provision of art. 12b made a referral to a non-existent law with regard to two elements: the State organ responsible and the procedure for the reimbursement of money. If we followed this approach, however, the plaintiff would have to prove unlawfulness of the legislative norm (art. 12b) in the proper way, that is by obtaining a judgment of the Constitutional Tribunal to this effect.

25

3. SN 1 December 2006, I CSK 315/06, OSN 11/2007, item 169: Liability of an Auditor to its Contractor a) Brief Summary of the Facts

The plaintiff is a corporation which sued an auditing company for losses sustained due to the negligent breach of professional standards of chartered accountants and breach of the rules of proper auditing. The audit of the balance sheet proved to be insufficient in view of the control of the taxation office, which questioned the rate of VAT used by the plaintiff in its business. The plaintiff claimed PLN 630,000 (€ 172,600) which included the interest on due taxes paid and the defendant’s fee. The defendant’s insurer intervened in the lawsuit.

26

The trial court dismissed the action entirely because the contractual claims were time-barred (two years) and no basis for tort liability of the defendant was established. The court of appeals reversed the verdict, holding the defendant liable in tort for negligent auditing (art. 415 KC), and awarded compensation for the loss consisting of the due tax with interest (PLN 590,000). The court dismissed the claim for the cost of the defendant’s fee.

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b) Judgment of the Court

28

The key problem in this case is whether and under what conditions breach of contract may constitute a tort and justify the choice of the legal regime of claims for compensation of damage (art. 443 KC).

29

The parties concluded a contract for auditing the balance sheet. The contract stated that the audit would be performed according to the requirements of the accounting law (1994) and the standards set by the National Council of Chartered Accountants. Thus, the standard of care was both part of the contract and envisaged in the provisions of law. A chartered accountant is obliged to examine the balance sheet both as to its formal requirements and to its merits. The control of the merits includes the way in which the company applies taxation rates.

30

Breach of contractual obligations does not per se constitute a tort. According to case law, the concurrence of causes of liability arises in a situation where the debtor not only fails to perform or improperly performs his contractual obligations, but at the same time he breaks a legal rule to which he is bound regardless of the legal relationship between the parties (general duty of care).8 The conduct of the debtor is then considered a tort. The Court states that the rules provided in accounting law are addressed to accountants, and not to the public, thus they are not to be considered as generally binding legal standards of proper and careful conduct. However, the Supreme Court agrees with the court of appeals that breach of professional standards contained in the statutes and deontological rules may under the given circumstances create a tort and justify a claim ex delicto. The Court observes that a chartered accountant is entrusted with a public function and he must perform his duties pursuant to the rules of law and the rules of professional conduct. Thus, his conduct, albeit in a contractual relation, may amount to a tort.

31

However, the court of appeals erred in basing the liability of the defendant on art. 415 KC (liability for one’s own conduct). According to the Supreme Court, the defendant may be held liable as a master for his servant (art. 430 KC – strict liability) or for an independent contractor who was employed to carry out professional tasks (art. 429 KC – liability for culpa in eligendo). The requirements for the vicarious liability of the defendant would thus differ.

32

In this case there was a controversy surrounding the proper interpretation and application of taxation law (the VAT rate). Therefore, it should also be re-examined whether the chartered accountant for whom the defendant may be liable should have filed a clear reservation in its report as to the proper rate of VAT, or whether he failed to examine this issue at all. These facts – once properly established – will have an impact on the determination of causation between the loss of the plaintiff and the conduct of the 8

SN 28 April 1964, II CR 540/63, Orzecznictwo Sądów Polskich I Komisji Arbitrazowych (OSPiKA) 1965 at 197, SN 10 October 1997, III CKN 202/97, OSN 3/1998, item 42.

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chartered accountant. For these reasons the verdict was reversed and the case remanded. c) Commentary

The case follows the liberal approach of Polish courts to the concurrence of the causes of liability (le concours de la responsabilité). Pursuant to art. 443 KC: “The fact that the circumstances of the action or omission from which the damage resulted constituted a non-performance or improper performance of a pre-existing obligation does not exclude a claim for redress of the damage caused by a tort, unless a different conclusion from the substance of the preexisting obligation provides otherwise.” The concurrence of liabilities arises only between the parties to a contract and when the debtor is liable in contract. When the debtor’s breach of contract amounts to a tort, then the creditor has a choice between the claims ex contractu and ex delicto.

33

In the two regimes the element of wrongfulness varies. Wrongfulness constitutes an element of fault in Polish civil law (in the general clause of liability of art. 415 KC). It is defined broadly and includes conduct contrary to the moral principles accepted by society. Particular obligations do not need to be envisaged in the legal provisions, they can stem from life experience and common sense. The Court included deontological norms (professional standards) in the notion of wrongfulness. However, it seems arguable whether the professional diligence should be treated as part of wrongfulness or as part of fault in its strict sense. The Court adopts the widest possible approach to wrongfulness. It underlines that an auditor is obliged by law to perform his duties with particular diligence. Hence, taking into consideration the objective standard of due diligence (art. 355 § 1 KC) and the professional character of the activity (art. 355 § 2 KC), negligence of an auditor is established through the sole breach of this duty.

34

So far, there have been no reported cases regarding the liability of an auditor towards third parties.

35

4. SN 21 December 2006, III CZP 129/06, OSN 10/2007, item 151: Scope of Traffic Accident Insurance Policy; Punitive Monetary Sanction by a Criminal Court a) Brief Summary of the Facts

The plaintiff was a negligent car driver who killed two persons in a collision. He was convicted by a criminal court and the court ordered him to pay a PLN 5,000 (€ 1,370) punitive monetary sanction (nawiązka) to one relative of each deceased on the basis of art. 46 § 2 Penal Code (kodeks karny, KK). After the execution of the sums (with interest), the plaintiff sued his traffic liability insurer for their reimbursement, claiming a contractual basis for the claim. The court of first instance ruled for the plaintiff, holding that the compensatory sanction was awarded to the relatives of the victims in place of the obligation to compensate for damage to third parties (art. 446 § 3 KC).

36

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On appeal the regional court sent a preliminary question to the Supreme Court in which it essentially asked whether a tortfeasor responsible for a car collision and who was sentenced to pay a punitive monetary sanction (pecuniary satisfaction) on the basis of art. 46 § 2 and art. 48 KK has a contractual claim for recourse towards his traffic liability insurer. b) Judgment of the Court

38

There are two penal sanctions of a compensatory nature which may be ordered by a criminal court: a penal order (obligation) to redress damage (art. 48 KK) or a punitive monetary satisfaction (nawiązka) – art. 46 § 2 KK. The former requires proof of actual damage and its scope. If it is too burdensome to provide such proof, a criminal court may instead award the second mentioned monetary satisfaction. The victim who obtained a monetary satisfaction from the tortfeasor in the course of criminal proceedings may always seek further claims (full compensation) in civil proceedings.

39

The Court answers the preliminary question in the negative and holds that the satisfaction granted by a criminal court from a perpetrator whose liability is insured by the traffic accident liability insurance policy (art. 46 § 3 and 48 KK) is not covered by the scope of the contractual liability of the insurer and thus the insurer is not liable to repay the insured the sums paid by him as a criminal sanction to the relatives of the victim. The Court gives the following reasons:

40

– the normative scope of the guarantee liability of the insurer in a traffic accident liability insurance is limited to the civil liability of any person who, while driving a car during the period envisaged in the contract, caused damage linked to the operation of the car. It does not cover any possible criminal liability of the insured. Moreover, the damages are paid within the limits of the civil liability of the insured. The criminal sanctions, on the other hand, may go beyond the limit of full compensation, thus beyond the limit of the guarantee liability of the insurer.

41

– the availability of sanctions of a compensatory nature in criminal proceedings gives no ground for alleging convergence of civil and criminal liability. The penal law doctrine emphasises that the legal basis of compensatory sanctions (art. 46 § 3 and 48 KK) is grounded in the provisions of the Penal Code and the subsidiary use of the provisions of the Civil Code considers solely the notion of damage, its scope and the manner of its redress. Besides, criminal proceedings are not the “court proceedings in which the recovery for damage is sought” in the meaning attached to it by insurance law; in fact, unlike in a civil suit, the insurer may not intervene in a criminal suit.

42

– the sanctions imposed by a criminal court, despite their satisfactory character, are a specific penal reaction. They aim at penalizing the perpetrator, as well as at prevention and deterrence. A criminal court may refrain from application of the principle of full compensation and reduce or increase the compensatory sanctions according to the sentencing guidelines and taking into account facts

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such as the perpetrator’s financial standing. Hence, the said sanctions are quite different from sanctions that may be imposed on a tortfeasor by a civil court. c) Commentary

This case is not about punitive (or exemplary) damages. It touches upon the difficult issue of the relation between sanctions of a satisfactory or compensatory nature imposed by a criminal court as an additional penalty and the compensation for damage granted by a civil court. In Poland, it often happens that victims of traffic accidents do not file claims for redress to a civil court but instead they seek some monetary satisfaction in the criminal proceedings which are faster and less costly. The Court correctly emphasizes the difference in functions and structure between the sanctions. The insurer’s liability in a traffic liability insurance does not cover a potential criminal liability of the insured. In this regard the decision is a precedent and should be approved of.

43

5. SN 23 January 2007, III CSK 338/06, OSN 12/2007, item 187: Liability of a Person who Helped to Hide Damage a) Brief Summary of the Facts

The plaintiff is a company that produces spirits. In 1995 it sold to a Ukrainian buyer a quantity of spirits worth approx. USD 2,000,000. The consignment was to be transported in two trucks. The goods were cleared for export but never left the territory of Poland because they were stolen while being transported. Three security guards hired by the plaintiff to escort the goods were involved in the theft. Moreover, a customs officer forged the export documents, stamping them so as to declare that the goods had actually crossed the border. The officer had promised to forge the documents a few weeks before the theft. He was convicted of two crimes: forgery and corruption (for the promise of forgery) together with the security guards.

44

Because of the fact that the goods had never left Poland, the export decision was annulled by the Customs Office. The Office then issued a new decision in which it treated the contract of sale as domestic and ordered the plaintiff to pay VAT at a rate of 22% (instead of the prior 0% rate) as well as excise tax plus interest. The plaintiff paid the sums and sued the State Treasury for compensation of PLN 1,600,000.

45

The regional court awarded most of the claimed amount, but the court of appeals reduced it to PLN 600,000. It held that the customs officer was a helper for whose tort the State is liable on the basis of art. 417 KC. It also established that the plaintiff was contributory negligent to the extent of 50%, because he is vicariously liable for the actions of the security agents he had hired. Both parties filed a cassation.

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b) Judgment of the Court

47

Art. 422 KC provides for liability for aiding, abetting or consciously taking benefit from the damage caused to another person. Inducing or assisting the tortfeasor to inflict damage by a tort and taking benefit of it is a tort in itself. Even though art. 422 does not indicate the requirements for liability, it is unquestionable that the basic requirement of helper’s liability in inflicting damage by the tortfeasor is the helper’s fault (art. 415 KC). Any degree of negligence will be sufficient. As a result of art. 441 § 1 KC, helpers are jointly and severally liable with the persons they have helped, even when the direct actor may not be held responsible.

48

The State Treasury may be vicariously liable for the conduct of its functionary even though such person acted as a helper. However, the State argued that one may contribute to a tort before or during the infliction of damage, and not after such infliction (in this case art. 422 KC would not apply). The Court holds that the scope of “assistance” is construed broadly, although there is controversy in case law regarding the liability of persons who helped to hide the infliction of damage. The Court accepts the more liberal view: the requirement of a normal causal connection between the behaviour of the helper and the damage must be fulfilled for the liability to occur. A person who helped to hide an inflicted damage is not liable on the basis of art. 422 KC unless she had assured the direct wrongdoer of her readiness to hide the damage before the infliction of the harm.

49

The defendant also argues that the promise to forge the documents was an act committed outside the scope of the officer’s entrusted duties (unlike the forgery itself). According to the Court however, when considering the application of art. 422 KC, the conduct of the officer should be seen as one event, instead of two separate acts (as was assessed by the criminal court), which falls within the scope of entrusted duties.

50

The final question is for which damage the helper should answer. The Court states that a helper may only be a person whose acts are causally linked to the damage. The “primary damage” is the loss of the value of the stolen goods and the helper (the State) should be jointly and severally liable for this damage (i.e. the damage to which he helped). The plaintiff, however, seeks recovery for the taxes paid due to the fact that the goods had never left the country. This raises the question of an adequate causal relation between the loss claimed by the plaintiff and the wrongful acts of the officer. The Supreme Court first applies the conditio sine qua non test which proves negative. The loss that is the subject of the claim would have happened even absent the help of the officer, because the obligation to pay the taxes is the consequence of the fact that the goods were stolen and the theft was detected and not because the officer forged the documents and helped to hide the crime. c) Commentary

51

Actions undertaken by helpers constitute a particular type of a joint infliction of harm. Under art. 422 KC they are liable for the entire damage – just like the

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main tortfeasor. The obligation of those persons towards the injured party is thus a form of a joint and several obligation. This solution is fully justified as one should keep in mind that the conduct of helpers (and those who induce others) is a significant causal element in the infliction of harm. There are thus no justified reasons for shaping the helper’s liability in any way different from the other cases of the concurrence of tortious causes.9 A helper is obliged to fully compensate the victim even if he did not foresee the scope of the damage.10 In cases of joint and several liability, such as exists under art. 422 KC in connection with art. 441 KC, the courts do not allow an assessment of the relative contribution of each of the tortfeasors in inflicting the damage and it is of no relevance that one tortfeasor may have contributed more to the damage than the other. However, the liability of helpers covers only the harm that would not have happened without their help. One may only assist in the realisation of a defined tort and therefore a helper must at least have the knowledge that the direct tortfeasor will take advantage of the facilitative or aiding conduct. The damage inflicted in such circumstances is deemed a normal consequence of the helper’s conduct because he had partially created the conditions of its happening.11

52

Because of the criminal nature of the servant’s conduct, the application of the respondeat superior principle in this case is arguable. In principle, jurisprudence treats conduct such as theft or fraud as falling outside of the scope of entrusted tasks in the meaning of art. 430 KC, because such deeds fulfil personal purposes exclusively.12 However, if such a conduct was facilitated by the entrusted function or the latter served as the means to cause damage, the answer may be different. Some legal writers see the purpose of a servant’s conduct as the only subjective factor in the process of the evaluation, which in principle should be based on objective, external criteria.13

53

6. SN Resolution of 7 Judges, 17 May 2007, III CZP 150/06, OSN 10/2007, item 144: Scope of Traffic Accident Insurance Policy; Consideration of VAT in the Calculation of Damages a) Brief Summary of the Facts

The Ombudsman for the Insured (Rzecznik Ubezpieczonych) asks the Supreme Court a preliminary question regarding the consideration of VAT in the calculation of damages for a damaged car when it is to be repaired on the basis of the calculation of costs. The Ombudsman points out that the claims calculated in this way and presented to insurers include VAT in the prices of spare parts and service. He also observes varying practices among traffic insurers, some requiring claimants to present an invoice as a proof that VAT was actually paid (and the car actually repaired). 9 10 11 12

13

See A. Koch, Causal link as a prerequisite for the liability for damage in civil law (1975) 212. SN 6 December 1972, I PR 212/72. See B. Lewaszkiewicz-Petrykowska, Wyrządzenie szkody przez kilka osób (1978) 110. SN (Guidelines) 15 February 1971, III CZP 33/70, OSN 4/1971, item 59; A. Rembieliński, Odpowiedzialność cywilna za szkodę wyrządzona przez podwładnego (1971) 131. See e.g. A. Szpunar, Odpowiedzialność Skarbu Państwa za funkcjonariuszy (1985) 172.

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b) Judgment of the Court

55

There is no doubt that VAT is an element of a price and that VAT-payers may reduce the VAT due by the VAT they include in the prices of the services or goods they sell.

56

In traffic accident liability insurance the scope of liability of the car possessor or driver determines the scope of compensation (up to the guaranteed limit).14 Thus, the general rules of the Civil Code regarding recovery for losses find their application. However, the damage is to be repaired only by the payment of an appropriate sum of money (art. 361 § 1 KC). The amount of the damages is generally determined according to the prices on the date when the damages are determined (art. 363 § 3 KC). As VAT is a component of a price, it should be treated as an element of damages when they are determined according to prices of things or services.

57

The Court reminds that the duty to remedy the damage to property arises at the moment of its infliction (here: a traffic accident), regardless of whether the injured party actually repaired the damaged thing (or if he wants to do so later). The loss exists from the moment of the event until the payment of compensation as determined according to law.

58

Hence, whether a car has actually been repaired is irrelevant for the determination of the compensation payable by the insurer because in traffic accident liability insurance the injured person cannot demand that his/her car be returned to its previous condition (as provided in art. 363 § 1KC15), but is entitled only to a payment of money. This payment must make up the difference between the present patrimonial standing of the injured and the standing which would have existed if the event causing the damage had not occurred. It is a claim for compensation of the loss suffered and not a claim for the cost of repair.

59

The Court finally turns to the interpretation of art. 17a of the Act on Insurance Business (2003),16 which entered into force on 17 August 2005. Pursuant to art. 17a, if the claimant, who is not a VAT-payer, presents the insurer with an invoice(s) for the repair of the “traffic damage”, the insurer is obliged to include VAT in the scope of compensation. This provision is used by insurers to deny the reimbursement of VAT in a situation not covered by it. In the Court’s opinion, any controversy surrounding this norm should be disposed of in view of the Civil Code rules on compensation of damage as well as in view of art. 36 of the Act on Compulsory Insurance, the Insurance Guarantee Fund and the Polish Bureau of Traffic Insurers (2003). In particular, art. 17a of the Act on Insurance Business does not change the date on which the insurer’s obligation to compensate arises. 14

15

16

See art. 36 of the Act of 22 May 2003 on compulsory insurance, the Insurance Guarantee Fund and Polish Bureau of Traffic Insurers, Dz. U. no. 124, at 1152 with later amendments. However, if the restoration to the previous condition were impossible or if it resulted for the person obliged in excessive difficulties or costs, the claim of the injured person shall be limited to a performance in money. Dz. U. no. 124, at 1151, with later amendments.

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The Court holds that compensation from the insurer in traffic liability insurance, calculated on the basis of prices of spare parts and service includes VAT to the amount that would be due for payment by the victim (i.e. it will depend on whether the victim is a VAT-payer and can reduce the amount of tax due).

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c) Commentary

The decision is plainly correct and in accord with the leading case law and jurisprudence. The Supreme Court confirms the dominant position of judicature regarding the scope of compensation for property damage in traffic accident liability insurance. The extent of damages must be determined in such a way as to redress completely the damage sustained by the injured (art. 361 § 2 KC). This rule finds full application in the traffic liability insurance sector.

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7. SN 9 June 2006, IV CNP 48/06, OSP 11/2007, item 126: State Liability for a Valid Judgment; Admission of an Action for Rendering a Valid Judgment Unlawful a) Brief Summary of the Facts

During divorce proceedings, the mother filed a motion for a suspension of the child custody interim order, granting custody of her children to her husband (the plaintiff in this case). The motion was finally granted on appeal. The husband filed an action for rendering this court decision unlawful, indicating that the latter violated several norms of family law and international conventions. The plaintiff claimed to suffer harm because the decision of the court made it impossible to execute his parental authority and care over his two children.

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b) Judgment of the Court

The Supreme Court has the sole competence to render a valid final judgment unlawful (for the purpose of seeking compensation from the State).

63

According to art. 4241§ 1 kodeks postępowania cywilnego (Code of Civil Procedure, KPC), an action for rendering a valid judgment unlawful may be commenced:

64

– with respect to a decision concluding proceedings issued by a court of second instance,

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– provided that its rendering caused damage to the party, and

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– the change or reversal of the decision could not and still cannot be obtained through other legal means.

67

Explaining the meaning of a “decision concluding proceedings”, the court states that it would not be a decision that closes only a part of the proceedings, thus a decision related to an incidental issue (in interlocutory proceedings). From the facts of the primary (divorce) case it follows that a divorce ruling will be such a “decision concluding proceedings”. The interim order on child

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custody during the divorce proceedings does not conclude this issue on the merits.

69

Moreover, the Court states that “damage” in the meaning of art. 4241§ 1 KPC concerns only pecuniary damage. In Polish law there is a distinction as regards reparation of pecuniary and non-pecuniary losses. Courts cannot award nonpecuniary damages unless it is permitted to do so by a statutory provision (such as in personal injury cases and violation of personal rights cases). According to art. 417¹ § 2 KC, if the damage has been caused as a result of the rendering of a valid judgment or a final decision, compensation may be demanded only after having the illegality of the respective judgment/decision declared in proper proceedings.17 The Court reads the phrase “demand for compensation of damage” as regarding only pecuniary damage. Since the plaintiff’s loss is of a non-pecuniary nature, the case is dismissed. c) Commentary

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Although one may agree with the final outcome of the case, the motives of the Court are disputable. The dismissal of action should rather be based on the lack of probability of the loss. One commentator stresses that the plaintiff’s loss of the possibility of exercising care and control over his children stems first of all from the breakdown of his marriage.18 The legal framework of the relations between former spouses and between them and their children is to be decided later in the ruling on the divorce. Thus, one may have doubts as to whether the plaintiff’s loss is in an adequate causal relation with the court decision suspending the temporary child custody order.

71

The interpretation of art. 4241§ 1 KPC proposed in this case breaks away from the classical and dominant views of the fundamentals of civil liability for damage.

72

In Polish law there is no legal definition of damage. Traditionally, damage is considered to be every wrong against an interest protected by law, be it property or personality interests, suffered by a person against his/her will.19 The Polish legal language uses two terms to indicate damage and its reparation in money: for financial loss (szkoda) the reparation is called odszkodowanie, and for non-pecuniary loss (krzywda), the recovery is called zadośćuczynienie. For some authors szkoda denotes only pecuniary damage but, according to the prevailing view, it is interpreted broadly, thus including also non-pecuniary loss. Thus, the notion of “damage” refers both to pecuniary and non-pecuniary loss.

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All kinds of damage to person and property, pecuniary and non-pecuniary must be compensated (the principle of full compensation). According to art. 361 § 1 17 18 19

The action based on art. 4241§ 1 KPC belongs to the category proper proceedings. Z. Banaszczyk in the note to the reported judgment in OSP 11/2007, item 782, 784. See A. Szpunar, Odszkodowanie za szkodę majątkową (1998) 22–24. The case law supports the dominant view, recently in SN 25 January 2007, V CSK 423/06, not published.

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KC, the scope of damages comprises both damnum emergens and lucrum cessans. When compensation for non-pecuniary loss is permitted, then the claim may be based on any principle of liability ex delicto (fault, risk, equity) and the same requirements for all ensuing claims are applicable. Thus, non-pecuniary loss may be considered to be addressed separately by the legislator, but only with regard to the permissibility of the claim, its inheritance and transferability. The fact that non-pecuniary loss has been permitted in art. 4172 KC, providing for public liability for personal injury caused by a lawful exercise of authority, does not give ground to the argument a contrario, that in the general rules of public liability, non-pecuniary loss was excluded because it was not explicitly mentioned. The meaning of the notion “decision concluding proceedings” raises some controversy in doctrine and case law. For the purpose of art. 4241§ 1 KPC and state liability it should be understood as a final court judgment that permanently determines the merits of a case. This definition does not include incidental issues decided in interlocutory proceedings.

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8. SN 4 January 2007, V CNP 132/06, OSN 11/2007, item 174: State Liability for a Valid Judgment; the Meaning of Unlawfulness of a Valid Judgment a) Brief Summary of the Facts

The plaintiffs, employees of an insolvent company, were not able to execute the judgments issued by labour courts against the company. Hence, they sued the managing officers of the company in their individual capacity for compensation on the basis of art. 299 kodeks spółek handlowych (Commercial Companies Code, KSH). The court awarded compensation. The defendants filed an action to the Supreme Court for rendering a valid judgment unlawful.

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b) Judgment of the Court

The Court states that the construction of art. 299 KSH applied by the regional court is within the limits set by the rules of interpretation of law and it does not justify the declaring of the judgment unlawful.

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Bearing in mind that the rendering of a valid judgment unlawful opens the possibility of claiming compensation from the State, the Court imposes restrictive requirements for the contents of “unlawfulness”. It does so although, pursuant to the language interpretation of art. 417¹§ 2 KC and the provisions of civil procedure (art. 4241§ 1 KPC, art. 4245§ 1 KPC), the degree of unlawfulness is irrelevant for the declaration of the illegality of a judgment. The Court invokes arguments of functional and systematic construction of statutes to support the conclusion that only judgments that possess obvious or egregious procedural or substantive errors that may be observed without deep legal analysis are unlawful. Because of the specific nature and structure of the judiciary, the notion of unlawfulness in the case of court judgments should be given an autonomous, specific interpretation. Thus, a judgment that is unlawful is a judgment that is

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unquestionably contrary to the principal legal provisions not subject to different interpretation, or contrary to the general standard of using discretion or that was issued as a result of a particularly erroneous interpretation or application of law, which is obvious and does not require thorough legal analysis.

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The Court also resorts to the ECJ’s construction of an illegal conduct for the purpose of liability of Member States for breach of European law, in particular to the judgment C- 224/01 Köbler v. Austria. In the Court’s view, the proposed interpretation of the notion “unlawfulness” brings the new Polish rules on public liability (including the liability of the judiciary) in line with European law. c) Commentary

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This decision shows that the actual shape of the regime of public authorities’ liability is not without flaws. The problems in the interpretation of the rules, already remarked by doctrine, relate first of all to the definition of illegality and its relation to civil “wrongfulness”.

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The judgment contributes to the discussion about the requirements and scope of liability of public authorities for damage caused by the acts of the judiciary. The Court follows its recent decisions based on art. 4241 § 1 KPC.20

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The restrictive approach to unlawfulness may also be found in some cases dealing with liability for non-final administrative decisions, although in that area one can hardly speak of a leading opinion.21 9. SN 11 April 2006, II CSK 191/05, OSP 7-8/2007, item 8322: Hospital’s Liability; Form of Informed Consent a) Brief Summary of the Facts

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The plaintiff demands compensation for the personal injury resulting from negative consequences of a gynaecological operation. The operation was necessary and urgent. During the operation the plaintiff’s uterus and ovaries were removed. The plaintiff sued the private hospital, its insurer and the surgeon in solidum, alleging that she had been given very general information on the method of procedures and the scope of the operation and, hence, her consent was not informed. The consent form that she had signed described the surgery as the removal of the uterus.

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The plaintiff claimed pecuniary damages, an annuity and compensation for pain and suffering. The regional court awarded compensation for the infringement of the patient’s right to informed consent. The claim for annuity was dismissed. 20

21

22

See e.g. SN 31 March 2006, IV CNP 25/05, OSNC 1/2007, item 17; SN 4 July 2006, V CNP 86/06, OSNC 3/2007, item 47. See e.g. SN Resolution of 7 judges, 26 April 2006, III CZP 125/05, OSN 12/2006, item 194, reported in Yearbook 2006, case 5. Note by P. Daniluk, OSP 7-8/2007, 513 and by M. Nesterowicz, Prawo i Medycyna 3/2007, 146.

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The court of appeals reversed the decision and awarded PLN 3,000, while dismissing all other claims. It established that the plaintiff had been informed orally about the scope of the operation first by her doctor and again before the operation, and agreed to it. According to the court of appeals, the fact that the plaintiff signed the consent form indicating a narrower scope of operation is irrelevant since the actual consent may be proven by other evidence. The written form required by the statute is only for the purpose of evidence. The awarded sum is compensation for the negligent treatment of the patient after the surgery. The cassation to the Supreme Court followed.

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b) Judgment of the Court

The Law on the Professions of Physicians and Dentists23 deals with the obligation of informed consent in art. 31–34. Generally, a patient’s consent may be given orally or in any other way that indicates the patient’s will to submit to the proposed medical acts without a doubt. However, according to art. 34, a physician may perform an operation or apply a treatment or diagnostic method that creates an increased risk for the patient only after having obtained the latter’s written consent. The law is not precise as to the consequences of the lack of a written form of consent.

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The Court states that a patient’s consent is a declaration of will similar to a juridical act, the effect of which is the elimination of unlawfulness of a physician’s medical intervention. The Civil Code provisions relating to juridical acts, in particular with respect to defects and form, are applicable. According to art. 74 § 1 KC, the requirement of written form without pain of validity has the result that if the form stipulated is not observed, then in litigation no evidence provided by witnesses or statements by the parties concerning the fact of concluding the transaction is admissible (the form ad probationem). Hence, the fact that the patient’s consent to an operation was not given in writing does not give any grounds for invalidation of the consent. The requirement of a written form causes only evidential restrictions here.

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c) Commentary

The central issue of the case – the effects of a consent not given in a written form – is the subject of controversy. The judgment rightly follows the dominant view accepted by most civil law scholars.24 Criminal lawyers, on the other hand, take a strict approach and consider a consent that is not expressed in writing when it is required by law, as invalid.25

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However, in this case the lower courts evaluated the scope of the consent given by the plaintiff differently. All means of evidence were admissible, but we re-

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23

24

25

Act of 5 December 1996, Law on the Professions of Physicians and Dentists (Dz. U. 2002, no. 21, item 204 with later amendments). See M. Safjan, Prawo i medycyna (1998) 67–68; M. Nesterowicz, Prawo medyczne (8th ed. 2007) 127; M. Świderska, Zgoda pacjenta na zabieg medyczny (2007) 80. See e.g. M. Filar, Lekarskie prawo karne (2000) 274–275.

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ally do not know what evidence was actually provided by the parties. If the patient was examined twice before the surgery, and informed about the scope of surgery, then it seems strange that this was not reflected in the signed form. The burden of proof that an informed consent was given rests on the physician.26 It is the doctor who has the duty to provide the information, thus he has the burden of proving that he has fulfilled his obligation pursuant to the general rule on the burden of proof (art. 6 KC). In particular, he has to prove that the information has been given and that it has met the statutory requirements.

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On a general note, the physician is bound by the patient’s declaration of will, and he cannot change the direction of acts, established method or the object of the intervention. He can neither change nor widen the operating field. The physician’s duty to comply with the scope of the patient’s consent is a rule when a physician makes the right diagnosis, and there are no unforeseen complications during the intervention. However, sometimes there are medical cases when the proper diagnosis can only be made during the operation, or unforeseen circumstances occur. This was not the case here.27 I agree with M. Nesterowicz that the outcome of this case would probably be quite opposite in the US, Germany or the UK.28 10. SN 16 November 2005, V CK 349/05, Prawo i Medycyna 1/2007, 133: HVB Infection; Prescription of Claims; Abuse of Rights a) Brief Summary of the Facts

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The plaintiff, a young boy, had been hospitalised in several institutions since his birth in January 1994. In April 1994 he was diagnosed with hepatitis B infection. The boy’s mother was informed of the infection in May 1994, but the medical personnel assured her that the boy would recover from the infection. After some time, however, the plaintiff became ill and the first treatment failed. He is now being treated with other medication. The law suit was filed in March 2002 against a university hospital and the State Treasury.

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The lower courts dismissed the action because the claim was time-barred. The cassation to the Supreme Court followed, based on the ground that the plea of limitation of action should have been overruled on the basis of the abuse of rights (art. 5 KC). 26

27

28

SN 17 December 2004, II CK 303/04, OSP 11/2005, item 131, reported in Yearbook 2005, case 4. SN in the judgment of 29 December 1969 (II CR 551/69, OSPiKA 1971, item 118, note by M. Nesterowicz) assumed the physician’s (hospital’s) liability when the former obtained from the patient her consent to operate on a tumour on the left appendages. However, he removed her right appendages and womb. The Supreme Court said: “If having opened the abdominal cavity the operating physician finds out another status than resulted from the clinic examinations, he may in some cases exceed the scope of consent for the intervention granted by the patient. However, this may occur only in particular cases when failure to make a necessary intervention would hazard the patient’s life or when an insignificant, but necessary correction of the designed intervention is necessary”. Art. 35 of the Law on the Physicians’ Profession gives a physician greater powers of intervention into the patient’s organism without his consent than results from the above-mentioned judgment. See Nesterowicz, Prawo i Medycyna 3/2007, 150.

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b) Judgment of the Court

The Court explains the nature of the institution of the abuse of rights. By virtue of art. 5 KC, the use of one’s right may be denied legal protection because of the consideration about the principles of community life. The Court holds that this provision may be invoked in the context of limitation of claims even though the debtor’s conduct had no impact on the running of the prescription time (which is the principle).

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The Court holds that art. 5 KC may be applied to the facts of the case because of the high degree of permanent disability of the plaintiff (30%), the need for treatment and the moral suffering. Moreover, over a period of several years, the plaintiff’s parents have taken great care of the child, in order to cure him. They acted with the hope, induced by the medical personnel, that the boy would recover completely. Thus, their delay in filing the law suit and seeking damages is justified.

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c) Commentary

This decision shows the need for a flexible application of the rigid rules of prescription of claims and for the recent revision of the Civil Code. Now, pursuant to art. 4421 KC, the claims of a minor for redress of the damage stemming from personal injury may not expire earlier than after the lapse of two years from the day of maturity.

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Pursuant to former art. 442 KC, a three-year prescription period began to run from the day on which the information about the loss and the person liable for it was acquired, and not on the day when the victim learned of the extent of damage or permanent consequences thereof. In any case, the three-year period stopped running with the passage of ten years from the day of the tort. The tenyear period from the day of the tort was a maximum one. The courts, however, often overruled the plea of limitation of action on the grounds that plaintiffs should not bear the consequences of being infected with an unknown and incurable virus. The application of art. 5 KC helped to overcome the problems of long-tail injuries (infection of minor patients with HVB or HVC viruses, or medical errors committed at childbirth).29 In earlier case law, however, the courts required proof of a reprehensible conduct of the doctors or of the vicariously liable persons, such as e.g. persuading a patient that there would be no adverse effects of the treatment,30 concealing information on the actual causes and scope of the damage, denying access to medical records. Current practice also takes into account circumstances lying in the victim’s sphere, e.g. miscomprehension of information, erroneous assessment of health condition, a

95

29

30

There was also the second path of case law which emphasised the prevailing role of the general rule of art. 120 KC. Accordingly, the claim for compensation will not arise until the damage actually occurs. Although one might say that the interpretation proffered by the Supreme Court was contra legem, this functional approach enhanced the position of the injured. See SN 21 May 2003, IV CKN 378/01, OSP 4/2004, item 55, with a note by M. Nesterowicz, at 237. See RC in Wroclaw 20 September 1999 IC 708/96, affd CA 1 June 2000 I A Ca 323/00, Prawo i Medycyna 9/2001, 115, reported in Yearbook 2001, case 8.

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serious disability that would not have happened if not for the culpable conduct. The reported judgment widens the grounds for the application of art. 5 KC by holding that the parents’ delay in filing the law suit and seeking damages may not have a negative influence on the rights of the minor to compensation.31 This position should be applauded.

C. LITERATURE 1. G. Bieniek, Odpowiedzialność cywilna za wypadki drogowe (Civil Liability for Traffic Accidents) (2nd ed. LexisNexis, Warsaw 2007)

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The book, authored by a Supreme Court judge, is a thorough and comprehensive study of practical problems of civil liability for traffic accidents. The book covers the rules of car possessors’ liability, drivers’ liability and insurers’ liability. It also contains chapters on the scope of compensable damage and ways of seeking damages. The author synthesises numerous court cases relating to these issues, which gives the book a great practical dimension. 2. U. Drozdowska, Cywilnoprawna ochrona praw pacjenta (The Protection of Patients’ Rights in Civil Law) (CH Beck, Warsaw 2007)

97

The monograph presents the array of private law instruments that may be used in the health care sector in order to protect the rights of patients. The author classifies and defines the contents of patients’ rights. She also describes the relation between the notions of patients’ rights and personality rights (interests). Particular attention has been given to the catalogue of patients’ rights, the right to information about one’s health condition, the right to medical confidentiality, civil liability for breach of patients’ rights and claims arising from violation of personal interests and rights of a patient. 3. M. Nesterowicz, Prawo medyczne (Medical Law) (8th ed. TNOiK, Toruń 2007)

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The popular textbook on medical law contains a comprehensive overview of civil liability of physicians, hospitals and the National Health Fund. It deals in detail with liability for medical malpractice, lack of informed consent, lack of safety during hospitalisation, and for the wrongful organization of health care services. The book also covers the regulation of health care activities. In the new edition there is a separate chapter on the right to health care services in the EU (authored by M. Śliwka). Attention is given to specific activities (e.g. artificial insemination, organ transplantation, experiments on human beings, euthanasia and transsexual intervention). What is not to be found in the volume is the presentation and discussion of the doctrinal views regarding the issues mentioned above. Nevertheless, numerous citations of court cases make the monograph a good starting point for further scientific research.

31

See M. Nesterowicz in the note to this judgment, Prawo i Medycyna 1/2007, 140.

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4. J. Parchomiuk, Odpowiedzialność odszkodowawcza za legalne działania administracji publicznej (Liability for Damage Caused by Legal Conduct of Public Authorities) (CH Beck, Warsaw 2007) This is a published dissertation devoted to public liability for a legally caused damage. The author first examines the evolution of this liability and its regimes existing in foreign legal systems and the European law. The main part, devoted to Polish law, starts with the constitutional regulation and the interpretation of the Civil Code rules. The essential rules on public liability for legally caused damage are created by the whole array of administrative provisions, scattered in the whole legal system. First and foremost they relate to different forms of expropriation and quasi-expropriation. The final chapters describe the persons liable, the ways of reparation of damage, the scope of compensation, and the procedure for the settlement of claims. The author concludes that liability for damage caused by the legal conduct of public authorities is civil liability, i.e. it is rooted in private law rather than in administrative (public) law.

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5. K. Bączyk-Rozwadowska, Odpowiedzialność cywilna za szkody wyrządzone przy leczeniu (Liability for Medical Malpractice) (TNOiK, Toruń 2007) The book is a dissertation, mostly dogmatic in nature, devoted to the changes that the rules of civil liability for medical malpractice have undergone in the last two centuries in Polish and comparative law. The study is divided into two parts. The first part analyses the stages of the evolution of liability for medical malpractice in Poland in the period 1933–2004. The second part presents, in a chronological order, the development of a solution alternative to the traditional civil liability based on fault: the so-called no-fault compensation schemes. The mechanisms of the latter type have been successfully introduced in some countries (New Zealand, Sweden, the United States and France) and their importance and attractiveness systematically increases.

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The author proposes to introduce a no-fault compensation scheme in Poland, at least for some types of medical injuries (such as personal injuries stemming from hospital infections and medical accidents). K. Bączyk sees the Swedish No-Fault Patient Insurance and the French model as the most suitable for Polish juridical, economic and social conditions. This alternative legal redress regime in the medical sector seems to the author as the best and most appropriate way to make the system of compensation more efficient and to prevent the spread of the existing malpractice crisis.

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6. T. Siemiątkowski, Odpowiedzialność cywilnoprawna w spółkach kapitałowych (Civil Liability in Companies) (CH Beck, Warsaw 2007) Civil liability in company law has so far been a subject of shorter studies and articles. This monograph is the first comprehensive, very informative, comparative analysis of all aspects of civil liability of persons in a corporation. The volume covers, among others, the liability of partners, officers, management,

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auditors and promoters of a company. The dogmatic analysis of the provisions of KSH is enriched with interesting theoretical reflections. The book is also a good tool for practitioners. 7. M. Świderska, Zgoda pacjenta na zabieg medyczny (Patient’s Consent for a Medical Procedure) (TNOiK, Toruń 2007)

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This is the first monograph that gives an excellent comprehensive overview of legal aspects of a patient’s consent. As to the legal nature of a patient’s consent, the author defends the view that it is a unilateral juridical act, authorising a doctor’s intervention (act) and revocable. The effect of consent is the elimination of unlawfulness of a physician’s medical intervention. The author examines when a consent is informed and correctly given, the extent of the right to information, substitute consent, cumulative consent, burden of proof, medical intervention without consent or against a patient’s will. Specific cases (e.g. artificial insemination, experiments on human beings, abortion, euthanasia and transsexual intervention, organ transplantation) are also dealt with. 8. M. Wałachowska, Zadośćuczynienie pieniężne za doznaną krzywdę (Compensation for Non-Pecuniary Loss) (TNOiK, Toruń 2007)

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The book is a doctoral thesis devoted to non-pecuniary loss. It presents the mechanisms and basis for compensation for non-material loss. The analysis of Polish law and foreign legal systems (German, French and English) allows for comparative conclusions. The author derives from numerous case law and doctrinal views, focusing on new tendencies in legal theory and practice. The greatest part of the volume is devoted to Polish law. It covers not only the law of torts, but also many other branches of law, such as copyright law, press law and medical law. The author provides a critical evaluation of court decisions regarding damages for non-pecuniary loss in medical malpractice, forced medical treatment and patients’ rights cases. She defines the contents of the notion of non-pecuniary loss and presents the way, scope and functions of its compensation. 9. J. Jastrzębski (ed.), Odpowiedzialność odszkodowawcza (Liability for Damage) (CH Beck, Warsaw 2007)

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This book, authored by young academics, is a collection of essays about several modern issues concerning liability for damage. An interesting contribution on the limits of compensation by J. Jastrzębski opens the volume. The other contributions include the following aspects of liability: compensation for loss of chance (by P. Grzebyk), concurrence of claims for compensation in product liability cases (by W. Kajkowski), recovery for non-pecuniary loss in non-personal injury cases in a contractual regime (by K. Kosicki), liability for indirect harm (by B. Lackoroński), liability for the wrongful filling of an in blanco draft (by S. Rudnicki), claims for recovery of profits (by K. Sarek), and damages for non-pecuniary loss arising from violation of personality interests of legal persons (by M. Świdowska). The common theme of these contributions is to seek solutions that best serve the functions of civil liability.

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10. Selected Articles: Contributory negligence: S. Byczko, Przyczynienie się do powstania szkody poszkodowanego, któremu nie można przypisać winy. Kilka uwag, Palestra 1–2/2007, 11.

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Environmental damage: E. Czech, Spór wokół odpowiedzialności za szkodę w środowisku (Dyrektywa 2004/35/WE) Państwo i Prawo 1/2007, 55.

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Skiing accidents: S. Krajcer, Odpowiedzialność za wypadki narciarskie, porównanie z rozwiązaniami austriackimi, Palestra 1–2/2007, 210.

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Punitive satisfactory sanction in criminal proceedings: A. Muszyńska, Zasądzenie nawiązki a cywilnoprawne roszczenia pokrzywdzonego przestępstwem, Przegląd Sądowy 2/2007, 74.

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Non-pecuniay loss: M. Nesterowicz, Zadośćuczynienie pieniężne ex contractu i przy zbiegu z odpowiedzialnością ex delicto, Państwo i Prawo 1/2007, 20.

110

Prescription: Z. Radwański, Przedawnienie roszczeń z czynów niedozwolonych w świetle znowelizowanego art. 442 kc, Monitor Prawniczy 11/2007, 591.

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Traffic liability: W. Robaczyński, Kontrowersje wokół pojęcia ruchu pojazdu (art. 436 kc), Palestra 5–6/2007, 9.

112

Causation and company law: T. Sójka, Związek przyczynowy jako przesłanka odpowiedzialności spółki publicznej za naruszenie obowiązków informacyjnych, Ruch Prawniczy, Ekonomiczny i Socjologiczny 2/2007, 109.

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Intellectual property and liability: P. Stec, Zasady i funkcje odpowiedzialności z tytułu naruszenia własności intelektualnej, Kwartalnik Prawa Prywatnego 2/2007, 429.

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Wrongful birth/conception/life: M. Nesterowicz, Odpowiedzialność cywilna lekarza i szpitala za wrongful conception, wrongful birth, wrongful life w orzecznictwie europejskim (2000–2005), PiM 3/2007, 19; R. Trzaskowski, Czy urodzenie dziecka może być źródłem szkody? Palestra 9–10/2007, 11.

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Public liability: R. Trzaskowski, Odpowiedzialność odszkodowawcza za nieostateczną decyzję podatkową, Palestra 5–6/2007, 278.

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XX. Portugal André G. Dias Pereira

A. LEGISLATION 1. Decree-Law no. 38/2007, 19 February, Radioactive Radiations Act

1

This Act implements Council Directive 2003/122/EURATOM of 22 December 2003 on the control of high-activity sealed radioactive sources and orphan sources.1 Entities authorized to use such radiation are strictly liable when they cause damage to the environment, persons or goods, after an accident or any anomaly in the operation, even when the legal norms have been respected. The Act also imposes liability insurance in different amounts for different levels of risk. 2. Law no. 27/2007, 30 July, Television Act

2

This Law regulates television activity. Concerning tort liability, Art. 70 (1) states that general rules of tort law apply and Art. 70 (2) determines that the television provider is solidarily liable with the person responsible for the emission of the programme previously recorded, except when using the right to broadcasting time:2 in that case, the television provider is not liable.

1 2

Official Journal (OJ) L 346, 31/12/2003 P. 0057–0064. Art. 40 of the Portuguese Constitution guarantees the right to broadcasting time, of reply and of political response: 1. Political parties, trade unions, professional and business organisations and other organisations with a national scope shall, in accordance with their size and social representativity and with objective criteria that shall be defined by law, possess the right to broadcasting time on the public radio and television service. 2. Political parties that hold one or more seats in the Assembly of the Republic and do not form part of the Government shall, as laid down by law, possess the right to broadcasting time on the public radio and television service, which shall be apportioned in accordance with each party’s proportional share of the seats in the Assembly, as well as to reply or respond politically to the Government’s political statements. Such times shall be of the same duration and prominence as those given over to the Government’s broadcasts and statements. Parties with seats in the Legislative Assemblies of the autonomous regions shall enjoy the same rights within the ambit of the region in question. 3. During elections and as laid down by law, candidates shall possess the right to regular and equitable broadcasting time on radio and television stations with a national or regional scope.

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3. Law no. 24/2007, 18 July, Rights of Users of Motorways and other Main Roads This Act defines the rights of users of motorways and other main roads (with at least two lanes in each direction), notably rules concerning safety, information and the quality of the road for driving. Art. 12, concerning tort liability,

3

imposes on the provider of the motorway service, in case of a motor vehicle accident, the burden of proof that the rules concerning safety were respected if an object has been thrown onto the road, or a thing on the road caused the accident, if animals crossed the road, or if there were liquids (not due to normal weather conditions) on the road.3 4. Decree-Law no. 291/2007, 21 August, Motor Vehicle Insurance Act This Decree-Law implements Directive no. 2005/14/EC relating to insurance against civil liability in respect of the use of motor vehicles (5th Directive on motor vehicle insurance).4 The functions and competences of the Automobile Insurance Fund (Fundo de Garantia Automóvel) are enlarged in order to provide a better protection of injured persons due to traffic accidents. The control over non-insured automobiles is also reinforced. There is an increase of the insurance capital, which will be progressively implemented during the next five years. That Fund will compensate injured people when the liable person is unknown (as provided in the Directive) and also – as an option of the Portuguese legislator – when the vehicle that caused the injuries was abandoned and it is not insured. This Fund is also responsible for compensating victims of accidents with vehicles which are not obliged to have insurance.

4

5. Decree-Law no. 352/2007, 23 October, Labour Accidents and Professional Illnesses Incapacity Table and Civil Law Incapacities Indicative Table This statute establishes a new table of incapacities caused by labour accidents and professional illnesses. Of outstanding importance is the creation of an indicative table of incapacity in civil law. This Act distinguishes labour law and civil law compensation. In the first case there is the evaluation of the incapacity seen from the perspective of the “loss of earning capacity”. In the second, due to the principle of integral compensation, there shall be an evaluation of the permanent incapacity in general, that is, the daily life activities, and secondly the limitations in the particular professional activity of the injured person. Therefore, there are two tables: the first concerns labour law compensation, the second concerns civil law compensation.

3

See A. Menezes Cordeiro, A lei dos direitos dos utentes das auto-estradas e a constituição (Lei n.º 24/2007, de 18 de Julho), Boletim da Ordem dos Advogados, Vol. II, September 2007.

4

Directive 2005/14/EC of the European Parliament and of the Council of 11 May 2005 amending Council Directives 72/166/EEC, 84/5/EEC, 88/357/EEC and 90/232/EEC and Directive 2000/26/EC of the European Parliament and of the Council relating to insurance against civil liability in respect of the use of motor vehicles, OJ L 149, 11.6.2005, 14–21.

5

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6

These tables aim to help the forensic expert to write the medico-legal report and help the judge to determine the amount of damages, taking into consideration the need to have more internal coherence and more equality when compensating personal injuries. The legislation of other countries as well as the “Guide barème europeén d’evaluation des atteintes à l’intégrité physique et psychique”5 was taken into account.

7

Of importance is the fact that only doctors with expertise in evaluation of physical injuries or forensic medicine are allowed to write the medico-legal reports. It must be stressed that it is the Court which will have to make the final decision concerning the quantum respondeatur, that is, the amount of damages. 6. Decree-Law no. 384/2007, 19 November, Insurance Contract

8

This Act imposes more duties of information on insurance companies in some contracts: life insurance, personal accidents insurance and financial operations insurance. A central registry of insurances is established in order to have public access to the insurance benefits after the death of the insured person. The aim is to protect the heirs and/or other beneficiaries of the insured person in case of death of the insured person, even when the latter had not informed the others of their rights and benefits. 7. Law no. 67/2007, 31 December, Extra-Contractual Liability of the State and Other Public Bodies

9

This Law regulates the extra-contractual liability of the State and other public bodies. The former statute dated from 1967 and had long been overruled by the administrative case law and doctrine. This Act is an expression of the more recent dogmatic developments in these areas. It regulates liability of all functions of the State: administrative power, judicial power and legislative power.

10

A major novelty is the fact that it includes not only public bodies but also private bodies which act under some form of public power (ius imperium) or according to rules and principles of administrative law (Art. 1 (5)). This is a consequence of the so-called “privatization” of the State. One must take into consideration as well that, according to the Portuguese Constitution, administrative courts are competent for these cases and have the same ranking as judicial courts (“courts of law”).6 The legislator intends to unify all cases of 5

6

Confédération européenne d’experts en évaluation et réparation du dommage corporel, Guide barème européen d’évaluation médicale des atteintes à l’intégrité physique et psychique, 2006. This guide has been adopted as the reference method for evaluating labour and domestic accidents of the European Union functionaries, as of 1 January 2006. This equal hierarchy is stated in Art. 209 (Categories of court) that states: “1. In addition to the Constitutional Court, there shall be the following categories of court: a) The Supreme Court of Justice and the courts of law of first and second instance; b) The Supreme Administrative Court and the remaining administrative and tax courts; c) The Audit Court.” Art. 212 (Administrative and tax courts) reinforces the material autonomy of administrative jurisdiction competence, declaring: “1. Without prejudice to the specific responsibilities of the Constitutional Court, the Supreme Administrative Court shall be the senior body in the hierarchy of administrative and tax courts. (…) 3. The administrative and tax courts shall try contested suits and appeals, the purpose of which is to settle disputes arising from administrative and fiscal legal relations.”

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liability when there is an entity with public power or acting in accordance with rules and principles of administrative laws, even if such entities have a private law nature. The new political and managing trend applauds the “privatization” of, e.g., motorways, roads management, railways, hospitals, universities and even water supply. “Privatization” is here used in the sense that, in spite of being a traditional entity of public law, there are nowadays (or there will be in the future) foundations and corporations owned by the State or municipalities which are entities of private law. On the other hand, the State attributes some traditional “public functions” to these private companies. The basic structure is the Portuguese tort system based on fault, wrongfulness damage and causation. The limitation of action is three years (in general).7 The State and other public entities are strictly liable for the negligent activities or omissions of its organs, functionaries or auxiliaries. The State or other public body is solidarily liable for the activities of its civil servants. If the functionary acted with slight negligence, there is no redress action. On the contrary, if there were gross negligence of the civil servant, the State or other public body are obliged to propose the redress action. This mandatory character of the redress action is an innovation of this Act.

11

A very important difference – vis-à-vis tort law among private citizens – is the right to claim compensation from the State in case of special and abnormal losses. These are special losses when they fall unto a person or a group of persons, without affecting “the community at large”; there are abnormal losses, “when surmounting the costs of life in society deserves the protection of the law”. The interpretation of the general clause will probably lead to very creative case law. Moreover, Art. 7 (3) and (4) accept the so-called “faute du service” that was previously adopted in case law.8 There is “faute du service” when the court cannot identify who had acted negligently, but it is clear from the facts of the case that the service or body did not fulfil its legal duties and caused damage because of its negligent organisation.

12

Strict liability is provided when the State or other public bodies operate especially dangerous activities, things or services. There are, though, two causes of exoneration of strict liability: (1) force majeure and (2) contributory negligence, in which case the court may reduce or eliminate compensation.9 In case of third party intervention, the State or other public bodies are solidarily liable, but have the right of redress.

13

There is a special chapter (III) concerning liability of jurisdictional function. The Law states that the State is liable in general terms for damage caused by wrongful administration of justice, notably in case of violation of the right to justice in a reasonable time. The State is also liable for damage caused by judi-

14

7 8 9

The same limitation period is provided in Art. 498 Código Civil. See Supreme Administrative Court, 17 June 1997. This is in line with the PETL: general clause of strict liability (Art. 5:101), contributory conduct or activity (Chap. 8) and reduction of damages (Art. 10:401).

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cial decisions manifestly unconstitutional or illegal or unjustified due to reckless mistake in the appreciation of the facts (Art. 13). Moreover judges and the public prosecutor magistrates are also liable – in a redress action by the State (that must be requested by the High Council of Magistrates (Conselho Superior de Magistratura)) – for damage caused with intention or grave negligence. This norm is seen with some criticism by the magistrates (judges and magistrates of the public prosecution office) but one should bear in mind that there will be no direct judicial action between a citizen and a magistrate: rather a procedure between the citizen and the State and afterwards, if applicable, between the State and the magistrate and only after request of the High Council of Magistrates. Therefore I do not think judges should fear a disrespect of the principle of independence (Art. 203 of the Constitution)10, neither should they fear being systematically or often sued in court. That will occur only in very exceptional cases.

15

Very innovative is chapter IV concerning liability for political-legislative function: the State and the autonomous regions (Madeira and Azores) are liable for abnormal damage caused to rights or legally protected interests of the citizens when they violate the Constitution, international law, European Community Law or a law of higher ranking. The omission of legislative actions necessary to execute constitutional injunctions that cause abnormal damage also leads to a right to compensation.

16

Finally, chapter V provides “compensation for sacrifice”, when for public interest reasons the State causes grave burden to particular citizens. This already existed in previous legislation under the denomination of “liability for lawful activities”.

17

In conclusion, this Act is “generous” to the citizen and very demanding to the State, not only in its administrative functions, but also in respect of judicial and legislative power. Only its interpretation and application through case law will give us insight into its “fair balance”.

B. CASES 1. Supreme Court of Justice, 7 November 2006 (Vida Judiciária 111 (2007) 26–27): Traffic Accident, Alcohol Abuse, Right to Redress of the Insurance Company a) Brief Summary of the Facts

18

Driver A caused a traffic accident because he was driving in the wrong direction. His insurance company paid compensation to the injured persons and is now suing the wrongdoer on redress, based on Art. 19 (c) of Decree-Law 522/85, of 31 December, which regulates motor vehicle compulsory insurance. According to this rule, the insurance company has a right to redress, among 10

Art. 203: “The courts shall be independent and subject only to the law.”

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other cases, when the accident was due to alcohol abuse. After some doubts in jurisprudence concerning the burden of proof of causation, the Supreme Court of Justice stated in the Acórdão Uniformizador de Jurisprudência 6/2002, of 28 May, that the insurance company must prove the causal link between the alcohol abuse and the accident.11 In this case the wrongdoer was driving with 1.42 g/l in blood (this already constitutes a crime as the limit is 1.2 g/l). However, there was not a clear definition in the facts whether the alcohol abuse was the direct cause of the accident. The defendant (the intoxicated driver) argued that the insurance company had the burden of proof of causation, that is, that the fact of driving under the influence of alcohol was the concrete cause of the accident. Moreover, he argued he had not slept in the 24 hours prior to the accident and, thus, perhaps that was the cause of the accident. In the decision the judge of first instance did not consider the causal link between the alcohol abuse and the accident to be proved.

19

b) Judgment of the Court

The court of first instance, the Court of Appeal and finally the Supreme Court, applied the so-called “judicial presumptions” or “natural presumptions”: based on the experience of a normal person, the judge decided that the alcohol “diminished the ability to drive”; the fact that he had not slept in the 24 hours prior to the accident only aggravated the negative effects of alcohol consumption. The causal relation between the abuse of alcohol and the accident does not have to be directly proved, but through a “general consideration of all the events”; such statement is a juridical decision, not a factual statement. Therefore the Supremo Tribunal de Justiça upheld the decisions of the lower courts.

20

c) Commentary

To understand this case we must take into consideration the separation between decisions regarding facts and decisions regarding law. Because in the decision regarding the facts the judge of first instance did not consider the causal link between alcohol abuse and the accident to be proved, the wrongdoer tried to oppose the redress right of the insurance company. But, such a decision – of causation – is a normative, juridical one, where the experience of the judges gives rise to the “judicial presumptions.”

21

2. Supreme Court of Justice, 23 January 2007 (Colectânea de Jurisprudência – Supremo Tribunal de Justiça (CJ-STJ) 2007, 30–34): Duty of Surveillance, Liability of Minors and Parents a) Brief Summary of the Facts

In 1984 (!), a minor of 16, while walking out of school, in a crowd, threw a rock towards another young boy, causing him severe injuries in his head. The 11

See A. Pereira, Portugal, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2002 (2003) 348 ff. According to this “precedent”, the insurance company must prove the causal link between the excessive alcohol consumption and the accident.

22

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injured boy underwent several operations, lost one year at school, had serious pain and suffering, lost amenities of life (like playing with other children) and suffers permanent partial incapacity to work of 50%.

23

The plaintiff sued the parents of the minor and the State (Ministry of Education), claiming compensation of 25 million Portuguese Escudos (approx. € 125,000) for pecuniary and non-pecuniary losses. The court of first instance and the court of appeal denied compensation, stating that the fault of the parents had not been proved and that the presumption of fault (Art. 491 CC) does not apply in this case: therefore the parents were not found liable. Concerning State liability, the judicial court is not competent and the case should be decided in an administrative court. b) Judgment of the Court

24

The Supreme Court stated that the parents are liable for the actions of the child. There is a presumption of fault (Art. 491 CC) that falls on those who have a legal or contractual duty of supervision of an incompetent person. The Supreme Court stated that an inadequate upbringing of children is considered as non-performance of the duty of supervision, which gives rise to tort liability. Parents are required to educate children to respect to life and personal integrity of other persons. Therefore, the Court ordered the parents to pay compensation of € 85,500 for pecuniary losses and € 39,500 for non-pecuniary losses. That is € 125,000, as demanded by the plaintiff.

25

Concerning State liability, the Court of Conflicts decided on 2 November 2006 that the Administrative Courts are competent to analyse the liability of the school. c) Commentary

26

Parents are not strictly liable for damage caused by their children. However, Art. 491 CC provides a presumption of fault. Parents are not held liable if they prove that they fulfilled the duty of supervision or that damage would have arisen in any case. This presumption is extended to all who are legally or contractually bound to the duty of supervision of persons with natural incapacity (teachers, nurses, guardians of children, mentally impaired, senile persons, etc.). This is not a case of liability for the facts of another; rather these persons are liable for their own fault, i.e. the lack of supervision. The Supreme Court went one step further considering that, when a child throws a stone at another child, this proves bad upbringing of the child and that in itself is the proof of fault for faulty supervision. The duty of supervision starts before the injuring activity, since there is a duty of education. This is common case law (Supreme Court decisions of 23/08/88, 05/11/95, 06/10/98, 20/03/1991).

27

If the parents were not found liable, the plaintiff could seek compensation from the child himself, according to Art. 489. This article provides the possibility of compensation based on fairness when a child without capacity in the moment of the wrongful act causes damage to third parties. Delictual incapacity is pre-

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sumed if a child is below the age of seven. The judge must take into consideration the economic position of the tortfeasor and the victim, the necessities of the injured and other criteria. 3. Supreme Court of Justice, 31 January 2007 (CJ-STJ 2007, 54–57): Limitation Periods, Criminal Law and Civil Law a) Brief Summary of the Facts

In 1998, during a football game at district level, the plaintiff, a referee, was injured by a cement stone thrown by someone from the public and offended in his honour. The incident was possible because the football stadium did not fulfil the legal requirements (provided in Decree-Law 270/89 and Ordinance 371/91). Therefore he suffered pecuniary and non-pecuniary damage.

28

The question under analysis concerns only the problem of the limitation period. On 9 May 1998 the referee was injured; he presented a complaint to the police on 29 May 1998 but the criminal action was filed on 16 June 2000, since the police could never find out who threw the cement stone. On 11 April 2003 the plaintiff sued the Football Association in tort, based on the violation of protective rules.

29

According to Art. 498 (1), a tort action has a three year limitation period. However, according to Art. 498 (3), if there is simultaneously a crime, the criminal law limitation period applies. The crime in question would be an assault (offence against physical integrity (Art. 144 Penal Code)) which has a prescription period of five years.

30

The tortfeasor was not identified during the criminal investigations. Now it is a different person, the Porto Football Association (which is responsible for the stadium) that is being sued in tort. It is, thus, not clear if Art. 498 (3) (and consequently the limitation period of five years of the Penal Code) applies.

31

Some authors argue that this extended prescription period should only apply to persons who simultaneously committed a crime and a tort. But the main jurisprudence decides that it applies to all persons liable in tort, even if they are not criminally liable. The main arguments are: the existence of the principle of adhesion (“Adhäsionsprozess”) and the principle of unity of the juridical system.

32

b) Judgment of the Court

The Court decided that there was no prescription yet, since the plaintiff could be protected by Art. 498 (3) and the limitation period of five years provided in the Código Penal.

33

c) Commentary

There are different limitation periods for tort and criminal offences. The latter period applies to all persons who are liable in tort law, even if these persons

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had not been sued in the criminal action. That is, even if there was no criminal accusation after the investigation, the criminal law limitation period would apply to persons liable in tort. The principle of adhesion states that the criminal court shall decide simultaneously the criminal offence and the tort law compensation. The scope of this principle is to avoid divergent decisions on the same facts. Therefore it seems fair to the injured party who hoped for a legal solution through penal law to be protected by the interruption of the limitation period also towards persons only liable in tort. 4. Supreme Court of Justice, 13 March 2007 (CJ-STJ 2007, 108–110): Traffic Accident; Intentional Injury; Insurance Company is not Held Liable a) Brief Summary of the Facts

35

The plaintiff was crossing the road when the tortfeasor (the driver) braked suddenly. The plaintiff complained and told the driver he should drive more slowly and stated: “This is not a racing circuit!”. Immediately the driver accelerated and hit the plaintiff on his leg; afterwards the car drove away. The plaintiff was severely injured physically. The plaintiff sued the insurance company and demanded compensation of € 86,560 plus future damage. The court of first instance and the court of appeal awarded compensation of € 8,485 in pecuniary damages and € 4,500 in non-pecuniary damages.

36

The insurance company argues that the norms concerning traffic accidents (strict liability and compulsory liability insurance) should not apply in this case since there was an intentional crime in which the car was used as an instrument of the crime. b) Judgment of the Court

37

The Supreme Court of Justice decided that the insurance company is not liable. The Court argues that there was a crime, an intentional assault and the system of liability-insurance provided for traffic accidents is only applicable in case of accidents. Therefore compensation was denied. c) Commentary

38

This decision may be subject to doctrinal criticism.12 The pedestrian was hit by a car, suffered serious and grave damage caused by a car. Art. 7 DL 522/85 stated the exceptional cases in which the insurance company is not liable, and neither the practice of a crime nor an intentional act were considered as a cause of exemption for the insurance company. This interpretation of the law leaves victims of injuries of motor vehicle traffic without protection. 12

Case law had different decisions, as for example: Supreme Court of Justice 18/12/96, Porto Court of Appeal 04/04/00 and Porto Court of Appeal 18/01/01. According to these decisions, the insurance company cannot escape liability even if there is dolus (intention) on the part of the driver. The same rule is now in force in the new act Decree-Law 291/2007, 21 August, in Art. 15.

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On the other hand, Art. 8 (2) of Decree-Law 522/85 expressly states that the insurance guarantees compensation to the injured parties even if damage is caused by persons who stole the car or if the accident was caused with dolus (intention). Moreover, Art. 17 of the same Act provides the cases when the insurance company has the right of redress against the driver and this includes cases of intentional damage! That should be interpreted in the following way: if the law provides a right of redress, this means that the insurance company should pay compensation to the victim and later demand redress from the driver. The teleological element of interpretation is also in favour of the idea that the law intends to protect the injured person against the risk of lack of patrimony to pay compensation. Therefore, the patrimonial risk lies on the part of the insurance company, not on the part of the injured bystander. This decision is also not in accordance with the European directives concerning motor vehicle compulsory insurance.13

39

Pedestrians should be protected by the insurance company even if there was an intentional tort or even a criminal action by the driver. Society has accepted the existence of dangerous objects such as cars but, on the other hand, has created a no-fault system and compulsory insurance in order to protect third parties from this source of danger. It is not fair to let the pedestrian bear the risk of insolvency of the driver. It seems much more reasonable and in accordance with the legal system on motor vehicle regulation to impose on the insurance company the duty to pay compensation to pedestrians and afterwards sue in redress the driver who acted intentionally.

40

5. Supreme Court of Justice, 13 March 2007 (CJ-STJ 2007, 122– 124): Medical Liability; Damage Caused by Things or Activities; Presumption of Fault; Contaminated Blood a) Brief Summary of the Facts

The plaintiff suffered a labour accident on 6 January 1989 and was operated on the knee in a private clinic of the first defendant. Due to the operation, he was administered a blood transfusion on 12 January 1989. The blood was contaminated with the VHC virus (hepatitis C); in 1998/99 the plaintiff started to experience physical and psychological problems, which led him to being admitted to hospital. The plaintiff was diagnosed with cirrhosis caused by the VHC virus. He sued the clinic claiming compensation of € 220,835 plus interest. He is now retired. 13

See: Directive 2005/14/EC of the European Parliament and of the Council of 11 May 2005: (16) “Personal injuries and damage to property suffered by pedestrians, cyclists and other nonmotorised users of the road, who are usually the weakest party in an accident, should be covered by the compulsory insurance of the vehicle involved in the accident where they are entitled to compensation under national civil law. This provision does not prejudge the civil liability or the level of awards for damages in a specific accident, under national legislation.” Art. 4 (2) states: “Article 1a: The insurance referred to in Article 3(1) of Directive 72/166/EEC shall cover personal injuries and damage to property suffered by pedestrians, cyclists and other non-motorised users of the roads who, as a consequence of an accident in which a motor vehicle is involved, are entitled to compensation in accordance with national civil law. This Article shall be without prejudice either to civil liability or to the amount of damages.”

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In January 1989 medical science was aware of the existence of a third type of hepatitis, which was called “not-A” and “not-B”. Since 1991 it has been called hepatitis C. The court of first instance and the court of appeal did not award damages. b) Judgment of the Court

43

The Supreme Court of Justice decided that the presumption of fault concerning dangerous activities (Art. 493 (2)) applies in the case of a blood transfusion, that the defendant did not prove he had taken all necessary measures to avoid damage and therefore ordered compensation. c) Commentary

44

Normally, Art. 493 (2) Código Civil is not applied in the field of medical accidents. In this situation, the Supreme Court of Justice decided that a blood transfusion is a dangerous activity. It is a reasonable judgment and shall be taken into account in the evolution of Portuguese medical malpractice law.14 6. Supreme Court of Justice, 24 April 2007 (CJ-STJ 2007, I, 105–113): Medical Liability; Burden of Proof a) Brief Summary of the Facts

45

During surgery a patient had a serious adverse reaction to the anaesthetic and died. The court of appeal did not award compensation. b) Judgment of the Court

46

The Supreme Court states that there is contractual liability in a private law relationship between doctor and patient. The anaesthetist is not considered as an auxiliary of the surgeon (Art. 800 does not apply). However, the surgeon included the anaesthetist in his team, and therefore is liable for damage caused by the anaesthetist. There is dispute concerning the burden of proof in medical contract law cases. The Supreme Court decided that the debtor (the doctor) must prove he was not at fault.

47

The Supreme Court ordered compensation for damage and both physicians are found solidarily liable. The amount of €100,000 was awarded, divided as following: € 50,000 in compensation was awarded for the death of the plaintiff (the violation of the deceased’s right to life) and € 50,000 was awarded to the parents for the non-pecuniary loss for the death of their daughter.

14

It is in great contrast, though, with the decision of the Supreme Administrative Court of 15 December 2005 which denied compensation in a case where the State was the defendant and in a jurisdiction where the State shall be liable for exceptionally dangerous activities. See A. Pereira, Portugal, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2006 (2008) 400 f.

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c) Commentary

This decision of the Supreme Court is important since it opted clearly for the doctrine according to which the inversion of the burden of proof typical in contract law also applies in cases of medical contracts. Therefore, the doctors were found liable since they could not prove that the death was attributable to an unexpected reaction of the patient’s physiology to the anaesthetic drugs, rather than to a wrongful performance of the anaesthetic procedure. It had been proved that the anaesthetist had had no previous contact with the patient and had not read her medical file thoroughly.

48

A similar decision was taken by the Lisbon Court of Appeal (decision of 23 January 2007, www.dgsi.pt). In a contractual relation, the doctor (the debtor) has the burden of proof that he committed no fault. However, it must be stressed that the patient has the burden of proving the wrongful performance or non-performance of the medical duties. Therefore, the distinction between fault (subjective element) and wrongfulness (objective element) should be respected also in contract law.

49

Concerning damage of death, it is worth mentioning that such concept is beginning to be challenged in Portuguese courts. The decision of the Supreme Court of Justice of 7 November 2007 distinguishes the non-pecuniary damages of the relatives of those of the defunct. It states that such loss is unknown in Resolution no. 7/75 of the Council of Europe, the jurisprudence of the European Court on Human Rights and in the other Member States of the European Union. Nevertheless, Portuguese law accepts such compensation (Art. 496 (3)) and the courts shall apply it before there is a legislative reform. Such compensation shall be, however, “symbolic” and shall be taken ex aequo according to normal case law practice. In this case the victim was a sex worker, drug abuser, lived with her mother and brothers and helped in domestic affairs. It is reasonable and fair to award € 40,000 for the damage of her death plus € 7,000 for non-pecuniary damage suffered before death.

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7. Supreme Court of Justice, 5 July 2007 (CJ-STJ 2007, II, 152–154): Loss of Use as Non-Pecuniary Damage? a) Brief Summary of the Facts

After a traffic accident the plaintiff sued the insurance company of the tortfeasor claiming compensation for pecuniary and non-pecuniary loss, especially the repair costs of his car (compensation in natura) and damage of loss of use of the car until the repairs were complete. The insurance company argued that the market value of the car was only € 2,000, which is lower than the repair costs (€ 3,740.98), and that the plaintiff could not argue the loss of use since he had another car.

51

The court of first instance ordered compensation of a) € 3,840.98 plus delay interest since the time the quotation was given and b) for the loss of use, the amount of € 10 a day since the quotation until payment of the repair costs decided in a). In appeal, the court of appeal upheld the decision.

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The court of first instance and the court of appeal awarded non-pecuniary damages for loss of use of the car because the plaintiff was restricted in his freedom of movements. According to Art. 496 (1) of the Código Civil, compensation for non-pecuniary loss is to be awarded when “due to the severity of the damage the protection of the law is deserved.” b) Judgment of the Court

54

The Supreme Court of Justice stated that loss of use is a recoverable pecuniary loss, and not a non-pecuniary damage. There is damage because the function of ownership is the use of one’s possessions; if the car cannot be used there is a violation of the ownership and the property of the plaintiff. Concerning the amount of € 10 a day – a decision that had been taken ex aequo by the judge of first instance – it is considered as appropriate. Some years have passed and the amount to be paid is already over € 20,000. However, as the Supreme Court states: sibi imputat – the insurance company shall only complain of its own conduct since it should have paid the repair costs from the beginning.

55

On the other hand, the Supreme Court also upheld the decision according to which the plaintiff has the right to the costs of repairing the car and not only the market value of the car, since the restitutio in natura is not extremely onerous (Art. 566 (1)). c) Commentary

56

The Supreme Court stated that damage of loss of use shall be considered a pecuniary damage, which is a sound decision. The use of the non-pecuniary damage concept in this situation is not to be applauded. It seems that judges use Art. 496 (non-pecuniary damage) to order compensation for punitive damage.

57

On the other hand, the loss of use can be calculated in abstract or in concrete. Should the plaintiff prove a concrete pecuniary damage (taxi bills, train tickets, bus tickets, hired cars) or shall the court accept an abstract calculation of the costs – perhaps ex aequo – as has been accepted in courts? As a rule Portuguese law asks for the “real damage” (dano real) and is not satisfied with the abstract damage (dano abstracto).

58

In fact, when dealing with the issue of repair costs vs. market value of the car, the Supreme Court uses a similar reasoning: one shall not take into consideration the market value (the abstract loss) alone, rather the Court analyses the significance of the car as the property of the injured person. There seems to be, thus, incoherence in this area of pecuniary losses. 8. Supreme Court of Justice, 4 December 2007: Old-Timer; “Patrimonial” Value (www.dgsi.pt) a) Brief Summary of the Facts

59

After a car collision the plaintiff’s car – an old Renault Clio from 1992 (with 178,000 km) – was severely damaged. The insurance company proposed to

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compensate only the market value of the car, which was € 1,200. On the other hand, the repair costs would be € 5,843. After the accident, the damaged car was worth only € 200. The plaintiff argues that although the car was old, it still fulfilled the functions for which he needed it (driving his children to school, going to work, going shopping, visiting friends, going on vacation, etc.) and with € 1,200 he would not be able to find a similar car. He claimed compensation for the repair of the car (as well as the loss of use of the vehicle during the time it was being repaired).

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The insurance company argues that it is excessively onerous to obtain restitutio in natura (reparation), thus, according to Art. 566 (2), the insurance company should pay compensation equivalent to the market value of the car less the value of the damaged car, that is € 1,200 – € 200 = € 1,000.

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b) Judgment of the Court

The court of first instance ordered a compensation amount similar to the market value (€ 1,500), but the Court of Appeal reversed that decision and ordered the compensation demanded by the plaintiff (i.e. the repair costs of the vehicle). The Supreme Court of Justice upheld the decision of the Court of Appeal.

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According to the Supreme Court, the defendant (the insurance company) had to prove that the reparation costs would be excessively onerous. However, the comparison should not be made between the reparation costs and the market value of the car. Rather the damaged car should be compared with the economic value of a car that fulfils the functions that the old Renault Clio used to perform. The “affective value” of the car could also be taken into consideration, although the plaintiff did not argue that. In summary: the “patrimonial” value of the car shall be analyzed within the “patrimony” of the victim, not in the market. The opposite thesis, according to which the value of the car is equivalent to its market value, would mean that the insurance company would have a kind of a potestative right to sell the old car. But, such right to sell someone else’s property does not exist. Therefore, this opinion is not to be accepted.

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In conclusion, the main rule of compensation is restitutio in natura, the exception is compensation in money; therefore the plaintiff has the burden of proof of the rule, the defendant has the burden of proof of the exception. The plaintiff proved how much the repair costs would be; the insurance company should have proved that such repair would have been excessively onerous. However, the market value of the car is not the decisive criterion, rather the patrimonial value of the car within the patrimony of the plaintiff. The insurance company should have compared the old Renault Clio with the value of another vehicle that would satisfy the needs of the plaintiff.

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c) Commentary

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The Supreme Court of Justice follows its jurisprudence,15 according to which the market value of the car is not decisive. A very important argument is that the insurance company (and no one else) would have the right to impose the sale of an old vehicle, i.e. only the market value was to be applied. Thus the notion of “patrimonial value” shall be determined in the patrimony of that concrete person. However, it seems exaggerated – in a teleological and economic analysis of the decision – to accept repair costs that are five times more expensive than the value of the car. In Germany the limit would be 30% over the market value of the car.16 Perhaps, in Portugal judges take into consideration the low purchasing power of the majority of citizens.

C. LITERATURE 1. Rita Ferreira da Silva, Do Contrato de Seguro de Responsabilidade Civil Geral. Seu Enquadramento e Aspectos Jurídicos Essenciais (Coimbra, Coimbra Editora 2007)

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This book attempts to demonstrate some of the most important and essential juridical aspects regarding the insurance contract of general civil liability, which can be characterised by two essential duties: the duty to compensate the third party injury and the duty to protect the insured person against all pretensions, contestable or unfounded, in or outside the court, demanded by the third party. The author discusses two modalities described in Portugal: a) “Nuclear Energy” and b) “Others” (however, due to the fact that there are so many risks related to the insurance it becomes impossible to establish all the risks that can be included here) and the protection of the patrimony of the insured person and of the third party involved. In this book, the author concluded that, although the insurance and the insurance contract of general civil liability are recent, it is possible to find historical sources since the 15th century, and that it is extremely important, due to either the socialisation of the civil liability and of the risk, to establish a relationship between the insurance contract of general civil liability and the juridical institute of civil liability. 2. João Calvão da Silva, Apólice “Vida Risco – Crédito Habitação”: as pessoas com deficiência ou risco agravado de saúde e o princípio da igualdade na Lei no. 46/2006, Revista de Legislação e de Jurisprudência, no. 3942, 158–170

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Life insurance contracts are routinely concluded in order to have access to a mortgage. The author argues that this Act does not prohibit insurance companies from demanding higher premiums or from refusing certain categories of 15

16

See A. Pereira, Portugal, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2004 (2005) 499 f. See B. Markesinis/H. Unberath, The German Law of Torts – A comparative treatise (2002) 935.

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clients who create a higher risk, as long as actuarial evidence-based decisions are made and that such decisions are not taken because of the “handicapped person” or the “person living with an aggravated health risk,” but directed to a “category of clients”. 3. Eduardo Santos Júnior, Mitigation of damages, redução de danos pela parte lesada e “culpa do lesado”, in: António Menezes Cordeiro/ Luís Menezes Leitão/Manuel Costa Gomes, Prof. Doutor Inocêncio Galvão Telles: 90 anos (Coimbra, Coimbra Editora 2007) 349–368 This article deals with mitigation of damages which is possible under Portuguese law, according to Art. 494 Código Civil. The fault of the injured person also may lead to a reduction or exclusion of damages, according to Art. 570 CC.

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4. André Dias Pereira, Limitation Periods – a comparative study. Law of the Member States and International Documents: Searching for “Recent European Trends”, Boletim da Faculdade de Direito 2006, 583–612 This paper deals with the issue of limitation periods in European private law systems and in international documents. The author understands there are some common trends in European private law, although there are impressive differences. The main conclusions are the following: Most countries have relative (subjective) limitation periods and most of the relative limitation periods start from the knowledge (or duty to know) of the damage and the tortfeasor; the most common relative limitation periods are three and five years. Most countries also have absolute limitation periods; those limitation periods normally start from the occurrence of damage (with some exception, where it starts from the activity) and modern codifications and international documents opt for an absolute limitation period of 10, 20 years or (in case of personal injuries or environmental damage) 30 years.

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Concerning the diversity between tort and contract law, modern codifications provide similar rules on limitation periods for tort and contract law; however different limitation periods are frequent in Southern European and Latin countries. In most of these countries the limitation period in tort law is shorter than the contractual one. In the large majority of civil law countries criminal law limitation periods influence civil law limitation. This influence varies, but in most countries when the tortious act is simultaneously a criminal offence, and the criminal code provides a longer limitation period, the latter applies. It is a well established common core of European private law that the courts shall not, on its own motion, bring the question of limitation of action.

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Finally, the international conventions take into account criteria which are similar to those of national legal orders. Normally relative limitation periods depend on subjective criteria, but the relative periods tend to be short (one, two or three years) and the absolute limits vary from 10 to 30 years.

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5. Júlio Gomes, Sobre o dano de “Perte de chance”, Direito e Justiça, Vol. XIX, Tomo II, 2005, 8–48

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The author analyses the very controversial “perte de chance” theory. He argues that the “perte de chance” is primarily a matter of causation and not of damage. The theory has not been adopted in Portuguese law, because it is not included in the theory of adequate causation provided in Art. 563 Código Civil. De jure condendo the author agrees with some solutions proposed by the doctrine of “perte de chance”, but de jure condito he only accepts the inversion of the burden of proof of causation in some cases. 6. José Brandão Proença, Balizas perigosas e responsabilidade civil, Cadernos de Direito Privado 17 (2007) 32–42

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A 12-year-old child was injured by the goal post while playing at a football ground. Is the association owner of the field liable? This article examines whether the presumption of fault for things (Art. 493 (1)) is applicable in this case. 7. Maria Manuel Veloso, Danos não patrimoniais a sociedade comercial? Cadernos de Direito Privado 18 (2007) 29–45

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The author analyses the possibility of ordering compensation for non-pecuniary damage to corporations and other legal persons, that is, the right of legal persons to receive compensation for non-pecuniary losses. From her point of view, the affirmative answer, the right to compensation for non-pecuniary damage for legal persons, is to be defended in exceptional circumstances.17 8. Comemorações dos 35 anos do Código Civil, Volume III, Direito das Obrigações (Coimbra, Coimbra Editora 2007)

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A book commemorating 35 years of the Civil Code (from 1966), concerning the law of obligations was published in 2007. Several articles deserve mention here:

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José Brandão Proença, Culpa do Lesado, 139–152. The author analyses the issue of contributory negligence.

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Maria da Graça Trigo, Responsabilidade civil do comitente (ou responsabilidade por facto de terceiro), 153–170. This paper deals with vicarious liability or liability for the activities of third parties.

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Dário Moura Vicente, Culpa na Formação dos Contratos, 265–284. Culpa in contrahendo is the subject of this study.

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Manuel Carneiro da Frada, A responsabilidade pela confiança nos 35 anos do Código Civil – balanço e perspectivas, 285–308. The author argues for a basis of liability founded on breach of confidence. 17

Supreme Court of Justice, 8 March 2007 awarded compensation for non-pecuniary damage of a football club (a legal entity; association).

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Jorge Sinde Monteiro, Responsabilidade delitual. Da ilicitude, 453–481. The author analyses the issue of wrongfulness in tort law, comparing the 1966 Portuguese Civil Code, the Swiss Draft of the Code of Obligations, the Principles of European Tort Law and the proposal of the European Civil Code Group. The author focuses on the possibility of wrongfulness for violation of the principle of good-faith as stated in the Swiss Draft (Art. 46 (2)). He concludes that such criterion of wrongfulness is not possible in the current Portuguese law.

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Maria Manuel Veloso, Danos não Patrimoniais, 495–559. The author analyses the issue of non-pecuniary damages, analyzing literature and case law in a comparative perspective. The author criticizes a recent import of the concept of “danno biologico”, which she deems unnecessary to our law. In fact, the Civil Code accepts compensation for non-pecuniary damage broadly.

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9. Medical Liability The area of medical liability is attracting more attention every year in Portuguese literature as the following studies show:

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Paulo Mota Pinto, Indemnização em caso de “nascimento indevido” e de “vida indevida” (“wrongful birth” e “wrongful life”) Lex Medicinae – Revista Portuguesa de Direito da Saúde 7 (2007) 5–26. This paper is important since the author defends with very strong arguments that both wrongful birth and wrongful life should be compensated.

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Manuel Carneiro da Frada, A vida própria como dano – Perspectivas civis e constitucionais de um tema actual, in: A. Pinto Monteiro/I. Sarlet/J. Neuner (eds.), Direitos Fundamentais e Direito Privado, Uma Perspectiva de Direito Comparado (Coimbra, Almedina 2007). The author denies the legitimacy of a wrongful life claim.

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Vanessa Correia, Wrongful Birth e Wrongful Life: de Nicolas Perruche a Kelly Molenaar, Sub Judice 38 – Direito da Saúde e Biodireito (2007). This paper provides a comparative update of the debate concerning wrongful life.18

85

André Dias Pereira, Responsabilidade Civil dos Médicos – alguns casos da Jurisprudência, Lex Medicinae – Revista Portuguesa de Direito da Saúde 7 (2007) 53–68. The author analyses recent case law, from a comparative perspective, concerning liability of doctors and hospitals, including accessory duties of surveillance, cleaning, storage of goods and infected blood.

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Mafalda Barbosa, Notas esparsas sobre responsabilidade médica – Anotação ao Acórdão do Supremo Tribunal de Justiça de 22 de Maio de 2003, Lex Medicinae – Revista Portuguesa de Direito da Saúde 7 (2007) 119– 150. This text analyses some problems of medical liability, especially the in-

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18

See also: A. Moraitis, When Childbirth becomes damage: a comparative overview of “wrongful birth” and “wrongful life” claims, Lex Medicinae – Revista Portuguesa de Direito da Saúde 8 (2007) 37–58.

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version of the burden of proof concerning dangerous activities (Art. 493) and expresses the opinion that, normally, such inversion norm shall not apply in the context of medical activity.

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André Dias Pereira, Dever de Documentação, acesso ao processo clínico e sua propriedade. Uma perspectiva Europeia, Revista Portuguesa do Dano Corporal 6 (2006) 9–24. This paper discusses the reasons, goals and objectives of the doctor’s duty to register. Secondly, the system of access to medical records in different European countries is analyzed. Increasingly the patient has the right to access directly his/her medical file. Finally, taking into consideration the challenges of genomics, a new perspective of the ownership of medical files is discussed. In this respect, recent Portuguese law (Law 12/2005, 26 January) states that medical information is owned by the patient. However, in Portugal there is still a mediate or indirect right to access to medical files, that is, the patient must be accompanied by a doctor.

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Rui Cascão, O Dever de Documentação do Prestador de Cuidados de Saúde e a Responsabilidade Civil, Lex Medicinae – Revista Portuguesa de Direito da Saúde 8 (2007) 27–36. The author publishes a paper concerning the doctor’s duty of registration in the medical file and its importance in cases of medical liability. The author makes special reference to the Principles of European Law of the Study Group on European Civil Code, and to French, German and Dutch law.

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Álvaro Rodrigues, Sinopse Esquemática da Responsabilidade Médica em Geral (Breves Anotações), Lex Medicinae – Revista Portuguesa de Direito da Saúde 8 (2007) 85–96. A short essay with a synopsis of medical liability in tort, criminal and disciplinary law.

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Helena Melo, Os Direitos da Pessoa Doente, Sub Judice 38 (2007). This paper deals with patients’ rights in Portugal.

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Rita Marques/Patrícia Gonçalves, A Recusa de Transfusão: da Prática à Jurisprudência. Sub Judice 38 (2007). The authors discuss the right to refuse treatment, in particular the right to refuse blood transfusions on religious grounds.

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Manuel Albuquerque, Análise comparativa das indemnizações por acidente de viação em Portugal e Espanha, Revista Portuguesa do Dano Corporal 6 (2006) 57–70. This article compares compensation for personal injury (body damage) due to traffic accidents in Portugal and Spain. Since ancient times there have been laws referring to sanctions and indemnity for bodily damage. In Rome, Lex Aquilia assumed the need for the repair of damage, assessed the non-pecuniary loss of free men, created the notion of temporary incapacity, considered victim’s capacity before and after the damage and his professional skills. Napoleon’s code determined the duty to compensate all damage and liability was based on fault. Technological evolution increased the risk of no-fault accidents imposing the need to compensate through insurance companies and society. Evaluation and compensation of damage is a central subject of discussion

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in the EU. Traffic accidents are the major cause of personal injury. In Portugal indemnity depends upon a medical legal evaluation to be assessed by a judge in court; in Spain there is a mandatory evaluation instrument. The author compares compensation amounts in 32 cases in Portugal, judged by different courts, with values obtained for the same cases using Spanish “baremo”.19 Values from different years were actualized according to the inflation rate. The compensation amounts in Portugal were also converted to the Spanish standard of living using the ratio of gross domestic product (GDP) of Portugal and Spain. Indemnity for death, in Portugal, varied from € 20,351 to € 227,795 (average € 83,387). In Spain they varied from € 33,815 to € 194,383 (average € 108,914). Indemnity for temporary incapacity with or without permanent lesions in Portugal varied from € 956 to € 399,105 (average € 90,201); in Spain from € 3,488 to € 365,152 (average € 99,104). Considering major incapacity only, the average indemnity was € 88,331 in Portugal and € 219,185 in Spain. On the other hand, considering cases with incapacity below 50%, the average indemnity was € 57,978 in Portugal and € 39,918 in Spain. In Portugal the time lapse between the accident and the final court decision was up to 13 years. Both systems seem equally effective in evaluating damage and determining indemnity. However major incapacities receive a higher compensation in Spain. On the other hand, the Spanish system may arrive at decisions faster and at lower costs. 10. Corporation Law and Tort Law It should be pointed out that – as Oliphant stated last year – the interconnections between tort law and corporation law are increasing immensely. This is especially true for Portuguese literature. This is due probably to the changes in the Code of Corporations that occurred in 2006,20 and perhaps to some serious cases that occurred in important Portuguese corporations. In this area we can find several publications from last year:

94

João Calvão da Silva, “Corporate Governance” – Responsabilidade civil de Administradores Não Executivos, da Comissão de Auditoria e do Conselho Geral e de Supervisão, O Direito, Ano 139, 2007, III.

95

Jorge Manuel Coutinho de Abreu, Responsabilidade Civil dos Administradores de Sociedades (Coimbra, Almedina 2007).

96

Elena Pérez Carrillo/Maria Elisabete Ramos, Responsabilidade Civil e Seguro dos Administradores, Boletim da Faculdade de Direito 2006, 291– 347.

97

Pedro Vasconcelos, D&O Insurance: o Seguro de Responsabilidade Civil dos Administradores e Outros Dirigentes da Sociedade Anónima, in: Menezes Cordeiro/Menezes Leitão/Costa Gomes, Prof. Doutor Inocêncio Galvão Telles: 90 anos (Coimbra, Coimbra Editora 2007) 1154–1181.

98

19

20

See on this issue, E. Laborda Calvo, Baremos en valoración del daño corporal – Baremo español, Revista Portuguesa do Dano Corporal 6 (2006) 25–48. Pereira (fn.14) 395.

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André G. Dias Pereira

Luís Menezes Leitão, A Responsabilidade Civil do Auditor de uma Sociedade Cotada, in: J. Miranda (ed.), Estudos em Honra de Ruy de Albuquerque (Coimbra, Coimbra Editora 2006) 819–828. 11. Roman Law and Tort Law

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Another area that deserved some attention in 2007 were the papers published by Roman law experts concerning the Lex Aquilia:

101

António Santos Justo, Lex Aquilia, in: Jorge Miranda (Coord.), Estudos em Honra de Ruy de Albuquerque (Coimbra, Coimbra Editora 2006) 13– 51. An essay concerning the Lex Aquilia.

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Paulo Sousa Mendes, Sobre a Origem dos princípios jurídicos da causalidade e do domínio do facto – A lex aquilia de damnum iniuria datum, in: António Menezes Cordeiro/Luís Menezes Leitão/Manuel Costa Gomes, Prof. Doutor Inocêncio Galvão Telles: 90 anos (Coimbra, Coimbra Editora 2007) 1085–1110. The author writes about the origin of the principles of causation and domain of the fact in Roman law.

XXI. Romania Christian Alunaru and Lucian Bojin

A. LEGISLATION 1. Emergency Decree of Government no. 82/2007 Amending Companies Act no. 31/1990 (28 June 2007, Monitorul Oficial no. 446 of 29 June 2007) After the substantial amendments to the Companies Act in 2006, aiming mainly to transpose the White Paper on Corporate Governance in South East Europe issued by the OECD in 2003,1 a few amendments were adopted also in 2007. Two of them have a particular relevance for the field of liability. The first one concerns the insertion in Romanian law of the “business judgment rule” as a standard of liability for company managers. The “business judgment rule” has been inserted in the context of a new article defining generally the directory principles of the management function (the new art. 1441 for the first time mentions explicitly and jointly the duty of loyalty and of confidentiality, as well as the duty of prudence and diligence). The “business judgment rule” is conceived as a counterweight to the latter (art. 1441, par. 2 states that “the manager does not breach the duty [of prudence and diligence] if, when making a business judgment, he reasonably believes to be acting in the interest of the company and based on adequate information”). Commentators have already expressed their worries2 about the success of this “legal transplant” from the common law system, since the general legal framework of the managers’ function is the contract of mandate, as regulated by the Romanian Civil Code and Commercial Code, both essentially French legal acculturations. It must be noted that, according to the present text of the regulation, the “business judgment rule” only applies to managers of stock companies (societati pe actiuni), and not to those of the smaller limited liability companies (societati cu răspundere limitata), which are still governed by the general rules of the contract of mandate.

1 2

See www.oecd.org/dataoecd/9/21/20490351.pdf. L. Bercea, Regula judecatii de afaceri: despre noul regim al răspunderii administratorilor societatilor pe actiuni, Pandectele Romane 8/2007.

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The second amendment to the Companies Act is the new art. 2371 which, for the first time in Romanian legislation on companies3 explicitly establishes the possibility of “piercing the corporate veil” and making it possible for shareholders (with limited responsibility) to be held liable for a company’s liabilities towards creditors. The conception that was introduced into Romanian law is based on the abuse of rights’ doctrine. The new article (placed within the chapter concerning the dissolution of the companies) mentions that: “The shareholder that, aiming to defraud the creditors, abuses the limited character of his liability and the separate legal personality of the company, shall be liable unlimitedly for the liabilities of the dissolved company that were not liquidated”. This is a subsidiary liability of the shareholder, for which par. 4 of the same article offers some examples. It is very interesting to see how this article will be applied by courts, especially as regards its possible incidence in insolvency proceedings, where the law provides for a subsidiary liability of managers (also based on the abuse of rights), but not of shareholders. 2. Act no. 304/2007 Amending Act no. 136/1995 Regarding Insurance and Reinsurance in Romania (13 November 2007, Monitorul Oficial no. 784 of 19 November 2007)

3

Among the few amendments made to the Act regarding Insurance and Reinsurance, one has a great practical relevance. It concerns the way in which compensation for damage is established in the case of insurance for civil liability in motor vehicles accidents. The previous regulation (art. 43) required the agreement of all three parties involved: insurant, insured and victim. In case agreement could not be reached, a judicial decision was necessary. The actual regulation after the recent amendment only requires an agreement between the insurant and the victim. The consent of the insured is no longer needed in order for the insurant to compensate the damage of the victim. Although this seems to be a simplification of procedures, the new norm is not likely to lead to a major reduction of cases in courts concerning insurance, since, even until now, it was the insurant’s agreement that was very difficult to obtain in practice. 3. Emergency Decree of Government no. 68/2007 on Environmental Liability with Regard to the Prevention and Remedying of Environmental Damage (28 June 2007, Monitorul Oficial no. 446 of 29 June 2007)

4

This Decree implements Directive 2004/35/EC of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage, OJ L 143, 30.4.2004, 56–71 (Dir. 2004/35/EC). From the preamble, the Government explains the urgency of the Decree as a result of the infringement procedure that was started against Romania for having exceeded the implementation term stated in the Directive, which was 30 April 2007. That is also the cause of a very particular case of retroactivity of the Decree. Having in mind the direct effect of the EC 3

The possibility of “piercing (lifting) the corporate veil” was first prescribed in 2004 by the Fiscal Procedure Code, but only applied for taxation duties.

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directives not duly implemented within the required time limit,4 the Government declares that the Decree no. 68/2007 is not applicable to “environmental damage caused by an emission, event or incident that took place before 30 April 2007”, even if the Decree entered into force only two months after. Following Directive 2004/35/EC, the Decree imposes strict liability for activities with high environmental risk, as listed in annex III of the Directive (and of the Decree), if they produce an environmental damage, as defined by the Decree. However, Romania chose not to extend strict liability to the cases expressly mentioned in art. 8, par. 4 of the Directive, whose application was left to the choice of every Member State.

5

B. CASES 1. High Court of Cassation and Justice, Civil and Intellectual Property Section, Decision no. 393 of 18 January 2007, Romanian Ministry of Culture and Religious Affairs vs. E.I.D., D.I.P. and M.I.: Interruption of Prescription Period by a Criminal Claim a) Brief Summary of the Facts

The Romanian Ministry of Culture and Religious Affairs filed an application (no. 1364 of 30 March 2005), registered at the Bucharest Tribunal, in which it requested that the respondents, E.I.D., D.I.P. and M.I. be declared jointly liable to pay damages amounting to USD 1.500.000, as a result of their photographing and photocopying the C.A. manuscript. Upon motivating its request, the plaintiff claimed that in 1999, the National Library of Romania had lent the first part of the C.A. manuscript to the Land of Hessen in Germany, in order to participate in the Das Lorscher Evangeliar Exposition and the 799 GBR Exposition. Since the manuscript had been catalogued as part of patrimonial cultural assets, a conservation record of the manuscript was filled in by the restorer of old books at the National Museum of Unification in Alba Iulia, according to the provisions of Act no. 63/1974. At the time of its return to the country, on 5 November 1999, a commission of experts found some deteriorations of the manuscript caused by photography and photocopy making. These operations had taken place in the absence of any agreement between the Romanian State and the representatives of the German Land. This was due to the oversight of the respondents who, by virtue of the competences of their offices held at that time, were in charge of contracting such agreements.

6

The first instance court (the Bucharest Tribunal) admitted the exception of prescription of the material right to action and, consequently, dismissed the plaintiff’s claim by civil decision no. 956 of 14 September 2005. In order to deliver this judgment, the Tribunal considered that, from the written evidence existing in the case, it results that the claimant had also filed a criminal com-

7

4

ECJ 8/81, Becker v. Finanzamt Münster-Innenstadt [1982] ECR 53.

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plaint against the above-mentioned respondents. The matter was resolved in 2005 when the criminal investigation was ended on the grounds that the conditions for the existence of abuse of official powers were not met in the case. Therefore, it was held that the plaintiff had knowledge of the extent of the damage and of those responsible for it since 5 November 1999, at the time of analysis of the manuscript by the expert commission. The court applied the provisions of art. 8 of Decree no. 167/1958 regarding extinctive prescription and concluded that the period of prescription had started on 5 November 1999 and had been terminated on 5 November 2002. Also, it argued that the filing of the criminal complaint in this case did not constitute a situation of interruption of the period of extinctive prescription.

8

The plaintiff appealed against the decision. The Bucharest Court of Appeal, by its civil decision no. 115/A of 15 June 2006, admitted the appeal, revoked the sentence and ordered the case to be sent back to the Bucharest Tribunal. It concluded that the Tribunal had incorrectly applied the provisions of Decree 167/1958, when admitting the exception of prescription of the plaintiff’s substantial right to action.

9

The respondents filed for a review of the latter decision. They argued that the date of the offence had erroneously been considered to be 5 November 1999, and that in fact it had taken place somewhere between 1992–1993, when the agreement for the photocopying was made. They claimed that the court had confused the moment of committing the acts with that of the acknowledgement by the claimant of the damage caused. They also pointed out that the plaintiff did not submit a civil complaint jointly to the criminal one in the criminal trial and that the mere criminal complaint does not constitute a cause of interruption of the period of prescription. Consequently, extinctive prescription has produced effects on the plaintiff’s claim. The review of the decision was dismissed by the High Court of Cassation and Justice. b) Judgment of the Court

10

The Court of Appeal correctly established the date of 5 November 1999 as the moment from which the Ministry of Culture and Religious Affairs knew or ought to have known of the damage caused and of the persons liable. These are the circumstances relating to which the course of the period of prescription as mentioned by art. 8 of the Decree 167/1958 is to commence. Extinctive prescription is indeed a sanction on the creditor who persists in a passive conduct over a determined period of time when the debtor does not recognize the liability. In the case discussed, as correctly mentioned by the Court of Appeal, the Ministry of Culture and Religious Affairs has proven its actions for the purpose of holding responsible those liable for the damage it had suffered, by filing the criminal complaint in case no. 415/P/2002 of the Prosecutor’s Office of the Supreme Court of Justice. The moment of filing of the criminal complaint occurred within the three year prescription period provided by art. 3 of Decree no. 167/1958. Thus, the Bucharest Court of Appeal considered that the criminal complaint filed by the plaintiff was to be interpreted as a claim, as

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defined by art. 16 b) of the Decree no. 167/1958, for the purpose of interruption of the course of prescription. The order of the prosecutor not to proceed with the criminal investigation (delivered on 9 February 2005) resolved all criminal questions, but without solving the civil aspects of the case. Therefore, according to art. 17 of Decree no. 167/1958, following the interruption of the extinctive prescription – which lasted from the introduction of the criminal complaint up to the moment of the prosecutor’s order – a new period of prescription had begun. Under these circumstances, the application registered on 30 March 2005 is considered to have been made within the time limit for extinctive prescription. c) Commentary

The decision of the High Court of Cassation and Justice concerns some important aspects in the field of extinctive prescription of an action by which a person requests compensation for the damage caused by a tort. A first aspect is that of the interruption of the course of extinctive prescription by “a claim before a court”, in the sense of art. 6 b) of Decree no. 167/1958 on extinctive prescription. Assimilation of a criminal complaint with a claim before a court in the sense of the given article is generally accepted by both legal literature and case law in Romania5. This is explained by the fact that, unlike requests before administrative organs or other public authorities without jurisdictional competences (which cannot be regarded as courts), the criminal investigation authority has, still, some judicial functions and the person who has suffered an injury from a crime may seek, in addition to the criminal claim, also compensation of the damage (engaging the civil liability). Thus, before the resolving of its complaint by the criminal investigation authority, the plaintiff cannot be held responsible for lack of action in resolving the case or for any negligence in exerting its rights.

11

A controversial aspect in the discussed decision regards the fulfilment of the legal condition according to which a claim, in order to interrupt the course of prescription, has to be admitted by an irrevocable court decision. In the given case however, the decision in question is an act by which the criminal procedure is stopped – that is, an act, which is favourable to the accused, but which under civil law, does not resolve the claim in any way. Therefore, although the abovementioned complaint may be interpreted as in accordance with the condition that the creditor “shall not remain passive, but perform acts by which he claims that his right be satisfied or observed”,6 it does not fulfil the condition that the claim be decided upon and accepted by means of an irrevocable decision.

12

Another controversial issue concerns the commencement of the new prescription period, following the interruption. According to art. 17, par. 3 of Decree

13

5

6

M. Nicolae, Prescripţia extinctivă (2005) 545; A. Silvian, În legătură cu întreruperea prescripţiei civile prin sesizarea organelor de urmărire penală, Justiţia Nouă 10/1964, 70–74; V. Pătulea, Efectele produse cu privire la prescripţia extinctivă, de plângerea adresată procurorului ierarhic superior, Revista Română de Drept 6/1968, 105–108. Nicolae (fn. 5) 538.

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no. 167/1958, in the case of interruption of prescription by a judicial action, the prescription will not start again as long as the case has not been resolved by means of a definitive decision. In the given case, however, we are dealing with a decision stopping the criminal procedure, with its previously discussed content, which cannot be equated to a definitive sentence. Consequently, we find that the interpretation given by the High Court of Cassation and Justice, according to which “after the interruption that lasted from the time of notification of the district attorney to the time of issue of his decision, a new prescription had started”, is unsupported.

14

As for the moment which is to be considered as the beginning of the first period of prescription, the High Court of Cassation and Justice correctly identified it as 5 November 1999, the moment when the plaintiff knew or should have known of the damage and of the individuals liable for it. This conclusion is in observance of art. 8 of Decree 167/1958, whilst the contention of the respondents that “the moment when the facts have been committed has been confused with the moment of the plaintiff’s knowledge of the damage” has no legal basis. 2. High Court of Cassation and Justice, Civil and Intellectual Property Section, Decision no. 2220 of 9 March 2007, O.F.C. vs. Romania: Damages for Injuries Caused by Judicial Errors a) Brief Summary of the Facts

15

O.F.C. filed a complaint against the Romanian State, represented by the Ministry of Public Finances, asking that the respondent be obliged to pay moral and material damages in the amount of ROL 989,000,000 (approx. € 28,000). He filed an application that was registered at the Bucharest Tribunal on 14 July 2004 and was based on art. 504 of the Civil Procedure Code. Motivating his request, he showed that he had been arrested by the Prosecutor’s Office at the Bucharest Tribunal and that he had been held in prison for about six months as he was accused of robbery, a criminal offence stipulated under art. 211, par. 2, lit. c) of the Criminal Code. He was subsequently discharged on 9 September 2002, when the prosecution issued order no. 1249/P/1998, which stated that, according to the evidence presented in the case, there was no reliable proof to suggest that the victim had been deprived of any goods or money by use of violence. Moreover, the prosecution decided not to pursue the criminal proceedings against him as regards the charges of violence stipulated under art. 180, par. 2 of the Criminal Code.

16

The Bucharest Tribunal, third civil section, concluded that the conditions stipulated by art. 504–505 of the Civil Procedure Code were met, that the plaintiff had indeed been illegitimately held under arrest. Therefore, by decision no. 394 of 14 April 2005, the court admitted in part the plaintiff’s claim and obliged the respondent to pay moral damages in the amount of ROL 20,000,000 (approx. € 600). It rejected the claim regarding material damages as unsupported by material evidence.

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The Ministry of Public Finances and the Prosecutor’s Office at the Bucharest Tribunal appealed against this sentence affirming, among others, that moral damages had been erroneously granted, since the plaintiff’s claims had not been supported by evidence in this respect. The Bucharest Court of Appeal, third civil section, rejected entirely the plaintiff’s claims. In its civil decision no. 570 A of 23 October 2006, it motivated its decision stating that there was no judicial error in the present case. The plaintiff had been discharged only because the victim did not file a complaint. The High Court of Cassation and Justice accepted the plaintiff’s request for a review of the latter decision considering the reasons showed below.

17

b) Judgment of the Court

According to art. 48, par. 3 (I) of the Romanian Constitution, the State is liable for any damage caused by judicial errors. As held by the Constitutional Court in decision no. 45/1998, the principle of State liability towards persons who have suffered injuries due to judicial errors during criminal trials must apply to all victims of such errors; it is thus inadmissible that the victim bears the burden of certain judicial errors, although they are not imputable to him. In the given case, one can easily observe that the plaintiff was the victim of a judicial error, since the prosecutor’s order concluded that there was no consistent evidence supporting the charges against the plaintiff. The plaintiff’s benefit of a doubt was severely broken by the fact that he was deprived of liberty for six months for a crime he was not proven guilty of. The Court of Appeal has mistakenly concluded that the case did not concern a judicial error because its reasoning was based on the missing complaint of the victim, when it should have referred to the order of discharge, which shows clearly that the plaintiff was not guilty. The conditions required by art. 504 par. 1 of the Criminal Procedure Code are thus cumulatively met and hence there was a judicial error.

18

Moral damages cannot be precisely quantified. In this field, the principle of total reparation governing civil liability for torts is fully operative. It is obvious that essential moral values of the plaintiff have been harmed – his professional, social and family life has been affected. Therefore, the compensation is to be granted in the requested amount. As for material damages, they are a direct consequence of the illegal detention. The plaintiff presented evidence that he had been employed and during the appeal procedures, an expertise report was carried out for the purpose of determining the income that he had been deprived of during his arrest period. Therefore, the plaintiff’s claim for material damages is fully justified.

19

c) Commentary

The above-presented judgment clarifies some important aspects regarding State liability for damage caused by judicial errors. Firstly, as established by both legal literature and case law, art. 504 par. 2 of the Criminal Procedure Code grants the right to reparation for injuries caused by illegal detention to victims of judicial error, irrespective of whether they have been committed by the prosecutor during the criminal investigation, or by the judge during the

20

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Christian Alunaru and Lucian Bojin

trial. According to art. 504 par. 3, the unlawfulness of the arrest may be established not only when the accused is acquitted or when the measure of detention is revoked, but also when the prosecutor orders the criminal investigation to be stopped.7

21

Secondly, the person who has suffered injuries has no direct action against the magistrate who committed the judicial error, but exclusively against the State, represented by the Ministry of Public Finances (art. 506 par. 3 of the Criminal Procedure Code). The State’s recourse against the individual who – acting in bad faith or severely negligently – has caused the injury is mandatory, according to art. 507 of the Criminal Procedure Code, as modified by Act no. 356/2006. The legal nature of liability – both of the State and of the magistrate – is that of liability for torts concerning both patrimonial and non-patrimonial damage.8 The grounds for appeal of the Ministry of Public Finances, accepted by the Court of Appeal are unsupported. The Ministry claimed that the moral damages in the amount of ROL 20,000,000 (approx. € 600) have allegedly been wrongfully granted. The High Court of Cassation and Justice has correctly decided that moral damages cannot be subject to any precise quantification. They are to be assessed in relation to other criteria, such as: the extent to which the honour, dignity, social and professional status of the plaintiff was harmed, his individual freedom, personal non-patrimonial rights, the burden he and his family had to bear due to being the object of public blame, etc.9

22

Thirdly, a question that has to be added to the arguments of the decision passed by the High Court of Cassation and Justice concerns the reason why charges against the plaintiff were dropped. One must not forget that robbery is a complex crime, which encompasses both theft and acts of violence. As the theft component was dismissed due to insufficient evidence, only violence is left as a crime stipulated by art. 180 Criminal Code. In this case, the pursuit of a legal action depends on the victim’s criminal complaint. The existence of these two aspects of robbery was contemplated by the Ministry of Public Finances in its appeal and also by the Bucharest Court of Appeal, both arguing that there was no judicial error since the plaintiff was not found innocent, but charges were dismissed against him due to the lack of the victim’s complaint. It was possible to reach this erroneous conclusion due to the fact that the existence of the other, more serious crime of which the plaintiff had been accused – robbery – was left out. In the case of robbery, the pursuit of legal action does not require a complaint on the part of the victim. The illegal character of the imprisonment is a consequence of a judicial error consisting of the accusation 7

8

9

I. Stoica, Răspunderea magistraţilor pentru prejudiciile cauzate prin erori judiciare săvârşite în procesele penale, Dreptul 2/2007, 164. O. Puie, Răspunderea autorităţilor publice şi a persoanelor fizice pentru prejudiciile cauzate în materia contenciosului administrativ, precum şi aspecte privind răspunderea patrimonială a statului pentru prejudiciile cauzate prin erori judiciare, section 6: Aspecte privind răspunderea patrimonială a statului pentru prejudiciile cauzate prin erori judiciare, Dreptul 2/2007, 108– 112. In this respect: The High Court of Cassation and Justice, Civil and Intellectual Property Section Decision no. 5292/2004, quoted by Stoica, Dreptul 2/2007, 167.

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of robbery without evidence to support it, rather than the lack of a complaint filed by the victim. 3. High Court of Cassation and Justice, United Sections, Decision no. XL of 7 May 2007, case no. 10/2007, published in Monitorul Oficial, part I, no. 763 of 12 November 2007: Inadmissibility of Claims for Damages for Moral Injuries in Labour Litigation a) Brief Summary of the Facts

The High Court of Cassation and Justice, sitting as United Sections, with the President of this Court, Prof. Nicolae Popa chairing, examined the special appeal “in the interest of the law” declared by the General Attorney regarding the application of art. 269 al. 1 of the Labour Code to the moral damages claimed by employees in cases concerning the material liability of employees. It has been observed that the case law is contradictory concerning the application of this provision of the Labour Code. Some courts have stated that moral damages in labour law litigation are admissible on the grounds that the provisions of art. 998–999 of the Civil Code regarding tort constitute general law in relation to the special provisions of the Labour Code and therefore, complement the latter. On the contrary, other courts have regarded moral damages as inadmissible, unless there are special clauses in this respect incorporated in the general labour agreement or in the labour contracts. These latter courts have correctly interpreted and applied the law. For the reasons showed below, the High Court of Cassation and Justice accepted the appeal in the interest of the law and decided upon the matter brought before it.

23

b) Judgment of the Court

Art. 295 par. 1 of the Labour Code stipulates that “the provisions of the present Code are to be corroborated with the other legal texts in the field of labour legislation and, unless incompatible, with the provisions of the civil legislation”. Nonetheless, in order to corroborate the specific provisions of the Labour Code with those of the Civil Code, it is necessary, as resulting from the above-mentioned text, that the particular situation not be dealt with by a provision of the Labour Code and that there be no incompatibilities determined by the specific nature of working relations, as long as they are based upon the collective agreement or individual employment contract. As long as the legal nature of the liability stipulated by the Labour Code is a species of civil contractual liability with certain particularities pertaining to work relations – amongst which that established derogatorily by art. 269, par. 1 and art. 270, par. 1, according to which it only refers to reparation of material damage – it is obvious that, based on such a liability, moral compensation cannot be asked for; it can only be claimed in the case of tort (art. 998–999 of the Civil Code).

24

According to the rule, in contractual liability, moral damages can only be awarded as an exception, which means that their granting is only possible if there is a legal provision to this effect or a special clause in the contract between the parties (in this case, the collective agreement or the individual employment contract).

25

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c) Commentary

26

According to art. 329 of the Civil Procedure Code, in order to ensure a harmonized application and interpretation of the law, the General Attorney (as well as the boards of the courts of appeal) is competent to ask the High Court of Cassation and Justice to give its opinion on matters that have been resolved differently by several courts in the country. The decisions rendered by the United Sections of the High Court of Cassation and Justice are published in the Romanian Official Monitor, part I. The judgments are passed only in the interest of the law – they bear no effect on the decisions examined or on the situation of the parties in those respective cases. These solutions are binding for all courts in the country.

27

In the above-mentioned case, the High Court of Cassation and Justice reaffirms, with general power over all courts in Romania, a point of view that had been expressed and discussed in the past by doctrine and which is based on strong arguments.10

C. LITERATURE 1. M. Józon, Liability for Defective Products in the European Union (Răspunderea pentru produse defectuoase în Uniunea Europeană) (C.H. Beck, Bucharest 2007)

28

The monograph, published by the prestigious publishing house C.H. Beck in the collection “European Law”, is regarded as being the first Romanian treatise that approaches, on an interdisciplinary level (legal and economic), the reform of private law in Europe, under the influence of the EU acquis. The author affirms that the success of any regulation adopted with the purpose of reducing the risks generated by products depends on the legislator achieving the optimum balance between the corrective effect of market mechanisms and the legal regulations, because market mechanisms can consolidate, but can also annihilate the effects of legal regulations. The misunderstanding and the disregard of this conditioning leads to over-regulation, namely to a legal regulation of certain phenomena that are efficiently governed by economic mechanisms or to the creation of adverse effects due to regulation. This is why a certain approach of the legal regulation of liability is required, one that takes into account both the conditionings and the economic effects of regulation.

29

Directive 85/374/EC concerning liability for defective products is dealt with in compliance with these requirements. Thus, the book exceeds the plan of the positivists’ legal analysis based strictly on textual interpretation and presents the interpretation and the application difficulties of the Directive resorting, within the study of comparative law, to new methods of legal investigation that have appeared and have evolved in the European and American doctrine 10

S. Beligrădeanu, Inadmisibiltiatea – de regulă – a acordării daunelor morale în cadrul raportului juridic de muncă reglementat de Codul muncii, Dreptul 2/2006, 102.

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in the last 40 years such as law and economics, legal realism, law in context, and legal functionalism. The author’s conclusions are based on the study of a vast bibliography comprising 150 works from European law (British, German, Austrian, etc.) and American law, which includes the results of American research on the topic of civil liability for torts undertaken within ECTIL (European Centre of Tort and Insurance Law).11 The book serves as a backup for legal practitioners by presenting EU jurisprudence and by dealing with the interpretation problems that are raised by Directive 85/374/EC, which was implemented also by Romania through Law no. 240/2004, with serious implications on the legal culture of Member States. By mentioning the economic reasons with which the EU jurisprudence works when applying the Directive, the treatise wishes to offer the Romanian business environment a real guide to risk management related to the liability for defective products.

30

The book consists of six chapters and an introduction comprising the fundamental ideas of the treatise and the main goals of the author. Chapter I presents the key interpretation problems of the central elements of the liability established by the Directive, in the light of the solutions elaborated especially by German and British doctrine, as well as by the practice of the European Court of Justice. Chapter II discusses the market arguments that represent the cornerstone of the necessity for regulating the liability for defective products, by referring to pro and contra arguments developed by the representatives of the economic theory of law regarding the preventive and compensatory function of liability without fault within this topic. Chapter III comments on the purpose and the effects of the Directive in the light of economic arguments promoted by it. Chapter IV questions the efficiency of the liability established by the Directive in the conditions of market integration on a European level and of EU policies concerning consumer protection. Chapter V discusses, in a comparative law approach, the legal nature of the new form of liability established by the Directive and presents the conclusions of the European projects regarding the unification of civil law, which analyze the trends of convergence and divergence regarding those aspects of strict civil liability which are not harmonized at the EU level, trends that may by found out in the legislation, in case law and in the legal literature. Chapter VI, relating to the aspects of international private law with respect to the liability for defective products, discusses the Hague Convention from 1973.

31

Extremely interesting is the analysis of the legal nature of the new form of liability established by Directive 85/374/EC. The author presents the three evolutionary stages of liability for defective products: The first stage up to 1932 adopted a policy favourable to the interests of industry and merchants. The non-execution of the contract was considered a proof of fault, the injured party being obliged to prove the existence of a contractual relation with the person

32

11

B.A. Koch/H. Koziol (eds.), Unification of Tort Law: Strict Liability (2002); European Group on Tort Law (ed.), Principles of European Tort Law. Text and Commentary (2005).

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who supplied the product that caused damage. The second stage considered negligence a sufficient requirement in order to offer damages, and in the third stage liability for defective products was no longer dependent on fault, but more likely on the defectiveness of the product.12

33

The author underlines that the analysis of legal liability set forth by Directive 85/374/EC has not only implications in legal literature, but also serious consequences for the evolution of European judicial practice in the field of liability for torts. The Directive does not unify tort law at the level of Member States, but introduces a new form of liability that co-exists with the other forms (traditional) of civil liability – extra-contractual and contractual. The evaluation of the historic evolution of civil liability for torts shows that this civil law institution has oscillated between two ideas: fault and causation. Despite this oscillation, no system of liability for torts is purely causal or purely based on fault. National systems can only be categorized in relation to the level of importance that they offer to the two aspects of liability.13

34

Analyzing different legal systems (German, French, British), the author criticizes the use as synonyms of terms such as strict liability and absolute liability. Authors like Jane Stapleton emphasize the distinction between the two terms: absolute liability, by contrast to strict liability, does not recognize the development risk as a precluding cause for liability.14 For the Romanian legal system, the author proposes the use of the term “strict liability for defective products” and not that of objective liability or liability for one’s own things, as the Directive introduces a new form of liability sui generis, which cannot be assimilated with any of the forms of civil liability for torts known in Romanian law.

35

The objective of the Directive to establish a uniform system in Europe relating to the topic of civil liability for damage resulting from defective products is hard to achieve, as the Directive has harmonized only certain aspects of liability without fault for these products, the central elements of liability still being left to the solutions promoted by the national civil codes and judicial practice.

36

The author underlines the importance of scrutiny of the famous European civil systems concerning strict liability with the purpose of understanding the present trends of doctrine and judicial practice at a national level focusing on its comparative method used in this sense. She criticizes those authors that compare the provisions of the Directive by relation to the elements of liability based on fault and those of liability based on risk, and not from the perspective of the functions that every system of liability has, in the light of the objectives that are promoted by modern tort law in the field of economic torts. The vast majority of these approaches do not attempt to define liability in a positive manner, but limit themselves to identifying differences and to declaring what 12

13 14

A. Nedwik, The Future of Negligence in Product Liability, Law Quarterly Review (L.Q.R.) 1987, 290. R.A. Epstein, A Theory of Strict Liability, Journal of Legal Studies (J.L.S.) 151–163. J. Stapleton, Products Liability (1993) 6.

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the new form of liability is not, without offering practitioners effective means of interpretation and appliance of the Directive. As such, the liability set forth by the Directive ends up, in this way, being opposed to liability based on fault. The authors who fall in this trap are not only those who try to define the legal nature of liability for defective products by applying traditional interpretation methods of civil law, in a positive approach based on rigid literal interpretation, but also those who tackle tort law from a multidisciplinary perspective, bearing in mind the social, moral and economic arguments. The book strays away from the positivist approach and from the literal technique typical for the traditional interpretation method of civil law and proposes a contextual approach of law. Relevant for the interdisciplinary approach made by this treatise, emphasizes the author, are the comparative studies elaborated by the Common Core of European Private Law15 as well as those undertaken by ECTIL16 in Vienna. These studies examine the place and the role of strict liability in Europe using a practical approach, based on hypothetical, but typical cases, in order to identify the convergence points at a European level, firstly through the scrutiny of relevant judicial practice in the last years, but also by an enquiry into the existent divergences at the level of the same civil law system between the solutions of codified law, doctrine and jurisprudence.

37

Following the analysis of famous European civil law systems (German, Austrian, French, British, Italian, Spanish, Portuguese, Danish, Finnish, Dutch, etc.), the author concludes that the trends in legal literature and judicial practice point towards an acknowledgment of the similarity of the new form of liability for torts with the other forms of known liability. This occurs because the Directive does not give a positive definition of the liability it establishes. Some authors identify this liability with liability for activity risk, others state that it remains based on the criterion of fault, despite the negative definition that the Directive offers, and some qualify it as liability without fault, which is not identified with liability for activity risks.

38

Although the condition of liability established by the Directive is the production and marketing of certain defective products, the activity in itself is not the sufficient condition of liability, but the defectiveness of the product related to the expectations of the consumer. It is an abstract criterion for qualifying behaviour, typical for liability without fault. The distinction between this form of liability and liability for activity risks (this, as well, is not established based on fault) is the way in which the former defines the illegality of the activity that triggers the liability. In the case of liability for activity risks, the wrongful act is not the decisive element of liability, whereas the condition of liability without fault is the non-compliance with an abstract requirement regarding a certain type of behaviour, namely the non-compliance with a legal obligation. Nevertheless, the author emphasizes the existence of some elements which

39

15

16

F. Werro/V.V. Palmer (eds.), The Common Core of European Private Law, Trento Project, The Boundaries of Strict Liability in European Tort Law (2004). www.ectil.org.

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plead for the requirement of fault: the manner in which the flaw is defined; liability of persons assimilated with the manufacturer and liability of sellers that cannot indicate the supplier within the time limit provided by law; liability of the manufacturer related to the level of science and technique at the time when the product is released onto the market; the predictability element, etc. These elements make the liability set forth by the Directive seem a liability based on fault disguised as strict liability.17 The conclusion of the author is that, although it presents certain characteristics of liability for tort based on fault, as well as of liability for activity risks, the liability established by the Directive is a form of liability sui generis.

40

The analysis of Directive 85/374/EC leads to the conclusion that it constitutes a first attempt at intervening in the private sector even though the Directive has been adopted based on art. 100 of the EC Treaty, because it regulates important aspects of compensation caused by civil wrongs. Thus, the Directive is considered as a cornerstone of a European private law system.18 Therefore, the unification project of civil law at a European level is inconceivable without the consideration of liability for defective products. 2. I. Sferdian, Insurance Law (Dreptul asigurărilor) (C. H. Beck, Bucharest 2007)

41

“Insurance Law” is an academic course, structured in relation to Romanian insurance law. The analysis of the problems raised by insurance from a legal perspective has represented a true challenge for the author, especially due to the fact that Romanian legal literature takes a predominantly economic approach to the insurance phenomenon. In the communist period, insurance ope legis, contracted through the State Insurance Administration, inhibited, with few exceptions, the attempts to theorize in law the insurance contract, seeming, even to the acknowledged civil minds, arid and meaningless. The rapid evolution of the insurance market in post-communist Romania has brought forth the study of this contract, even though it is regulated by a law that is in need of improvement.

42

As, in legal literature, a book justifies its existence through the novelty that it brings by comparison to what has been written until its release, we shall point out a few of the questions that have been dealt with by the author in an original manner. The insurance contract is analyzed as a totally atypical contract, which breaks the pattern of the special civil and commercial contracts and it presents substantial differences even with regard to the proximate genre of aleatory civil contracts. It has been shown that this contract has legal characteristics strongly influenced by its aleatory element. Although it is a reciprocal contract, its reciprocity is imperfect, as the non-execution exception of the contract cannot be invoked by the insured until the occurrence of the risk. 17

18

H.B. Schaefer/A. Schoeneberger, Strict liability under the disguise of negligence and negligence under the disguise of strict liability in product liability, in: F. Werro/V.V. Palmer (eds.), The Boundaries of Strict Liability in European Tort Law (2004) 55–57. U. Magnus, Die Produkthaftung im Kontext eines Europäischen Zivilgesetzbuchs, Zeitschrift für Europarechtliche Studien (ZEuS) 1 (2002) 132.

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The risk, the crucial element of the insurance contract, has been comparatively assessed, with reference to the other essential elements of this contract and the necessary distinction between the risk and the condition of the contract, as a modality of the civil legal act has been pointed out. The correlation between the risk as an element of the insurance contract and the issue of who bears the risk of the object was also presented. The connection between the principle of the insurable interest as a particular category of the insurable goods and the principle of compensation in damages insurance, with a focus on the special form of credit insurance, was underlined.

43

The author has extended, through a vast analysis, the circle of people that are holders of an insured risk in the insurance contract of goods and she has developed the theory of insurance on somebody else’s behalf. The obligations of the contracting parties are treated in relation to the moment when the risk is produced, emphasizing the fact that, in this contract, the occurrence of the risk has no extinctive consequences on the fulfilment of the obligations that are incumbent on the contracting parties, but contrariwise they generate new effects of this contract. The right of the insured to compensation is qualified, by the author, as an eventual right and, for the first time in insurance doctrine, the distinction is made between objective and subjective causes of limiting the compensation. The issue of the personal legal subrogation of the insurant is analyzed in an original and detailed manner, with a comparative analysis of the aspects specific to the insurance of goods and to the insurance for motor civil liability. The cases of legal annulment of the insurance contract are explained in a specific manner, through the assessment of the disappearance of risk, insurance premiums and the insured risk, as essential and specific elements of this contract.

44

Being written in the classic language of civil law, this book constitutes useful study material for undergraduates in legal sciences, but also for legal practitioners, who will discover innovating solutions to the controversial problems in the insurance domain.

45

3. L. Pop, The Regulation on Subsidiary Liability in the Project of the New Civil Code (Reglementarea răspunderii subsidiare în proiectul noului Cod civil) Dreptul 10/2007, 22–42 Considering that the Civil Code in force at the present moment (which is the one adopted in 1865) does not speak about “subsidiary liability”, the author tries to explain the formula regarding this liability chosen by the authors of art. 1106 of the Project of the new Civil Code, adopted by the Senate on 13 September 2004 and published by C.H. Beck Bucharest in 2006, but still not in force even today.

46

Taking into account some precedents in the Romanian case law and also the provisions from different legal systems, the author questions the usefulness of the explicit mention of subsidiary liability in the Civil Code, as proposed by the Project. The author also questions the effect of the solution adopted for the

47

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case in which an incapacitated person causes an injury to another person over the solution to be found for the case in which an incapacitated person is a victim of an injury to which he or she contributed himself or herself.

48

De lege lata subsidiary liability exists only regarding the persons mentioned by art. 30 of the Law no. 20/1969 (amended by Law no. 54/1994), namely the persons who facilitated the injury caused by the treasurer, up to the part of the damage that was not compensated by the author of the injury, in case of insolvency of the latter. Concerning the cases of liability for torts mentioned by the present Civil Code, subsidiary liability is a creation of the legal literature. It concerns the situation in which the teacher or the master can be released from liability for his/her pupil, or for his/her apprentice, according to art. 1000 (4) of the Civil Code, which triggers the subsidiary responsibility of the parents for their child prescribed by art. 1000 (2) of the Civil Code.

49

Under the present regulation in force, the liability for one’s own act (art. 998– 999) is essentially subjective, based on fault, which requires the existence of discernment. This conception was considered inadequate for the social requirements ever since the third decade of the last century. Some authors proposed the substitution of the concept of moral guilt with that of social fault, in abstracto, the conduct of the author being regarded as an anomaly compared to the average behaviour in society.19 Civil liability based on the idea of normality would have allowed the reparation of an injury inflicted on a poor person by an incapacitated person, who is wealthy. In the case of the incapacitated person, the source of the liability must be the idea that against the acts committed by such a person a guarantee with his or her own assets must exist. The fault is not an indispensable element – not fault but causation triggers liability.20

50

The case law, even during the communist years, has changed radically starting from 1972, when, based exclusively on equity reasons, the possibility of the liability, but only subsidiary, of the incapacitated person and his duty to repair the injury caused by his tort, if his personal assets allowed him to do so and if such a solution were justified, was admitted. The cases concerned an underage incapacitated person, without parents or tutors, who set fire to a large area of forest21 and also that of an incapacitated person who inflicted injuries on a person.22

51

The conclusion of the commentators was that this was a new case of objective (strict) liability, based on the idea of social equity, while the other cases of strict liability acknowledged by the authors were founded on the idea of guarantee, which, in turn, is based on that of risk of the activity.

52

From the foreign legal systems, Liviu Pop mentions the Spanish Civil Code, the Italian Civil Code, the Swiss Federal Code of Liability, the Belgian Civil 19 20 21 22

M.B. Cantacuzino, Elementele dreptului civil (1921) 430–433. G. Plastara, Curs de drept civil român, vol. IV, Cartea Românească (1925) 219–220. Trib Suprem, S. civ., decree no. 175/1972, in Culegere de decizii 1972, 151–153. Trib Suprem, S. pen., decree no. 2883/10.09.1975 (unpublished).

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Code and the French Civil Code (after its amendment by Law 68-5 of 3 January 1968), all of which admit the right of the victim to see his injury repaired by the author of it, even if he has no discernment, subject to certain conditions. The project of the new Romanian Civil Code maintains the subjective approach of liability based on fault, which supposes the existence of discernment in order to trigger liability (art. 1096, combined with art. 1094-2). It makes a single exception: “subsidiary liability” (art. 1106). This article requires two preconditions: (a) the injury must be caused by an incapacitated person and (b) no person exists who would have had the duty to supervise the author of the damage and who could thus have been liable, on a different ground, or, in the alternative, if such person exists, it must be objectively impossible to repair the injury. After a detailed analysis of these conditions, Liviu Pop discusses the effect that art. 1106 of the project of the Civil Code might have on the solution to be applied when the incapacitated person is the victim of an injury to which he or she has contributed.

53

The different treatment to be applied to incapacitated persons if they cause an injury to a third person or to themselves, is solved by the project of the Civil Code following the classic doctrine that regards fault as an essential element of liability. Only the fault of the victim or force majeure could result in a partial limitation of liability of the defendant. In this way, a different solution from the one established five decades ago is proposed. Unfortunately, the possibility of making the victim provide a part of the reparation for different reasons, such as equity or causation, without the necessary existence of the element of subjective fault was not envisaged.

54

The conclusion of the discussed article is that, from the perspective of the victim, it is unjust that the amount of the reparation differs depending on whether or not the author of the injury has discernment. Some solutions are proposed in order to satisfy the victim without aggravating the situation of the incapacitated person. Such solutions would be to extend the category of persons to which vicarious liability apply (including to establish the liability of the State) or to put in place alternative mechanisms to indemnify the victim, the “socialization of the risk” of such injuries that would allow the use of collective legal procedures to repair the injuries of victims, for example, mandatory liability insurance for the incapacitated persons as well as the creation of a “special guarantee fund”.

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4. I. Adam/C.N. Savu, Liability of Members of the Administration and Supervision Boards and of any Other Person that Caused the Insolvency of the Debtor through One of the Acts Mentioned by Art. 138 of Act no. 85/2006 on Insolvency (Răspunderea membrilor organelor de conducere, supraveghere şi a oricărei alte persoane care a cauzat starea de insolvenţă a debitorului persoană juridică prin una din faptele enumerate de art. 138 din Legea nr. 85/2006 privind procedura insolvenţei) Dreptul 8/2007, 18–57

56

The article focuses on the conditions of the specific responsibility of the persons who caused the debtor’s state of insolvency. These persons are explicitly mentioned by art. 138 of the new Act on Insolvency (no. 85/2006), whose text is similar to that of the former regulation (art. 137 of the Act no. 64/1995). Different issues are analyzed: the competence of settling the action in liability, the persons who have locus standi in judicio, the prescription period, etc. Particular attention is paid to the analysis of the legal nature of this liability.

57

The authors consider the nature of the legal relations between the persons on whom the responsibility is incumbent and the debtor in insolvency. Some authors,23 even if for different reasons, agree that the source of the obligations violated by the administrators determine the nature of their responsibility. Thus, the violation of an obligation arising from a mandate contract (its source can be either the statute of the company or the decision of the general assembly) leads to contractual liability, while the violation of an obligation imposed by the law (Companies Act) triggers civil liability for torts. If the act committed by the administrator or the manager fulfils the conditions prescribed by the law in order to be qualified as a crime, then it is considered that the liability incurred is a liability for tort.

58

Some authors support a so-called organicist doctrine, according to which the members of the managing or supervisory boards are not legal subjects distinct from the company and, as such, the source of their powers is not the Company’s by-laws, but the law itself. For this reason, the liability cannot be but a liability for torts.24 The theory of the mandate mentioned by the legislator itself in art. 72 of the Companies Act no. 31/1990 led some authors to the conclusion that the origin of administrators’ liability is contractual.25 Others argue that 23

24

25

N. Ţăndăreanu, Procedura reorganizării judiciare (2000) 245; I. Turcu, Falimentul. Actuala procedură. Tratat. Ediţia a V-a (2005) 473; I. Schiau, Regimul juridic al insolvenţei comerciale (2001) 296 f. F. Baias/S. David, Răspunderea civilă a administratorilor societăţilor comerciale, Dreptul 8/1992, 21; V. Pătulea, Răspunderea juridică a organelor de conducere, administrare şi control ale societăţilor comerciale cu capital de stat, Dreptul 1/1996, 15. I. Turcu, Teoria şi practica dreptului comercial român, vol. I (1998) 45; St.D. Cărpenaru, Drept comercial roman (2001) 252; O. Căpăţînă, Societăţile comerciale (1994) 298; Gh. Piperea, Obligaţiile şi răspunderea administratorilor societăţilor comerciale. Noţiuni elementare (1995) 152 ff.; M. Şcheaua, Legea societăţilor comerciale nr. 31/1990 comentată şi adnotată (2000) 330; E. Munteanu, Regimul juridic al administratorilor societăţilor comerciale (2000) 280– 282.

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this liability is rather eclectic, mixed, having both a contractual and a legal origin.26 All these opinions are criticized by the authors of the article because, according to them, they do not analyze directly the legal nature of the liability prescribed by art. 138 of the Act regarding insolvency, but only indirectly, considering it only from the point of view of the contractual relations between the members of the direction and supervision boards and the insolvent company. The authors’ conclusion is that the discussed liability has the legal nature of a specific liability for torts – sui generis – for one’s own act because it has many of the traits of the general liability for torts. It also presents the following differences: –

– –

–

–

– –

–

26

This specific liability arises only if the damage was inflicted by one of the wrongful acts explicitly and exhaustively mentioned by art. 138 of the Law no. 85/2006, while the general liability for torts is incident in case of any kind of wrongful act; The specific liability necessarily implies the state of insolvency of the debtor, while general liability does not imply this condition; Only the persons explicitly and limitedly mentioned by the law have legal standing to make the action in court (the judicial administrator or the liquidator and, in subsidiary, the creditors’ committee), while the general action in court for liability can be made by any person who suffered a damage; The action in court can be made only against the persons limitedly mentioned by the law (the members of the direction or supervisory board, the executive directors or any person who contributed to the occurrence of the state of insolvency), while the general action for liability for torts can be made against any person who caused a damage; The action in court is governed by the principle of the official character, meaning that the plaintiff cannot undertake procedural acts of disposition (renouncement, transaction, etc.), while the common action for liability for torts is governed by the principle of freedom of the parties; The action profits all creditors registered in the table of creditors, while the common action for liability only profits the plaintiff; The special liability is partial, limited to “a part of the insolvent company’s liabilities”, so that this action is only meant to compensate the damnum emergens, while the general civil liability for torts is integral, meaning within this action, the plaintiff can seek the compensation of both damnum emergens and lucrum cessans. There are important distinctions concerning causation and the injury. Within this action, causation is sought between the wrongful act and the state of insolvency of the debtor. The persons who are liable must compensate part of the company’s liabilities not because these would have caused damage to the creditors, but because of them the debtor became insolvent. ThereV. Paşca, Unele consideraţii teoretice şi aspecte practice privind răspunderea membrilor organelor de conducere ale societăţii comerciale supusă procedurilor reglementate de Legea nr. 64/1995, Revista de drept comercial 2/2004, 25 ff.; V. Paşca, Falimentul fraudulos. Răspundere şi sancţiuni (2005) 95–96.

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–

–

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fore, the injury to be compensated consists of the liabilities (debts) of the insolvent debtor. The opinion, according to which this would be a direct liability of the members of the executive board towards the creditors, is incorrect27 because this liability is derogatory from the general rules, the persons being liable not towards the creditors, but towards the company. Concerning fault, while for the general rules of liability for torts the form of the fault (intent or negligence) is indifferent, within this specific category of liability there are some wrongful acts that cannot be committed otherwise than with intent; Concerning the circumstances precluding wrongfulness, beyond the cases accepted by the general regulation (force majeure, the act of the victim, the act of a third party for which the members of the board do not respond), the law adds the following specific circumstances: the members of the executive/supervisory board can be absolved from joint liability if (1) they opposed the acts that led to the insolvency or (2) they were absent when the decisions that caused the insolvency were taken.

The authors conclude that the analyzed liability is a sui generis form of liability for torts, with its own rules, derogatory from the general regulation in this field, which is triggered only through committing one of the acts explicitly mentioned by the law, acts that are not related to the powers given to the person who is a member in the executive/supervisory board of the insolvent company. Thus, it is a liability whose source is the law (ex legem). 5. I. Stoica, The Liability of Magistrates for Injuries Caused by Judicial Errors in Criminal Cases (Răspunderea magistraţilor pentru prejudiciile cauzate prin erori judiciare săvârşite în procesele penale) Dreptul 2/2007, 163–167

61

The author analyzes the liability of the State and of magistrates for injuries caused by judicial errors, prescribed by art. 52 (3) of the Romanian Constitution as well as by art. 96 of Law no. 303/2004 Concerning the Status of Judges and of Public Prosecutors. The cases in which the injured person is entitled to the reparation of the injury suffered because of errors committed in criminal cases are mentioned by art. 504 (1)–(4) of the Criminal Procedure Code.

62

The Criminal Procedure Code was modified by Act no. 356/2006 and the cases in which preventive arrest is allowed were limited to the cases compatible with the European Convention of Human Rights. Thus, some reasons for preventive arrest were eliminated as, for example, that of being a recidivist, the reason based on the impossibility of identification of the person or of his/her domicile, or that concerning the flagrant character of the crime. However, there can be situations in which the deprivation or restriction of liberty have been unlawfully issued, and this circumstance can be established by the Prosecutor’s order of revoking the measure of deprivation of liberty, by the Prosecutor’s order of 27

Gh. Piperea, Obligaţiile şi răspunderea administratorilor societăţilor comerciale. Noţiuni elementare (1995) 174.

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ceasing the criminal action for the reason provided by art. 10 par. 1 lit. j of the Criminal Procedure Code, and by final judgments of revoking the measure, of acquitting or of ceasing the criminal trial for the reason provided by art. 10 par. 1 lit. j of the Criminal Procedure Code. The author analyzes the criteria that must be taken into consideration when repairing the injury (the duration of the unlawful arrest, its consequences on the person or his/her family), as well as the modalities of reparation: payment of a lump sum of money, payment of a life annuity or curing the injured victim in an institute of social and medical assistance. As a result of the liability of the State, the protection of the victim, but also of the magistrate, against whom a direct claim cannot be made by the victim, is ensured.

63

The legal nature of this liability is that of a liability for torts, with all its elements: the wrongful act, the injury and causation. The difference with respect to the general law is that the wrongful acts (the judicial errors) are restrictively described by the law. If the reparation of the injury was awarded based on art. 506 of the Criminal Procedure Code or if the State was convicted in an international court, it is mandatory that the State initiates a recourse action against those who, in ill-faith or seriously negligently, caused the injury. The State’s and the magistrate’s liability are not joint. The victim of the judicial error can only make a complaint against the State, without the possibility of a direct complaint against the magistrate. The liability of the magistrate is subjective and it is subsidiary.

64

The criteria that must be considered when assessing compensation for pecuniary and moral damage are: the negative consequences suffered by the plaintiff both physically and psychically, the importance of the values which were injured and the degree of injury, the intensity with which the consequences of the injury were perceived by the victim and the extent to which the family, the professional and the social status of the victim were affected.

65

The author emphasizes the contradictory reactions caused by Act no. 356/2006 when imposing the recourse of the State against the magistrate guilty for judicial error in order to repair the damage suffered by the State following a conviction from an international court. The author accepts that the lack of legislative coherence as well as the diverging case law may create a general climate of judicial negligence, but according to him, with professional diligence, a wrong decision can be avoided. The magistrate must accept the importance of its function and to take impartial decisions, ensuring the protection of the procedural rights of the parties according to the law, to the Constitution and to the European Convention of Human Rights.

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6. O. Puie, Liability of Public Authorities and Natural Persons for Injuries Caused in the Field of Administrative Litigation, as well as Aspects regarding Financial Liability of the State for Injuries Caused by Judicial Errors (Răspunderea autorităţilor publice şi a persoanelor fizice pentru prejudiciile cauzate în materia contenciosului administrativ, precum şi aspecte privind răspunderea patrimonială a statului pentru prejudiciile cauzate prin erori judiciare) Dreptul 2/2007, 92–112

67

In the light of the Act on Administrative Litigation no. 554/2004, but also of other regulations that make reference to this statute, the author makes a vast analysis of the liability of public authorities or natural persons on which the judicial decisions by which public authorities were obliged to fulfil an obligation or to pay damages for material or moral injuries, as well as of the liability for the non-execution of judicial decisions in this field are based.

68

An interesting issue is the legal nature of this liability. Art. 52 of the Romanian Constitution and art. 1 of Act no. 554/2004 establish the right of those who have been injured in the exercise of their legitimate rights or interests by illegal administrative acts or by the unjustified refusal to process their applications to ask in the administrative litigation procedures, not only to nullify these administrative acts, but also to seek compensation for material and moral damage. The problem of liability of public authorities or natural persons must be examined differently, depending on whether the plaintiff takes legal action only against the public authority or, at the same time, he takes legal action against both the public authority and the natural person, when the joint liability of the public authority and of the natural person is engaged.

69

The exclusive liability of public authorities has been considered ever since the inter-war period, by both French28 but also by the Romanian29 literature, as being an objective liability for torts, without fault, based on the idea of warranty, because only a rational and living individual can be declared guilty for his conduct. Other authors30 have preferred the liability for risk, which would imply the extension of the liability of public authorities even in the situation in which the acts are legal. The fundamental idea of this liability is that the functioning of public services represents for the individuals a risk of being injured and, as a consequence, individuals must be insured by the State against these risks.

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The liability of public authorities, in the hypothesis in which this is jointly obliged with the natural person to compensate damage, is a subjective civil liability for torts, based on fault. If the plaintiff – the injured party – has taken 28

29

30

M. Hauriou, Précis de droit administratif (1933) 516 ff.; M. Waline, Manuel élémentaire de droit administratif (1939) 220. E.D. Tarangul, Responsabilitatea administraţiei în jurisprudenţa română (1940) passim; for the contemporary literature: L. Pop, Unele aspecte în legătură cu răspunderea pentru prejudiciile cauzate prin acte administrative ilegale, Dreptul 9/1994, 30 ff. P. Negulescu, Tratat de drept administrativ (1934) 272 ff.; G. Rarincescu, Contenciosul administrativ (1927) 272 ff.; T. Lambert/J.-Jacques Neur, Droit du contentieux (1990) 175.

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legal action against both the authority and the guilty natural person, then he must prove the fault of this person. The analysis of the term, “natural person”, mentioned by the law, who can personally be obliged to compensate the damage jointly with the public authority, leads to the conclusion that this term designates two types of capacities: (1) the capacity of employee (contractual staff) whose status is governed by the provisions of the Labour Code, who can be obliged only to pay material damages; and (2) the capacity of civil servant (public agent), whose status is governed by the provisions of Law no. 188/1999 concerning the Status of Civil Servants (Public Agents), (modified by Law no. 251/2006), who is liable for moral damage and as well as for material damage.

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The author underlines the difference between financial liability of public authorities (and natural persons) as a result of an administrative act (or by the refusal to process an application) which is engaged only in compliance with the special law (Act on Administrative Litigation) and the liability of the State for injuries caused by judicial errors, which is engaged not only in accordance with the special law but also with the general law.

72

In order to determine when the administration is liable and when the civil servant is liable for the injury caused by an administrative act, the doctrine makes the distinction between the act performed within the job and the personal act. The former is when the mistake cannot be attributed to a civil servant, but rather to the bad management of the public service. The personal act is one which can be attributed only to the civil servant, being performed by exceeding his/her competence (ultra vires) or by his/her negligence.

73

A special issue scrutinized by the author is the possibility of paying damages also for the injuries caused by the public authority by legal administrative acts. A comparative law analysis is made, quoting law systems where this possibility is acknowledged (Italian law) or, even if in principle it is denied, it is admitted in the special circumstances of injuries caused by a legal expropriation act (German law system). In EU law it is shown that such a liability exists only if that damage, considered to be “an injury that still subsists” affects a determined circle of economic agents in a disproportionate way, by comparison to others (special injury), and exceeds the limits of economic risks which are inherent in the activity of the sector in question (uncommon injury) without the legal measure, which generated the claimed injury, to be justified by a general interest.31

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The author also examines the recourse action that the public authority has against the natural person for the material and moral damages paid to the injured party on the basis of a judicial decision. The legal nature of this recourse is recognized as being a general civil law action. The joint liability of the pub-

75

31

The case law of the Court of First Instance quoted by O. Manolache, Tratat de drept comunitar (5th ed. 2006) 798.

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lic authority and of the natural person who has the quality of an employee or of a civil servant does not lead to a division of the recourse of the public authority against the guilty person according to the rules of recourse against joint debtors established by art. 1052–1053 of the Civil Code. In the field of administrative litigation, the administrative act enjoys a presumption of legality. This is why the solidarity exists only from the perspective of the victim. It is not solidarity due to a liability together with the guilty natural person, but due to a liability for this person.

76

A final important problem analyzed by the author is the financial liability of the State for injuries caused by judicial errors. The author compares the situation prior to the revision of the Constitution in 2003, when the State was financially liable only for injuries caused by errors in criminal trials, with the situation after the revision of the Constitution, when art. 52 par. 3 was harmonized with the provisions of the European Convention of Human Rights and with the case law of the European Court of Human Rights, acknowledging financial liability of the State both in civil and in criminal trials. However, one can criticize the provisions of the Civil Procedure Code which establish the norms of material competence for resolving claims of compensation for such injuries, provisions that have not yet been correlated with the Constitution, affirming the tribunals’ competence solely for claims regarding compensation for injuries caused by judicial errors in criminal trials.

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The injured party has no direct legal action against the guilty magistrate but only against the State, which is represented by the Minister of Finances. Only the State has recourse against the magistrate who has acted in ill-faith or with gross negligence. Therefore, the distinction between the two actions due to the fact that they have different entitled persons is made.

78

Special attention is given to the civil liability of judges and prosecutors in the field of judgments delivered by the European Court of Human Rights against Romania. Art. 12 of Government Decree no. 94/1999, corroborated with art. 96 of Act no. 303/2004 regarding the Status of Judges and Prosecutors, set out that the State has the right to recourse against persons who, by their activity, with guilt, caused the obligation for the State to pay compensation that was decided by judgment of the Court or by friendly settlement. The legal nature of this liability is believed to be that of a civil liability for torts according to art. 998– 999 of the Romanian Civil Code, which provides for the compensation of both pecuniary and non-pecuniary injuries.

XXII. Slovakia Anton Dulak

A. LEGISLATION 1. Additional Protocol to the European Convention On Human Rights and Biomedicine Concerning Biomedical Research published in the Collection of Laws under No. 494/2007 Z. z. The Department of Foreign Affairs of the Slovak Republic reports on the Additional Protocol to the European Convention on Human Rights and Biomedicine concerning Biomedical Research.

1

The National Council of the Slovak Republic affirmed the Additional Protocol by Resolution No. 1493 of 9 February 2005, resolving that this is an international treaty under Art. 7 par. 5 of the Constitution of the Slovak Republic that has priority over the statutes. The President of the Slovak Republic ratified the Additional Protocol on 26 August 2005.

2

The Additional Protocol entered into force in the Slovak Republic as of 1 September 2007.

3

Parties to this Protocol will protect the dignity and identity of all human beings and guarantee everyone, without discrimination, respect for their integrity and other rights and fundamental freedoms with regard to any research involving interventions on human beings in the field of biomedicine.

4

In case of infringement of the provisions of this Protocol, the person who has suffered damage as a result of participation in research will be entitled to fair compensation according to the conditions and procedures prescribed by law (Art. 31).

5

2. Act No. 359/2007 on Preventing and Remedying Environmental Damage and Amending some other Statutes The Act, like the EU Directive establishes a framework for environmental liability based on the “polluter pays” principle, with a view to preventing and remedying environmental damage (Art. 1 par. 1a).

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7

The principle of liability applies to environmental damage and imminent threat of damage resulting from occupational activities, where it is possible to establish a causal link between the damage and the activity in question.

8

The Act distinguishes between two complementary situations, each one governed by a different liability scheme: occupational activities specifically mentioned in the Act and other occupational activities.

9

The first liability scheme applies to the dangerous or potentially dangerous occupational activities listed in Art. 1 par. 2. These are mainly agricultural or industrial activities requiring a licence under the Act on integrated pollution prevention and control, activities which discharge heavy metals into water or the air, installations producing dangerous chemical substances, waste management activities and activities concerning genetically modified organisms and micro-organisms. Under this first scheme, the operator may be held responsible even if he is not at fault (see Art. 1 par. 2 in fine).

10

The second liability scheme applies to all occupational activities other than those listed in Art. 1 par. 2, but only where there is damage, or the imminent threat of damage, to species or natural habitats protected by legislation. In this case, the operator will be held liable only if he is at fault or negligent (see Art. 1 par. 3 in fine).

11

The liability scheme does not apply in the case of damage or imminent damage resulting from armed conflict (Art. 1 par. 4a), natural disaster (Art. 1 par. 4b), activities covered by the Treaty establishing the European Atomic Energy Community (Art. 1 par. 4c), national defence or international security activities (§ 1 par. 5a) or environmental damage that occurred more than 30 years after emission or other similar event (§ 1 par. 6).

12

Under the terms of the Act, environmental damage is defined in Art. 2 as: • • •

direct or indirect damage to species and natural habitats; direct or indirect damage to the aquatic environment; direct or indirect contamination of the land which creates a significant risk to human health.

13

There are three types of environmental remedy provided by law: primary remedy (Art. 7), complementary remedy (Art. 8) and compensatory remedy (Art. 9).

14

The Act imposes an obligation of financial coverage of liability for environmental damage. The operator of an occupational activity is obligated to provide financial coverage of its liability for environmental damage, including anticipated costs of remedial action or remedial measures to eliminate environmental damage that might be caused by its occupational activity, for the entire operation time of such occupational activity.

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The amount of financial coverage must correspond to the amount of anticipated costs of remedial activity, including risk and costs analysis of remedial activity for the elimination of environmental damage.

15

This Act came into effect on 1 September 2007 with the exception of Art. I § 13, and Art. I § 20 entering into effect as of 1 July 2012, and 1 January 2008 respectively.

16

3. Act 84/2007 Z.z. effective as of 1 March 2007, Amending Several Statutes on the Protection of Intellectual Property Through this Act Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights (OJ L 157, 30.4.2004, 45–86) was implemented in the legal system of the Slovak Republic.

17

Within these changes, the Civil Code was also modified in the provisions concerning the methods and extent of damages/compensation for the loss. Under the new provisions of § 442a, in cases of infringement or threat of infringement of the right to intellectual property, compensation is paid for non-monetary loss, where granting another satisfaction, particularly an excusal or publication of the judgment at the cost of the person who infringed or threatened to infringe a right to intellectual property, is considered insufficient.

18

Newly defined is the determination of damages in cases of infringement or threat of infringement of a right to intellectual property that may arise from a license agreement. Where the amount of the damages cannot be determined otherwise, the amount will be determined at the minimum amount of payment for obtaining the license at the time of such unlawful interference with this right.

19

B. CASE LAW 1. Judgment of the Prešov District Court (6C 67/04-89) of 18 October 2006: Compensation of Non-Pecuniary Damage for the Loss of a Close Relative1 a) Brief Summary of the Facts

In her claim of 21 April 2004, the claimant requested the Court to order the defendant to pay non-pecuniary damages of SKK 5,000,000 (approx. € 130,000) plus the costs of proceedings. The claimant alleged that, on 24 September 2002, her mother died during childbirth as a result of the incorrect and nonprofessional conduct of a physician, the defendant’s employee. According to the claim, due to the death of the claimant’s mother, the claimant suffered emotional distress and an irreversible interference with her right to the protection of privacy and family life (§ 11 of the Civil Code). 1

Unpublished decision.

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21

The defendant admitted liability for the death of the claimant’s mother, but argued that the claim sought did not fall under the provisions of § 11 and § 13 OZ, and that the claim should be dismissed on this ground.

22

The District Court granted the claim and awarded compensation of SKK 400,000 (approx. € 10,400).

23

The claimant appealed against the judgment, demanding compensation in the full amount sought, arguing that the courts grant higher awards in cases of unlawful interference with the rights to the protection of personality caused by critical statements or false information in the media. The Regional Court, as an appellate court, upheld the judgment of the District Court by its decision of 18 October 2006. Regarding the amount of compensation, the Regional Court affirmed the reasons given by the District Court. b) Judgment of the Court

24

The defendant was ordered to pay to the claimant non-pecuniary damages of SKK 400,000 within three days of the final judgment. c) Commentary

25

The claimant sought compensation of non-pecuniary damage for her emotional injury. She argued that the interference with the right to the protection of privacy causes irreparable, extraordinarily significant, highly sensitive and deep harm, as the claimant lost her mother with whom she had very close bonds.

26

As established by the evidence, there was an extraordinary relationship between mother and daughter, one essentially living for the other, and vice versa. One of the witnesses evaluated this relationship as “exaggerated”. According to the expert opinion, the claimant was emotionally strongly dependent on her mother. Through the loss of her mother, the quality of the claimant’s life and further development of her personality considerably deteriorated.

27

The Court’s decision was based on the provisions of the Constitution of the Slovak Republic (Art. 19 par. 2), the Convention for the Protection of Human Rights and Fundamental Freedoms (Art. 8 par. 1) and § 11 of the Civil Code governing the protection of private and family life.

28

In its interpretation of the law and its application to private law, the Court went beyond the previously narrow understanding of the damage caused by unlawful and unauthorized interference with privacy, invoking, in its reasons for its decision, also the case law of the European Court of Human Rights, more specifically the judgments in Niemnitz v. Germany (1992) and Marckx v. Belgium (1979).

29

As for the amount of awarded damages, both the District Court and the Regional Court reasoned that the satisfaction granted by the Court must be adequate to the severity of the damage and the circumstances under which the unlawful

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interference occurred. Satisfaction, in view of the Court, cannot substitute an income and logically cannot result in unjust enrichment.

C. LITERATURE A. Dulak, Európsky rozmer zodpovednosti za škodu spôsobenú vadným výrobkom (European Dimension of Liability for Damage Caused by Defective Products), in: Zborník z konferencie 13 slovenské dni obchodného práva (The Proceedings of the Conference 13 on Commercial Law) SAK 2007, 177–185 This article deals with the interpretation of the European model of strict liability, in particular differences in its application between national courts and the European Court of Justice. The author also focuses on the evaluation of the application of the Directive in the Reports of the Commission in 1995, 2001 and 2006, particularly the contribution of the Directive to the harmonisation of European private law.

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XXIII. Slovenia Rok Lampe

A. LEGISLATION 1. Act on Alternative Medicine (Official Gazette, no. 94-4685/2007)

1

This Law is interesting not only due to its regulation of alternative medicine, which regulates this domain in Slovenia for the first time, but also because it includes the initiative of civil responsibility (tortious liability for malpractice) in alternative medicine. Healing is an activity undertaken to improve the health of its users. It includes measures and activities based on healing systems and healing methods and it is performed in such a way that it does not harm an individual’s health. This Law determines all kinds of health treatments, the performers of healing, the methods of performance of the healing process, Health Assembly, and the control over the performance of the healing. Besides, it also determines some specifications that are important in terms of responsibility of the performer of healing, informed consent, gathering of information, responsibility for abuse of information, etc.

2

Before dealing with these specific areas it is important to mention that healing is not regarded as an alternative form of medicine but as complementary to medical treatment. Therefore, the basic commitment of the healer is to direct the patient to medical treatment. A healer who suspects that the user of this kind of treatment has severe signs of a disease or severe aggravation of a chronic disease must immediately recommend to the patient the appropriate medical treatment and make a note of this recommendation in the patient’s medical file. The healer should not dissuade the patient from undertaking medical treatment. However, the doctor should also, on the request of the patient, express his/her opinion on the suitability of the healing system and healing method with regard to the diagnosis or the patient’s state of health.

3

As already mentioned, healing is also based on the system of informed consent to the methods of healing. The consent should at least include the information that the user of the healing treatment is acquainted with: • •

the form of the healing system or healing method; the procedure of the application of the healing system or healing method and

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the fact that eventual interruption of already performed healing treatment can have a harmful impact on the patient’s health. If the user of this service is a child under 15 years of age or a person under ward, the healer must acquire a written statement of the parents or the guardians.

The law on healing also envisages certain rights of its users, such as the right to: • • • • •

4

quality and safe healing treatment; privacy in all treatment; access to the documentation related to the patient and permission to copy the information from the documentation; demand the permission to transfer the copy of the documentation to another healer or general practitioner and file a complaint.

The parents or the guardians can assert the rights from the above-mentioned article for children younger than 15 years of age or persons under ward. The same is true for the users of these services who, due to the illness, physical or mental handicap, cannot express their wishes. In this case his/her parents or guardians can assert these rights.

5

The Law envisages an appeal to the Health Assembly if the healer or any other person under the healer’s supervision has acted against the standards of the healing activity, code of professional healer ethics or has with his/her actions violated the provisions of this Law. Furthermore, the Law also envisages civil responsibility of the healer.

6

The standard of an excellent specialist is a basic legal criterion for the function of the healer. Therefore, the healer is obliged to perform the healing practice with the attentiveness of an excellent specialist and should not, by his actions or omissions, aggravate the health of the patient. Besides, the Law also envisages the responsibility for the violation of the obligation to instruct the patient to visit a “classical doctor” and also for the consequences due to missing the “classical” healing treatment. However, the Law also states exceptions. Therefore, the healer is not responsible for the aggravation of health of the patient, when the patient:

7

• • •

does not state to the healer true information about his/her health; does not act according to the healer’s instructions; does not follow instructions in the recovery process.

The healer is professionally responsible also for the actions of other persons working under his supervision. The Law also introduces obligatory basic insurance for the damage that could occur to the user of this service during the healing treatment or because of the healing treatment. An employed healer should be insured by the employer.

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B. CASES 1. Judgment of the Supreme Court II Ips 328/2005: Damage Caused by an Animal; Responsibility of the Owner of the Animal; Responsibility of the Rider; Joint Liability a) Brief Summary of the Facts

9

The first defendant, the owner of the mare Brena, lent his horse to R. S., stating, among other things, that no-one apart from himself and R. S. are allowed to ride the horse. R. S., after being persuaded by the third defendant party and after alleging that he had made an arrangement about this with the first defendant, without the knowledge of the first defendant and against his instructions, gave the mare to the second defendant to ride. This mare was one of the most calm and manageable riding-horses and was chosen by the third defendant because of these qualities. Under his supervision, the second defendant went for a long ride outside indicated riding paths although she was inexperienced for such a ride (she had only previously ridden for four hours). However the second defendant agreed to embark on the ride after being persuaded to do so by the third defendant. The third defendant, who chose the path, had decided after it became dark to cross the main road. Meanwhile the mare, ridden by the second defendant, stopped in the middle of the road. This unpredictable reaction of the mare was a result caused by the second defendant, who could not control the mare and give her proper orders. The plaintiff ran into the mare, which was standing in the middle of the road, thereby causing him damage. The collision could only have been avoided if the driver had been driving at a speed below 58 km/h. The speed limit on this stretch of road was 80 km/h and the plaintiff was driving at a speed somewhere around 100 km/h. The driver did not react to the obstacle (the horse was dark-coloured and the second defendant, who was wearing a light grey training suit, had dismounted before the collision) in time. b) Judgment of the Court

10

The Revision court acknowledges the legal point of view of the Court of Appeal that in this case the trial deals with damage caused by a domestic animal. The plaintiff ran into a mare, which was standing in the middle of a main road. In this case they should apply § 1320 of the Austrian General Civil Code (which was applicable as a subsidiary legal source in Slovenia until 1978) and the legal practice determined by it. For the damage caused by an animal, the owner of that animal or its holder or the person to whom the owner entrusted the animal is responsible. The first defendant, who entrusted the mare to R. S. to take care of it and also to supervise it (instructing him clearly that only he can ride the mare besides the owner) cannot therefore be responsible for the damage.

11

The situation of the second and third defendants is different. Even though the mare was ridden by the second defendant and the animal was therefore under her direct control (which gives her the position of the holder), certain specific

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circumstances have much weight in the proceedings: 1) the second defendant was not a skilled rider; 2) she only decided to ride after being persuaded to do so by the third defendant; 3) the horse was chosen by the third defendant and he also persuaded R. S. to allow others to ride the mare, and 4) the third defendant, as an expert rider, guided the second defendant (who did not have enough riding experience) and also made the decision to cross the road. The Court of Appeal is right when it reproaches the second defendant stating that “the fact that she could not remove the mare from the road works against her”. But only from a factual point of view. Legally, the person who was guiding the ride as an expert rider and who decided to cross the road and who had chosen the mare for the second defendant (an inexperienced rider) and had persuaded her to go riding at night should be held responsible. Therefore, in this case R.S also had the role of the holder of the animal – he was the person to whom the animal was entrusted. The point of view of the Court of Appeal “that the decision where Š. Z. and A. Ž. will cross the road was not important by itself” is therefore wrong. Also incorrect is the statement that the third defendant was only involved “in the accident as a bystander”, and “that he has nothing to do with the caused damage”. The damage was caused exactly because of the fact that the third defendant decided to cross the road. However, there are some other factors which have jointly led to the unlucky event (persuasion of the second defendant, choice of the mare and the path, etc.). From the above-mentioned the following can be concluded: The holders of the mare (that is persons who had the animal in their care and under their supervision) were the second defendant (who had direct control of the animal) as well as the third defendant (who had direct supervision over her). However, neither of them proved that the damage occurred without his/her guilt – the second defendant is guilty of agreeing to ride at night outside the designated path, knowing that she did not have enough experience, while the third defendant, who initiated and then guided the riding excursion, is guilty of all other things – such as choosing the mare and the riding path, deciding to cross the road. As a result of the above, the second and third defendants are jointly liable (first paragraph of art. 121 of the Act on Obligational Relations (Official Gazette, no. 29/78)).

12

The revision court accepts the legal point of view of the Court of first and second instance that the plaintiff was responsible for (only) 20% of the caused damage (second paragraph of art. 192 of the Act on Obligational Relations). Although he exceeded the speed limit and did not react to the obstacle in time, the deciding factor for the accident was the fact that the mare was standing in the middle of the road at night. Furthermore, the mare was dark, and the second defendant (who was wearing a light grey training suit) had dismounted before the collision. Based on the fact that such an obstacle in the main road is extremely uncommon and unexpected, the reaction of the plaintiff is not the most important factor for the damage.

13

The amount of compensation for the non-material damage which was caused is also justified. Considering the amount, the revision court is limited to the ac-

14

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tual statements of the Court of first instance, which were also accepted by the Court of Appeal. Therefore, the plaintiff’s statements in the review regarding the greater extent of the damage were not considered (for example, fracture of at least two vertebrae with the resulting damage to the spine) and the review statements of the second defendant party were not considered. The reproach that “each specific item was thoroughly criticized in the prepared written document dated from 10 September 2003 that the court did not even reply to or gives its point of view on” is unfounded. It is not the role of the revision court to supervise the basic violations of legal proceedings (art. 371 of the Act on Civil Procedure). Therefore, this reason for revision needs to be explained and well grounded. In this case the plaintiff, in a precise and concrete manner, has to explain which items were not dealt with or which were overlooked by the court. Non-specific and ungrounded statements that the court did not respond to the plaintiff’s “criticism of each individual complaint” are not sufficient for explanation of the review’s reason.

15

The Court of first instance ordered the second and the third defendants to pay to the plaintiff a sum of approx. € 8,000 with all the statutorily defined interest and the amount of approx. € 2,300 from 5 November 1996, and the amount of € 4,500 from the day of the judgment. The second defendant filed an appeal but this was rejected as was the appeal lodged by the first defendant who was ordered to pay to the plaintiff approx. € 8,000 with all the statutorily defined interest from the amount of approx. € 3,400 from 5 November 1996, and from the amount of approx. € 8,000 from the day of the judgment. The second and third defendants were ordered to pay the plaintiff approx. € 2,300 for trial expenses plus the statutorily defined interest from the day of the judgment while the plaintiff was ordered to pay the first defendant approx. € 1,800 with all the statutorily defined interest.

16

Against this judgment the plaintiff, the second and the third defendants appealed. The Court of Appeal upheld the appeal of the third defendant and partially changed the judgment, acquitting him. However, the appeal of the plaintiff and of the second defendant was rejected and the unchanged part of the judgment of the Court of first instance was reconfirmed. The plaintiff was ordered to pay to the third defendant € 1,200 for the trial expenses of the Court of first instance and € 450 for the trial expenses of the appeal.

17

The second defendant filed an appeal against the part of the judgment where her appeal was rejected. She claimed the erroneous application of material law and the violation of provisions of the proceeding. In the review filed by the lawyer M.P., she alleged that she had decided, despite the lack of experience, to ride the horse outside the fence as a result of being persuaded to do so by the third defendant, who had also guided the riding party. He rode in front of her and gave her instructions, showing her the way. He was aware of her lack of experience and of her inappropriate clothing for riding. When he decided to cross the road, she did not have a choice because she did not have enough riding experience. Therefore, the decision of the Court of second instance that the third defendant is not responsible for causing the damage cannot be accepted

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(his guilt can be among other things proved also by the fact that he paid for the damage caused by the death of the horse). The position of the Court of Appeal that the Road Transport Safety Act prohibits leaving animals on a road is unfounded. The second defendant did not leave the mare unsupervised; being inexperienced she could not supervise it successfully. She left the animal on the road out of necessity, trying to save her own life.

18

The plaintiff’s contribution to the damage was greater than had been assessed since he substantially exceeded the speed limit and did not take into account the conditions on the road. After all, it is almost impossible not to notice a horse standing in the middle of the road. The position that the road sign “Wild animals on the road” is in this case irrelevant is wrong because such a sign warns drivers about the possibility that there are animals on the road (horses included).

19

This resembles the appeal filed by the attorney B.K., claiming (in a fragmented and inconsistent manner) that the judgment under appeal is incomprehensible and contradictory and that the Court of second instance did not take into account all the allegations. B.K. claimed that the damage was caused mainly by R.S. and the third defendant, and that the position of the Court of Appeal that the third defendant bears no responsibility is illogical and contradictory. B.K. stated, inter alia, that the conclusions of both courts regarding the gravity of the material damage do not correspond to the documents and allegations made by the plaintiff, and that the courts neither responded to them nor took a position regarding them.

20

The attorney then turned to the issue of the basis of liability stressing that the second defendant did not have enough riding experience, that the mare that she rode was too tired and injured, that it should have been in a horsebox two hours prior to the accident since it had traveled 25–35 km, and that the liability for the damage falls mainly with R.S. and partly with the third defendant.

21

The plaintiff filed for a review against the part of the judgment in which the Court of Appeal dismissed his appeal, deciding instead in favour of the appeal of the third defendant, accepting a lower compensation due to his partial liability for the caused damage but requesting a higher compensation amount for non-material damage. The plaintiff challenged the dismissal of the claim against the first and third defendants and thus opposes the position of the Courts of first and second instance that the first defendant provided care and supervision for the horse by entrusting it to R.S. However, there is no evidence that R.S. was qualified either to control the horses or to take care of them. He was qualified only to clean the stables and to feed the horses, but not to let them out of the stables. The damage was substantially caused also by the third defendant who, under a pretext that the owner had allowed him to borrow the mare Brena, convinced R.S. to let the mare out of the stables. The third defendant then saddled the horse and prepared it for a ride, and chose the way. What

22

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should also be taken into account is the fact that the event took place almost five hours after the mare was let out of the stables.

23

The first defendant responded to the plaintiff’s review stressing the conclusion that R.S had been forbidden to lend the mare to anyone. However, he did not have any influence on the decision of R.S. to let the mare out of the stables and thus could not influence the events which subsequently took place.

24

The plaintiff’s review is partly allowed, partly unfounded and partly founded. The review filed by the second defendant is partly allowed, but unfounded.

25

Regarding the unfairness of the appeals – the right to a review is therefore judged separately (Act 41 of the Act on Civil Procedure – Official Journal of the Republic of Slovenia, no. 26/99), which in this case, where the compensation claims do not exceed SIT 1 million (approx. € 4,000), means that the part of the plaintiff’s review challenging the part of the judgment regarding the claim against the first and third defendants requesting them to reimburse him the amount of SIT 871,004 for the material damage, is unfair (art. 367 (2) of the Act on Civil Procedure). For the same reason the review filed by the second defendant is unfair in the part disputing the part of the judgment regarding the approval of the request for payment of the material damage. The plaintiff’s review is unfair in the part challenging the dismissal of his higher claims against the second defendant requesting compensation of the non-material damage. The dismissed part of these claims does not exceed SIT 1 million. Therefore, the reviewing court dismissed these parts of the plaintiff’s claim and the claim filed by the second defendant as unfounded (art. 377 of Act on Civil Procedure).

26

Regarding the merits of the appeals, the majority of the barely transparent review statements cannot be taken into account by the reviewing court. The review cannot be filed due to the erroneous or incomplete assessment of the actual state of affairs (art. 370 (3) of the Act on Civil Procedure). Therefore, the reviewing court did not take into account the review criticism of the evidence assessment of testimonials, expert opinion and other.

27

In its judgments the Supreme Court has frequently stressed that parties to a dispute cannot use procedural violations to challenge, in terms of contents, the actual state of affairs, which was established by the Court of first instance and then accepted as correct by the Court of second instance. A plea regarding a procedural violation is in such cases only fictional since the party to the dispute actually criticizes the accepted evidence assessment. Therefore, the reviewing court dismisses the (constructed) pleas from the review of the fundamental violation of the legal procedure from point 14 of art. 339 (2) of Act on Civil Procedure, which, in the opinion of the second defendant, can be found in the unconvincing evidence assessment.

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c) Commentary

The holders of the animal that caused the damage (that is those who had custody and control of the animal) were the second defendant (who had direct management and control over the animal) and the third defendant (who had indirect control). Since neither of them proved that they were not responsible for the caused damage and since their responsibility is obvious (the second defendant is guilty because she, as an inexperienced rider, consented to a night ride outside the regular riding path, and the third party is guilty for everything else – for choosing the mare and the path as well as for the decision to cross the road, which was the direct cause of the accident and because he initiated and guided the riding trip), they are both equally responsible for the damage.

28

2. Judgment of the Supreme Court II Ips 267/2005: Basis of Liability; Unlawfulness; Liability of a Ski-Track Manager; Ratio Legis Causality a) Brief Summary of the Facts

The following case concerns a classical injury caused by skiing on a demanding terrain. The plaintiff injured himself while skiing through a forest which was part of the ski-track, and accused the management of the ski-track for the accident.

29

b) Judgment of the Court

The Court of first instance dismissed the claim. It concluded that neither guilt nor objective responsibility of the defendant was stated. It concluded that this was an undemanding part of the ski-track. It dismissed the plaintiff’s statement that he slipped on an ice plate; it concluded that the inclination of the track was in accordance with the highest inclination allowed, that the ski track had an appropriate operating license and that the management did not need to place a protective fence in the contentious area of the track because the area was not precipitous or dangerous in any other way. The court concluded that the danger posed by skiing was common to this kind of sport and that the skier accepted the risk. On the other hand, the stated facts do not show that the defendant did anything wrong.

30

The Court of Appeal accepted the reasons of the Court of first instance, dismissed the plaintiff’s appeal and confirmed the judgment of the Court of first instance. In its reasoning it responded to the claims stating that skiing takes place in nature, where the management of the ski track does not need to cushion trees in forests or clear the edges of forests.

31

The plaintiff filed a review against the judgment. He suggested that the reviewing court dismiss the judgments of the Courts of lower instance and return the case to the Court of first instance for a new trial.

32

The Courts of lower instance dismissed the claim that was based on fault-based liability, because the defendant could not be accused of wrongful actions. If

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this decision is acceptable, the discussion regarding other elements of the tortious liability (which are reasoned in the review) is irrelevant. The reviewing court agrees with the material and legal conclusion that the defendant cannot be accused of wrongful actions.

34

Wrongful action, which would be taken into account in this case, would be the failure by the management of the ski-track to fulfill its obligations. The condition needed for a discussion regarding the unlawful dismissal would be an action ordered to a legal subject by the legal order. These obligations are determined only in really exceptional cases (of life importance).

35

The Act on Safety on Ski Slopes sets out in art. 3 (2) that the management has to provide protection near precipices and other dangerous areas. The actual grounds for the judgment explain that in this case the track leading through the forest was not steep. The judgments of the Courts of lower instance do not state that this part of the ski track was an unsecured dangerous area or even a precipice (e.g. a track on a forest track with a steep unsecured forest, higher natural step, sharp and unsecured turn on extremely steep track). This was a regular leveled track leading through a forest. This does not mean that accidents are impossible (since the accident in this case happened there) but there is a slight possibility for accidents as in other (everyday) activities. The claim that there should always be someone present to reduce an already slight possibility in every possible way would be exaggerated and would ad absurdum disrupt normal life, which obviously cannot be the objective of substantial law. If the track under dispute, which was proven not to be steep but regular, should have been secured, all the ski-tracks on all ski slopes on both sides should also have been secured with a protective fence from start to finish. The reviewing court explained in its reasoning that skiing takes place in nature. This means that the individual who decides to go skiing assumes a particular risk and should bear it. The individual who decides to perform some outdoor activity such as skiing cannot expect or demand the management of the ski-track to remove all natural factors and turn it into an artificial track that has nothing in common with nature. According to the Act on Safety on Ski Slopes, the management has to provide protection against particular risks (e.g. hollows, sinkholes, rocky areas, cliffs, etc. – art. 9 (1) of the Act on Safety on Ski Slopes) but not against regular and known natural risks. The warning signs that the management has to place refer to particularities (turns, crossing of tracks, narrowing, greater inclination, etc. – art. 9 (3) of the Act on Safety on Ski Slopes) but not to natural occurrences which are clearly visible, e.g. in this case a forest.

36

The decision that there is no objective responsibility for a dangerous object or activity is also correct. The party that filed for review claimed that the Court of second instance did not base its decision on objective responsibility. This is not true. The Court of second instance confirmed the decision of the Court of first instance as did the Supreme Court also. In its reasoning the Court of second instance has to review only the statements that are crucial and reasons which have been taken into account according to its official duties. The party that filed for a review does not state that the Court of second instance did not

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respond to any of its crucial statement in appeal. Because the court agreed with the material and legal decision of the Court of first instance regarding the (non-) existence of the objective responsibility, there are no reasons to state more than its agreement. The unfounded claim that there was a substantial violation of dispositions of the civil procedure is unfounded. c) Commentary

The plaintiff fell on a regular ski track and injured himself. The responsibility for what happened cannot be placed on the ski track management because they met all the requirements ordered by the Act on Safety on Ski Slopes.

37

3. Judgment of the Supreme Court II Ips 811/2005: Term “Hazardous Activity”; Physical Training; Playing Football; Liability of the Organizer a) Brief Summary of the Facts

During psychophysical training the plaintiff played football with other members of the special police force. While playing, he ran towards the ball, which was flying through the air, at the same time as another player (who was heavier and stronger). When both players jumped to catch the ball they collided and their bodies entangled so that the plaintiff lost his balance, fell and hurt himself. The incident did not occur because of the excessive roughness in the game (a certain degree is normal in a football match) and the player who collided with the plaintiff did not break any rules of the game.

38

b) Judgment of the Court

The Court of first instance refused the plaintiff’s claim that the defendant should compensate him in the amount of approx. € 17,943 for the damage he suffered while playing football as a police officer at psychophysical training. The plaintiff is required to reimburse € 1,500 of legal costs to the defendant.

39

The Court of Appeal refused the plaintiff’s complaint and supported the judgment of first instance. It agrees with the position that playing football does not represent a hazardous activity and that the plaintiff’s injury was a consequence of the game.

40

The plaintiff brought an appeal against this judgment because of the error in substantive law. It claims that every activity of the police special forces should be defined as a hazardous activity, playing football included, which is a part of physical training. The work of a special police force officer is always dangerous and the liability of the State is a no-fault liability for the damage he might endure while working.

41

The review court supports the view of the law of Courts of first and second instance that football itself as a sport cannot represent a hazardous activity and, therefore, the organizer of the game is not subject to no-fault liability (art. 154(II) of the Act on Obligational Relations). Prior to this case, the

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Supreme Court had already given numerous rulings on this issue (e.g. II Ips 566/96 of 9 April 1998, II Ips 330/2002 of 6 March 2003, II Ips 719/2003 of 3 March 2005, II Ips 84/2003 of 29 January 2004, etc.). Nothing changes the fact that the plaintiff as a member of special police force played football during physical training. The work of a special police force officer could be dangerous (e.g. performing operative tasks) but not when they are training, for example, running and performing other exercises to improve strength. Ball games cannot be dangerous only because their goal is to train the members of the special police force for the efficient performance of operative tasks. Because of the correct use of substantive law, the review court refused the review (art. 378 of the Act on Civil Procedure). c) Commentary

43

Football itself as a sport cannot represent a hazardous activity and therefore the organizer of the game cannot be subject to strict liability. 4. Judgment of the Supreme Court II Ips 50/2005: Liability for Damage Caused by a Hazardous Object; Liability of the Owner of a Hazardous Object; Entrusting the Object into Operation a) Brief Summary of the Facts

44

It is evident from the findings in the judgments at first and second instance that the second defendant B.R. tried to prove, in his testimony from 6 December 1991, that a Honda CRX vehicle was entrusted to the first defendant A.D., who caused a car accident, thereby causing damage. The court also took into consideration the content of the defendant’s plead in the criminal trial, according to which he stated, that “he drove his own car” (rec. 66 from the stated document). From the foregoing facts it can be concluded that the defendant B.R. handed over his car to A.D. more than three months before the accident. b) Judgment of the Court

45

The Court of first instance ordered the payment of compensation in the amount of € 13,454.79 together with legal interest. As for the defendant A.D., a similar complaint was upheld with the judgment of the Court of first instance of 17 August 2001 in relation to the judgment of the Court of second instance of 16 January 2003.

46

The Court of second instance, which dealt with the appeal of the defendant B.R. (the defendant), partially upheld this appeal and changed the part of the judgment of the Court of first instance which stated that the defendant is jointly and severally liable. As to the other points raised in the appeal, these were rejected and the judgment of the Court of first instance was confirmed in the unchanged part.

47

The defendant made an application for a review alleging a serious infringement of provisions of the legal proceeding and an error in substantive law; he suggested both judgments from the Courts of first and second instance be

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annulled and the case be referred back to the Court of first instance to be reconsidered. The plaintiff seeks payment from the defendant, who is liable for the damage as the owner of a hazardous object. For the damage caused, the provision of art. 176 of the Act on Obligational Relations, which refer to the liability problem of the owner of a hazardous object for the damage caused by the person to whom the owner entrusted the object in use, should be applied. The review in this direction does not offer a suitable basis for confirmation, but the review court judged the liability of the defendant B.R. within the review cause of the error in substantive law and by its legal duties (art. 371 of the Act on Civil Procedure). The owner who entrusts the operating of hazardous objects to a third party is liable when it is not obvious who the manager is (legal opinion of the Supreme Court of 21 and 22 December 1992 – Report on case-law no. 2/92). However the stated legal opinion has a completely different factual background from the treated one. In this case, the defendant B.R. gave his vehicle to A.D. for permanent use, not temporary use. Therefore, the property of the operator, according to the stated factual background, is not disputable. The operator of the vehicle, which was given to him for permanent use by the defendant B.R., was A.D. who also caused the car accident and the damage. In the contested judgment the Court of second instance focused only on the problem of the liability of the defendant B.R. as the owner of a hazardous object in accordance with the provision of art. 939 of the Act on Obligational Relations (subrogation of the victim’s insurance company for AO-plus insurance) without using the provisions of art. 176 from the Act on Obligational Relations according to the stated factual background. Since, according to stated factual findings, the provision of art. 176 from the Act on Obligational Relations excludes the liability of the defendant B.R. for the caused damage, for which the manager of the vehicle is fully liable, the review court has, with the correct use of substantive law, upheld the revision with a change of the contested judgment and a refusal of the action against the defendant, without dealing with the question of the legal nature of the insurance of the owner and the driver for compensation of damage (AO-plus insurance).

48

c) Commentary

The owner who grants the operating of hazardous objects to a third party is liable when it is not obvious who the operator is.

49

5. Judgment of the Supreme Court II Ips 763/2005: Liability of a Teacher; Fault-based Liability; Due Care Requirement a) Brief Summary of the Facts

The Court of the first instance concluded that in the warm-up session prior to a basketball match, there was confusion on the court due to the lack of clear instructions and to the lack of supervision for the activity. The physical education teacher responsible for the warm-up and supervision confirmed that 20 basketballs on the court represent a potential danger for injuries if the players are

50

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running around unsupervised, explaining how the players should warm up correctly prior to a match. The pupils shooting into the basket were unorganized and unsupervised. Therefore, the possibility could arise that a pupil shooting a ball into the basket using the “two-step technique” step on a ball when he finished his jump. This is exactly what happened, because the plaintiff broke his ankle after stepping on a ball which was rolling around under the basket. b) Judgment of the Court

51

In the light of this proved evaluation supported by both lower courts, it is legally irrelevant whether the plaintiff was familiar with the warm-up instructions: even if he were familiar with them, the determined causal relation showed that the injury occurred because of the unsuitable supervision of the warm-up by the person responsible. This conclusion leads to the following finding that the Court of the first instance reasonably did not follow the “as necessary” suggested proof after hearing the sport expert. Therefore, the Court of first instance determined that the defendant is liable for damage sustained by the plaintiff in the harmful event on 7 January 1997. The Court of second instance rejected the appeal of the defendant against the stated intermediate judgment and upheld the judgment of the Court of first instance.

52

The defendant filed a review because of substantial infringement on provisions of legal proceeding and error in substantive law. He also suggested the annulment of the lower courts’ judgments and a re-consideration of the case. The plaintiff injured himself while a pupil in the eighth grade during the warm-up for a basketball match. He was 14-and-a-half years old, had played school basketball for several years and was familiar with the warm-up procedure. Therefore the defendant suggested acquiring the opinion of the sports faculty for the purpose of proof – only an expert in basketball would be able to answer the question about what the warm-up rules were, what kind of instructions were necessary before the warm-up and how the warm-up was to be supervised. Since the Court of first instance did not consider the evidence it decided only on the basis of the statements of the plaintiff. The defendant was prevented from proving his statements. Therefore, the defendant could not express to what extent the plaintiff could have been jointly liable for the damage caused. c) Commentary

53

The physical education teacher is liable for the damage sustained by the pupil during the warm-up to the basketball match because he did not supervise the players who had 20 balls at their disposal. As a result, one of the pupils stepped onto one of the balls and injured his leg.

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6. Judgment of the Supreme Court II Ips 35/2007: Liability of the State; No-Fault Liability; Military Service; Term “Hazardous Object” as Legal Standard; Damaged Hearing due to the Use of Firearms a) Brief Summary of the Facts

The plaintiff was injured (damaged hearing) during his military service on 19 January 1998. The incident occurred during a military exercise when the plaintiff was shooting with a Kalashnikov gun.

54

b) Judgment of the Court

The plaintiff claims from the defendant the payment of compensation for nonmaterial damage. The Court of first instance determined the defendant’s nofault liability and assessed the compensation amount, which was lowered by 10% because of the plaintiff’s contribution to the harm suffered. The plaintiff did not use the required protection; he obviously discarded the ear plugs soon after the exercise began and he did not seek to get new ones in time, although that was possible.

55

The plaintiff did not lodge an appeal against this judgment, but the defendant’s appeal was entirely successful, since the Court of Appeal changed the contested adjudged part of the judgment of first instance in the way that it also refused this part of the action. There was no case of hazardous object or hazardous activity since the soldier had at his disposal suitable ear plugs, which suppressed the increased danger. The determined factual background shows the exclusive blameworthy conduct or omission of the plaintiff himself.

56

The plaintiff in his due review against the second instance judgment put forward a plea of review concerning the error of substantive law and suggested altering the contested judgment with the refusal of the defendant’s appeal, annulling the judgment and returning the case to the Court of Appeal for reconsideration. The review agreed that the factual background showed the exclusive fault of the plaintiff due to his duty to act. The Court of Appeal disregarded the grounds upon which the appeal was based according to art. 177(2)(3) of the Act on Obligational Relations on exculpation of no-fault liability. The review claimed that a military exercise with such a weapon is a hazardous activity and that firearms with integrated systems to double the effect of the shot are hazardous objects. The view of the Court of Appeal, which states that the defendant would only bear no-fault liability if the soldiers did not have protective plugs which would prevent the danger at their disposal, is incorrect. The review stated that ear plugs do not provide sufficient protection that would completely prevent the increased danger to zero level. The mere formal warning of the dangers of not using ear plugs at every shooting is not satisfactory for the exculpation of no-fault liability. The Kalashnikov gun with its special integrated system still remains a hazardous object. Protective plugs have merely symbolic rather than real protective significance. The Court of Appeal’s judgment cannot be influenced by the circumstance that the soldier did not hear the orders due to the plugs in his ears. The Court of Appeal should apply art. 177(3) of the Act on Obligational Relations ZOR.

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Since the defendant is liable on a no-fault basis and the plaintiff on a fault basis, they cannot be assessed on the basis of the same rules; consequences have to be weighted and damage has to be divided by the principle of equity. The Court of Appeal did not weigh the opposition of two different kinds of liability. The cause on the defendant’s side, the non-use of protective instruments, is relatively small in comparison with the increased danger; therefore, the keeper of the gun should (at least partially) bear the damage.

58

According to the decision of the Supreme Court, the review is justified. The review court supports the plaintiff’s reprimand of the grounds of the Court of Appeal that the exercise of tactics with the use of the stated weapon would represent a hazardous activity or that the Kalashnikov gun with integrated system to double the effect of the shot would represent a hazardous object (only) if the participants did not have at their disposal the protective plugs which prevented the danger. According to art. 154(2) of the Act on Obligational Relations ZOR, hazardous activities or objects are those which pose a greater danger. The term “hazardous object” or “hazardous activity” is a legal standard by case-law in each case. The word “surroundings” from the stated legal provision also includes the user of the hazardous object, not only third parties (as might be understood from the explanation of the Court of first instance). The fact that the use of different kinds of firearms increases the danger of hearing damage of the user of this weapon is confirmed by not so rare cases of injuries amongst soldiers (and other users). For this reason the defendant tried to lower the increased danger when he prescribed and enabled the use of protective ear plugs. However, this behaviour did not influence the potential of the hazardous weapon to cause hearing damage. In legal terms, the gun remained a hazardous object. Or similarly: the non-use of the required and enabled protection does not change the characteristics of a hazardous object. A similar situation occurs for workers working dangerous machines, which have certain protection mechanisms installed or have to be used under certain protective measures. The protection itself does not remove the hazardous characteristics of the machine, but if the worker removes the protection or does not follow the protective measures, such behaviour influences the finding concerning his contribution to the damage which occurred. c) Commentary

59

From the explanation it can be seen that the Court of Appeal did not base its judgment on prior legal practice. The Supreme Court adds that in a similar case, II Ips 70/2003, the view had already been taken that the State bears no-fault liability for the hearing damage caused by the use of automatic Kalashnikov guns. Because of such approach – that the Kalashnikov gun with a special integrated system would be a hazardous object if there were no protective instruments, and that it is exclusively about the fault of the plaintiff – the Court of Appeal did not consider the contribution of the victim. For the same reason the court did not judge the defendant’s statement of appeal about the excessively high assessment of the compensation for physical injury and nonjustified assessment of compensation for fear.

XXIV. Spain Jordi Ribot and Albert Ruda

A. LEGISLATION 1. Environmental Liability Last year the Spanish Parliament passed the current Act on environmental liability,1 according to the obligation laid upon it by the Directive 2004/35/CE of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage.2 Following the steps of the Directive, the new Act does not confer on individuals any right to file a claim on the basis of its provisions (Art. 5). Therefore, the general rules of liability based on fault (Art. 1902) and liability for toxic emissions and fumes (Art. 1908) laid down by the Civil Code remain unaffected.

1

However, the new statute goes beyond the Dir. 2004/35/CE in several aspects. Among others innovations, it lays down a widened definition of environmental damage. Damage to wild species and habitats falls within the new liability regime, without requiring them to be already protected by European law (Art. 2.1.a)). In addition to damage to water, also damage to the seashore and those long, narrow, tidal inlets known as “rías” triggers liability according to the new regime (Art. 2.1.c)). As regards damage to the soil, risk to human health is not the only condition laid down for there to be liability, contrary to what the Directive had established. It is sufficient that risk to the environment is created (Art. 2.1.d)). The Spanish legislature has also widened the scope of the new regime in a different way. The operator is obliged, on a strict basis, to adopt preventative measures in the presence of a threat of damage, as well as to avoid creating further damage. It is not required that the economic or

2

1

2

Ley 26/2007, de 23 de octubre, de Responsabilidad Medioambiental (Boletín Oficial del Estado, Official Gazette [BOE] no. 255, 24.10.2007). See M. Medina de Lemus, Medio ambiente. Protección y responsabilidad (2007) and C. de Miguel Perales, Régimen jurídico español de suelos contaminados (2007). Official Journal (OJ) L 143, 30.4.2004, 56–75. On this Directive see now G. Seraphim Ferreira, El nuevo régimen jurídico de la responsabilidad por daños ambientales en la Unión Europea, Noticias de la Unión Europea 273 (2007) 5–19.

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professional activity which caused such a threat should fit within the list established by Annex III of the Act (which is similar to the same Annex of Dir. 2004/35/CE; Art. 17.1). However, the operator will have the duty to restore damage only if his activity is included on the list (Art. 19.1). This liability rule is also strict. If the activity is not on the list, the duty to adopt restoration measures will only exist if the operator behaved in a negligent way (Art. 19.2). This latter rule applies in cases of environmental damage as defined by the statute, and – in contrast to the criterion of the Directive – not only in the case of damage or threat of damage to wild species and habitats. It should be borne in mind that Art. 1908 CC has been construed by the courts as laying down a general rule of strict liability for pollution damage.3 From this point of view, the new regime may be less protective than tort liability rules. Apart from this, damage caused by genetically modified organisms falls within the scope of the new regime (Annex III, no. 12), as the Directive had already established.4 The Act provides that damage to crops caused as a result of the release of GMOs will be compensated for according to the rules of private tort law (Additional Disposition no. 4). The separate liability regime laid down by the Biosecurity Act 2003 has been left unaffected.5

3

Another innovation is the statutory rule which lays down a presumption of the causal link (Art. 3.1 2nd par.). Its wording reminds us of the similar rule laid down by the German Umwelthaftungsgesetz (§ 6). According to the new Act, it will be presumed on a rebuttable basis that an activity included in Annex III has caused damage or an imminent threat of damage provided that the activity is appropriate to causing it, taking into account the intrinsic nature of the activity or the way in which it has been carried out. Finally, the new Act imposes on the operator an obligation to provide financial security so as to guarantee the fulfilment of his/her obligations under the legal regime (Art. 24). This can be done through liability insurance. A surcharge on the insurance fees paid will be used to finance a compensation fund, integrated into the Consorcio de Compensación de Seguros (Art. 33). Such a fund should supplement cover provided by insurance, by compensating for damage caused by licensed activities during the period of time that the insurance was valid, but which manifests itself after the time periods indicated by the insurance policy (Art. 33.1 par. II). The fund will also intervene in a case where the insurer has gone bankrupt (Art. 33.2).

3

4

5

See now S. Guido Villegas, El ocaso de la responsabilidad subjetiva por daños al medio ambiente, Ecosostenible 30/31 (2007) 13–21 at 18. On this issue see now R. Herrera, Responsabilidad derivada de los daños producidos por la biotecnología (2007). On the latter see now the Spanish report by M. Martín-Casals/A. Ruda in: B.A. Koch (ed.), Liability and Compensation Schemes for Damage Resulting from the Presence of Genetically Modified Organisms in Non-GM Crops, 2007, Annex I: Country Reports, 407–437 (available at ec.europa.eu/agriculture/analysis/external/liability_gmo/annex1.pdf).

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2. Road Traffic Liability and Insurance In this area, we should note the passing of Act 21/2007, which amends the Road Traffic Liability Act6 (hereafter LRCSCVM) in order to implement the so-called Fifth Directive on road traffic liability insurance.7

4

In the field of liability insurance8, the new law redefines the rules for determining the territory in which a vehicle is normally based, with the aim of facilitating the insurance cover when the vehicle’s plates are temporary. Besides that, vehicles bearing false or illegal plates are considered to be based in the territory of the country that issued the original plates. The administrative competent body − i.e. the Consorcio de Compensación de Seguros − is called on to provide cover to victims of uninsured vehicles when imported from another Member State, even though they are not yet registered in Spain. Moreover, insurers are required to apply the “reasoned offer” procedure to any kind of motor vehicle accident. Those that, having received notice of their liabilities, omit to proceed accordingly are subject to administrative penalties as well as to the payment of punitive interest for any amount they must eventually pay.9

5

According to Art. 2 Dir. 2005/14/EC, Member States shall include the payment of compensation by the corresponding body in the event of damage to property by an unidentified vehicle, provided that it has paid compensation for significant personal injuries to any victim of the same accident. The definition of “significant personal injuries” has been left to Member States. Accordingly, Act 21/2007 has made reference to “death, permanent incapacity and temporary incapacity which requires at least seven days of hospital care”.10 It also provides that a future regulation may establish an excess, of not more than € 500, for which the victim of such damage to property may be responsible.

6

The reform has also clarified the rule that compulsory insurance does not cover the driver’s personal injuries or the damage sustained by relatives or close

7

6

7

8

9

10

Ley 21/2007, de 11 de julio, por la que se modifica el texto refundido de la Ley sobre responsabilidad civil y seguro en la circulación de vehículos a motor, aprobado por el Real Decreto Legislativo 8/2004, de 29 de octubre, y el texto refundido de la Ley de ordenación y supervisión de los seguros privados, aprobado por el Real Decreto Legislativo 6/2004, de 29 de octubre (BOE no. 166, 12.7.2007). Directive 2005/14/EC of the European Parliament and of the Council of 11 May 2005 amending Council Directives 72/166/EEC, 84/5/EEC, 88/357/EEC and 90/232/EEC and Directive 2000/26/EC of the European Parliament and of the Council relating to insurance against civil liability in respect of the use of motor vehicles (OJ L 149, 11.6.2005, 14–21). See L.F. Reglero Campos, La Ley 21/2007, de 11 de julio, de reforma de la Ley de Responsabilidad Civil y Seguro en la Circulación de Vehículos a Motor: Transposición de la Quinta Directiva CE, InDret 4 (2007) 3 ff. (available at www.indret.com). See also C. Jiménez Segado/M. Puchol Aiguabella, Novedades de la acción ejecutiva de la Ley sobre Responsabilidad Civil y Seguro en la Circulación de vehículos a motor, La Ley (2007) 6845, 1–6. The thorny issue of the extent of the rule imposing punitive interest in a case of mora debitoris of insurance companies has been dealt with by the judgment of the Supreme Court (Sentencia del Tribunal Supremo (hereafter STS) 1.3.2007 (Repertorio de Jurisprudencia Aranzadi-Westlaw [RJ] 2007, 798; commented upon by B. Arquillo Colet, Los intereses moratorios del art. 20 de la Ley del Contrato de Seguro: el tipo de interés aplicable, InDret 1 2007 (available at www.indret.com)). See Art. 11.1 LRCSCVM.

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friends as a result of his or her death (Art. 5.1).11 On the other hand, pursuant to Art. 4 Dir. 2005/14/EC, Art. 6 III LRCSCVM expressly rejects any contractual clause excluding passengers from insurance cover because they knew or should have known that the driver of the vehicle was under the influence of alcohol or of any other intoxicating agent at the time of the accident. This was already the law in force before the amendment.12 Besides this, the provision does not prevent insurance companies from recouping against the liable driver according to Art. 10 a) LRCSVCM.

8

The new wording of Art. 3 LRCSCVM stipulates that the owner of an uninsured vehicle will be held liable for damage caused by it. Since victims of uninsured vehicles are already protected by the corresponding body, i.e. the Consorcio de Compensación de Seguros13, it seems obvious that this rule primarily intends to reinforce the owner’s obligation to take out insurance by expanding the criteria to make him liable and allowing an unlikely recoupment action to be brought by the Consorcio. Until now, the owner was not held liable unless the driver was related to him or her by one of the relations provided for in Art. 1903 CC (for instance, employer-employee, father-son, tutor-ward, etc.).14 In such a case, the liability of the owner ceases when he or she proves that to prevent the harm in question he or she acted according to the standard of care of a reasonable person. It is very doubtful that such exception could apply to liability stemming from the mere fact that insurance was not taken out.

9

In any event, the most trumpeted novelty brought in by Act 21/2007 is a huge increase in the minimum amounts of compulsory liability insurance cover. The fifth Directive demanded that the Member States require compulsory insurance (a) in the case of personal injury up to a minimum amount of cover of € 1,000,000 per victim or € 5,000,000 per claim, regardless of the number of victims, and (b) in the case of damage to property, up to € 1,000,000 per claim, regardless of the number of victims. Dir. 2005/14/EC thereby increased the previous minimum amount of cover threefold. A transitional period was therefore logical in order to allow Member States and insurers to adapt practice to the new rules. The Directive laid down a period of up to five years.

10

Spain implemented Dir. 2005/14/EC in due time and, regarding the minimum amounts of compulsory insurance cover, Spanish law apparently awards traffic victims much more protection than the Directive demanded. The liability insurance cover is now “a) in the case of personal injury, € 70,000,000 per claim, and b) in the case of damage to property, € 15,000,000 per claim”.15 Despite 11

12 13 14 15

Such a rule was already laid down in Art. 10 a) and b) RD 7/2001, of 12 January (Real Decreto 7/2001, de 12 de enero, por el que se aprueba el Reglamento sobre la responsabilidad civil y seguro en la circulación de vehículos a motor [BOE no. 12, 13.1.2001]) and it has now been legalised by Act 21/2007. The regulation was challenged on the grounds of extra-limitation of regulatory powers, but the action eventually failed (see STS 3ª 15.4.2002 [RJ 2002, 4689]). In this sense, see Reglero Campos, InDret 4 (2007) 9 ff. and more references therein. Art. 11.1 b) LRCSCVM. Art. 1 V LRCSCVM. Art. 4.2 LRCSCVM.

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such an increase in the minimum amounts, the Spanish legislator declined to use the transitional period provided by the Directive and insurers had to provide the new cover from 1 January 2008. Extra losses for insurance companies or a significant increase in the cost of premiums are very unlikely. The reason for this is that damages stemming from personal injury and death suffered in road traffic accidents will be assessed by applying the tariffication scheme included as Annex to the LRCSCVM and accordingly the final amount to be paid has not changed.16 According to UNESPA17, in 2005 insurers paid € 3,100 million in personal injury compensations.18 It is worth pointing out that a minimal fraction resulted in damages of over € 450,000 and that only 14 out of 10,000 accidents caused by cars resulted in costs greater than € 300,000.19 Most of the successful claims consist thus of amounts below the (old) minimum amounts of the compulsory insurance cover.

11

These data shed an interesting light on the practical effects of the tariffication scheme, which has been left untouched by the reforms of 2007. Firstly, the reforms now make it unnecessary to take out insurance cover above the minimum amounts of the compulsory liability insurance. In practice, almost all owners of vehicles appear to have such cover but this is going to change. What is difficult to ascertain is whether the corresponding premiums are going to be added to the premium paid for compulsory insurance20 or removed from the insurance prices.21 Secondly, it may be difficult to understand that the implementation of a Directive whose aim is “to improve the protection of victims” and “to compensate fully and fairly all victims who have suffered very serious injuries” (Preamble [10]) has triggered no costs upon the insurance system. This may lead one to think that such situation exists at the expense of a number of victims being regularly undercompensated by the application of the compulsory tariffication scheme, especially those suffering the most serious injuries as well as their relatives. Moreover, recent comparative data show that Spain holds one of the last positions as regards official monetary valuation of road accident fatalities (i.e. direct costs generated by road accidents, including medical costs, property damage and administrative costs). In the case of fatal road

12

16

17 18

19

20 21

On this see F. Reglero Campos, Accidentes de circulación: responsabilidad civil y seguro (2nd ed. 2007). In English, see M. Martín-Casals, An Outline of the Spanish Legal Tariffication Scheme for Personal Injury resulting from Traffic Accidents, in: H. Koziol/J. Spier (eds.), Liber amicorum Pierre Widmer (2003) 235–251 and M. Martín-Casals/J. Ribot/J. Solé, Compensation for Personal Injury under Spanish Law, in: B.A. Koch/H. Koziol (eds.), Compensation for Personal Injury in a Comparative Perspective (2003) 238–292 at 267 ff. National Association of Spanish Insurance Companies. In February 2007, 741 people died in traffic accidents in Spain and more than 500,000 suffered injuries. This number is a little lower than in 2006. UNESPA, Memoria social del seguro español 2005 (2006) 42–45 (available at www.unespa.es/ adjuntos/fichero_2440_20071025.pdf). As Reglero Campos, InDret 4 (2007) 12–13 suggests. See V. Magro Servet, La V Directiva Europea de Automóviles y su repercusión sobre la cobertura de las indemnizaciones de tráfico a partir del 1 de enero de 2008, La Ley 6874 (2008) 3–4.

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traffic accidents, Spain is far below the European average. It seems therefore that up to now Spanish insurers have been paying far less than would be consistent with the country’s level of real income.22 Accordingly, current amounts of damages, as assessed by the tariffication scheme, may be subject to criticism on the basis of the correlation between undercompensation and a high number of fatal traffic accidents involving serious personal injuries. Hence a substantial reform of the tariffication scheme has become urgent23, not only so as to comply with the goals of the European directives, but also to save lives.24

13

The situation is even more outrageous since in areas other than road traffic liability courts are awarding sums for personal injury and death four or five times higher than damages afforded to road traffic victims. Indeed, in many cases such awards are paid by public bodies either on the basis of State liability or according to specific legislation allowing victims to claim from the State advances on what should be paid by typically insolvent tortfeasors (i.e. terrorists and other criminals). Courts do not hesitate to depart from the assessment made by the tariffication scheme when aware that the State will enter the scene and pay the damages awards to victims. For that reason, for instance, spouses of persons assassinated in the terrorist attack of March, 2004 have received around € 900,00025, whereas if the spouse had died in a traffic accident the average amount would fall short of € 150,000. 3. Product Liability and Consumer Protection

14

In the previous report notice was given that the Spanish legislature had passed a new Act introducing some minor changes to improve consumer protection.26 However, the legislation in this area remained scattered among several acts and lacked internal consistency in some aspects. Therefore, the Final Disposition no. 5 of the Act authorised the Government to revise the existing legal texts on consumer protection and to combine them into a single statute. The authorisation included the possibility of “regularising, making clear and harmonizing” those texts. Last year, the Government completed this task by merging six different legal texts on consumer protection into a single, consolidated Consumer Protection Act.27 In particular, the new Act unifies and systematises the 22

23

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European Road Safety Observatory (2006) Cost-benefit analysis, retrieved on 18 January 2008 from www.erso.eu. The Government has announced that in-depth reform of the tariffication scheme is going to be undertaken in 2008. See El País (Date: 9.10.2007). Some proposals are already dealt with by M. Medina Crespo, Bases concretas para una reforma conservadora del sistema legal valorativo, Revista Española de Seguros (RES) 131 (2007) 271–295. In this sense, see F. Sánchez Calero, La revisión del baremo y la vigencia de la Quinta Directiva en el seguro de automóvil, RES 128 (2006) 741–761 at 759. That is the amount established as the damages award by the decision of the Audiencia Nacional 65/2007 (Criminal Chamber) 31.10.2007 (JUR 2007, 328722), which must be paid by the Spanish State according to Art. 9 Act 32/1999, of 8 October, on solidarity with the victims of terrorism. See A. Ruda, Spain, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2006 (2008) 437 ff. Real Decreto Legislativo 1/2007, de 16 de noviembre, por el que se aprueba el texto refundido de la Ley General para la Defensa de los Consumidores y Usuarios y otras leyes complementarias (BOE no. 287, 30.11.2007).

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previous provisions from the Consumer Protection Act,28 the Product Liability Act,29 the Act on the protection of the consumer in respect of contracts negotiated away from business premises,30 the Package Travel Act,31 the Act on the sale of consumer goods and associated guarantees,32 and the Act on the protection of consumers in respect of distance contracts.33 Nevertheless, the new Act leaves out other provisions on similar topics – consumer credit, advertising, standard contract terms, and time-sharing. In fact, the provisions of the Act are – rather surprisingly – divided into several Books (just as the Civil Code is), but this is not a true Consumer Code. In any case, it will be the main statutory text on consumer protection in Spain. Moreover, it is something more than a mere reorganisation and assemblage of pre-existing rules, since a detailed examination of the new provisions reveals that the Government may have – perhaps inadvertently – introduced some innovations, although it was neither really necessary, nor asked for, nor perhaps even allowed, to do so. One of them is a set of definitions of legal terms which is included at the very beginning of the Act, including such concepts as “producer”, “product”, “supplier”, etc. It is well known that every legal definition entails a certain risk. Indeed, some problems derive from the way those definitions have been drafted and applied through the text. For instance, there is not a single definition of “product”, but two. First, it is defined as “any movable thing according to Art. 335 of the Civil Code” (Art. 6), whereas it is later defined as “any movable thing, even if it may be united or incorporated to a different movable or immovable thing, as well as gas and electricity” (Art. 136). Moreover, when dealing with guarantees associated with the sale of consumer goods, the Act refers to “products” instead of “goods” (Art. 114 ff.). However, as is known, the English version of the Directive 1999/44/EC prefers the latter word. In addition to that, the new Act no longer refers to the “manufacturer” (fabricante) as a liable party in the context of product liability, but replaces it with the “producer” (productor) (Art. 138). The latter inaccurately includes both “the manufacturer of the goods and the supplier (prestador) of the service” (Art. 5). But oddly enough, the specific provisions on liability for services do not refer to the producer but to the “supplier” (Art. 147). Therefore, the supplier of services is mistakenly considered to be a producer in connection with product liability (Art. 138). Moreover, the replacement of the expression “manufacturers and importers” by one single word, “producers”, has caused some textual maladjustments in provisions where the alternative phrasing is presupposed (for instance, Art. 135). 28

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31 32

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Ley 26/1984, de 19 de julio, General para la Defensa de los Consumidores y Usuarios (BOE no. 175 and 176, 24.7.1984). Ley 22/1994, de 6 de julio, de responsabilidad civil por los daños causados por productos defectuosos (BOE no. 161, 7.7.1994). Ley 26/1991, de 21 de noviembre, sobre contratos celebrados fuera de los establecimientos mercantiles (BOE no. 283, 26.11.1991). Ley 21/1995, de 6 de julio, sobre viajes combinados (BOE no. 161, 7.7.1995). Ley 23/2003, de 10 de julio, de Garantías en la Venta de Bienes de Consumo (BOE no. 165, 11.7.2003). Ley 47/2002, de 19 de diciembre, de reforma de la Ley de Ordenación del Comercio Minorista, para la transposición al ordenamiento jurídico español de la Directiva sobre contratos a distancia (BOE no. 304, 20.12.2002).

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Moreover, the Act has a set of common rules regarding so-called “liability for defective goods or services” at the beginning of the third Book. This set is problematical for several reasons. Firstly, product liability does not really belong to consumer law (although its inclusion is widely accepted: among others see STS 19.2.2007 [RJ 2007, 1895]). Certainly, the provisions on product liability refer to the “affected person” (perjudicado) instead of to the consumer. But the fact is that product liability should never have been included in a consumer act. Secondly, the joint treatment of both instances of liability mixes contractual and extra-contractual or tort aspects and rules. In fact, liability for defective services may derive from contract or from tort, whereas product liability can only be based on tort. Thirdly, a safety defect is determinant in the context of tort liability (Art. 137.1). For example, fireworks may be defective due to a lack of safety and information on their use.34 It is the victim who bears the burden of proof of damage, the defect and the causal link. Case law has rejected, on several occasions, shifting this burden to the defendant.35 However, services liability may be based upon either a safety defect (for instance, incorrect handling of a pipe by the management company)36 or a lack of efficacy (Art. 148). Furthermore, the Act defines compensable damage as requiring personal damage or material damage to things or services (Art. 129.1). However, material damage to a service seems hardly conceivable. In addition to this, for damage to be compensable, the affected goods and services are required to be set for private use or consumption and to have been used for this purpose by the victim (Art. 129.1). As a result, the scope of the liability rule with regard to defective services has been severely restricted in comparison to the previous rule, since not every kind of damage – in particular, to other kinds of goods and pure economic loss – will be compensable under the new regime. Perhaps in an unnoticeable way, the new Act has thus worsened consumer protection with regard to liability for defective services. However, it must be borne in mind that liability for public services is governed by a different legal regime.37 Apart from this, some interpretative problems may arise due to the deficient wording of the new provisions. For instance, it remains unclear whether non-pecuniary loss, compensation for which had already been excluded by the previous Product Liability Act, is also excluded by the new provisions. On the one hand, it could be argued that this damage is compensable because it is damage to the person (pursuant to Art. 129.1). On the other hand, a different provision seems to make non-pecuniary damage fall under the scope of other liability rules different from the present Act (Art. 128 2nd par.).38

34 35 36

37 38

STS 23.11.2007 (RJ 2007, 8122). Among others, STS 16.3.2007 (RJ 2007, 1859) and 21.9.2007 (RJ 2007, 5495). STS 19.12.2006 (RJ 2006, 9241). See also Á. López Caballero, La responsabilidad de las Administraciones Públicas por una defectuosa asistencia sanitaria, Aranzadi Social 17 (2007) 37–40. Among others, see STS 7.5.2007 (RJ 2007, 3553). On the compensation of damage within the administrative procedure for violations of consumer legislation see E. Ribón Seisdedos, La liquidación de daños entre particulares en el marco del procedimiento administrativo sancionador de consumo, Estudios de consumo 81 (2007) 29– 46.

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Moreover, the legislature has not included some aspects which have to do both with product and services liability in the common set of rules referred to above. It seems obvious that the victim of damage caused by a defective product may contribute to his/her damage through negligence/in a negligent way. For instance, this was the case in a decision which awarded the claimant reduced compensation after having been burnt by a defective oven (actually the claimant was a minor and his parents had negligently not watched over him).39 It was also the case of an apparently healthy, but mentally ill youngster, who bought potassium cyanide with the aim of killing himself. In this case, the Court stated that damage derived not from the correct use of a product but from an improper use by the victim.40 However, contributory negligence may also occur in cases of damage caused by a defective service.41 Nevertheless, the statutory rule on contributory negligence (Art. 145) is included in the Chapter on product liability only.

17

4. Equal Treatment between Men and Women With the aim of making a significant step forward to improve the status of women and their role in society, the Spanish Parliament passed the Organic Act 3/2007, on the equal treatment between men and women (hereafter LOI).42 This Act primarily served the purpose of implementing several anti-discrimination Directives in Spanish law.43 However, it has a much broader scope and deals with many aspects of social and economic life, where women are being discriminated against on the grounds of sex. From this point of view, the Act seeks to break the “glass ceiling” for women by promoting their presence at all levels of social and economic power.44 One of the most publicised measures has been that of introducing a compulsory proportion of female members to the lists of candidates for elections or to the board of directors of certain corporations.

18

Art. 69.1 LOI lays down equal treatment of men and women as an enforceable legal principle vis-à-vis all persons, either public or private, who provide goods and services outside the area of private and family life and with regard to the transactions carried out therein. This principle forbids any kind of discrimi-

19

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40 41

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44

See STS 6.6.2007 (RJ 2007, 5557). In a different case it was proved that the defective bottle which caused the victim intoxication had not been manipulated before the victim had it (STS 16.4.2007 [RJ 2007, 2012]). STS 16.10.2007 (RJ 2007, 7102). See the commentary below under no. 52 ff. As STS 30.3.2007 (RJ 2007, 1613) reminds us. The defendant had argued that the victim had manipulated a toxic gas device, but the court finally rejected this and found for the claimant. Ley Orgánica 3/2007, de 22 de marzo, para la igualdad efectiva de mujeres y hombres (BOE no. 71, 23.3.2007). Directive 2002/73/EC of the European Parliament and of the Council of 23 September 2002 amending Council Directive 76/207/EEC on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions (OJ L 269, 5.10.2002, 15–20) and Council Directive 2004/113/EC of 13 December 2004 implementing the principle of equal treatment between men and women in the access to and supply of goods and services (OJ L 373, 21.12.2004, 37–43). For a general overview of the Act see V. Manteca Valdelande, La Ley Orgánica de Igualdad entre Mujeres y Hombres, La Ley 6778 (2007) 1–5.

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nation, direct or indirect, based on sex. Any discriminatory conduct as well as the terms of any legal act that do not respect the principle of equal treatment of men and women are void and lead to liability (Art. 10 LOI). Following the terms of Art. 9.2 Dir. 2004/113/EC, the Act recalls that such liability will be imposed by means of a system of compensation that is real, effective and proportionate to the damage sustained as a result of discrimination.45 Administrative penalties aimed at preventing such conduct from happening are also put into effect.

20

Persons suffering discrimination have the right to be compensated for the damage sustained (Art. 72.1 LOI).46 Complying with European Directives47, the Act includes a rule reversing the burden of proof in cases of sex discrimination. According to Art. 13 LOI, the defendant bears the burden of proving that any measure taken by him and which allegedly48 infringes the principle of equal treatment does not discriminate against the claimant and is proportionate with the aims sought when adopting it. Equivalent rules have been introduced in procedural legislation too.49

21

Amendments of procedural rules include provisions to allow certain legal persons to bring civil proceedings based on discrimination on the grounds of sex on behalf of its members. These are the trade unions and the associations whose main goal is the promotion of equal treatment between men and women (Art. 11 bis 1 Civil Procedure Act [hereafter, LEC]). The Act also stipulates that public bodies responsible for equal treatment, the most representative trade unions 45

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On the nature of this liability see M.P. García Rubio, La igualdad de trato entre hombres y mujeres y su repercusión en el derecho de contratos. Análisis del proyecto de ley orgánica para la igualdad de mujeres y hombres a la luz de la Directiva 2004/113/CE, La Ley 6602 (2006) 1–5. The author stresses that the basis of liability – infringement of the principle of equal treatment – entails that contractual rules (and not the general rules on tort liability) apply as regards the scope of liability, compensable damage and prescription. Neither intent nor fault is required to hold the defendant liable. Actually, since the Spanish Constitution entered into force courts have regularly applied the infringement of equal treatment between men and women as a ground for civil liabilities (for instance see STS 10.4.1999 [RJ 1999, 1877], which awarded damages to an air-hostess for “hostile behaviour and for treatment that was against dignity and discriminatory”, suffered in the workplace). Compensation for non-pecuniary loss is quite common in cases of discrimination in the workplace, harassment or sexual harassment, or reprisals against pregnant working women. Moreover, according to prevailing case law, such damages awards are independent of fixed amounts derived from the extinction of labour contracts and may be accumulated to these sums (see STS Social 20.9.2007 [La Ley 2007, 1692]). The Act explicitly mentions the Council Directive 97/80/EC of 15 December 1997, on the burden of proof in cases of discrimination based on sex (OJ L 14, 20.1.1998, 6–8). But see also Art. 9 Dir. 2004/113/EC. At any rate, the claimant must prove some facts or any circumstantial evidence upon which the rebuttable presumption of discrimination can be established. Among others see Y. SánchezUrán Azaña, Garantía Jurisdiccional del derecho a la no discriminación en la relación de trabajo, Revista del Ministerio de Trabajo y Asuntos Sociales 2007, 187–240 at 221. See Art. 217.6 and 7 LEC and Art. 60.7 Labour Law Procedure Act. See previously Art. 20.1 Ley 51/2003, de 2 de diciembre, de igualdad de oportunidades, no discriminación y accesibilidad universal de las personas con discapacidad (Act on equal opportunities, non-discrimination and universal accessibility for disabled persons).

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and national associations whose main goal is the promotion of equal treatment between men and women may bring proceedings on their own “when victims are indeterminate or their identification is difficult”. Such capacity does not preclude the right of any individual victim from entering proceedings on her behalf (Art. 11 bis 2 LEC). At any rate, civil proceedings based on alleged harassment or sexual harassment can be brought by the victim only (Art. 11 bis 3 LEC).50 The prohibition of discrimination on the grounds of sex “does not affect the freedom of contract, including the individual’s freedom to choose a contractual partner as long as an individual’s choice of contractual partner is not based on that person’s sex” (Art. 69.2 LOI). Moreover, differences in treatment are to be allowed “whenever they are justified by a legitimate aim and the means of achieving that aim are appropriate and necessary” (Art. 69.3).51 In principle, differences arising from sex being used as a factor in the calculation of premiums and benefits for the purposes of insurance and related financial services are not justified. Accordingly, Art. 71.1 LOI forbids entering into such contracts and provides the victim of discrimination with the right to ask for an amendment of the contract to assimilate the contract premiums and benefits to those applied to persons of the other sex. As is well known, however, the Dir. 2004/113/EC allowed the Member States to permit proportionate differences in individuals’ premiums and benefits “where the use of sex is a determining factor in the assessment of risk based on relevant and accurate actuarial and statistical data” (emphasis added). Accordingly, the Act refers to regulations for the determination of such cases (Art. 71.2).52 At any rate, costs related to pregnancy and maternity shall not result in differences in individuals’ premiums and benefits.

22

5. Biomedical Research with Human Subjects On 5 July 2007, a new Act on Biomedical Research (hereafter, LIB)53 entered into force. The Act applies to any biomedical research either involving invasive procedures upon human subjects − with the exclusion of clinical trials aimed at developing pharmacological products54 − or using biological tissue 50

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53 54

Needless to say, persons other than the direct victim could claim, however, for their own harm, if available according to general rules on civil liability (in this sense, see García Rubio (fn. 45) 4. See Art. 4.5 Dir. 2004/113/EC. The Act, however, makes no explicit reference to the fact that it does not apply to the content of media and advertising nor to education (see instead Art. 4.3 Dir. 2004/113/EC). See RD 1361/2007, of 19 October, developing Act 3/2007, on equal treatment between men and women as regards actuarial data (BOE no. 254, 23.10.2007). This regulation has amended Art. 34 of the regulation on private insurances and stipulates that tables of mortality, survival, incapacity and morbidity may contain different probabilities for each sex. In any event they must be justified on the grounds of statistical data and cannot reflect the risks of pregnancy or delivery. Ley 14/2007, de 3 de julio, de Investigación Biomédica (BOE no. 159, 4.7.2007). See M. Martín-Casals/J. Solé/J.C. Seuba Torreblanca, Liability for and Insurability of Biomedical Research Involving Human Subjects under Spanish Law, in: J. Dute/M.G. Faure/H. Koziol (eds.), Liability for and Insurability of Biomedical Research with Human Subjects in a Comparative Perspective (2004) 264–296 at 267 ff. Clinical trials are regulated by the Ley 29/2006, de garantías y uso racional de medicamentos y productos sanitarios (Act on guarantees and rational use of medicines and healthcare products) (BOE no. 178, 28.7.2006) and developed by Royal Decree 223/2004, of 6 February.

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of human origin. Moreover, the Act includes rules on genetic tests and on the management of genetic data derived thereof. The aim of the Act is to eliminate perceived legal uncertainty that was allegedly impairing the expansion of biomedical research.

24

Research involving human subjects is regulated by sec. II of the Act, which lays down the conditions for carrying it out. Art. 4 and 13 ff. LIB require specific written consent signed by the research subject − or by his/her legal representatives − once detailed information is provided. Information shall include, among other items, the research goals and its expected results, information about who provides funding to do it and what measures are going to be taken if any adverse effects result. The subject must also be instructed of the guarantees established to ensure proper compensation if he or she suffers any harm (Art. 14 LIB).

25

Research involving invasive procedures upon human subjects is not to be allowed if an equally effective alternative exists and provided that the research does not entail nuisances and risks out of proportion to the potential benefits for the subject (or for any person in his/her situation) within a reasonable period of time (Art. 13 LIB).55 Moreover, any biomedical research on human subjects involving invasive procedures must be assessed in advance by the corresponding research ethical committee and authorised by the competent regional administrative body (Art. 16 LIB).

26

As for liability issues56, LIB has followed the lines already laid down by legislation on clinical trials.57 It thus provides that any biomedical research on human subjects may be undertaken only when the sponsor has taken out liability insurance to indemnify the research subject for any damage resulting from the research conducted upon him/her (Art. 18.2 LIB). This insurance shall cover the liability of the sponsor, the main researcher and his or her collaborators and the owner of the hospital or centre where the clinical trial is carried out.58 When by any circumstance the insurance policy does not offer full coverage, those persons will be held jointly and severally liable regardless of the fact that “fault cannot be established” and that the research was conducted with the permit of both the research ethical committee and the competent administrative body (Art. 18.3 LIB). In addition, there is a rebuttable presumption of the causal link between the research and “the damage related to the health of the subject, 55

56

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Art. 19 and 20 specify the proportionality principle when allowing biomedical research conducted on unborn children, pregnant women, incapacitated persons or persons who lack the capacity to consent. The Act focuses on the administrative liability derived from the violation of its provisions. Art. 72 provides, therefore, that any criminal or civil liabilities remain unaffected. See Art. 61 Ley 29/2006 (fn. 54). LIB does not determine the extent of the insurance cover. This is in all likelihood going to be done by means of a regulation as in the case of clinical trials. In this case the amount of compulsory liability insurance cover is € 2,500,000 per year and per trial (see Art. 8.6 RD 223/2004). On this insurance see L. Jiménez-Asenjo, El seguro obligatorio de ensayos clínicos: riesgos, límites y cláusulas de exclusión (I), Actualidad del Derecho Sanitario (2007) 139, 447–453 and 140, 570–577.

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suffered while he/she is undergoing the research and during the year following its termination” (Art. 18.4 LIB). At any rate, the defendants may prove that the impairment in the health of the research subject is not causally linked to it and that it is inherent to the subject’s pathology or belongs to the regular evolution of the illness resulting from the inefficacy of the treatment.59

B. CASES 1. STS 17.7.2007; RJ 2007, 4895: Domestic Accident a) Brief Summary of the Facts

Two friends had invited Ms. María Milagros to have dinner at their home. During the meal, the guest left the table and went along a corridor. However, it was dark and she could not see a small toy with small wheels lying on the floor. She accidentally stepped on the toy and suffered a bad fall, as a result of which she suffered physical injuries. Therefore, she filed a claim against the couple, one of whom was the owner of the flat, and also against the multi-risk home insurer.

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b) Judgment of the Court

The Judge of First Instance had dismissed the claim arguing that the claimant had gone into the dark corridor on a voluntary basis, without having turned on the light or asking her friends to do so. Therefore, the Judge concluded, she had assumed the risk inherent to wandering about in the darkness, although it was foreseeable that in an inhabited house there may be pieces of furniture or other things lying around. Moreover, having toys with wheels in a domicile cannot be considered to be a risky activity. The claimant appealed and the Court of Appeal of Valencia found for the claimant. According to it, the hosts had assumed the position of guarantor of the safety of their guests, which meant that they had to prevent their guests from being at risk. Accordingly, they should have illuminated the corridor or removed any risky object which the guest could not detect. The owner of a house has, as a rule, the duty to create the necessary safety in it and therefore the guest is allowed to trust that there are no such “traps” in there. The insurance company appealed on this decision before the Supreme Court.

28

The Supreme Court starts its reasoning by focusing on the interpretation of the general rule of liability based on fault established by Art. 1902 of the Civil Code. According to the decision, case law has never set up risk as the only source from which liability may arise according to this provision. Instead, it is required that the condition of fault or negligence be met. However, not every

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This is the logical sense of the strange wording of Art. 18.3 LIB, which lays down that “the burden of proof lies with the defendants” but omits to mention what must be proven. See A. Díaz Martínez, Daños causados en la investigación biomédica y la realización de estudios genéticos: conductas y omisiones determinantes de responsabilidad y resarcimiento, La Ley 6782 (2007) 2.

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risk falls within the scope of Art. 1902 CC. There are some small or “not qualified” risks which belong to the general risk of life and therefore the victim has to cope with them alone. In connection to this, the decision adds that the host is not liable for any risky situation which may occur in the household sphere. In the case at stake, the risk could not be attributed to the defendants in an objective way – according to the German doctrine of the scope of liability (objektive Zurechnung) – because the risk was too remote and the situation was normal from the point of view of a home.

30

In addition to this, case law related to bad falls in apartment buildings belonging to several people or in commercial premises has always required fault to establish liability. Therefore, there is no liability if damage is attributable to the victim only. This is the case if the victim trips over an obstacle which can be deemed normal in the context of a home. The Court also quotes the Principles of European Tort Law of the European Group on Tort Law (PETL) with regard to the definition of the required standard of conduct (Art. 4:102 par. 1). According to the decision, the criteria laid down by this rule can be taken as a reference to complete or develop the wording of Art. 1902 CC. In this way the Principles could be used as an integration or supplementary device, just as other provisions of the Civil Code belonging to the Chapter on the nature and effects of obligations are, such as Art. 1104 (referring to the standard of care according to the model of the bonus pater familias). Moreover, the decision defines caso fortuito as that event which could not be foreseen (pursuant to Art. 1105 CC). Therefore, not every human disgrace entails someone being held liable for damage resulting from it, since life in itself entails risks.

31

According to the preceding considerations, the decision emphasises that the place where the dinner took place was well-known by the claimant. As a matter of fact, when she arrived at the flat she was received by the husband at the entrance and immediately afterwards she headed to the kitchen to greet the other friend. This reveals an important degree of proximity or special trust with regard to the hosts, so they did not need to behave in an extremely careful way. In particular, they were neither required to turn on the lights of the corridor as well as the lights at both ends of the same, which were indeed turned on, nor to remove the little toy. In summary, the defendants had not behaved in a negligent way, so they could not be held liable for damage suffered by the claimant. c) Commentary

32

This seems a noteworthy decision for several reasons. First of all, it refers to the PETL (Art. 4:102) as a device or tool to supplement the general rule of liability based on fault laid down by the Spanish Civil Code (Art. 1902). Moreover, the Principles are put on an equal footing with other provisions of the very same Civil Code, such as Art. 1104 CC on the definition of the standard of care. Leaving aside the fact that the Court surprisingly refers to the “preparatory works” of the Principles, as if they had not been already adopted and published by the Group, but were “still on the way” – in the words of the

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decision – the most remarkable aspect of the decision is that the highest court in Spain has made use of the Principles as an element for filling in the gaps of the domestic liability rules. As a matter of fact, this is not the only decision which relies on the PETL to back up its legal reasoning. In the STS 10.10.2007 (RJ 2007, 6813) the decision refers to Art. 6:102 while trying to ascertain whether the defendant could be held liable for the act of another. The court states that verification is required as to whether the defendant infringed “what Art. 6:102 PETL calls the required standard of conduct in supervision, i.e., whether the duty to supervise has been violated”. This is in keeping with a similar previous case, decided by STS 6.3.2007 (RJ 2007, 1828), which stated that the defendant bank was not liable for the acts of one of its workers because the aforementioned standard of conduct in supervision (pursuant to Art. 6:102 PETL) had not been infringed.

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The second thing that calls our attention is the position of the Supreme Court as to the construction of the general clause of liability based on fault laid down by Art. 1902 CC. Over previous decades, case law had interpreted this provision in a very flexible way, by shifting the burden of proof to the defendant and increasing the required standard of care.60 Accordingly, proof that the defendant had behaved in a careful way became very rare, if not impossible. With very few exceptions, the Spanish liability system operated as if the Civil Code really established a reversal of the burden of proof, and therefore tort liability became quite close to strict liability, although the courts in theory never formally abandoned the principle of fault. Nonetheless, the latest decisions of the Supreme Court seem to be revising or qualifying its previous stance as to fault. As the present case illustrates, there is no reversal of the burden of proof. Quite the contrary, the decision relies on a range of arguments to avoid making the defendants pay for damage suffered by the victim. It could be asked whether the decision construes the relationship of proximity or special reliance between those involved in the same sense it is used in the PETL (Art. 4:102 par. 1)61 or in the Common Law of torts, but the fact is that the Court rejects establishing liability on the mere creation of risk. The Court even suggests that the toy which apparently caused the bad fall was never sufficiently described and that the only thing actually known about it was that it had wheels.

34

This restrictive stance can be seen in other decisions as well. In a different case, the claimant had lost the sight of one eye while he and his little friends were playing with some bottles containing etching acid. The bottles had been removed from one box stored in a pickup truck, which had been parked by the defendant on the street. Although the vehicle was locked, and the box had been hidden under a basket, it was possible for the children to climb into its

35

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61

See for instance STS 23.10.2006 (RJ 2006, 8929). In legal scholarship see M. Martín-Casals/J. Ribot Igualada/J. Solé Feliu, Spain, in: B.A. Koch/H. Koziol (eds.), Unification of Tort Law: Strict Liability (2002) 281–282. See the commentary by P. Widmer, in: European Group on Tort Law (ed.), Principles of European Tort Law. Text and Commentary (2005) 78, especially no. 12.

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open body and remove the bottles. The Court could have considered that the defendant had negligently parked the vehicle near a site where children usually played. However, the Court states that damage was unforeseeable to the defendant. Moreover, it adds that even if one could aim at making liability stricter, the claimant always needs to prove that the defendant has behaved in an at least minimally negligent way. According to the decision, the truck driver did not create any legally relevant risk and therefore it is not possible to hold him liable.62 This is in contrast with a previous decision, which held the organisers of the festival of San José in Xirivella, Valencia – a display combining firecrackers and fireworks – liable for damage suffered by a minor. The defendants had negligently failed to prevent the minor from obtaining access to the firecracker which caused her damage (although the damages award was reduced by 90% because of contributory negligence).63

36

In a different case, the claimant had fallen at the entrance of the building where she lived. One of the steps was broken and she had forgotten it at that particular moment, although she actually knew this circumstance very well. It would have been easy to state that the community of owners of the building had behaved negligently by having left the access of the building in a dangerous condition. However, the STS 19.2.2007 (RJ 2007, 1896) found for the defendants for lack of fault on their side. In another bad fall case, the claimant had fallen off a balcony while he was trying to do a pirouette on a handrail in a discotheque. Due to the fact that he was drunk when he suffered the accident – the decision even seems to suggest that he was an alcoholic – and the facilities met all the required safety standards, it was clear that damage was caused by the negligence of the victim only.64 Nonetheless, the Court offers interesting reasoning by stating that it is possible to base tort liability upon a criterion other than fault and accordingly shift the burden of proof only provided that there is a risky activity which implies an abnormally high risk in comparison to the medium standards (STS 25.1.2007 [RJ 2007, 1699]). The Court expressly rejects the criterion followed in a previous case where the owners of a disco were found negligent for not having hired security personnel who would have prevented a customer from doing pirouettes on a handrail and falling on the victim (STS 2.10.1997 [RJ 1997, 6964]). The 2007 decision makes it clear that the influence of the risk factor on the establishment of liability has to be qualified on the basis of an evolutionary process, so it can only be taken into account when it exceeds the general risk of the ordinary activities of life. In a similar vein, a different decision, also in a bad fall case, states that strict liability does not fit 62 63 64

STS 11.6.2007 (RJ 2007, 3570). STS 20.12.2006 (RJ 2007, 439). See also STS 6.6.2007 (RJ 2007, 3422) which also rejects risk as a sufficient basis for establishing liability (the claimant was the mother of a 40-year-old man who had drowned in a swimming pool, which he knew well and which was operated under correct conditions, while the lifeguard was aiding an injured person in a different department). The opposite decision is reached by STS 30.11.2005 (RJ 2006, 81); commented on by P. del Olmo García, Cuadernos Civitas de Jurisprudencia Civil (CCJC) 73 (2007) 101–118, which held a Municipality and a lifeguard liable for neurological injuries suffered by a minor due to an accident at a swimming pool operated by them, under irregular conditions.

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in well with the principles established by the Civil Code (Art. 1902) and that case law has only shifted the burden of proof of fault in cases of disproportionate damage, extraordinary risks or where the defendant has failed to cooperate in explaining how damage occurred because of his professional circumstances or the like.65 Accordingly, the Supreme Court has stated that fault can be presumed whenever the defendant created a situation of risk beyond the average standards.66 As a matter of fact, some decisions have gone even further and stated that strict liability based on the risk doctrine and the reversal of the burden of proof of fault cannot be applied in the framework of Art. 1902 CC, even in case of disproportionate damage or faute virtuelle.67 In conclusion, the tide seems to be reversing in case law, moving back from its previous criterion of drawing the rule of liability based on fault closer to strict liability. 2. STS 19.7.2007; RJ 2007, 5143: Compensation of Damage Subsequent to Erroneous Diagnosis of HIV Infection a) Brief Summary of the Facts

At the beginning of 1988, the claimant underwent ELISA and Envacer tests at the Microbiology Service of the Hospital of Granada to discover whether he was HIV-positive. The already available Wester Blot test, however, was not carried out. The hospital informed the claimant that, according to the tests, he was HIV-positive. He then began undergoing pharmacological treatment, including administration of azidothymidine (AZT), under the supervision of a physician responsible for the internal medicine service of the San Juan de Dios Hospital of Granada. On 9 October 1991, after the claimant had undergone pharmacological treatment for almost four years, his physician told him that the diagnosis was mistaken and that he had never been HIV-positive. In December 1996, he filed a suit asking € 420,000 for the damage sustained as a result of being erroneously diagnosed with AIDS, which he described as consisting in the psychological effects of undergoing unnecessary treatment as well as in the anxiety derived from the fear of developing the disease, at the time still perceived as irremediably fatal. The defendants were the physician, the public bodies responsible for the two hospitals involved in the case and their liability insurer.

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b) Judgment of the Court

The court of first instance dismissed the claim on the grounds that it should have been brought before the administrative courts. In appeal, the Provincial Court of Granada rejected this ground for inadmission and examined the case. It concluded that all defendants had acted negligently and awarded the claimant € 120,000 in damages.68 According to the expert witness, the service performing the tests acted negligently because the erroneous diagnosis could only have resulted either from a misinterpretation of the tests or from communication of 65 66 67 68

STS 22.2.2007 (RJ 2007, 1520). See also STS 17.12.2007 (JUR 2008, 11054). STS 20.12.2007 (JUR 2008, 10969). STS 7.5.2007 (RJ 2007, 3553) and 15.11.2007 (RJ 2007, 8110). See SAP Granada 9.2.2000 (Actualidad Civil [AC] 2000, 1373).

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results belonging to a person other than the claimant. Concerning the physician and the public body responsible for the San Juan de Dios Hospital, they were held liable because they negligently failed to order new tests to confirm the initial diagnosis once it had become clear that the patient’s physical condition was unexpectedly improving. Expert evidence also confirmed that, under these circumstances, carrying out such tests is what medical standards required.

39

The Supreme Court dismissed the appeal brought by the defendants. Upholding the ruling of the Provincial Court of Granada, it considered that the defendants infringed their professional duties by delivering a mistaken diagnosis and by conducting routinely pharmacological treatment whose necessity should have been reaffirmed in the light of the claimant’s condition. The judgment holds the opinion that the defendants’ negligence was the legal cause of the fact that the claimant had to live for almost four years with the fear of dying of AIDS if the disease eventually developed. The Supreme Court stresses that, despite the lack of permanent effects, unnecessary pharmacological treatment had caused the claimant to bear the unpleasant side-effects of AZT and of other drugs. The ruling also takes into account that the claimant showed permanent psychological effects even after being informed that he was never HIV-positive. c) Commentary

40

This is the second reported decision of the Supreme Court dealing with a case of HIV “false positive”.69 In a previous decision, from 1998, the Supreme Court reached the opposite conclusion that the claimant’s bad psychological condition was not the consequence of an erroneous diagnosis of HIV-positive but of his long-term addiction to heroine. Accordingly, the Supreme Court denied his € 500,000 damages claim.70

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In the decision under comment, the medical malpractice seems to be sufficiently proven. The heads of damage, however, are somewhat unclear. The Supreme Court mentions the emotional impact of the erroneous diagnosis but apparently relies upon the fact that the claimant’s psychological condition worsened irreversibly due to the prognosis associated to AIDS. Indeed, this is why both the Supreme Court and the instant court denied the extinction of the claim on the basis of prescription: as long as the claimant’s pathology had not been definitively established when he filed his claim, both courts said that the six-month prescription period laid down in Art. 1968.2 Civil Code had not started running yet.

42

In any event, the decision leaves the question open as to whether part of the damages award corresponds to psychological distress, i.e. anxiety and other effects on the claimant’s personality that, strictly speaking, cannot meet the requirements for a medically ascertainable pathology. Indeed, the Provincial 69

70

On the issue, see J.C. Seuba Torreblanca/S.Ramos González/A. Luna Yerga, Falsos positivos. La responsabilidad civil derivada del diagnóstico erróneo de enfermedades, InDret 3 2002 (available at www.indret.com). See STS 28.12.1998 (RJ 1998, 10155).

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Court insisted upon the fact that the claimant must have suffered some collateral effects connected to the fact that AIDS entailed at the time (and even today in many parts of the world) the stigmatisation of the patient and his/her social isolation amid fear and feelings of guilt. In the context of the current practice of the Spanish courts, this decision cannot be seen as exceptional. Apparently, the precedent of 1998 dismissed the claim because a lifelong drug addiction made the claimant a very unlikely victim of emotional distress caused by an (erroneous) diagnosis of AIDS. Conversely, in the case at stake an impact such as this appears to be the central issue, regardless of the fact that both courts took episodic anxiety into account as a lasting pathology that ruled the defence of prescription out. Besides that, there are already a number of cases of the same type71 together with claims where the heads of damage are even broader.72 Such a stance makes it difficult to argue that asymptomatic persons, when diagnosed with fatal or serious diseases, must wait until they actually develop these diseases in order to claim compensation. Emotional distress and some of the collateral effects linked to the mere fact of being diagnosed with the potentially fatal disease, for which the decision under comment retrospectively compensates, appears in asymptomatic patients too, regardless of whether the disease eventually develops or not.73

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3. STS 30.4.2007; RJ 2007, 2397: Medical Liability a) Brief Summary of the Facts

At the end of 1991, the claimants’ son, then one-month old and who had been born with Down’s Syndrome, underwent a surgical operation to implant intraocular lenses to remove bilateral congenital cataracts. Two years later, an infection appeared in the right eye that eventually led to the loss of his sight. The claimants sued the surgeon and the hospital on behalf of their child. They argued that, according to medical standards, surgical solutions on such small children were unacceptable and that more conservative techniques should have to be applied instead. Moreover, the claimants said that no information was provided to them about the risks that the implant of the intraocular lens involved.

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b) Judgment of the Court

Both the court of first instance and the provincial court rejected the parents’ claim. Expert evidence declared that an intraocular infection was a rare but unavoidable complication associated with an implant of an intraocular lens. 71 72

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See Seuba/Ramos/Luna, InDret 3 (2002) 8–10 and more references therein. As, for instance, in cases consisting in tort actions seeking compensation for fear of contracting AIDS while living together with an HIV-positive defendant who said nothing about his disease. See recently SAP Madrid 10.7.2007 (La Ley 2007, 176259 = AC 2007, 1899) and Illes Balears 14.9.2001 (AC 2001, 2221). But see, against the availability of a compensatory remedy in such cases, A. Azagra Malo, Placas pleurales, angustia e incremento de riesgo, InDret 1 (2008) 12–13. This article comments, with approval, on the view held by the House of Lords in Johnston 2007 [UKHL] 39.

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With regard to the lack of information, it was unclear whether the parents were provided with enough information about the specific risk that eventuated. At any rate, the Supreme Court concluded that information concerning such a remote risk was not required. The court said that in so-called “curative” medicine, where surgery is needed to treat a disease, “there is no need to warn about every possible or potential risk that may eventuate”. Moreover, it is reasonable to conclude that, even if they had been informed about that specific risk, the claimants would not have rejected an operation essential for the welfare of their child. c) Commentary

46

This ruling provides an excellent illustration for summarising the current stance of Spanish case law on central issues of medical liability.

47

As in many other cases, the judgment provides an answer to the usual double tier of arguments put forward by claimants in this sort of case. Firstly, allegations of a negligent execution of the medical procedure. Secondly, the supposed infringement of the medical duty to disclose the risks that the procedure entailed before asking the parents to give their consent to it.

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Regarding the plea of improper execution of the medical procedure, the Supreme Court upheld the view taken by the instant court.74 The claimants argued that, bearing in mind the age of the patient, the technique was inappropriate and that one could presume that the procedure had been executed negligently in the light of the “disproportionate damage” suffered by the child. Expert evidence showed instead that the more conservative treatments mentioned by the claimants at the time had already fallen into disuse. Besides that, the Supreme Court rejected the argument based on the doctrine of disproportionate damage by recalling that the mere existence of a “disproportionate result” − in the sense, here, of “disastrous” result − does not automatically trigger the physician’s liability. The doctrine of disproportionate damage does not operate as a presumption of fault but as a device requiring a coherent explanation of the defendant as to why a certain medical procedure that entails limited risks could end in a catastrophic result.75 That was not the case at stake. It was clear 74

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The judgment implicitly takes as its departing point the prevailing view according to which a physician’s liability can be based upon fault only. Conversely, hospitals’ liability may under some circumstances be stricter. Thus, in two judgments involving post-operative infections (in one of them the patient also lost his right eye) the Supreme Court made the defendant hospital liable according to the regime of strict liability laid down in Art. 28 General Act on Consumer Protection. See STS 5.1.2007 (RJ 2007, 552) and 4.7.2007 (RJ 2007, 5124). Regarding a physician’s liability, STS 15.11.2007 (RJ 2007, 8110) recalled that the said Art. 28 is not applicable to individual health providers and STS 28.11.2007 (JUR 2007, 361405) that the strict liability rule laid down in Art. 28 requires the previous determination of certain levels of purity, thereby pointing to installations, devices or medical equipment rather than to medical acts. See J.A. Seijas Quintana, Responsabilidad civil médica: ¿Obligación de medios, obligación de resultado? Jueces para la democracia (2007) 59, 8–16. The doctrine of disproportionate damage is applicable to simple procedures that end with fatal or serious adverse effects. For instance, an operation to rectify the nasal septum, which ended with the death of the patient (STS 23.5.2007 [RJ 2007, 3273]). See also STS 16.4.2007 (RJ 2007, 4332) concerning a case of tetraparesia caused by post-operative infection.

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enough that the loss of sight was caused by an infection linked to the surgery performed by the defendants, but expert witnesses declared that such an outcome could happen unavoidably in some rare and exceptional cases. Concerning the medical duty to inform, the judgment uses two lines of reasoning, both connected to the necessity of the operation executed by the defendants. The first line of reasoning is that the duty to warn is less demanding for “necessary” procedures than for “voluntary” ones (i.e. aesthetic surgery, sterilisation).76 Accordingly, information about rare or remote risks may be dispensed with as regards indispensable operations.77 Secondly, the necessity of the operation leads to the conclusion, according to “the natural order of things”, that duly informed parents would have consented that their child should undergo the risky but necessary operation. It is obvious that the reasoning of the Supreme Court shifts from the standard of care to the causation issue. In both lines of reasoning, however, the Court takes a very inauspicious standpoint for the claimants. This, however, is in line with some recent developments of the Supreme Court in this field.

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The first development is the attempt that the court is making to draw a clearer demarcation line between curative and voluntary medicine as regards the extent of the duty to disclose. If such developments are consolidated in the following years, the result will be that most informed consent cases will be dismissed as long as this type of case tends to concern rare or even extraordinary risks.78 It is worth emphasising that the Supreme Court relies here upon parallel legal developments that have drawn up the boundaries regarding the right of patients to be provided with substantial information about risks before giving their consent to certain procedures.79

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The second tendency concerns the causal problems inherent to making the defendant accountable for bodily injuries when the exclusive basis for liability is the negligent performance of his duty to warn.80 Even if sometimes case

51

76

77

78

79

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The departing point of the Supreme Court is that none of these types of medical services constrains the health provider in obtaining a certain result. In that sense, STS 22.11.2007 (JUR 2007, 361570) stressed that aesthetic surgery does not entail per se a duty to obtain the expected result. But see STS 26.4.2007 (RJ 2007, 3176), which held that under the circumstances of the case it was proved that the defendant promised to repair the claimant’s congenital penis curvature. See STS 17.4.2007 (RJ 2007, 3541) (rare risk associated with spine traction) and 28.11.2007 (JUR 2007, 361414) (equina foot risk, which was nonetheless mentioned in the consent form). See STS 12.1.2001 (RJ 2001, 3; commented upon by J.C. Seuba Torreblanca, CCJC 56 (2001) 719–744) and 21.10.2005 (RJ 2005, 8547). On the case law of the Supreme Court on disclosure of rare and extraordinary risks see J. Ribot Igualada, Consentimiento informado y responsabilidad civil médica en la reciente jurisprudencia del Tribunal Supremo español, Lex Medicinae. Revista Portuguesa de Direito da Saúde 3 (2005) 55–72. STS 28.11.2007 (JUR 2007, 361414) recalls that, according to Art. 10 Basic Act 41/2002, of 14 November, on patient autonomy and rights and duties on medical information and clinical data (BOE no. 274, 15.11.2002), the medical doctor shall provide information (only) about typical and probable risks. See among many others J. Ribot Igualada, La responsabilidad por falta de consentimiento informado, Revista de Derecho Privado (Rev Der Priv) 6 (2007) 29–62; M.L. Arcos Vieira, Responsabilidad Sanitaria por Incumplimiento del Deber de Información al Paciente (2007)

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law appears to be using inconsistent lines of reasoning81, an established line of thought is that defendants, as a defence, can oppose the proposition that the patient (or his/her legal representatives), hypothetically, would have consented to the procedure if he/she had been duly informed.82 In the case under comment, this was one ground among others for dismissing the claim and probably it was not the most important. Other decisions accept the defence regarding the claim for damages for personal injury but hold the defendants liable in tort for infringement of the patient’s right to self-determination if the lack of information had deprived him/her of the opportunity to reflect upon the risks that the procedure entailed.83 4. STS 16.10.2007; RJ 2007, 7102: Vicarious Liability a) Brief Summary of the Facts

52

The facts have already been summarily explained above.84 The claimant was the mother of a youngster who had committed suicide. Although he seemed completely healthy, he suffered paranoid schizophrenia and had attempted to kill himself on previous occasions. His mother argued that the owner of a shop located in Leon, where they were living, had negligently contributed to the death of her son. In fact, the teenager, who lived with his parents, had entered the shop, pretending to work in a jewellery workshop and had deceived the shop clerk by showing him – at his request – a business card. Thanks to this, he was able to buy a toxic substance normally used in jewellery work. His mother had allegedly warned the owner of the shop – which had the necessary authorisations to operate – not to sell anything to the teenager, but this fact was not proved before the Court. The teenager took a lethal dose of the liquid and died. b) Judgment of the Court

53

After having said that it was the claimant who should have proved that she had warned the owner of the shop about her son’s condition, the Supreme Court states that the defendant did not behave in a negligent way. Certainly, it is true that after the death of the teenager the defendant increased the safety measures observed at the shop. However, the Supreme Court takes into account that it is not possible to reproach the defendant for anything from the point of view of fault. The lethal substance can be traded on a free basis and without any regula-

81

82

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95–111 and M.P. García Rubio, Incumplimiento del deber de información, relación de causalidad y daño en la responsabilidad civil médica, in: E. Llamas Pombo (ed.), Estudios de derecho de obligaciones. Homenaje al profesor Mariano Alonso Pérez, vol. I (2006) 801–827. For instance see STS Cont Adm 4.3.2007 (RJ 2007, 3145), which relies upon the idea that medical non-disclosure of risks means that the physician assumes liability for the consequences if the undisclosed risk eventuates. See STS Cont Adm 4.4.2000 (RJ 2000, 3258) and 6.2.2007 (RJ 2007, 2771). See also 29.6.2007 (RJ 2007, 3871) (insufficient information about the likelihood of a failed sterilisation is irrelevant as long as an informed patient would have authorised it anyway). STS 10.5.2006 (RJ 2006, 2399; commented upon by J. Ribot Igualada, CCJC 74 (2007) 773– 800). See also STS Cont Adm 4.4.2000 (RJ 2000, 3258) and STS 15.11.2006 (RJ 2006, 8059). See no. 17.

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tory requirements; the teenager had a normal physical appearance and he knew the toxic character of the product he was buying; the clerk required justification for the future use of the substance and was satisfied by the card displayed; any other person – the decision concludes – would have been deceived under such circumstances and the damaging result was also unforeseeable. Moreover, it is not even possible to attribute the result to the defendant on the basis of the criteria of objective attribution (imputación objetiva). The Court also rejects establishing liability for the acts of others (pursuant to Art. 1903 CC), because the clerk did not behave in a negligent way. Furthermore, the defendant did not incur in negligence either in eligendo or in vigilando. The mere delivery of the toxic substance, which is causal from the factual or physical point of view, is too remote from the perspective of legal causation. Furthermore, the Court makes reference to what it considers criteria of objective attribution (according to the German doctrine of objektive Zurechnung already mentioned), namely prohibition of regress, general risk of life, rational unforeseeability, and adequate causation.

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The claimant had relied on previous case law stating that mere observance of regulatory standards does not exclude negligence of the defendant. However, the Court replies that the mere fact that damage has occurred does not mean that there is fault on the side of the defendant. Otherwise, liability would be strict, which does not fit in well with the rule of the Civil Code (Art. 1902). Obviously, it is always possible in practice to increase the safety measures, but in this particular case it would have obliged the defendant to carry out inquiries and investigations which are not normal from the point of view of previous regular trade. Moreover, liability cannot be established on the mere creation of risk. The principle of social solidarity and the principle that the person who receives benefits should also bear the negative consequences of his activity (cuius commoda, eius incommoda) are not appropriate for basing fault liability upon, nor are they sufficient for establishing a quasi-objective liability. Indeed, if someone creates a risk, he is obliged to increase his level of care. However, the concept of risk is not unitary, but gradable, so the required standard of care has to be proportionate to the importance of the particular risk, attending to the circumstances of the activity, persons, time and place. The shop clerk could not be required to have behaved in a more careful way.

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Finally, no liability can be derived from the alleged fact that the seller infringed the duty to inform the buyer about the risk of the substance. Damage was exclusively caused by the victim himself, and derived not from the correct use of a product but from improper use.

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c) Commentary

It is worth noting that the decision makes use of the category of objective attribution elaborated by German scholarship. The present decision is an example of how the Supreme Court is moving its previous position with regard to causation in a broad sense. Previously, case law tended to mix or com-

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bine – sometimes in a rather unclear way – several criteria regarding causation, without duly distinguishing between causation in fact or conditio sine qua non and legal causation.85 Sometimes, it seemed that the Supreme Court chose one criterion or the other depending on the mere circumstances of the case, which made the law in this area rather unpredictable and lacking in consistency. However, the latest decisions have started to follow a path well-trodden by the Criminal Chamber of the Supreme Court. Now it is also usual for the Civil Chamber to refer to the distinction between causation in fact and legal causation86 or between objective attribution and pure “phenomenical” causation.87 Only the second level of analysis, not the application of the csqn test, can be revised by the Supreme Court on appeal.88 In fact, objective attribution is used by the Supreme Court to apportion liability among a plurality of tortfeasors89 or between the victim who contributed to damage and the tortfeasor.90 Another decision, dealing with damage suffered by a German citizen, states that contributory negligence is an issue of objective attribution. If a zoo visitor jumps over the fences and – disregarding the existing safety devices – tries to give caged Bengali tigers water to drink, liability of the defendants for the loss of an arm is excluded. Moreover, the general risk of life – for instance, falling down in a public shower, in spite of the safety measures – will not make damage attributable to the defendant (STS 17.12.2007, referred to above). Similarly, a decision related to a bad fall in a cafeteria states that interference by the act of a third party or the victim is also an issue of objective attribution (STS 29.11.2006 [RJ 2007, 271]).

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However, the use of the scholarly category of objective imputation will probably have to be refined by future decisions. The Court has regretted that the criteria of objective attribution are not entirely precise.91 In fact, on some occasions the Court equates objective attribution to adequate causation,92 whereas other decisions – such as the one commented on here – make reference to other criteria as well. The Supreme Court has also made reference in this context to the so-called principle of reliance, according to which the duties of care affecting each person are established by taking into account that other people will observe theirs.93 But the distinction between the two theoretical categories, causation in fact and causation in law, may be blurred in practice. For instance, STS 30.11.2007 (RJ 2007, 9491), in a case of death caused by a stroke while 85

86 87 88 89

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91 92 93

See J. Ribot/A. Ruda, Case 1 in: B. Winiger/H. Koziol/B.A. Koch/R. Zimmermann (eds.), Essential Cases on Natural Causation (2007) 41. For instance, STS 14.6.2007 (RJ 2007, 5120) and 15.11.2007 (RJ 2007, 8110). STS 20.12.2006 (RJ 2007, 383). STS 7.12.2006 (RJ 2007, 377) and 29.6.2007 (RJ 2007, 3871). Such as a public authority which licensed the risky activity and the seller of defective fireworks, STS 19.10.2007 (JUR 2007, 324417). In a different case the organiser of the firework festival was freed from liability because the accident which caused damage to the victim was attributed to the bad organization by the defendant municipality (STS 20.12.2007 [JUR 2008, 10969]). As in a case of damage partly caused by the negligent handling of a notary (STS 28.11.2007 [RJ 2007, 8124]). See STS 17.4.2007 (RJ 2007, 2322). As in STS 19.6.2007 (RJ 2007, 5570). See STS 22.10.1997 (JUR 2007, 345887).

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the victim was travelling on a train, states that, according to objective attribution, “damage cannot be attributed to someone who did not participate in its production”, although this issue has probably more to do with the csqn test.94 The decision under comment seems interesting for a second reason also. It makes clear that for liability for the acts of others to be established (pursuant to Art. 1903 CC) both fault of the auxiliary person and fault of the principal are required. This is something which was not that clear in previous case law.95 Similarly, the STS 5.1.2007 (referred to above) refuses to construe the aforementioned provision as a vicarious liability rule, and reminds that fault of the principal in eligendo – i.e. choosing his/her auxiliaries – or in vigilando – i.e. supervising them – must have existed. As another decision puts it, such fault may also exist if a company subcontracts a different company to carry out some work in spite of the fact that the characteristics of the second company are not adequate with regard to the required safety conditions. However, the decision adds, in this case liability could be based on the negligent behaviour of the first company under Art. 1902 CC.96 This approach can also be found later in the STS 17.5.2007 (RJ 2007, 3542). A security guard working for a private company had used a gun belonging to the company to kill his wife and injure her sister. The company lacked any device such as a gun rack or stand for weapons to keep them secure. The appeal was based, and decided, not on the basis of liability for auxiliaries but on the general rule of liability for fault (Art. 1902 CC). As a result, the company was found liable. The decision contrasts with another issued by the Criminal Chamber of the Supreme Court, which considered that the University of Lleida could not be held liable for the acts of one of its security guards.97 The culprit had sexually abused and killed a student while he was working on the University premises, but the Court makes it clear that liability of the University could not be established because the behaviour of the offender was alien to the labour contract with the University.98 However, the Archbishopric of Madrid was held liable on a subsidiary basis for damage to a minor deriving from sexual abuse by the secretary of a vicariate.99 Apart from these cases, it may be interesting to observe that the Supreme Court tends to focus on the omission of safety measures as an issue of objective attribution.100 94

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97 98

99 100

See also a mixture of objective attribution and the csqn test in a medical malpractice case in STS 5.1.2007 (RJ 2007, 552), commented on by J.C. Galán Cortés, CCJC 74 (2007) 995–1014. See M. Martín-Casals, Líneas generales sobre la responsabilidad de las entidades de seguros de salud en las reclamaciones por efectos adversos, errores o negligencias médicas, RES 128 (2006) 803–837 and R. de Ángel Yágüez, ¿Responde el asegurador de asistencia sanitaria por culpa de los médicos incluidos en sus listas? RES 129–130 (2007) 7–50. As was already decided by STS 18.7.2005 (RJ 2005, 9251), commented on by M. MartínCasals/J. Solé Feliu, CCJC 72 (2006) 1361–1380. STS Criminal Chamber 18.10.2007 (RJ 2007, 352311). On tort liability of minors for the commission of a crime see M.C. Núñez Zorrilla, La responsabilidad civil del menor derivada de ilícito penal, Anuario de Derecho civil (ADC) (2006) 1767–1857 and M.D. Casas Planes, La reparación y la responsabilidad civil “ex delicto” en la Ley Orgánica (LO) 5/2000, de 12 de enero, de responsabilidad penal del menor de edad, modificada por la LO 8/2006, de 4 de diciembre, Rev Der Priv 7 (2007) 33–62. Auto TS Criminal Chamber 7.6.2007 (JUR 2007, 197557). On the liability of the Public Administration for omissions see A.M. Romero Coloma, Omisión y responsabilidad civil, Revista Crítica de Derecho Inmobiliario (RCDI) 83 (2007) 1731–1756.

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5. STS 31.5.2007; RJ 2007, 3431: Landscape as a Protected Interest101 a) Brief Summary of the Facts

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The company “Aceralia Corporación Siderúrgica, S. A.” had built a railway line between its steel plants in Gijón-Veriña and Avilés. The line was used to carry pig iron from one plant to the other, and included a viaduct located near a small town called Pervera. Two brothers, each of whom owned an apartment or similar property – the decision does not make this clear – located there, sued the company in tort, on the basis that the price of their properties had decreased because of the construction of the viaduct. Moreover, they allegedly suffered non-pecuniary loss because of the intensive train traffic and the noise deriving from it, as well as so-called aesthetic or visual pollution. b) Judgment of the Court

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The Judge of First Instance had awarded compensation for non-pecuniary loss to one of the claimants only, and dismissed the claim of the other because he did not actually live there. Both brothers appealed. The Court of Appeal awarded compensation to both claimants for the depreciation of their properties and confirmed the previous decision on the issue of non-pecuniary loss. Aceralia appealed before the Supreme Court, because it had been allegedly obliged to pay compensation for damage to the landscape and because the claimants had come to the nuisance.

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The Supreme Court admits that the response given by case law to damage caused by nuisance has been heterogeneous and that the increase in the number of statutory provisions referring to the issue has not always improved effective protection against environmental perturbations. The decision summarises the position of case law and legislation in the field of private law with regard to nuisance and reminds the appellant that coming to the nuisance (“pre-ocupación”) is no defence. Moreover, the mere fact that compensation is awarded to the claimants neither implies that their right of property is unlimited or absolute nor does it mean that a compulsory purchase on the basis of a public interest should take place. Well established case law states that the administrative licence does not exclude liability in tort. Moreover, the venal value of the house affected or the possibility of renting it to a third party is a patrimonial matter and its decrease caused by the defendant amounts to damage (damnum emergens). Continuing noise and the risk of particles suspended in the air coming from the railway line must also be taken into consideration. Furthermore, liability for nuisance is strict pursuant to Art. 1908 of the Spanish Civil Code. However, the landscape is not a subjective right that is protected by private law, but a collective good whose protection has to be taken charge of by the public authorities. The infringement of such a protection may entail fines or sanctions but not compensation in tort in favour of determined individuals. In fact, any new construction alters the landscape, which does not mean that 101

Commented on by E. Rubio Torrano, ¿Son indemnizables los daños por contaminación estética o visual? Aranzadi Civil 11 (2007) and A. Ruda, CCJC 76 (2008) 153–198.

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any alteration has to be deemed detrimental. Historical experience shows that engineering or architectural works which had once been criticised for being non-aesthetic are appreciated nowadays as symbols of some cities. Moreover, aesthetic perception is relative and it would be practically impossible to determine the individuals affected by damage to the landscape since a perception of it depends on an unlimited number of distance and perspective combinations. Because of all this, the Supreme Court decision quashes the decision by the lower Court and reduces the compensation award to both claimants (thus awarding them approx. € 12,000 each for the depreciation of their property and approx. € 9,000 for non-pecuniary loss to one of them). c) Commentary

The decision summarises the existing law on nuisance and distinguishes very clearly between different kinds of damage, in particular loss of profits (lucrum cessans) and emerging damage (damnum emergens). It also rejects one of the claims with regard to non-pecuniary loss derived from pollution in a convincing way, since the claimant at stake did not live in the apartment affected. However, the reasoning of the decision with regard to the protection of the landscape may be less persuasive. The Supreme Court actually confirms the criterion already held in a previous decision, where a similar claim seeking compensation for noise and visual pollution had been dismissed with regard to the second aspect.102 On that occasion the Court scarcely gave any reasons to back up the decision. However, the decision under comment argues on the basis that the landscape cannot be protected by private law and focuses on the relativism inherent to aesthetic judgments.

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Although the decision finally reached by the Court may be correct, the reasoning applied seems problematic to a certain extent. It has to be borne in mind that the decision does not describe the landscape that the claimants could allegedly enjoy before the construction of the viaduct. Moreover, it seems open to debate whether the claimants had to tolerate the operation of the viaduct in front of their land on the basis that it might become an architectural symbol some day. In fact, it seems doubtful that an ordinary viaduct will ever make any place distinguishable from others. Quite the contrary, due to their characteristics, such infrastructures usually produce the homogenization of the landscape, so it becomes more or less the same everywhere. Furthermore, the reasoning of the Court prevents an untouched natural landscape from becoming a true, distinguishing feature of the place where the apartments of the claimants were located. In addition to this, the Spanish legislature has refused to adopt a purely subjective and relativistic approach to the landscape. There is a legal framework protecting the landscape as such, including the European Landscape Convention of the Council of Europe103 and legislation on environmental impact assessment. It can be derived from these provisions that the construction of a viaduct or similar structure is detrimental to the landscape. From an

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102 103

See STS 13.7.2005 (RJ 2005, 9154). Ratified by Spain on 26 November 2007.

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economic point of view, valuation methods have been developed which allow an assessment of such damage104 in a similar way as is done with regard to environmental damage valuation.

65

Apart from that, the Court could have addressed the conflict between the parties in a different way. It could have been asked whether the liability rule for nuisance could be applied to the case. The Spanish Civil Code assumes that nuisance exists whenever there is interference consisting in toxic fumes or emissions (Art. 1908). It is generally interpreted that some sort of substances or energies must penetrate the neighbouring land and that such interference can be measured with scientific apparatus.105 Therefore, if one neighbour deprives the other of a nice view, this can hardly be considered nuisance under Spanish law. In such a case, the defendant is depriving the claimant of certain advantages which he enjoyed before the fact occurred. This is a merely negative nuisance which, according to legal scholarship, does not trigger liability.106 As a result, the Court could have rejected the claim based on visual pollution by merely stating that interference with the landscape perceived by the claimants was a negative interference for which the defendant could not be held liable.

C. LITERATURE 1. M.L. Arcos Vieira, Responsabilidad sanitaria por incumplimiento del deber de información del paciente (Thomson Aranzadi, 2007)

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This book is an updated survey of Spanish case law regarding the medical duty to disclose information to the patient about the risks and alternatives in medical procedures.107 It deals with common topics such as the content and scope of the duty to warn and the burden of proof that the information was effectively and timely delivered. Special attention is also paid to the causation conundrum, although the author tends to provide information by merely quoting and classifying the inconsistent body of judgments pointing towards divergent lines of thought. It is therefore not easy to ascertain what her opinion is. Finally, the book includes the most relevant decisions of the Spanish Supreme Court on the issue since 2000. 2. A. Azagra Malo, La tragedia del amianto y el Derecho español (Atelier, 2007)

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Asbestos-related litigation has not had in Spain – at least for the time being – a legal, social and political impact that is comparable to that in other jurisdictions. Neither legal scholarship (including courts and academic writers) nor public opinion at large have taken the risk of asbestos and its consequences for 104 105 106

107

See C. Fernández Rodríguez, La protección del paisaje (2007) 276 ff. See A. Cabanillas Sánchez, La reparación de los daños al medio ambiente (1996) 57. See M.R. Díaz Romero, La protección jurídico-civil de la propiedad frente a las inmisiones (2003) 33, with further references therein. See also S. López-Chapa, Autonomía del paciente y libertad terapéutica (2007).

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health to be an issue of great legal concern and discussion. Indeed, Azagra’s book is the first one dealing with the liability issues derived thereof and has been published at a time when asbestos litigation is already escalating. If some years ago the problem seemed to have been confined to the coverage of professional diseases and tackled accordingly, it is now being increasingly brought to courts, not only on behalf of former employees of the asbestos industry or their relatives, but also by victims of “environmental” exposure.108 After having written an influential paper on the same issue109, the book is devoted to detailing the legal framework where asbestos-related diseases will have to be tackled. It firstly provides information on factual and scientific data and then examines many different issues, relying strongly upon American sources to structure and to assess the Spanish approach to the topic. As for liability issues, after an overview of essential aspects of any action seeking compensation for asbestos-related damage – the nature of the claim, the judicial branch that is competent to deal with it, availability of class actions, etc. – special attention is paid to compensable damage, causation and apportionment of damage among severally liable defendants. Finally, the author provides comparative information on no-fault asbestos compensation funds, which he prefers to tort law on both deterrence and compensation grounds.110 3. C. Gómez Ligüerre, Solidaridad y Derecho de daños. Los límites de la responsabilidad colectiva (Civitas, 2007) The Spanish Civil Code does not deal with damage caused by a plurality of tortfeasors in a specific way. Therefore, the Spanish courts have opted for making all the tortfeasors liable on a joint and several basis.111 According to the author, this criterion disregards the effects that joint and several liability has on the behaviour of potential tortfeasors and, as a consequence, on accident prevention. The author therefore discusses some alternatives to joint and several liability.112 108

109

110

111

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Some groups of victims seem to be currently organising themselves to seek compensation for the permanent injuries allegedly suffered as a result of their being exposed to asbestos dust stemming from a factory located in the area where they lived. Recent news about a civil action brought against URALITA on behalf of 48 former neighbours appeared on press at the end of 2007 (El País 25.11.2007 [www.elpais.com]). See A. Azagra Malo/M. Gili Saldaña, Guía InDret de jurisprudencia sobre responsabilidad civil por daños del amianto, InDret 1 2005 (available at www.indret.com). This paper has been quoted by courts to justify a rigorous approach to fault and causation issues. See STSJ Catalunya 10.11.2005 (JUR 2006, 77904). Only very recently the prospect of some sort of alternative compensation system seems to be taking shape. By 2006, the Spanish Parliament required the Government to “study” the possibility of setting up a “mechanism” that could “satisfy the justified claims of the victims” of asbestosis, including workers’ relatives and third parties exposed to asbestos dust coming from neighbouring factories (BOCG Congreso, Serie D, no. 360, 29.3.2006, 25–26). At any rate, the motion falls short of what was initially asked for by the MP: “the establishment of a public system of compensation for the victims” (BOCG Congreso, Serie D, n. 337, 20.2.2006, 10–11). See also M.Á. Torres Mateos, Responsabilidad individual y solidaria (2007). On liability of a plurality of hunters, see C. Ortuño Navalón/R. Manzana Laguarda, Régimen de responsabilidades dimanantes de la caza (2007). See also id., Sobre la posibilidad de un segundo pleito entre condenados solidarios para determinar la distribución de las cuotas de responsabilidad, InDret 2 2007 (available at www.indret.com).

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4. J. Gutiérrez Gilsanz, El riesgo en el seguro de responsabilidad civil de los auditores de cuentas (La Ley 2007)

69

The liability risk assumed by auditors has been increasing over recent years as a result of the growth in the number of audited companies which are quoted on the Stock Exchange.113 As a result, insurance rates have risen and many insurers now refuse to cover these risks. However, the Spanish Audit Act requires auditors to provide security to guarantee their liability, including the possibility of contracting liability insurance. This book focuses on this insurance contract, including both liability with regard to the audited company and third parties.114 5. J. Marco Molina, Responsabilidad civil del fabricante por productos defectuosos (Atelier, 2007)

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The author points out that product liability is a phenomenon related to the evolution of the welfare state. It is therefore under criticism nowadays since the welfare state is also under discussion. Starting from this idea, the book – which was published before the legal reform explained at the beginning of this Report took place – aims at exploring whether the theoretical basis of product liability created by US case law and scholarship has been received by Spanish case law. According to the author, Spanish courts have been reluctant to make the producer strictly liable for damage caused by defective products. Therefore, she concludes that the Product Liability Act has become a satellite of the general rule of liability based on fault in the Spanish Civil Code (Art. 1902). 6. L. Medina Alcoz, La teoría de la pérdida de oportunidad (Civitas, 2007)

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This is the first book dealing with the theory of loss of a chance (perte d’une chance) under Spanish law in a monographic way. After showing in which situations it is possible to speak of a chance in a legal sense, the author describes the theory of the loss of a chance, both as a legal technique to deal with cases of uncertain causation, and as a proportional liability rule. The origin and development of the theory are also presented, as well as its reception by Spanish case law and scholarship. The book, in fact, covers a broad range of topics, such as causation in general, proof of the causal link, the all-or-nothing approach and its critique, what the author calls the ontological approach to damage, and probabilistic causation. The last part deals with the theory of loss of a chance in the context of administrative acts or decisions. 113

114

See also J.L. Díez Echegaray, La responsabilidad civil de los auditores de cuentas (2007); M. Otero Crespo, Algunas notas en torno a la responsabilidad civil de los auditores frente a terceros ajenos al contrato de auditoría, Dereito 16 (2007) 333–351. On reinsurance see now P. Portellano Díez, El reaseguro: nuevos pactos (2007). On insurance contract in general, see F. Reglero Campos (ed.), Ley de contrato de seguro. Jurisprudencia comentada (2007). On the obligation to pay the insurance premium see J. C. Vázquez Cueto, La obligación de pago de la prima en la Ley de contrato de seguro (2007). And on insurance mediation, J. Tirado Suárez/M.Á. Sarti Martínez, Ley de mediación en seguros y reaseguros privados (2007). See also C. Hartera, El deber de declaración de riesgo en el contrato de seguro (2007).

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7. J.A. Moreno Martínez (ed.), La responsabilidad civil y su problemática actual (Dykinson, 2007) This is a collection of papers presented at a series of lectures on tort law topics organised by the University of Alicante over the last few years. The book covers a broad range of issues, such as liability for medical malpractice,115 damage caused by noise pollution116 or activities carried out on the Internet,117 strict liability, product liability, liability for damage caused by violence at school,118 liability of the Public Administration,119 liability of bankruptcy administrators,120 liability for an activity which amounts to a crime or misdemeanour,121 insurance of liability derived from road accidents,122 liability because of discrimination against handicapped persons,123 and liability for the act of others according to the PETL, among many others.

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8. M.J. Santos Morón, La responsabilidad de las asociaciones y sus órganos directivos (Iustel, 2007) The book deals with a topic which has received little attention from Spanish legal scholarship, namely, liability of associations. After having examined the situation from a comparative perspective, it focuses on damage caused to third parties and damage caused to the members of the Association, as well as liability of the organs of the association with regard to the association itself, its members and third parties.124

115 116

117

118

119

120

121

122

123

124

See also Martín-Casals, RES 128 (2006) 803–837. For a comparison of the legal regimes under Spanish and German law, see M.Á. Martín Vida, Protección jurídico-civil frente al ruido en España y Alemania (2007). See also M. Peguera Poch, La exclusión de responsabilidad de los intermediarios en Internet (2007). See also C. Lasarte Álvarez/P. López Peláez/F. Moretón, La responsabilidad civil en el ámbito de los centros docentes (2007) and M.E. González Orviz, Responsabilidad por culpa “in eligendo” o “in vigilando” (2007). See also, in connection with medical malpractice, G. Pérez del Blanco, Responsabilidad patrimonial de la Administración sanitaria, in: V. Cortés Domínguez (ed.), Carga de la prueba y responsabilidad civil (2007) and P. Rodríguez López, Responsabilidad patrimonial de la Administración en materia sanitaria (2007). See also J. Romero, Aproximación al estudio de la responsabilidad de los administradores concursales (2007). See also S. Albert Pérez, Sistema de responsabilidad civil derivada de delito cometido por menores de edad (2007). See also J.M. Rives Seva, El juicio civil de tráfico con relación al Consorcio de Compensación de Seguros (2007). On the liability of carriers in the international transport of goods see M.V. Petit Lavall, La responsabilidad por daños en el transporte aéreo internacional de mercancías (2007). On compensation for non-pecuniary loss see also M. Barrientos Zamorano, El resarcimiento por daño moral en España y Europa (2007) and J.M. Ferrer Vicente, La cuestión de los daños morales (2007). On the liability of a law firm, G. Ortega Reinoso, La responsabilidad del socio de un despacho de abogados, ADC 60 (2007) 119–156.

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XXV. Sweden Håkan Andersson

A. INTRODUCTION 1

The year 2007 gave Swedish lawyers a good deal of new worthy cases worthy of mention. In this Yearbook we, nevertheless, have to choose only those cases which can be of most value seen from a comparative perspective. An interesting feature in legal development over the past few years is that the European Convention on Human Rights (ECHR) has become part of the national discourse. In this Yearbook article, the focal point will be on cases that in different ways consider the impact of the Convention. The direct application is one interesting aspect, but perhaps even more fascinating is the means by which the Convention gradually may change traditional tort law reasoning. Therefore, the title – or subheading – of this article should read “Human Rights in Tort Law – Development of National Discourse in the Light of International Conventions and Patterns of Reasoning”.

B. LEGISLATION 2

There was no new legislation of particular comparative interest in 2007.

C. CASES STATE LIABILITY – “POSITIVE” USE OF NATIONAL APPLICATION OF THE ECHR 1. Supreme Court, Högsta domstolen, 4 May 2007, [2007] NJA, 295: Direct Application of art. 5 ECHR – Principled Argumentation a) Brief Summary of the Facts

3

A man was committed to four years in prison for serious tax crimes. He claimed that the 16 month detention, before the judgment, was a violation of art. 5

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ECHR. According to the Attorney General, the custody was due to the interest of avoiding the man’s intervention in the investigation of well-organised economic crimes. b) Judgment of the Court

The Supreme Court did not deal with the whole case, but rather the preliminary and principal issue of whether a violation of art. 5 – if there was such a violation (which the lower court then would have to judge) – could give rise to compensation for non-pecuniary damage, even without direct confirmation in the Swedish Tort Liability Act (according to this Act, non-pecuniary damage presupposes a criminal offence, but the detention could not be regarded as a crime). The question was answered in the affirmative. It was considered that Sweden would violate the Convention if no right to non-pecuniary damages was ensured in cases where art. 5 had been violated.

4

c) Commentary

The case does not have immense news value, but rather declares a denial of a restrictive interpretation (made by the Attorney General) of the ground breaking case [2005] NJA, 462 (which is examined in the 2005 Yearbook, no. 3–12 in the Swedish report). The 2005 case stated that the ECHR could be directly applied in national courts when art. 6 was violated. The issue in the 2007 case therefore, was whether this application only was restricted to art. 6 (right to fair trial) or if the previous case law had a more principled significance. And the answer is that the direct tort law application of the ECHR can reach at least even art. 5 (right to personal liberty and security).

5

However, the judgment does not open up for non-pecuniary compensation regarding all the rights in art. 2–12, since the Court explicitly mentioned that art. 5.5 (regarding detention) prescribes tort compensation. On the other hand, it would be startling if that which the Supreme Court refers to as a “principle”, would not be given a principled application. At least, this judgment gives good arguments for future non-pecuniary compensation cases regarding violation of most of the rights in the Convention.

6

2. Supreme Court, Högsta domstolen, 21 September 2007, [2007] NJA, 584: Direct Application of art. 8 ECHR – Individual or Collective Argumentation a) Brief Summary of the Facts

Suspicions regarding sexual abuse led the local social welfare office to initiate an investigation concerning a family. After a while, the authority decided to apprehend the three daughters; this was executed in cooperation with the police authority. Personnel from both authorities fetched the children at home and questioned them at the office. Afterwards – as a result of a decision by the police – the children were brought to a children’s medical clinic, where they were examined. The next day the apprehension was cancelled, and some weeks later the whole investigation was brought to an end, since no suspi-

7

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Håkan Andersson

cions against the father remained. All family members – father, mother and the three daughters – claimed compensation due to violation of art. 8 (protection of private life). No complaints were made regarding the decision by the social welfare authority to initiate the investigation (i.e. no claim was made regarding the right of family life); the claims were instead made by reference to the fact that the police authority had made the decision about the medical examination (only the social welfare authority had the legal power to make such a decision). Since compensation of non-pecuniary damage, according to the Swedish Tort Liability Act, in such cases (i.e. when no personal injury is caused) depends on a criminal offence (and no such were present), the claims had to be based on art. 8 ECHR. b) Judgment of the Court

8

Since the police authority had no legal ground for such a decision, the Supreme Court found that the medical examination was a violation of art. 8. According to the Court, the interference was to be seen as covering both the daughters’ and the parents’ right to protection of their respective private lives. The above (supra no. 3–6) mentioned issue regarding direct application of the ECHR led the Court to state that there were no grounds to restrict the principle’s application only to art. 5 and 6 (which the previous cases had concerned). The Supreme Court compared this case with such cases from the European Court of Human Rights where “frustration”, “anxiety”, “stress” “powerlessness” and so forth had led to compensation; the conclusion was that this case involved emotions of the same kind, and therefore the family had a right to compensation. Regarding the sum, the Court made a comparison with the Swedish legal usage concerning compensation for aggravated damage due to a criminal offence. The sum was therefore estimated to an equivalent to the amount of € 1,600. All the family members obtained the same sum. c) Commentary

9

The case shows that the direct application of the ECHR is not limited to art. 5 or 6 (see supra no. 5–6). What is also notable is that the Convention seems to make some lines of argumentation easier to perform successfully – at least, some traditional border issues in tort law seem to be relatively easy to overcome when the ECHR can be used as a trump-card. Some examples will be given below.

10

A quite formal approach to the problem of causation can be interpreted. Since the social welfare office did not do anything wrong – it is their duty to start an investigation when suspicions arise about sexual abuse of children, and it is lawful in such circumstances to initiate a medical examination – the only wrong committed by the State was the formal aspect of decision-making. It was the wrong authority – the police instead of the social authority – that decided that the daughters should undergo a medical examination. However, was the family’s harm caused by the fact that the police (instead of the social welfare authority) decided – or was it the medical examination in itself that caused the harm? Probably the last alternative, but in that case, it could be asked if

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the formal side of the decision-making was over-emphasised. Since the social welfare authority could have decided the same action, and since personnel from both the social welfare and the police cooperated in the task on the actual day, it almost seems as a coincidence that the family could invoke this formal wrong as a cause of harm. The “actual” harm would otherwise normally have been the distress, due to the unlawful examination or the suspicions per se. But since the first alternative nevertheless could have been performed, and since the last alternative does not give rise to tort claims, one can conclude that the existence of the ECHR paved the way for lowered demands on the causation prerequisite. A reduced awareness of relational issues can also be observed, which pave the way for an almost collective consideration of the different family members and their respective damage. The Court did not differentiate between the parents’ and the children’s claims, but rather spoke of the damage for the “family”. However, it should be remembered that the case concerns the right to “private life” – not “family life” – in art. 8. From a traditional tort law perspective, it could have been expected that the “direct” victims of the offence (the daughters) would have been differently – and more favourably – viewed than the indirectly affected parties (the parents). From an argumentative point of view, the outcome of the case could be regarded as a kind of “collectivisation” of the daughters’ rights to a private life into a tort claim for all the family members. Maybe the reason for this overlap is that art. 8 contains both private and family rights, so when the private life violation of a family member is evident, an argumentative overspill concerning family rights for all the members is easily accomplished. The relative proximity to typical family rights – the caretaking of children – could therefore be used as a rhetorical device for collectivisation of the whole situation (although the case only deals with the wrongdoing of the decision regarding the medical examination, not the temporary caretaking in itself).

11

STATE LIABILITY – “NEGATIVE” USE OF NATIONAL APPLICATION OF THE ECHR 3. Supreme Court, Högsta domstolen, 22 November 2007, [2007] NJA, 862: No Liability for “Not Evidently Faulty” Application of the Law in Courts a) Brief Summary of the Facts

The case involves rather complicated administrative and procedural law issues, which however will not be dealt with here. The essence of the tort law problem is that a company temporarily lost its mining practice licence, due to an outsider’s application to abolish the license. This took place without the company being informed about the ongoing procedure – the court did not comply with the so-called duty of communication. In an early phase of the process, the court did not communicate due to the fact that the applicant’s request was

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incomplete; later communication was omitted because the court thought that the application would probably be overruled; in the final period, the absence of communication was due to the court’s standpoint that it was not meaningful to give the company a right to comment upon just procedural issues when the case thereby would be delayed. The company sued the State for compensation; the damages consisted in wasted costs for the mining business. b) Judgment of the Court

13

The Supreme Court found that the other court should have communicated the application with the company before it abolished the license. However, the company had not claimed that it could have put forward arguments which would have led to another outcome of the case; therefore, the claim was considered as only based on the missing information regarding the fact that there was a procedure under way. The Supreme Court referred to the legal usage from the European Court regarding art. 6 ECHR; communication of the application should – according to this interpretation by the Court – be regarded as a right to refute a claim, not in the first place a right to be informed about the proceedings. A specific duty to respect the company’s interest in information, could alas not have been relevant by the time when the issue of communication was considered in the license process.

14

Moreover, the lack of communication was not regarded as fulfilling the demands in the Tort Liability Act concerning negligence. Negligence in law proceedings means something more than that the court or authority has made a “wrong” judgment in a legal issue. Although the Swedish Tort Liability Act should be applied with consideration of art. 6 ECHR, the Supreme Court mentioned (as above) that the Convention does not safeguard the interest of the company in this particular case. The fact that the Supreme Court interpreted the procedural rule (concerning communication) differently, thus does not implicate that the decision by the other court had been evidently negligent. The positive requirement thereby is that a decision about an issue of law can give rise to tort claims only if it is evidently faulty or negligent.

15

A minority of the Supreme Court held another opinion, and voted in favour of the compensation claim. By emphasising both Swedish administrative law principles and art. 6 ECHR, the minority concluded that a communication duty also – together with the right to obtain information as such – would have protected the company’s possibilities to acclimatise to the fact that a procedure was under way – i.e. by not spending money on the mining activity. Even the minority reached the conclusion that the failure to communicate the court’s fault was not evidently negligent. However, since the claim was based on a fault that includes a violation of the ECHR, this extra requirement (concerning “evidently”) was not working. Thus, a non-communication that violates art. 6 ECHR was regarded as fulfilling the requirements of the negligence rule in the Tort Liability Act.

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c) Commentary

On the surface of the legal wordings, the case does not give any new directions regarding liability for faults in the courts; rather it just repeats the phrase “liability only if evident negligence”. The interesting thing is that the minority judgment indicates that we are reaching a borderline, where this phrase cannot always be met with a negative answer (that is non-compensation). The problem so far is though that Swedish courts never seem to admit that sufficiently negligent handling of cases can occur.

16

The best chance for compensation is when the court has made a mistake regarding the formal proceedings. On the other hand, it is more difficult to win a case if the claim consists of an alleged wrongful interpretation of a rule. That could – at least among thinking lawyers – be accepted as an almost natural consequence of the legal discourse, where different solutions can always be discussed and justified. The fact that one court decides in favour of solution A while the next court makes the judgment B, does not mean that the judgment of the “lower” court was negligent. However, when a court does not stick to the procedural rules, this more often can be said to be a negligent mistake – since it is not the result of a deliberate choice between legitimatised interpretations. A problematic aspect of the majority judgment is that what could be seen as a formal procedural mistake is nevertheless seen as an application of a legal evaluation – and therefore the more restrictive principle of “evident negligence” is used.

17

In the future the impact of the ECHR could perhaps open up the possibilities; at least it is an interesting message from the minority that we one day might get a positive outcome of a case of this kind. If someone is interested in this author’s opinion, it can be revealed that the minority judgment is preferred. The interest of legal protection and security could in the on-going discourse become values that – together with the rights in the ECHR – pave the way for a more relaxed attitude to admitting wrongs in the legal handling in courts.

18

4. Supreme Court, Högsta domstolen, 28 November 2007, [2007] NJA, 891: No Liability for Omission of Safe-Guarding against SelfDestructive Behaviour a) Brief Summary of the Facts

A man who was being held in custody committed suicide by hanging himself with his belt. Ten years earlier, he had tried to commit suicide after a divorce, but the doctor who was present when the man was taken into custody had not found any present suicidal tendencies. The two young sons claimed compensation according to the ordinary negligence rule for public authorities. The State admitted the wrongfulness by not ensuring that the belt was removed from the inmate’s trousers before putting him into the cell, but denied liability since the actual harm was not adequate.

19

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b) Judgment of the Court

20

Since the State had admitted that the omission of control regarding the belt was negligent, the Supreme Court did not have to evaluate the culpa requirements in detail. Nevertheless, the judgment appears to be worded like a statement concerning negligence (the details about the procedural issues and the scope of interpretation cannot, however, fully be covered in the context of this brief report). The Court discussed the rules regarding treatment of detainees, the main principle of which is that the inmate cannot be submitted to greater restraints than the purpose of the imprisonment and the security reasons demand. However, the personnel shall examine an inmate to search for objects which could be used to harm him or someone else.

21

As a complement to the ordinary negligence rule regarding the State, the Supreme Court stated that the demands on the personnel should also be seen in the light of the demand from the ECHR. In the legal usage from the European Court concerning art. 2 ECHR (right to life), there can be observed some positive duties in relation also to individuals with self-destructive tendencies. These cases deal with situations where the authority should have been aware of an acute risk (i.e. concerning suicide). The Supreme Court found no such acute suicide risks that the personnel who were present when the man was taken into custody should have been aware of. Consequently, there was no reason for allowing the omission by the State to lead to compensation. c) Commentary

22

When emphasising the Supreme Court’s explicit explanatory statement, it almost seems as if the ECHR has been used as a complementary negative argument which takes away a right to compensation that would otherwise have been possible. Since negligence, at least partly, was admitted by the State, the reference to legal usage from the European Court – i.e. the requirements of known acute risk of committing suicide – on the surface of the wording could be interpreted as an additional disclaiming argument against the individual plaintiffs. However, such an interpretation must be overruled from a systematic point of view: The European Convention on Human Rights can never – absolutely never – be used as a reduction of the rights a person has according to national law. On the contrary, the ECHR indicates the minimum standard that always can be enforced in national law. Therefore the wording should rather be interpreted as a basic tendency that the Convention has an argumentative power, which sometimes takes the form of invoking it, although the same path of argumentation could be taken in the traditional national legal language game. (However, this interpretation is like an apology for the Supreme Court’s explicit wording – i.e. alternatively, the judgment could be criticised for what could, in a narrow sense, be seen as a negative use of the ECHR.)

23

An additional understanding of the judgment can be brought forward when discussing the tort law relevance of the infringed rule of action for the personnel. The purpose of rules concerning the examination of an inmate’s clothes is to prevent the inmate from bringing objects that could harm him or someone

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else. However it is questionable if this purpose can be invoked in a compensation claim by a person (or his survivors) who intentionally has harmed himself. The risks of the injured cannot always be shifted to the tortfeasor. In cases of suicide (or suicide attempts) it could be argued that the injured has to bear the risk himself without any possibilities of transferring it to an alleged tortfeasor – even though the latter has omitted to act in accordance with safety rules. At least, this line of argumentation functions if no acute risk of suicide is at hand – if so, however, the judgment can be read as a rule of action which would make an omission relevantly negligent. If this argumentation is to be called “adequacy” or if it is called “purpose of protection” etc, could be discussed on a theoretical level. In short, however, the judgment gives evidence that such an underlying explanation can be defended.

STATE LIABILITY – THE BORDERLINE OF NATIONAL APPLICATION OF THE ECHR 5. Supreme Court, Högsta domstolen, 29 October 2007, [2007] NJA, 747: No Horizontal Application of the ECHR a) Brief Summary of the Facts

A policyholder claimed compensation from her insurance company due to personal damage. The insurer was suspicious about the extent of the alleged damage, and therefore hired an investigator who filmed the woman when she was walking and even working outside her riding stable. The result of this taped evidence was that the insurer refused to pay her compensation. She then sued the insurer, claiming that the company had violated her right to private life when videotaping her. She invoked a horizontal interpretation of art. 8 ECHR as applicable even between private subjects (since Swedish national criminal law does not view this kind of filming as a crime).

24

b) Judgment of the Court

The Supreme Court emphasised that the State has an obligation – according to art. 13 ECHR – to ensure that everyone can enjoy the rights in art. 8. If the State does not fulfil this obligation, it can be liable for tort compensation. Nevertheless, the Convention does not entail any rules that explicitly prescribe duties to a private subject; even further, the Court underlined, the Convention does not dictate any tort law compensation between individuals. In such situations, particular weight must be placed on the possibility for the individuals to foresee the legal consequences of their action. Since the legal usage of the European Court has developed in a dynamic fashion, in the light of changing circumstances in society, it can be difficult for individuals to foresee what can be considered as a violation of art. 8. Even more surprising, the Court stated, would it be if tort liability were not even revealed by the text of the Convention or by the usage of the European Court. Therefore, no tort liability between private subjects could be interpreted from the Convention – and since no tort

25

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claims under Swedish law were at hand, the Supreme Court ruled against the claimant. c) Commentary

26

This is a very important judgment. The European Convention has become a natural part of national tort law, but the case shows that the line of development has its borders too. Practising lawyers often use the Convention as a casual – and almost careless – argument to give extra weight to a claim. It is thereby often possible to shape a narrative, using one of the art. 2–12 ECHR as a vehicle for claims when a person is not pleased with the authorities’ handling of a case. In lower courts the lawyers at least can try to promote their clients’ rights by using some themes regarding “personal liberty”, “fair trial”, “private life”, “protection of property” and so on. However, since most of the claims against the State can be fashioned in such a language, the particular article in the ECHR does not mean that already these formulations give rise to a successful tort claim. The words and narratives are not in themselves trump cards that put an end to legal discourse. On the contrary, the words are just the beginning of the argumentation, which then must be legally differentiated and developed. The just mentioned issue is an important message, i.e. that legal argumentation is not to be avoided through the direct application of the ECHR; the Convention should rather be “translated” into the national discourse. The Convention cannot be used as a freewheeling mouthpiece for this and that reform or change of society.

27

In view of the fact that the ECHR has become more familiar to Swedish lawyers, the new case gives a special message (apart from the above-mentioned general comments). Even if the Convention gives rise to new claims, it does not exceed its obligations beyond the Convention’s explicit addressee, i.e. “The High Contracting Parties”, that is the States. Even though some minority voices in legal science have argued for a horizontal application of the rights between private subjects, the Supreme Court gives clear evidence against such an interpretation in Swedish tort law. It is one thing that the State can be liable for a duty that arises due to wrongs committed between individuals – for example if the State does not protect the private life properly – but the judgment shows that it is another thing to create new obligations for individuals, and that the ECHR will not be interpreted in that way. According to this author’s opinion, this judgment is well considered; the opposite judgment would have meant that individuals had to bear a conversed vicarious liability for the State – i.e. a liability because the State did not intervene and forbid the individual’s actual action that was permitted at the time it was exercised.

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BORDERLINES OF STRICT LIABILITY 6. Supreme Court, Högsta domstolen, 9 October 2007, [2007] NJA, 663: No Strict Liability for Spread of Fire According to the Environmental Code a) Brief Summary of the Facts

A glassblower’s workshop was equipped with an oven operated by liquefied petroleum gas. The gas container was placed outside the building, and a tube led the gas into the building. A gas leakage occurred one day when no work was being performed at the workshop. When the gas had filled the building, it was accidentally set on fire. The workshop was totally damaged, and the fire even reached some buildings on the neighbours’ estate. A neighbour claimed compensation referring to the strict liability regulated in the Swedish Environmental Code. Since none of the specific contamination clauses could be applied, the general clause concerning “other similar interference” was invoked by the plaintiff.

28

b) Judgment of the Court

The more specific clauses involve land, air and water pollution, loud noise and vibration. The Supreme Court ascertained that fire, which has spread from one estate to another, normally should not lead to strict liability since it is not an “interference similar” to the other damage causes mentioned in the Code. An exception would be if an industry permanently causes the formation of sparks. However, the course of events by a fire is, according to the Court, in a crucial sense divergent from the kind of interferences that are typically regulated by the rule of strict liability in the Environmental Code. Therefore, the plaintiff’s claim was denied.

29

c) Commentary

The judgment indicates the important message that a specific act regulating strict liability does not mean a straightforward “causation liability”. It is not enough that an object or activity – regulated by an act including strict liability – has been a cause of the damage. Something more – and legally relevant – must be provided. The relevant causation could perhaps be discussed under concepts such as adequacy, purpose of protection, etc; a customary expression regarding strict liability is to ask if the “typical danger” that motivates the liability has materialised.

30

Earlier legal usage as regards strict liability in the Environmental Code sometimes led to a quite widespread application. Therefore, the new case is to be welcomed as a reminder that even strict liability has its borders. It is not enough that an activity – which in principle can give rise to strict liability – causes negative consequences to the surrounding neighbourhood. Since every – or most – industries or workshops need fuel supply (either gas or electricity, etc.), it cannot be seen as a typical risk that something harmful results from this

31

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Håkan Andersson

source of energy. A fire due to such risks cannot in itself be in the scope of the purpose of the tort liability act in question. Alternatively, put in other words: Since every house and every activity are supplied with some kind of energy, damage resulting from this cannot be the specific – or typical – risk within the specific liability according to the Environmental Code (or any other strict liability act that does not specifically point out the gas or electricity risks, etc.). 7. Supreme Court, Högsta domstolen, 27 December 2007, [2007] NJA, 997: Strict Liability for Preparatory Actions According to the Traffic Accident Act a) Brief Summary of the Facts

32

A man started his car, but before driving off, he cleared his windows from ice and snow. While doing this he fell on an icy patch. He claimed compensation for the personal injuries from the compulsory traffic insurance. According to the Swedish Traffic Accident Act, personal injuries shall be compensated from the passenger’s own traffic insurance as a kind of strict liability. The requirement is that the damage shall have come into existence as a result of the vehicle being used in traffic. b) Judgment of the Court

33

Although the car was not literally used in traffic when the accident occurred, the Supreme Court found that compensation to the injured should be covered by the strict liability. Since the man was injured while performing a preparatory provision in order to make the car ready to be used in a traffic-safe way immediately afterwards, the personal damage was considered as having a connection to the normal use of a car. c) Commentary

34

The judgment is a positive response to the same question as the above-mentioned case (supra no. 28–31) gave a negative answer – i.e. the issue of finding a border for a strict liability so that it does not extend to a liability for all consequences that in some way are caused by the regulated activity. Although the result of the case is positive, the judgment nevertheless can be read as a restriction in comparison with earlier legal usage concerning the Traffic Accident Act. In the previous case [1988] NJA, 221 a young drunken man injured his eye while hitting the car door when his friends pushed him in to avoid a confrontation with the police. He received full compensation since the Court found that the injury had a normal connection to the use of a car. The 1988 case thus had no qualifications regarding the connection (and it has therefore been criticised in the legal doctrine), but the 2007 case gives two such important requirements.

35

We can pay attention to both a “time qualifier” and a “function qualifier”. The Supreme Court noted that the accident happened immediately before the car should be used; this time qualifier can put a borderline to such damage that occurs at a more obvious time distance to the actual car ride. Moreover, the Court

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emphasised that the function of the action was to remove ice and snow – or more precisely, to ensure that the car could be driven in a traffic-secure manner. This safety function can delimit the liability, since many actions before or after a car ride have no connections to such a function. Thereby, both these cases concerning strict liability give evidence of the requirements for making more obvious the argumentation concerning finding a purposive borderline of the liability in question. When comparing the two cases, we see that both the positive and negative responses sharpen the understanding of borderline interpretation.

36

NON-PECUNIARY DAMAGES – LIMITS OF INDIVIDUAL DIFFERENTIATION 8. Supreme Court, Högsta domstolen, 4 December 2007, [2007] NJA, 953: No Differentiation Regarding the Standard Amount When Two Relatives Have Been Killed a) Brief Summary of the Facts

A man and his son died in a car accident. The traffic insurance for the other car – which caused the collision – was held liable (according to the Traffic Accident Act) for the damages of the surviving wife (who was also the mother of their mutual son). The woman (wife/mother) claimed a double sum of nonpecuniary damages for pain and suffering, since she had lost two relatives.

37

b) Judgment of the Court

The Supreme Court did not find that these circumstances – two dead relatives – were suitable for an irregular standard amount, compared to the normal standard table concerning pain and suffering. In such a case, the plaintiff would have to demonstrate an investigation showing that more severe psychiatric harm was actually caused than in the normal cases according to the standard table; and since no such exploration was put forward, no extra amount was granted to the woman. The judgment was based on a practical motive, that the standard table system shall lead to a simplification of the legal usage and therefore the standard amounts should be based upon more general assumptions concerning the psychiatric consequences from various circumstances. The Court emphasised that the claim regarding “pain and suffering” was based on the one and same healing process, and even if this process can be longer if two relatives are killed, this fact does not warrant a specific new standard amount; instead the Court noted that the plaintiff in such cases will have to put forward specific grounds for departing from the standard amount.

38

c) Commentary

This case provides some complementary details regarding a case situation from last year’s legal usage. In the Yearbook 2006, the judgment [2006] NJA, 738

39

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Håkan Andersson

was presented (no. 20–31 in the Swedish report). In that case a differentiation regarding the standard amount was made, so that a double sum for the nonpecuniary damages was justified when the psychiatric injuries were caused by “grossly negligent actions which come very close to an intentional action”. It was assumed that those cases were generally more severe than if the defendant had only been ordinarily negligent or is liable due to strict liability. In the Yearbook 2006, the principles underlying standard tables and differentiations are thus discussed (no. 25–31).

40

The news value of the 2007 case is that, even though differentiation is plausible, we should not expect a more extensive use of such differentiations. The simplification concerning non-pecuniary damages would be lost if there was to be an exception from standard tables according to a variety of circumstances. It should be noted that the “pain and suffering” sum is estimated on a time-based healing process (i.e. monthly sums), and since a doubling of this time period could not be shown, the claim for a double sum could be dismissed. The Supreme Court nevertheless does not close the door totally regarding differentiations, but if no relevant general exception from standard table sums can be put forward, the plaintiff is given the burden of showing the concrete circumstance that will make it plausible that he or she has had a more severe psychiatric reaction than in “normal” cases.

D. LITERATURE 1. M. Schultz, Kausalitet. Studier i skadeståndsrättslig argumentation (Causation. Studies in Tort Law Argumentation) (Jure Förlag, Stockholm 2007)

41

This doctoral dissertation deals with the eternal and problematic issue of causation – and by succeeding in writing an interesting and intellectually awarding book, the author presents himself as a skilful scholar to be taken seriously. The subject matter is the factual, empirical causation and its role in tort law argumentation, i.e. the issue is not the legal evaluation (adequacy, etc.) of an already established cause, but the issue of what can be considered as a cause when dealing with tort law problems. Schultz makes a strong recommendation that the Swedish tort law argumentation should take into account a causation model which has been discussed in America, namely the so-called NESS-theory. NESS stands for Necessary Element of a Sufficient Set. In this model, the two well-known concepts “necessary” and “sufficient” factors can be modified and combined to avoid all too excluding results. The search for a causation concept is combined with an ambition to outline a general theory of tort law and its moral foundation. Schultz accentuates the concept of corrective justice and, according to that theory, causation becomes part of the ethically relevant considerations (i.e. it is the fact that A has caused B the damage which can motivate compensation, not only the fact that B needs compensation; a more individual approach – instead of collectivistic ideals – is thereby recommended by the author). While advocating the NESS-model, various concepts and doc-

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trines as regards causation are discussed, and the NESS-model is also applied to a selection of Swedish cases and doctrinal debates. 2. Articles Articles on tort law issues were published in various periodicals. For example, Prof. Bertil Bengtsson published an overview of the legal usage 2004–06 in Svensk juristtidning (SvJT), 554–568 (Svensk rättspraxis: Skadestånd utom kontraktsförhållanden 2004–2006). In Juridiska föreningens tidskrift i Finland (JFT) the author of this Yearbook article, Prof. Håkan Andersson, published an article on patterns of tort law argumentation concerning national application of the European Convention (Nationell EKMR-skadeståndsrätt – en argumentativ probleminventeringsskiss). The above (supra no. 41) mentioned Mårten Schultz published an article on the reasons for and against tort law claims by criminals in SvJT, 477–498 (Brottslingar förtjänar inte skadeståndsrättens skydd). Articles concerning new cases from the Supreme Court were published in Juridisk tidskrift (JT) – for example by Sandra Friberg (JT 2007–08, 117–129) and Mårten Schultz (JT 2007–08, 140–147) – and the author of this Yearbook report wrote articles about all new tort and insurance law cases at the websiteJournal www.pointlex.se.

42

XXVI. Switzerland Peter Loser

A. LEGISLATION 1. Insurance Contracts: General Revision of the Statute on Insurance Contracts

1

After the preliminary draft of the general revision of the Statute on Insurance Contracts was published in the year 2006,1 the discussion within the community of legal science and among economic stakeholders is now in full swing.2

2

Disputed are especially the rules concerning the procurement of insurance contracts, in the future distinguishing even more strictly between dependent agents and independent brokers than is the case today. These rules, as well as the regulation on compensation, are proving to be the crucial point (“pièce de resistance”) of the reform.3

3

As a next step, the Swiss Federal Government (Federal Council; Bundesrat) is expected to present the final draft, which is due to be published and submitted to the parliament in summer 2008. 2. Statute on Supervision in Financial Markets (Finanzmarktaufsichtsgesetz, FINMAG)

4

The Swiss legislative adopted the new Statute on Supervision in Financial Markets (Finanzmarktaufsichtsgesetz, FINMAG) in summer 2007.4 FINMAG proposes to merge the different hitherto existing regulatory authorities in the bank1

2

3 4

Compare the Swiss Report in the Yearbook 2006: P. Loser, Switzerland, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2006 (2008) no. 2 ff. Compare the discussion and articles in Haftpflicht und Versicherung (HAVE) 2007, 275 ff., and Zeitschrift für Schweizerisches Recht (ZSR) 2007, 389 ff., 419 ff. A comparison with European trends in the field of insurance law and particularly with the Principles of European Contract Law published as a draft in January 2008 may be found in H. Heiss, Der Vorentwurf einer “Gesamtrevision des BG über den Versicherungsvertrag (VVG)” im Lichte der europäischen Entwicklungen, HAVE 2007, 235 ff. Compare the discussion in HAVE 2007, 378 ff. Bundesgesetz über die Eidgenössische Finanzmarktaufsicht (Finanzmarktaufsichtsgesetz, FINMAG) vom 22. Juni 2007, published in Schweizerisches Bundesblatt (BBl) 2007, 4625 ff.

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ing and private insurance industry as well as in the field of monitoring money laundering. Currently, preparatory operations regarding the implementation of the new authority, supposed to take up its work starting 2009, are under way.

B. CASES 1. Schweizerisches Bundesgericht (Swiss Federal Court), 19 December 2006, Bundesgerichtsentscheid (Decision of the Federal Court, BGE) 133/2007 III 81:5 Evidential Issues regarding Product Liability a) Brief Summary of the Facts

The injured party had bought a filter coffee machine produced in China and imported to Switzerland by company Y. After half a year, an accident occurred as the claimant placed the hot glass pot on the kitchen counter made of marble. The glass pot exploded and injured the claimant’s hand.

5

The instructions for use for the coffee machine contained among others the following warning: “Avoid dropping the machine or its exposure to strokes. Do not place the hot glass pot on a cold or wet work surface as the glass could shatter.”

6

The claimant sued the importing company and claimed compensation in the amount of CHF 720,000 (approx € 448,200).

7

b) Judgment of the Court

The cantonal court dismissed the claim against the importing company because the claimant had not provided proof of a defect. The court argued that obtaining expert advice concerning manufacturing defects had not been possible as the shattered remains of the glass pot had no longer been available. Furthermore, proof of a design fault could also not be obtained, given that no other comparable glass pot had been submitted as evidence during the proceedings.

8

The Federal Court decided differently: The injured party does not have to prove the cause of the defect but only the failure of the product to meet the safety requirements an average consumer may expect of such a product in the specific circumstances. In the present case, the question therefore was whether the claimant had used the coffee pot properly and in accordance with the safety instructions provided by the manufacturer. However, the safety instructions may not state an illegitimate restriction of liability.

9

Furthermore, the Federal Court did not demand exact proof as to how the damage occurred. Rather, the judge has to consider the claimant’s testimony in the

10

5

Also at: http://www.bger.ch/jurisdiction-recht. Compare L. Wyss, Beweislast und Beweisanforderungen im schweizerischen Produktehaftpflichtrecht, HAVE 2007, 173 ff.; W. Fellmann, Der Produktfehler und sein Nachweis, recht 2007, 158 ff.; E. Holliger-Hagmann, Die Verantwortung für die Produktsicherheit, HAVE 2007, 305 ff.

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light of predominant probability. The manufacturer or the importer shall then be allowed to submit counter evidence and to try to prove that the version presented by the injured party is not the most probable one. c) Commentary

11

The Federal Court has rendered a consumer friendly judgment concerning requirements for proof regarding product liability.

12

The requirements regarding the proof of a defect are kept low. The injured party does not have to prove the original cause of the product’s faultiness. The individual categories of faultiness established in traditional Swiss doctrine have no longer any constitutive effect within the scope of the new Statute of 1993. As a result, a defect is presumed as soon as damage occurs despite proper use of the product. The Federal Court thus has interpreted the Swiss Statute on product liability in conformity with European law.6

13

The second mitigation concerns proper use of a product itself. In this respect, proof of predominant probability shall be sufficient. The judge may rely on plausible statements regarding the course of events submitted by the injured party. This view is in accordance with other decisions delivered by Swiss courts and reducing the degree of proof in regard to causality in cases where it is difficult to provide strict proof.7

14

Finally, the requirements in regard to proper use are also reduced insofar as the manufacturer’s safety warnings do not always have to be respected. As far as products for common use are concerned, the consumer may expect minimal safety standards and manufacturers may not exclude their liability in advance simply by issuing safety instructions. This reasoning is convincing as product liability is compulsory and not at the disposal of the parties. The compelling character may not be bypassed by safety warnings. In other words, the information contained in instructions for use is not a general alternative to the manufacturer’s duty to design and manufacture safe products. 2. Schweizerisches Bundesgericht, 18 April 2007, BGE 133 III 323:8 Committing Criminal Offences Requiring Wrongful Intent (e.g. Money Laundering) by Negligence does Not Lead to Civil Liability a) Brief Summary of the Facts

15

In 1995 C., a businessman from Mali, opened an account at the Dubai Islamic Bank. He managed to convince B., the bank’s director, that he was able 6 7 8

See Fellmann, recht 2007, 160 f. Compare the Swiss Report in the Yearbook 2006: Loser (fn. 1) no. 18 ff. Also at: http://www.bger.ch/jurisdiction-recht. Compare M. Hirschle/H.C. von der Crone, Zivilrechtliche Haftung für fahrlässig begangene Geldwäschereihandlungen, Schweizerische Zeitschrift für Wirtschafts- und Finanzmarktrecht (SZW) 2007, 330 ff.; I. Schwander, Entscheidbesprechung, Aktuelle Juristische Praxis (AJP) 2007, 1177 ff.; H. Corboz/P.G. Fleury, Blanchiment d‘argent et illicéité civile, un retour à la raison (ATF 133 III 323), HAVE 2007, 258 ff.

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to multiply money by using black magic. C. talked B. into embezzling money and transferring a sum of several millions to C.’s account with a bank in Geneva, from where the funds were transferred to other banks. After discovering the criminal manipulations, the Dubai Islamic Bank took legal action against the bank in Geneva. They accused the bank in Geneva of having violated regulations concerning the combat of money laundering and thus having caused them damage. b) Judgment of the Court

The damage claimed is a pure economic loss which, according to consistent jurisdiction, must be compensated only if the party causing it violated a specific provision protecting precisely the victim’s rights infringed upon. In principle, the penal provision concerning money laundering might be considered for this purpose. However, it has to be kept in mind that such offence has to be committed with wrongful intent (which was not proved in the case). The Swiss Penal Code stipulates no penalty for money laundering committed by mere negligence and – according to the Federal Court – such negligence does not establish any responsibility based on general liability law either.

16

The responsible staff members of the bank in Geneva could neither be accused of intentionally transferring money of criminal origin nor of any intentional breach of security regulations. The Dubai Islamic Bank’s claim therefore was dismissed.

17

c) Commentary

For the first time, the Federal Court was concerned with the controversial question whether the mental element of a penal provision, i.e. usually wrongful intent, must also be fulfilled to establish civil liability. The Federal Court rightly answered this question in the affirmative. In doing so, it has imposed an important barrier against the unrestricted extension of liability for pure economic losses. At the same time, the traditional definition of unlawfulness demanding a specific provision with protective effect for pure pecuniary losses has gained essential relevance in terms of public policy and commercial law, because it limits the possibilities of establishing liability. For instance, an action for compensation filed by existing and new shareholders under Swiss law may not be based on the penal provision9 concerning untruthful information about companies.10

18

The aggrieved Dubai Islamic Bank, in addition to the claims regarding the penal provision, also pled that other regulations on combating money laundering, in administrative law, had been violated. In the present case, the Court did not have to review this argument as the negligent actions had taken place before

19

9 10

Art. 152 Schweizerisches Strafgesetzbuch (Swiss Penal Code). Compare the discussion between D. Daeniker and V. Roberto on liability for violation of ad-hoc public disclosure, in: D. Daeniker, Thesen für Haftung zur Ad-hoc-Pubilizität, Gesellschaftsund Kapitalmarktrecht (GesKR) 2-3/2006, 139 ff., 146.

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the enactment of the administrative regulations relating to money laundering.11 However, legal science indicates that civil liability henceforth may also result from a violation of the Federal Act on Combating Money Laundering, also prohibiting negligence offences. This might partially result in the effect that claimants who have been aggrieved by a criminal offence turn to the bank instead of going after the (often fugitive and bankrupt) offender himself.12 3. Schweizerisches Bundesgericht, 12 June 2007, BGE 133 III 449:13 No Protection of Professional Fees on the Grounds of Liability Based on Reliance (Vertrauenshaftung) a) Brief Summary of the Facts

20

Company Y. carried out reconstruction work on the St. Gotthard tunnel on behalf of the canton of Uri. For some of the work, Y. called in company X. as a subcontractor. X. was not satisfied with the agreed professional fees. As a consequence, a number of emergency meetings with all three parties were held on the subject of a raise of the hourly wages. In the course of these negotiations, the cantonal chief of constructions “agreed” to higher wages.

21

X., respectively A. as its legal successor, demands CHF 955,000 (approx. € 594,500) from the canton of Uri. The amount demanded equals the difference between the actual wages paid by Y. and the higher wages the canton agreed to after X. had threatened to discontinue the reconstruction work due to the insufficient salaries. b) Judgment of the Court

22

Unlike the cantonal courts, the Federal Court denied the liability of the canton. At company X., one was well aware of the fact that a contract between the canton and X. did not exist. Tortious liability, on the other hand, was out of the question as the requirement of illegality was not fulfilled: There is obviously no provision with protective effect regarding the resulting pecuniary loss and the behaviour of the cantonal officials does not qualify as fraud in terms of the Penal Code either.

23

The Federal Court then reviewed whether the prerequisites of liability based on reliance were met. This was denied as well because X. had relied only on the fact that the canton would perform according to its obligation even without having made any contractual commitment. In principle, such reliance is not to be 11

12

13

Bundesgesetz zur Bekämpfung der Geldwäscherei im Finanzsektor, GwG, vom 10. Oktober 1997, Systematische Rechtssammlung (SR) 955.0 (Federal Act on Combating Money Laundering in the Financial Sector; an official English translation of the Statute may be found at http:// www.admin.ch/dokumentation/gesetz/index.html?lang=en). Compare the concerns published in the journal Finanz und Wirtschaft (FuW) of 4 July 2007, 23. Against: R. Cerutti, Rechtliche Aspekte der Vermögensverwaltung im Schweizer Universalbankensystem, ZSR 2008, 94 f. (with references). Also at: http://www.bger.ch/jurisdiction-recht. Compare P. Loser, Entscheidungen/Jurisprudence – Privatrecht/Schuldrecht – Vertrauenshaftung; Schutz des Vertrauens auf Honoraransprüche bzw. Leistungserbringung ausserhalb von Verträgen? Besprechung BGE 133 III 449, AJP 2008 (in booklet September, 1053 ff.).

Switzerland

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protected because, as a general rule, it may reasonably be expected of the relying party to secure their expectations of the other party by concluding a binding contract. Reliance on the other party’s voluntary performance might be protected only as an exception. Such would be the case in particular if the existing imbalance of power between the parties virtually prevented the conclusion of a corresponding contract and if furthermore the relying party may not reasonably be expected to renounce the transaction or to withdraw from the business relationship as a whole. None of these prerequisites were met in the present case. c) Commentary

In the present case, the Federal Court has accepted once more the legal concept of liability based on reliance in general and at the same time has correctly differentiated categories of cases where protection of reliance is admissible.14 The expectation of a partner’s performance without them having made any corresponding contractual commitment in most cases must not be worthy of protection. Liability based on reliance, by generally protecting such expectations, would otherwise lead to the undermining of the legal concept of the contract.15 This conception proclaimed in legal science has rightly been affirmed by the Federal Court.

24

If a party wishes to engage a third party in a binding manner, it is necessary to conclude a contract securing performance. Subcontractor X. could not claim that the conclusion of such contract had been impossible due to an imbalance of power. Rather, X. had been in a strong position for negotiations because the canton realistically would not have had any alternative if X. would actually have discontinued their work.

25

4. Schweizerisches Bundesgericht, 13 June 2007, BGE 133/2007 III 462:16 No Liability for Loss of a Chance a) Brief Summary of the Facts

The plaintiff appeared in the emergency room of a cantonal hospital at 3 a.m., actually suffering from bacterial meningitis, and complained about severe headaches, back pain and nausea. Since the medical practitioner in charge had not immediately recognised the disease – he had diagnosed flu at first – the treatment with antibiotics was not initiated until hours later. As a result, the plaintiff lost his hearing totally and claimed compensation in the amount of CHF 2.9 million (approx. € 1,795,000) from the hospital.

26

b) Judgment of the Court

The lower court, on the one hand, agreed that mistakes had occurred during the medical examination. On the other hand however, it denied causality, for it had 14 15

16

Compare P. Loser, Die Vertrauenshaftung im schweizerischen Schuldrecht (2006) no. 258 ff. Compare C.-W. Canaris, Die Vertrauenshaftung im deutschen Privatrecht (1971) 364 f., 369; Loser (fn. 14) no. 971. Also at: http://www.bger.ch/jurisdiction-recht. Compare C. Müller, Hat die „perte d’une chance“ in der Schweiz noch eine Chance? – BGE 133 III 462, Zeitschrift des Bernischen Juristenvereins (ZBJV) 2007, 862 ff.

27

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not been proven that starting the treatment with antibiotics 4 to 5 hours earlier could have prevented the loss of hearing, which is always a certain side risk of the meningitis treatment.

28

The plaintiff appealed to the Federal Court and invoked the legal concept of loss of a chance (“perte d’une chance”). The Court addressed this theory in detail but considered it as problematical and thus affirmed the judgment of the lower court, for the theory would eventually lead to the result that compensation would be awarded in percental relation to the probability of causing damage. In other words, had a patient’s chance of survival been one of 1 to 4 with proper treatment, his relatives would be allowed to sue the treating medical practitioner for compensation to the extent of 25%. However, this approach would conflict with the jurisdiction concerning natural causality because the medical practitioner’s behaviour could not be determined as the predominantly probable cause of the patient’s death.

29

The Court also repudiated the reasoning recognising loss of a chance in itself as a pecuniary loss because of the provisional nature of chance. In Swiss law, the calculation of damage is based on the net position of assets and liabilities at two particular points in time. An actual chance lost does not show up as an actual asset, nor does a probable but not realised chance constitute a hypothetical asset the “injured party” might have had at their disposal without the incident. c) Commentary

30

Part of recent Swiss legal science argues in favour of the theory of loss of a chance. The Federal Court, though, has not yet been concerned with this issue. In the present case, the Federal Court, for reasons of procedural law, had to review the question only with respect to a grossly incorrect, i.e. arbitrary application of law (“Willkür”). Therefore, the question of a future recognition of the theory of loss of a chance in Swiss law has not yet been decided definitively. However, there are no great odds, given that the Federal Court had confirmed its view towards the theory in a later decision of 26 September 2007.17 Possibly, one would need to distinguish between cases about loss of profits due to a lost competition (e.g. architects competing for a project [Architektenwettbewerb]) or to lost legal proceedings and cases about lost chances of survival or medical chances in respect to medical interventions concerning legally protected physical interests.18 5. Schweizerisches Bundesgericht, 14 June 2007, BGE 133/2007 III 556:19 No Liability of Parents for Bobsled Accident of their Children a) Brief Summary of the Facts

31

The two children R. (four years old) and B. (two years old) were sledging together on their plastic bobsled for 15 minutes on a level slope covered with 17

18 19

Schweizerisches Bundesgericht (Swiss Federal Court), 26 September 2007, BGE 4A.277/2007, consideration 3.5.3/3.5.4. Compare H. Koziol, Schadenersatz für verlorene Chancen? ZBJV 2001, 889 ff. Also at: http://www.bger.ch/jurisdiction-recht. Compare D. Tanner, Haftung des Familienhauptes, Jusletter (www.weblaw.ch) 24 September 2007.

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hard snow. At the same time, roughly 20 children between the ages of three to six were sledging on the same slope. R.’s and B.’s father was waiting for them at the bottom of the slope. On their last slide down, R. and B. collided with the plaintiff, who was waving to her grandchildren and had turned her back towards the upper slope and thus was not able to see the bobsled coming. As a result of the collision, the plaintiff fell and injured herself. b) Judgment of the Court

The plaintiff claimed compensation from the father on the grounds of neglecting his duty to supervise his children. According to Swiss law (art. 333 Civil Code), parents are liable for damage caused by their children if they cannot prove that they have applied the necessary care in supervising their children.

32

The plaintiff argued that the father should have accompanied his children. The Federal Court rejects this argument in order to avoid a situation where a crowd of custodians would have to run alongside their children’s bobsleds down a slope.

33

c) Commentary

Based on the Swiss legal situation, the judgment is to be welcomed. Supervising children cannot extend as far as to having to accompany them constantly. Even with small children, permanent supervision is neither possible nor desirable. As a consequence, the person concerned has to either prevent certain damage from being caused by children by applying caution of their own or tolerate such damage as possible hazards. If society does not approve of this result, the legislative would have to introduce strict liability for children’s behaviour.

34

6. Schweizerisches Bundesgericht, 5 April 2007, BGE 4C.45/2007:20 Unsafe Access to Bedroom as Defect of a Work a) Brief Summary of the Facts

The defendant is the owner of a studio apartment with a raised gallery used as a bedroom. The gallery is accessible by a ladder which is not secured in place but only leans against the gallery and furnished with rubber pads to prevent slipping. When early one morning, the tenant’s girlfriend tried to descend the ladder, it slipped and the woman fell to the floor. As a consequence, she was temporarily incapacitated for work.

35

b) Judgment of the Court

Under Swiss law (art. 58 Code of Obligations), the owner of a building or of another work is liable if the work is not sufficiently safe for the intended use. However, such liability is limited by the user’s self-responsibility.

20

Also at: http://www.bger.ch/jurisdiction-recht.

36

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Peter Loser

However, according to the Federal Court, this limitation was not applicable in the present case as neither the tenant nor his girlfriend could have detected the faulty condition of the ladder. The fact that the existing deficiency possibly might have been worsened when the former wall-to-wall carpet was replaced by parquet flooring at the tenant’s request did not change anything. In any case, access to the bedroom solely by a mobile ladder constitutes a fault in the work (per se). c) Commentary

38

The decision is consistent with other cases concerning the owner’s liability for a faulty work and convinces in principle. The Court determines the applicable safety standard based on the group of people possibly putting the work to its intended use.

39

However, it is arguable if this approach is also appropriate if the tenant of a work on his own authority or by agreement with the owner makes adjustments for its use. The tenant, for reasons of economy, may well have an interest in choosing only a simple and a little less safe solution, particularly if he is aware of the risks and deliberately accepts them. So far, this has been taken into consideration by the Federal Court as a reason for reducing liability to the favour of the owner. With respect to guests, though, strict liability apparently is applicable. This reasoning is not satisfying, particularly as it successively leads to the landlord consistently demanding from the tenant an absolutely safe and thus always more expensive solution for structural adjustments. In my opinion, this excessively constrains the freedom to determine the content of agreements between private parties granted under Swiss civil law. A possible resort might be to solve these cases by applying contractual liability based on the protective effects (or consequences) (“Schutzwirkungen”) of the tenancy agreement. Such protective effects (or consequences) in principle also exist to the benefit of third parties close to the tenant (e.g. spouse, guests). Consequently, however, the owner then also might assert against these third parties the reduction of liability deriving from an arrangement with the tenant at his request. 7. Schweizerisches Bundesgericht, 7 December 2006, BGE 133/2006 III 153:21 Compensation and Surrender of Profits due to Violation of Individual Sphere by Media a) Brief Summary of the Facts

40

“Sonntags-Blick”, a Swiss tabloid, between February and November 2002 published four articles covering the dispute between Patty Schnyder, a professional tennis player, and her father. According to the judgments of the courts, the articles unlawfully violated the father’s individual sphere. In this regard, his civil action was approved. However, his claim that the media enterprise surrender their profits derived from publishing the infringing articles remained disputed. 21

Also at: http://www.bger.ch/jurisdiction-recht. Compare H. Hausheer/R. Aebi-Müller, ZBJV 2007, 341 ff.; M. Berger, Entwicklungen im Immaterialgüterrecht, Schweizerische Juristenzeitung (SJZ) 2007, 406 ff.

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b) Judgment of the Court

The Federal Court approved the entitlement to have the profits surrendered to him. Such entitlement requires a publication to be judged as an unlawful violation of the injured party’s individual sphere and as causally contributing to increasing profits of the media enterprise. According to the judgment, proving “a predominant probability, as far as furnishing direct proof due to the nature of things is not possible” is sufficient to establish the causal chain. The argument put forward by legal science that a surrender of profits may only be considered if the infringing publication directly resulted in an increased circulation of the newspaper has been rejected by the Federal Court. The Federal Court does not focus on the daily circulation but on the publisher’s strategy for the long term. In the view of the Court, drawing profits thus not so much depends on single coverage but on satisfaction of the reader’s expectations in the long term. These expectations are “satisfied by running a course nearly qualifying as violating the individual sphere and possibly crossing the border into unlawfulness”. Under such circumstances, though, “causality between unlawfully violating the individual sphere and drawing profits from it has to be accepted if and as far as the aim and presentation of the newspaper article is a suitable contribution to preserving the circulation and thus drawing profits”. To determine the precise amount of the profits, the judge may use an estimate as a basis as far as the measure of the profits “cannot be strictly proven in exact figures”.

41

As the actual circumstances had not yet been established by the cantonal court, the case was sent back for new assessment. The cantonal court now has to review whether the plaintiff’s claim in the amount of CHF 75,000 (approx. € 46,400) is justified.

42

c) Commentary

For the first time, the Federal Court has been concerned with the issue of surrender of profits due to violation of the individual sphere. Applying much analytical expertise, it has come up with a pragmatic solution regarding the complex question of determining the profits. In its differentiated analysis, the Court has also defined the cases where surrender of profits and compensation may both be claimed in parallel. For instance, the person concerned may lose her job due to the negative coverage.

43

Due to the existing legal regulation, it still remains controversial in Swiss law whether surrender of profits only applies in cases of fault and bad faith or also in cases without fault as in regard to surrender of unjust enrichment. The present judgment has not clearly answered this question.

44

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C. LITERATURE 1. Hardy Landolt, Kommentar zum schweizerischen Zivilrecht (Zürcher Kommentar), Die Entstehung durch unerlaubte Handlungen, 2nd part, Art. 45–49 OR (translated: Commentary on Swiss Civil Law, Tort Law) (Verlag Schulthess AG, 3rd ed., Zürich 2007)

45

Art. 45 to 49 of the Swiss Code of Obligations regulate personal injury due to wrongful death, bodily harm and violations of the individual sphere.

46

The book is part of the traditional so-called “Zürcher Kommentar” (Zurich commentary) on Swiss civil law. On roughly 1,000 pages, it comments on this part of Swiss tort law and replaces the previous commentary of 1929. 2. Peter Jung (ed.), Aktuelle Entwicklungen im Haftungsrecht (translated: Current Trends in Tort Law) (Verlag Schulthess AG, Zürich 2007)

47

The book contains the papers read at a professional seminar held at the University of Bale in 2006 on current trends in tort law.

48

Thomas Kadner Graziano gives an overview of the jurisdiction during the past two years with a view to methodical aspects.

49

Peter Loser analyses the jurisdiction concerning liability based on reliance (Vertrauenshaftung) and puts it into a dogmatic concept.

50

With a view to actual practice, Hans-Peter Egli, Walter Fellmann and Markus Schmid examine the liability of the employee, of the lawyer and of the medical practitioner.

51

Cases of liability in regard to services rendered by a bank are the subject of Hanspeter Dietzi’s paper.

52

David Rosenthal highlights civil and penal liability of internet providers. The access as well as hosting provider’s liability for the content provider’s behaviour are examined in particular.

53

Philippe Spitz’s paper gives an overview of liability for violation of competition regulations. Here, the proof of hypothetical market results is an issue of particular interest.

54

Finally, the revision of civil procedural law as well as of insurance law is the subject of Thomas Sutter-Somm’s and Franz Hasenböhler’s papers.

Switzerland

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3. David Vasella/Anton K. Schnyder, Haftpflicht- und Privatversicherungsrecht – Entwicklungen 2006 (translated: Trends in Tort Law and Private Insurance Law 2006) (Verlag Staempfli AG, Bern 2006) The publishing house Staempfli has initiated a new range of publications. Each year, the trends of the previous year in the areas of Legislation, Jurisprudence and Literature are presented in one volume. The volume cited here examines the trends in the fields of tort and private insurance law.

55

4. David Vasella/Anton K. Schnyder, Haftpflicht- und Privatversicherungsrecht – Entwicklungen 2007 (translated: Trends in Tort Law and Private Insurance Law 2007) (Verlag Staempfli AG, Bern 2007) See the commentary supra no. 55.

56

5. Manuel Jaun, Haftung für Sorgfaltsverletzung – Von der Willensschuld zum Schutz legitimer Integritätserwartungen (translated: Liability for Breach of the Duty of Care – From Fault to the Protection of Legitimate Expectations of Integrity) (Verlag Staempfli AG, Bern 2007)22 Today, for the most part an objective approach is applied to liability for fault. Yet the theory of liability is still built on the traditional, subjective concept of fault. According to the author, this discrepancy causes many problems in legal science such as the controversy concerning the proper concept of negligence, the uncertainty regarding the function and content of duties of care as well as the question of a general provision with respect to strict liability.

57

The author as a solution suggests viewing strict liability as a principle of liability, focused on the protection of legitimate expectations of integrity. His book shows the great importance placed on the provisions concerning legally protected interests as well as on the idea of reliance when determining specific duties of care.

58

6. Franz Werro (ed.), Le temps dans la responsabilité civile (translated: Time and Civil Liability) (Verlag Staempfli AG, Bern 2007) The present book contains the papers read at a convention held at the University of Fribourg in 2005. It deals with the issues the factor of time raises in regard to the determination of compensation and coverage by insurance. In particular, the moment of determination of compensation, default interest, limitation and the calculation of the loss in the case of a young person’s permanent disability are discussed.

22

Compare in this regard also the review by P. Widmer, HAVE 2007, 405 ff.

59

XXVII. European Union Bernhard A. Koch

A. LEGISLATION 1. Conflict of Laws

1

After earlier reports on the progress of the European project to harmonise the rules regulating the law applicable to non-contractual obligations,1 this is finally the place to present at least a brief overview of the ultimate outcome, after the “Regulation (EC) No. 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II)”2 was adopted. It will enter into force on 11 January 2009 for all cases where the damaging event occurred thereafter, even though last-minute changes to the text obscured this for no apparent reason (Art. 31 and 32).3 a) Scope

2

The Regulation is not limited to tort law (though it is naturally the focus here), but extends to all “non-contractual obligations in civil and commercial matters” (Art. 1 par. 1), including unjust enrichment and negotiorum gestio, even if they are just likely to arise (Art. 2 par. 2). However, certain matters are excluded by the Regulation itself (Art. 1 par. 2). This is true, e.g., for nuclear 1

2

3

B.A. Koch, European Union, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2003 (2004) 435 (in the following: EU Report 2003) no. 1 ff.; B.A. Koch, European Union, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2005 (2006) 593 (in the following: EU Report 2005) no. 10 ff.; B.A. Koch, European Union, in: H. Koziol/B.C. Steininger (eds.), European Tort Law 2006 (2008) 487 (in the following: EU Report 2006) no. 3 ff. OJ L 199, 31.7.2007, 40–49. All articles cited in this section refer to this regulation unless specified otherwise. According to Art. 31, Rome II “shall apply to events giving rise to damage which occur after its entry into force”, but Art. 32 no longer speaks of “entry into force”, but instead uses the heading “date of application” and foresees that the Regulation “shall apply from 11 January 2009 …”. Since the entry into force is not addressed specifically elsewhere, one could argue that Art. 254 ECT steps in, so that Rome II applies from 11 January 2009 onwards to all “events giving rise to damage” occurring after the 20th day following the date of the Regulation’s publication in the OJ (31 July 2007), therefore after 20 August 2007. However, in light of previous drafts which did not differentiate between “entry into force” and “date of application”, one has to believe that this change was a mere drafting error, so that Art. 32 foresees the date of the Regulation’s entry into force.

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damage (Art. 1 par. 2 lit. f)4 or for “harm caused by violations of privacy and rights relating to personality, including defamation” (Art. 1 par. 2 lit. g). The latter exclusion is a memorial for the battle between Parliament and the Council whether or not to retain Art. 6 of the original draft,5 which specifically addressed violations of privacy,6 and how to shape it. Both sides lost, as no such rule found its way into the Regulation. The only remaining leftover of this original plan is Art. 30 par. 2, which calls upon the Commission to launch a study on the current situation in all Member States in this field. Liability of the State for acta iure imperii, including acts of officials acting on behalf of the State, and liability of publicly appointed office-holders (recital 9), are also excluded from the scope of the Regulation (Art. 1 par. 1). The Rome II regime is universally applicable irrespective of the target jurisdiction (loi uniforme). It will not be in force in Denmark, however, since it is based upon Art. 61 lit c and 65 ECT, which as part of the Treaty’s Title IV do not apply.7

3

b) General rule (Art. 4)

The general rule for conflicts of tort laws is contained in Art. 4 of the Regulation, which foresees that the law applicable to a tort case shall be the law of the country in which the damage occurs (lex loci damni), irrespective of the country in which the event giving rise to the damage occurred and irrespective of the country in which indirect consequences of that event occur.8

4

Those Member States whose current private international law centres on the lex loci actus (such as Austria or Poland) will therefore have to shift their focus. This will hardly lead to a massive change in the outcome of the average case, however, as the location of the typical harmful event and of its immediate consequences tend to be within the same jurisdiction: A traffic accident will therefore be governed by the place of the incident even if some victims

5

4

5

6

7

8

See, e.g., the comments by the Hamburg Group for Private International Law on the original draft (available at http://ec.europa.eu/justice_home/news/consulting_public/rome_ii/max_ planck_en.pdf), 5-9, convincingly arguing in favour of keeping cases of nuclear liability within the ambit of the Regulation. Proposal for a Regulation of the European Parliament and the Council on the Law Applicable to Non-Contractual Obligations (“Rome II”), COM(2003) 427 final, 22.7.2003. The draft provision reads: “1. The law applicable to a non-contractual obligation arising out of a violation of privacy or rights relating to the personality shall be the law of the forum where the application of the law designated by Article 3 [at the time by and large the equivalent to current Art. 4] would be contrary to the fundamental principles of the forum as regards freedom of expression and information. 2. The law applicable to the right of reply or equivalent measures shall be the law of the country in which the broadcaster or publisher has its habitual residence.” Art. 69 ECT, Protocol V on the position of Denmark, [1997] OJ C 340, 101. See also Art. 1 par. 4 of the Rome II Regulation and its recital 40. The lex loci damni is justified by recital 16, which claims that it “strikes a fair balance between the interests of the person claimed to be liable and the person sustaining the damage, and also reflects the modern approach to civil liability and the development of systems of strict liability”.

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Bernhard A. Koch

reside in other jurisdictions, and even if their need for medical treatment or compensation for lost income only arises there, as the latter will fall under the “indirect consequences” disregarded as relevant contacts by Art. 4.9 Only cases with direct transboundary effects of delictual conduct will therefore have to be reassessed in light of the new rules.

6

Art. 4 itself contains two exceptions to its general rule, both overriding the significance of the place where the damage occurred: The first one honours the common habitual residence of the parties, which Art. 23 defines more closely, but strangely enough only for legal persons.10 The second is a more general escape clause for stronger connections of “all the circumstances of the case“ to another jurisdiction. In essence, the former is but a special rule of the latter, though. c) Special rules (Art. 5 to 9)

(i) Product liability (Art. 5)

7

As a first special rule, Art. 5 par. 1 introduces a “cascade system of connecting factors” (recital 20) for product liability cases, starting off with the law of the victim’s domicile, but only if it was one of the product’s markets (lit. a). If that were not the case, it is the law of the country where the product was bought that counts, again only if it is a market envisaged for that product (lit. b). Failing that, the third alternative goes back to the general rule of the lex loci damni, but equally coupled with the additional requirement that it only leads to the applicable law if the damage occurred in a jurisdiction where the product was marketed (lit. c).

8

Rather problematic is the defence concluding that paragraph which shifts the focus to the defendant’s habitual residence “if he or she could not reasonably foresee the marketing of the product, or a product of the same type, in the country the law of which is applicable under (a), (b) or (c)”. First of all, it is not entirely clear how this rule should be applied. Let us assume as an example that a product was marketed in the jurisdiction of the victim’s habitual residence (alternative a), but that she bought it in another country where it was also marketed (alternative b). The manufacturer could not reasonably foresee the former, but knew of the latter country as a marketplace for his products. Alternative (a) does not apply because of the defence, but does this lead to the applicability of alternative (b) despite the wording of Art. 5 par. 1, which only allows (b) to step in if (a) is not given? Furthermore, one cannot even guess 9 10

Cf. infra at no. 21. Art. 23 reads: “1. For the purposes of this Regulation, the habitual residence of companies and other bodies, corporate or unincorporated, shall be the place of central administration. Where the event giving rise to the damage occurs, or the damage arises, in the course of operation of a branch, agency or any other establishment, the place where the branch, agency or any other establishment is located shall be treated as the place of habitual residence. 2. For the purposes of this Regulation, the habitual residence of a natural person acting in the course of his or her business activity shall be his or her principal place of business.”

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what the drafters had in mind when referring to “a product of the same type” whose marketing the producer could not reasonably foresee, which also triggers the defence. If the policy behind the defence is to protect the producer (and no other rational reason can be envisaged), it seems odd that it only extends to manufacturers of something so unique that no-one else in the world is likely to produce anything similar. Finally, the defence effectively gives the producer a choice to select the law he prefers, as it is entirely in his hands to raise that defence, which allows him to avoid, for example, stricter liability rules of his own jurisdiction. The special rule for product liability is subject to the same exceptions as the general rule: The common habitual residence rule of Art. 4 par. 2 is referred to directly in the introduction to Art. 5 par. 1. Strangely enough, the same legislative technique was not used for the general escape clause of Art. 4 par. 3, even though Art. 5 par. 2 essentially duplicates the wording entirely without even making specific reference to the special aspects of a product’s liability claim.

9

(ii) Unfair competition and acts restricting free competition (Art. 6) Another special rule governs damage caused by unfair competition. In its par. 1, Art. 6 identifies “the country where competitive relations or the collective interests of consumers are, or are likely to be, affected”. If the tortfeasor’s conduct only causes harm to a specific competitor, the general rule of Art. 4 applies, thereby reducing the scope of jurisdictions to the country where the direct damage occurred, which will typically be at the competitor’s place of business.

10

When it comes to “acts restricting competition”, i.e. infringements of national or Community competition law,11 the focus is on “the law of the country where the market is, or is likely to be, affected” (Art. 6 par. 3 lit. a). If the anti-competitive practices of a sole defendant concern more than one market, Art. 6 par. 3 lit. b allows the plaintiff to choose the law of forum as applicable to losses sustained in all these markets, but only if the forum country is one of the “directly and substantially affected” markets and if it is at the same time also the domicile of the defendant. To make things even more complicated, the same sub-paragraph foresees for actions against multiple defendants that the forum country’s law can also be chosen by the plaintiff as applicable if its market is “directly and substantially” affected, but this has to be true for the acts of each of the defendants. Instead of focusing in addition on at least one of these defendants’ domicile, the rule simply requires that the forum was chosen “in accordance with the applicable rules on jurisdiction”, as if the case could ever

11

11

Recital 23 states that, for the purpose of this Regulation, “the concept of restriction of competition should cover prohibitions on agreements between undertakings, decisions by associations of undertakings and concerted practices which have as their object or effect the prevention, restriction or distortion of competition within a Member State or within the internal market, as well as prohibitions on the abuse of a dominant position within a Member State or within the internal market, where such agreements, decisions, concerted practices or abuses are prohibited by Articles 81 and 82 of the Treaty or by the law of a Member State”.

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Bernhard A. Koch

get started without that prerequisite being fulfilled (thereby disregarding the likelihood of unconsciousness on either side of the bench).

12

In contrast to other tort cases, the parties to a case falling under Art. 6 may not agree on another applicable law as foreseen by Art. 14 (infra d)(i)). Apart from the reference to Art. 4 for cases of unfair competition affecting a specific competitor, there is no escape clause as in the previous Articles. (iii) Environmental liability (Art. 7)

13

Art. 7 deals with environmental liability, which expands the general rule insofar as it allows the victim to choose between the default applicable law and the law of the country from where the harm originated. The rule applies to “environmental damage”, which either in itself or as a trigger of ensuing personal injury or property damage must have led to the “non-contractual obligation” for which the applicable law is sought. “Environmental damage” is not defined by the Regulation itself, but merely by its recital 24, which speaks of any “adverse change in a natural resource, such as water, land or air, impairment of a function performed by that resource for the benefit of another natural resource or the public, or impairment of the variability among living organisms”.

14

Like the rule on unfair competition, Art. 7 does not include an escape clause, and there is no separate provision for the common habitual residence of the parties. (iv) Infringements of intellectual property rights (Art. 8)

15

With respect to non-contractual obligations arising from an infringement of intellectual property rights such as “copyright, related rights, the sui generis right for the protection of databases and industrial property rights” (recital 26), the Regulation maintains the lex loci protectionis and therefore connects the applicable law to the jurisdiction for whose territory protection is claimed (Art. 8 par. 1). With respect to unitary Community IP rights, however, the law to be applied in the absence of substantive Community law on the matter shall be the law of the place where the infringement was committed instead (Art. 8 par. 2). Parties may not deviate from these rules by mutual agreement12, and there is no escape clause attached or at least referred to. (v) Industrial action (Art. 9)

16

On the initiative of the Parliament, the Rome II Regulation includes a specific rule in Art. 9 for damage caused in the course of “industrial action” such as a strike or lock-out. Parliament justified the special rule by arguing that the “rights of workers to take collective action, including strike action, guaranteed under national law must not be undermined”.13 Therefore, if “a worker or an 12 13

Cf. infra at A.1.d)(i). Parliament’s Report on the proposal for a regulation of the European Parliament and of the Council on the law applicable to non contractual obligations (“Rome II”), 22–23 (available at http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//NONSGML+REPORT+A62005-0211+0+DOC+PDF+V0//EN).

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employer or the organisations representing their professional interests” such as trade unions are claimed to be liable for harm resulting from such an event, the law of the place where the strike or other industrial action has taken place governs and not where the damage ensued. Art. 9 also applies to non-contractual obligations arising out of merely pending action not yet carried out. While the common habitual residence of the parties is the overriding connecting factor due to a specific reference to Art. 4 par. 2, there is no more general escape clause for such matters contained in Art. 9.

17

d) Other noteworthy provisions

(i) Freedom of choice (Art. 14) The Rome II Regulation expressly acknowledges the choice of the applicable law by the parties to the non-contractual obligation. While this was true already in the original draft for selections made after the harmful event, it was initially not foreseen for ex ante-agreements.14 Following Parliament’s proposal (though luckily only in substance and not verbatim15), the Regulation in its final version16 also allows parties who pursue a commercial activity to agree upon the law applicable to future tort claims between them (Art. 14 par. 1 lit. b).

18

Mandatory provisions of a jurisdiction where “all the elements relevant to the situation” at the time of the harmful event are located apply irrespective of the chosen law, however. Furthermore, the parties’ choice of a non-EU law cannot avoid the application of mandatory Community law (either directly or as implemented by the forum Member State).

19

14 15

16

Cf. Art. 10 of the original draft (fn. 5). The Wallis report (Report on the proposal for a regulation of the European Parliament and of the Council on the law applicable to non-contractual obligations, A6-0211/2005, available inter alia on the rapporteur’s homepage http://www.dianawallismep.org.uk/pages/rome2.html) had proposed the following wording of an Art. 2a: “1. The parties may agree, by an agreement entered into after their dispute arose or, where there is a pre-existing arms-length commercial relationship between traders of equal bargaining power, by an agreement freely negotiated before the dispute arose, to submit non-contractual obligations to the law of their choice. The choice must be expressed or demonstrated with reasonable certainty by the circumstances of the case. It may not affect the rights and obligations of third parties and shall be without prejudice to the application of mandatory rules … 2. A choice of law made by the parties shall not deprive an employee who is a party to a contract of employment of the protection that would be afforded to him by the mandatory rules (a) of the country in which he habitually carries out his employment in performance of the contract; or (b) if the employee does not carry out his work in any one country, of the law of the country in which the place of business through which he was engaged is situated; or (c) of the country with which the contract is most closely connected.” The change was already accepted in the Amended Proposal for a European Parliament and Council Regulation on the Law Applicable to Non-Contractual Obligations (“Rome II“), COM(2006) 83 final, 21.2.2006.

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(ii) Scope of the applicable law (Art. 15)

20

Art. 15 defines to which aspects of a case the law determined on the basis of this Regulation applies. It obviously governs all facets of a tort claim from identifying the liable person(s)17 to the reasons for holding them liable as well as to defences, from the determination of available remedies to the persons entitled to claim them, including the question of transferability of the claim (such as by way of inheritance). According to Art. 20, the law applicable under the Regulation also governs claims for contribution between multiple tortfeasors.

21

It is interesting to note specifically that Art. 15 lit. (c) extends the scope of the applicable law to “the existence, the nature and the assessment of damage or the remedy claimed”. This rather inconspicuous provision is the graveyard for Parliament’s efforts to introduce a separate regime for the monetary assessment of personal injury claims triggered by traffic accidents,18 which fortunately could be defeated (though rather at the last minute). The consolation prize was recital 33, which expresses the (mere) wish that the forum court “should take into account all the relevant actual circumstances of the specific victim, including in particular the actual losses and costs of after-care and medical attention” if that victim was injured in a road traffic accident abroad. This is less interesting as it sounds, since this can only be within the limits and “[a]ccording to the current national rules on compensation”. These “current national rules” seem to refer to the law applicable under the Regulation rather than the forum State’s law despite the rather poor wording of this recital, which only speaks of the “court seised” and thereby seems to imply that the forum court will invariably apply its own “national” rules in disregard of the Rome II regime.

22

It goes without saying that both the positive as well as the negative ordre public are honoured by the Rome II Regulation (Art. 16, 26). In contrast to the original draft,19 punitive damages are no longer explicitly defined to be in violation of the Community public policy. (iii) Relationship with existing international conventions (Art. 28)

23

Probably the most disappointing aspect of the compromise between the Parliament and the Council was the fact that the former gave in to the latter’s perseverance to retain other international conflicts regimes as superior to the new regulation.20 Therefore, according to Art. 28 par. 1, the Rome II regime “shall not prejudice the application of international conventions to which one or more Member States are parties at the time when this Regulation is adopted and which lay down conflict-of-law rules relating to non-contractual obligations”. The only exception thereto allowed by Art. 28 par. 2 concerns conventions concluded between Member States exclusively. 17

18 19 20

Recital 12 spells out that the question whether a tortfeasor is capable to incur liability is equally governed by the law identified by this Regulation. See EU Report 2005, no. 13; EU Report 2006, no. 4. Art. 24 of the original proposal (fn. 5). See EU Report 2003, no. 16. See already EU Report 2006, no. 6.

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This is particularly disturbing with respect to the Hague Traffic Accidents Convention.21 Contrary to common sense and Parliament’s plea, this complicated and outdated conflicts treaty continues to have precedence over the Regulation since also third countries participate.22 It is unbelievable that a project aiming at the harmonisation of conflict of law rules within the Union refuses to extend to the most common practical case to which it would apply, i.e. international car accidents. And it was certainly not the breath-taking quality of the Hague Convention that kept the Council from reaching a reasonable solution, as it is long overdue that this “schizofrénie juridique”23 is repealed. If it is truly the “respect for international commitments entered into by the Member States” that requires a rule like Art. 28 as claimed by recital 36, this is yet another reason against the continued application of the Hague Traffic Accidents Convention, as it clearly lacks such respect in the legal community. It remains to be hoped that at least the Member States contribute to a more practicable conflicts regime in the future that truly deserves the label “harmonized” by making ample use of Art. 20 of the Hague Convention, which deals with its denunciation.

24

2. Limitation of Actions On 1 February 2007, Parliament adopted a non-legislative resolution directed at the Commission on the basis of Art. 192 ECT, endorsing yet another Wallis report, this time on limitation periods in cross-border disputes involving injuries and fatal accidents.24

25

Parliament wants the Commission to launch a study analyzing existing differences with respect to prescription of personal injury claims in cross-border settings. On the basis of that study, the Commission shall produce a “legislative proposal on limitation periods in respect of personal injury and fatal accident claims in cross-border litigation”, following some detailed recommendations outlined in the report itself (which therefore contains a self-fulfilling prophecy about the outcome of the study requested).

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21

22

23

24

It is not less disturbing for the Hague Convention on the Law Applicable to Products Liability, though, which is in force in six Member States (Finland, France, Luxembourg, the Netherlands, Slovenia, and Spain) and five non-member states (Croatia, Montenegro, Norway, Serbia, and FYROM). It is hard to follow arguments claiming that the Hague Traffic Convention is such an exotic instrument anyhow as it applies to just a handful of Member States: If 44 percent (Austria, Belgium, the Czech Republic, France, Latvia, Lithuania, Luxembourg, the Netherlands, Poland, Slovakia, Slovenia, and Spain) is a quota to be disregarded, the threshold for a noteworthy number seems to be fairly high. F. Schwind, Die Haager Konvention über das auf Verkehrsunfälle anwendbare Recht, Zeitschrift für Verkehrsrecht (ZVR) 1973, 326 (328). Report with recommendations to the Commission on limitation periods in cross-border disputes involving injuries and fatal accidents 2006/2014(INI), A6-0405/2006 (available at http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&reference=A6-2006-0405& language=EN&mode=XML). Diana Wallis was obviously “inspired” by lobbying efforts by PEOPIL (the Pan-European Organisation of Personal Injury Lawyers) and their draft regulation on the matter (available at http://www.peopil.com/pdf/EU-LIMITATION_ REGULATION.doc).

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27

Recommendation 1 is harmless inasmuch as it suggests to introduce “principles governing limitation periods … in appropriate form” for cross-border personal injury cases. Recommendation 2 outlines “the minimum content of the instrument to be adopted”, however, and therefore goes far beyond a mere framework: According to its first point, the general limitation period should be four years, “except where the proper law of the claim provides for a longer period”, which has to be proven by the claimant. If a damages claim is already established by a final judgment or arbitral award, it should last for ten years. Claims arising from “terrorist acts, torture or slavery” should not be subject to any limitation period at all.

28

Parliament further recommends that the limitation period should start: “(1) from the date on which the cause of action for personal injury accrued or from the date of (actual or constructive) knowledge (if later) of the person injured; (2) in the case of claims by heirs, from the date of death or the date of (actual or constructive) knowledge (if later) of the heirs of the estate; (3) in the case of claims by secondary victims, from the date of death or the date of (actual or constructive) knowledge (if later) of the secondary victim (fatal accidents) or the date on which the cause of action accrued or the date of (actual or constructive) knowledge (if later) of the person injured (non-fatal accidents).”

29

Further (equally detailed) suggestions address the suspension and interruption of the limitation period.

B. CASES 1. ECJ 15 February 2007 – C-292/05, Lechouritou et al. v. Germany [2007] ECR I-1519 a) Brief Summary of the Facts

30

Plaintiffs claim compensation for material and immaterial harm incurred due to acts committed to their parents by the German armed forces during World War II. They filed suit against the Federal Republic of Germany in a Greek court of first instance, relying inter alia on Art. 5 of the Brussels Convention25, which establishes personal jurisdiction “in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred” 25

Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters ([1978] OJ L 304, 36), as amended by the Convention of 9 October 1978 on the Accession of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland ([1978] OJ L 304, 1, and – amended version – 77), by the Convention of 25 October 1982 on the Accession of the Hellenic Republic ([1982] OJ L 388, 1) and by the Convention of 26 May 1989 on the Accession of the Kingdom of Spain and the Portuguese Republic ([1989] OJ L 285, 1).

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(par. 3) as well as in the court handling criminal proceedings if compensation is sought in an adhesion procedure (par. 4). The ECJ was asked for a preliminary ruling on the more fundamental question whether the whole matter fell under the Brussels Convention in the first place, as it was disputed that it were a “civil matter” as required by Art. 1 of said Convention. b) Judgment of the Court

The Court denied the question and ruled that actions brought by natural persons against another contracting State do not fall within the scope of the Brussels Convention if the claims are based upon acts committed by the defendant’s armed forces in the course of warfare in the territory of the plaintiff’s State. While the Court admitted that the Convention itself does not define the terms “civil and commercial matters” used as the prime filter in its Art. 1, their interpretation on the basis of the Convention’s objectives and of “general principles which stem from the corpus of the national legal systems” does not extend to claims of the type filed here. Even though “certain actions between a public authority and a person governed by private law may come within the scope of the Brussels Convention, it is otherwise where the public authority is acting in the exercise of its public powers” (par. 31). This was the case here, as the Court had “no doubt that operations conducted by armed forces are one of the characteristic emanations of State sovereignty” (par. 37). The mere civil nature of the claim as being for compensation under tort law and thereby being specifically addressed by Art. 5 par. 3 and 4 of the Convention was held to be “entirely irrelevant” (par. 41), as the overriding first test had to be the one enshrined in Art. 1. The Court pointed obiter at Art. 2 par. 1 of the European Enforcement Order Regulation26 and at Art. 2 par. 1 of the European Payment Order Regulation27, both referring to “civil and commercial matters” like Art. 1 of the Brussels Convention, but explicitly excluding “the liability of the State for acts and omissions in the exercise of State authority (‘acta iure imperii’)”.

31

c) Commentary

One would have been surprised if the Court had come to a different conclusion. Insofar, the ruling in this case is but an express clarification that the contracting States of the Brussels Convention did not want to submit themselves to the jurisdiction of another State in matters relating to the exercise of their sovereignty, irrespective of their nature. It is equally obvious that this correspondingly applies to the Brussels I Regulation28, which uses the same language in the relevant parts.

26

27

28

Regulation (EC) No. 805/2004 of the European Parliament and of the Council of 21 April 2004 creating a European Enforcement Order for uncontested claims, OJ L 143, 30.4.2004, 15–39. Regulation (EC) No. 1896/2006 of the European Parliament and of the Council of 12 December 2006 creating a European order for payment procedure, OJ L 399, 30.12.2006, 1–32. Council Regulation (EC) No. 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, OJ L 12, 16.1.2001, 1–23.

32

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2. ECJ 17 April 2007 – C-470/03, A.G.M.-COS.MET Srl v. Finland [2007] ECR I-2749 a) Brief Summary of the Facts

33

One of the vehicle lift types produced by A.G.M.-COS.MET (in the following: “AGM”) upon examination by Finnish authorities showed certain safety defects. Mr. Lehtinen, acting as an expert of the Finnish Ministry of Social Affairs and Health, but without decision-making power, was involved in the process of examining and evaluating the defect as well as the subsequent steps taken by the producer to correct it. In an interview he gave to national television recorded in his ministerial office with the permission of his immediate superior, but before the authority had rendered a decision on the case, Mr. Lehtinen stated that the vehicle lifts could present an immediate danger, and that the producer had failed to properly apply existing legislation. Even though the Ministry had withdrawn him from this case for acting contrary to its instructions and communication policy, Mr. Lehtinen continued to give interviews questioning the safety of the vehicle lifts, which triggered disciplinary proceedings against him.

34

AGM sued the Finnish State and Mr. Lehtinen jointly for compensation of economic losses allegedly incurred due to the public statements given by Mr. Lehtinen, which AGM claims to have triggered a loss of turnover in Finland and on the European market as a whole.

35

The Finnish court asked the ECJ for a preliminary ruling inter alia on the questions whether the public statements made by Mr. Lehtinen were attributable to the State as a measure having equivalent effect to quantitative restrictions within the meaning of Art. 28 EC, and whether this amounts to such a manifest and serious breach that the Finnish State has to compensate the ensuing losses if these statements had not been justified on the basis of freedom of speech. Furthermore, the question was raised whether Mr. Lehtinen can be liable himself under the circumstances. b) Judgment of the Court

36

As a preliminary question, the grand chamber of the ECJ first examined whether the matter has to be analysed on the basis of Art. 28 EC, or whether there is more specific Community legislation that needs to be taken into account when evaluating the conduct at issue. The Court was of the second opinion by pointing at the Machinery Directive29, which “harmonises exhaustively at Community level not only the rules relating to the essential safety requirements for machinery … but also the rules concerning the action that may be taken by the Member States with regard to machinery that is presumed to comply with those requirements” (par. 53). Art. 4 par. 1 of the Machinery Directive, for example, prevents Member States from prohibiting, restricting or impeding the 29

Directive 98/37/EC of the European Parliament and of the Council of 22 June 1998 on the approximation of the laws of the Member States relating to machinery, OJ L 207, 23.7.1998, 1–46.

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distribution of machinery in their territory if it complies with the Directive, and Art. 7 foresees certain measures Member States shall take if machinery bearing the CE marking (such as the vehicle lifts in the instant case) may still endanger the safety of persons. The Court went on to examine whether Mr. Lehtinen’s statements are attributable to the Finnish State, which has to be assessed from the perspective of the addressees of those statements. Whether these persons can reasonably suppose that the statements were made by an official within the authority of his office depends on such factors as the scope of the official’s authority, the circumstances of how and where the statements were given, whether the official declared his statements as personal or at least divergent from the authority’s point of view, and how the State reacted to the statements made by its official, e.g. by denouncing the statements as private opinion of the individual making them.

37

Since the Finnish State had not taken any measures foreseen by Art. 7 of the Machinery Directive with respect to the vehicle lifts, the prohibition of restricting their free movement contained in Art. 4 par. 1 continued to apply. As the public statements made by Mr. Lehtinen were held to be “capable of hindering, at least indirectly and potentially, the placing on the market of the machinery”, they could constitute a breach of Art. 4 par. 1 if the public could reasonably deem them to be attributable to the State under the circumstances just described.

38

The Court found no justification of Mr. Lehtinen’s conduct in the general objective to protect health, as the Directive was held to exhaustively serve this goal and to preclude any additional protective measures on those grounds. Neither could the statements be justified by Art. 10 par. 1 ECHR, as “Member States … cannot rely on their officials’ freedom of expression to justify an obstacle and thereby evade their own liability under Community law” (par. 72).

39

Since a breach of Art. 4 par. 1 was thereby established, the necessary follow-up question was whether it was sufficiently serious to trigger the liability of the Finnish State, and whether AGM could claim compensation on those grounds. The Court referred to the well-established conditions that need to be satisfied in order to hold a Member State liable vis-à-vis an individual for the breach of Community law: “the rule of law infringed must have been intended to confer rights on individuals; the breach must be sufficiently serious; and there must be a direct causal link between the breach of the obligation resting on the State and the loss or damage sustained by the injured parties” (par. 78).30 All these conditions were held to be fulfilled in the instant case: Art. 4 par. 1 of the Machinery Directive was deemed to indeed confer rights upon individuals, and since this provision left no room for discretion to the Member State in light of the measures foreseen by Art. 7 (but not taken by Finland in the instant case), the breach was also sufficiently serious. The third requirement – causality of the breach for the plaintiff’s loss – was for the national court to ascertain.

40

30

The Court obviously cited precedents such as ECJ joined cases C-46/93 and C-48/93, Brasserie du Pêcheur and Factortame [1996] ECR I-1029.

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41

Following concerns of the submitting court,31 the ECJ confirmed that national law must not impose any additional conditions of liability “that would make it excessively difficult to obtain damages or other forms of compensation” (par. 90). It also made clear that AGM’s damage must be compensated even if it is pure economic loss, since the “total exclusion of loss of profit as a head of damage for which compensation may be awarded in the case of a breach of Community law cannot be accepted. Especially in the context of economic or commercial litigation, such a total exclusion of loss of profit is liable to make it impossible in practice for damage to be compensated” (par. 95).

42

As to the question whether Mr. Lehtinen himself may be personally liable for AGM’s loss, the Court merely stated that liability of the State for breach of Community law “does not preclude an individual other than a Member State from being held liable, in addition to the Member State itself” (par. 98). c) Commentary

43

Both the outcome and the reasoning supporting it are convincing inasmuch as they are in line with the development of Member State liability for breach of Community law ever since the classic cases of Francovich32 and Brasserie du Pêcheur33. The additional twist of this case is that it was not the State acting through its officials in the exercise of its power, but rather an individual who publicized his personal views while holding an official function with the State. 3. ECJ 19 April 2007 – C-356/05, Farrell v. Whitty et al. [2007] ECR I-3067 a) Brief Summary of the Facts

44

The plaintiff was travelling in the rear of a van which was not designed for the carriage of passengers, seated on the floor. The defendant, who was also the owner of the vehicle, drove it into a wall after losing control of it. The defendant was uninsured. The plaintiff therefore sought compensation from the Motor Insurers’ Bureau of Ireland (MIBI), which is in charge of compensating victims of road accidents involving uninsured drivers. MIBI refused to acknowledge her claim on the grounds that she was travelling in a part of a vehicle not designed for passengers. The plaintiff argued that Ireland had not properly implemented Art. 1 of the Third Motor Insurance Directive34, which

31

32 33 34

Apparently, Finnish law made the right to compensation in the instant case dependant upon the condition that Mr. Lehtinen’s conduct amounted to a criminal offence, that it was part of the exercise of public authority, or that other “serious reasons for awarding compensation” were given. Neither of those national requirements were considered to be fulfilled in the instant case, though (par. 91). ECJ joined cases C-6/90 and C-9/90, Francovich et al. [1991] ECR I-5357. Brasserie du Pêcheur and Factortame [1996] ECR I-1029 Third Council Directive 90/232/EEC of 14 May 1990 on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles, OJ L 129, 19.5.1990, 33–35 (hereinafter: Third Directive).

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extended the scope of Art. 3 par. 1 of the First Motor Insurance Directive35 insofar as the liability insurance required by the latter should “cover liability for personal injuries to all passengers, other than the driver, arising out of the use of a vehicle”, vehicle being defined as “any motor vehicle intended for travel on land and propelled by mechanical power, but not running on rails …”. Under Irish law, compulsory liability insurance did not extend to personal injuries sustained in a part of a vehicle not designed and constructed with seating accommodation. Since MIBI had only undertaken to compensate losses that would have been covered by the mandatory insurance the driver should have (but in fact had not) taken out, its refusal to indemnify the plaintiff was in compliance with said restriction as her losses would not have fallen under the scope of the compulsory insurance cover that the defendant had failed to obtain. b) Judgment of the Court

Ireland unsuccessfully tried to point at the legislative history of the Third Directive, with the Council and the Commission agreeing at the time that Member States remained free to decide whether or not to extend protection to passengers carried in a vehicle not designed for transporting humans other than the driver.

45

Apart from rejecting such historic arguments altogether as a means of interpreting the Directive,36 the Court countered by stressing the wording of Art. 1 of the Third Directive, which speaks of “all” passengers, other than the driver, without distinctions and therefore without excluding those travelling in unsafe parts of the vehicle. It also referred inter alia to the fifth recital in the preamble to the Directive, which mentions its objective to protect all motor vehicle passengers as a “particularly vulnerable category of potential victims”.

46

In line with its reasoning in Candolin37, the Court insisted that “national rules … cannot refuse or restrict to a disproportionate extent the compensation to be made available to a passenger solely on the basis of his contribution to the occurrence of the injuries which arise” (par. 35). Only under “exceptional circumstances” may a Member State restrict the “amount [sic!] of such compensation”.

47

The Court further had to decide on the question whether the plaintiff herself could base her claim on Art. 1 of the Third Directive and its improper transposition into Irish law, which was answered in the affirmative as a matter of principle. However, such direct effect may only be relied upon against the

48

35

36

37

Council Directive 72/166/EEC of 24 April 1972 on the approximation of the laws of Member States relating to insurance against civil liability in respect of the use of motor vehicles, and to the enforcement of the obligation to insure against such liability, OJ L 103, 2.5.1973, 1–4, English Special Edition Series I Chapter 1972(II), 360 (hereinafter: First Directive). See also ECJ C-402/03, Skov Æg v. Bilka Lavprisvarehus A/S [2006] ECR I-199, par. 42. On this case, see EU Report 2006, no. 8 ff. ECJ C-537/03, Candolin v. Vahinkovakuutusosakeyhtiö Pohjola [2005] ECR I-5745. On this case, see EU Report 2005, no. 15 ff.

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State, and it was left open (and for the national court to decide) whether MIBI was acting in a public function under the control of the State, thereby fulfilling that requirement. c) Commentary

49

Alluding to Dinah Washington, what a difference a Directive makes! While the Irish legislation under scrutiny here was left uncontested by the Court as long as only the First and the Second Motor Vehicle Directives were in force,38 apparently the changes brought about by the Third Directive completely turned the outcome to the opposite.

50

This did not come unexpectedly so, however, as the unconditional willingness of the Court to ensure that car accident victims are compensated irrespective of the circumstances and their own contribution thereto had already shown in Candolin39. The critical analysis of that case40 is correspondingly valid here as well. In both cases, the victims entered a vehicle for a ride despite the obvious dangerousness of the circumstances (a drunken driver in Candolin, a place unsuitable for human passengers in the instant case). The sensitivity of the Court to the elements of a tort claim has not risen since, and the impact of the victim’s behaviour (here: volunteering to travel in a part of a vehicle that is obviously unsafe and completely unprotected against the slightest irregularities on the ride) continues to be entirely disregarded. Whether a passenger chooses to sit on the car’s hood, in the trunk, on the roof rack, or wherever, the liability insurer will always have to compensate any losses thereby suffered. This is even true for any other vehicle with even less suitable accommodation for passengers, since the Directive is not limited to automobiles. No matter how concerned a State is for the safety of its citizen and therefore provides for restrictions on ways to travel by motor vehicles, if these citizens voluntarily and knowingly choose to disregard those safety provisions, the liability insurer will still have to pay for the adverse consequences of their deliberate self-exposure to risk.41

51

It is somewhat frightening how this conclusion is being backed up. Advocate General Stix-Hackl, whose opinion the Court had followed at least with re38

39 40 41

See ECJ C-158/01, Withers v. Delaney [2002] ECR I-8301, an earlier Irish case with a very similar fact pattern (including a passenger injured in a part of the vehicle without seating) where the Court had held that the First and Second Directive “do not preclude a Member State from maintaining national legislation which does not require compulsory insurance against civil liability arising from the use of motor vehicles to cover personal injuries to passengers carried in a part of the vehicle other than a large public service vehicle, unless that part of the vehicle was designed and constructed with seating accommodation for passengers.” Oddly enough, the Court in the instant case makes reference to Withers without highlighting that fundamentally different outcome. See fn. 37. See EU Report 2005, no. 21–25. Ireland had rightly argued (but apparently not convincingly for the Court) that “it would be inconsistent to introduce directives on the construction, equipment and use of vehicles to standardise vehicle safety and at the same time to insist that persons travelling in any part of a vehicle, including on top of or underneath it, should be compensated through insurance when it is they who have placed themselves in danger” (as cited by Advocate General Stix-Hackl in her opinion at par. 34).

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spect to its conclusions, approvingly cites the Commission which had argued that the Third Directive was intended to introduce a uniform meaning of the term “passenger” which does not allow for a distinction between passengers who conform properly and those who entirely disregard safety requirements that are evident by law or common sense (par. 36, 47). While the case on its face admittedly deals with liability insurance only (or – as here Brasserie du Pêcheur and Factortame [1996] ECR I-1029 – the lack thereof) like Candolin, general statements restricting the State’s possibilities to curtail access to liability insurance awards necessarily have an impact on tort law as well. If the State is not allowed to provide for any limitations restricting claims by passengers against liability insurers, this necessarily reduces the range of possible requirements for establishing a tort claim in the first place. Advocate General Stix-Hackl suggested that the insurer (or in this case the guarantee body) may still “bring an action against the person whose conduct has contributed to causing the injury” on the basis of the law of civil liability (no. 56), but why fully compensate that person in the first place?

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4. ECJ 14 June 2007 – C-127/05, Commission v. United Kingdom [2007] ECR I-4619 a) Brief Summary of the Facts

The Commission had sued the United Kingdom for failing to properly implement Council Directive 89/391/EEC42. The complaint at stake here concerns Art. 5 of the Directive, which according to the Commission had been incorrectly transposed. Art. 5 provides in its relevant parts that the “employer shall have a duty to ensure the safety and health of workers in every aspect related to the work” (par. 1), but Member States may “provide for the exclusion or the limitation of employers’ responsibility where occurrences are due to unusual and unforeseeable circumstances, beyond the employers’ control, or to exceptional events, the consequences of which could not have been avoided despite the exercise of all due care” (par. 4). While Sec. 2(1) of the British Health and Safety at Work etc. Act 1974 essentially mirrored Art. 5 of the Directive, it reduced the employer’s duty to ensure the workers’ health and safety to cases “so far as is reasonably practicable”.

53

According to the Commission, this insertion effectively excludes the employer’s liability for risks stemming from his undertaking if he can prove to have taken all reasonably practicable measures to ensure the safety and health of his workers, which were the case if measures to avoid or reduce risks “would have been grossly disproportionate in terms of money, time or trouble when balanced against the relevant risk” (par. 20). The Commission deems such a defence not permissible, claiming that par. 4 only aims at truly exceptional cases equalling force majeure.

54

42

Council Directive 89/391/EEC of 12 June 1989 on the introduction of measures to encourage improvements in the safety and health of workers at work, OJ L 183, 29.6.1989, 1–8.

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The United Kingdom opposed this view by arguing inter alia that the Directive in dispute does not address matters of liability altogether, thereby leaving such matters for the Member States to regulate, though admittedly limited by their overall duty to guarantee the application and effectiveness of the Directive. According to the defendant’s view, Art. 5 imposes neither a guarantee of a risk-free environment nor a no-fault liability for any harm suffered at the workplace. b) Judgment of the Court

56

The Court was convinced by the arguments brought forward by the United Kingdom and denied that Art. 5 par. 1 of Directive 89/391 requires Member States to impose no-fault liability on employers for all harm incurred by their employees at the workplace. While said provision certainly does include a duty to keep the working environment safe, it does not extend to all consequences of a violation of such an obligation.

57

The Commission had supported its view by pointing at the fact that the United Kingdom (jointly with Ireland) had unsuccessfully tried to include the disputed insertion already into the wording of Art. 5 par. 1 of the Directive. The explicit rejection thereof during the drafting process was sufficient reason for the Commission to conclude that this provision was meant to imply that employers should be liable vis-à-vis their employees regardless of fault. Not surprisingly, the Court was unconvinced by such a far-reaching speculation.

58

Neither did the Court follow the narrow reading of Art. 5 par. 4 of the Directive employed by the Commission. Said provision merely defines the “margin of manœuvre” for Member States to transpose the duty embodied in par. 1 into national law (par. 49), again without any immediate impact on the consequences of a breach.

59

The last straw at which the Commission grasped equally failed to support its daring interpretation of Art. 5: While Directive 89/391 was certainly meant to improve the health and safety of workers, introducing a no-fault liability of employers for any harm employees suffer is not the exclusive and necessary way to reach that goal as suggested by the Commission. While it had acknowledged that the employer’s duty embodied in Art. 5 did not require him to take any imaginable preventive measure irrespective of the degree of risk, the Commission went so far as to claim that this is exactly why the employer should be liable without fault for any harm suffered if such minuscule risk should materialize. c) Commentary

60

By dismissing the Commission’s application, the Court followed the proposal by Advocate General Mengozzi, but did not endorse the latter’s full line of reasoning. Mengozzi had conceded that Art. 5 seems to be “designed not only to establish the employer’s general duty to ensure safety but also to determine the parameters of the minimum liability regime to which the employer, as the

European Union

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person responsible for the duty to ensure safety, must be subject should events detrimental to his workers’ health occur” (par. 66). However, in contrast to the Commission, he interpreted said Article to hold the employer liable only for fault should a foreseeable and preventable risk materialize (par. 112–118). He therefore rejected the Commission’s view that the Directive imposes a regime of strict liability upon all Member States. “That the Community legislature should have taken that approach seems all the more unlikely bearing in mind that some Member States, such as the United Kingdom, have little familiarity with no-fault forms of liability” (par. 84). He also rightly doubted that “the Community legislature was empowered to undertake harmonisation of the liability regimes in force in the Member States” (par. 93). The outcome of the case is reassuring. Had the Commission’s view prevailed, its simplistic view of the law of delict would have threatened all serious efforts to move towards a possible harmonisation of tort law in Europe: By applying the sledge-hammer of strict liability to any area where Community legislation speaks of safety, security or health, little room would have been left for an organically grown concept of tortious liability. What is really frightening, though, is that at least one of the Union’s institutions seriously seems to believe that strict liability means the same to all European jurisdictions,43 and that there is no need to differentiate between the various elements of liability. All those who trust in a more gradual approach to harmonisation, which requires respect of existing tort law cultures in the Member States, thereby suffer a snub.

61

5. ECJ 13 December 2007 – C-463/06, FBTO Schadeverzekeringen NV v. Odenbreit a) Brief Summary of the Facts

Mr. Odenbreit had been injured in a car accident in the Netherlands for which a person insured by the Dutch FBTO was responsible. Odenbreit had brought a direct action for compensation against FBTO at his domicile in Aachen (Germany). The German Federal Supreme Court (Bundesgerichtshof) had asked the ECJ for a preliminary ruling on the question whether Art. 11 par. 2 read together with Art. 9 par. 1 lit. b of the Brussels I Regulation44 allowed the victim of an accident to file a direct action in the courts of his own domicile against an insurer domiciled in another Member State.

62

b) Judgment of the Court

The ECJ answered this question in the affirmative by pointing inter alia at the Regulation’s preamble. Recital 13 thereof demands that in insurance matters 43

44

See only B.A. Koch/H. Koziol (eds.), Unification of Tort Law: Strict Liability (2002) for evidence that this is not the case. See fn. 28. Art. 11 par. 2 provides that “Art. 8, 9 and 10 shall apply to actions brought by the injured party directly against the insurer, where such direct actions are permitted”. Art. 9 par. 1 lit. b lets the insurer be sued “in another Member State, in the case of actions brought by the policyholder, the insured or a beneficiary, in the courts for the place where the plaintiff is domiciled”.

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“the weaker party should be protected by rules of jurisdictions more favourable to his interests”. It therefore made no difference for the court whether the plaintiff fell under the notion of beneficiaries as referred to in Art. 9 par. 1 lit. b Brussels I Regulation or any other category mentioned there, since the scope of that provision was expressly extended to cases falling under Art. 11 par. 2 by the reference contained therein.

64

The Court also cited the Fourth Motor Insurance Directive45 as amended by the Fifth Motor Insurance Directive46 in support of its conclusion. The latter had introduced a new recital 16a into the former, which explicitly refers to Art. 11 par. 2 read in conjunction with Art. 9 par. 1 lit. b of the Brussels I Regulation and confirms that “injured parties may bring legal proceedings against the civil liability insurance provider in the Member State in which they are domiciled”. c) Commentary

65

While some commentators had already argued in the past that direct actions against motor vehicle liability insurers can also be filed at the domicile of the victim, this was considerably disputed, even after the clarification brought about by the Fifth Motor Insurance Directive as just mentioned. Even though this debate is now moot, one may still wonder whether the Court would have found equally convincing arguments had it considered the possibility that victims domiciled in different countries may be injured by the same accident: In such a case, the insurer of the liable person may be subject to lawsuits in each of those jurisdictions, which brings about the danger of dissimilarities in the outcome of those proceedings, let alone the costs of multiple litigation.

45

46

Directive 2000/26/EC of the European Parliament and of the Council of 16 May 2000 on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles and amending Council Directives 73/239/EEC and 88/357/ EEC, OJ L 181, 20.7.2000, 65–74. Directive 2005/14/EC of the European Parliament and of the Council of 11 May 2005 amending Council Directives 72/166/EEC, 84/5/EEC, 88/357/EEC and 90/232/EEC and Directive 2000/26/EC of the European Parliament and of the Council relating to insurance against civil liability in respect of the use of motor vehicles, OJ L 149, 11.6.2005, 14–21.

XXVIII. Comparative Remarks Ken Oliphant

A. INTRODUCTION These comparative remarks provide an opportunity to assess the state of European Tort Law today, and celebrate its achievements, as well as to use European Tort Law as a lens through which to view developments in national systems. As in previous years, the country reports collected in this volume make clear that European Tort Law is no mere pipedream – as is sometimes suggested by sceptics – but a present fact. Yes, European Tort Law already exists, though it is a multi-layered concept with several planes of existence.

1

B. EC TORT LAW A first plane of existence is in the legislation of the EU, the decisions of the European Court of Justice and Court of First Instance, and the application of principles of EC law in national courts. EC Tort Law1 is a larger and more significant category than is commonly appreciated. It embraces amongst other things: expressly created civil liability regimes (notably that under the Product Liability Directive2); the judicially-developed principle of effective protection of Community rights, which may require the payment of compensation where a Community right is violated;3 state liability under the Court of Justice’s Francovich jurisprudence;4 the non-contractual liability of Community institutions under Art. 288 II EC; and the raft of supporting legislation – notably under the Motor Insurance Directives – that ensure the effective operation of tort liability rules.

2

This year, the European Union report gives detailed consideration to the long-awaited arrival of Rome II.5 In addition, many country reporters have

3

1 2 3 4 5

See further H. Koziol/R. Schulze (eds.) Tort Law of the European Community (2008). Directive 85/374/EEC on product liability. The principle may be traced back to ECJ 14/83, von Colson and Kamann [1984] ECR 1891. ECJ joined cases C-6 & 9/90, Francovich v Italy [1991] ECR I-5357. B.A. Koch, European Union (supra 598), 1 ff.

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noted the transposition of EC liability laws into their national systems, notably in the areas of motor insurance,6 intellectual property7 and environmental liability.8 There is arguably nothing of major significance for tort lawyers in the 2007 case-law of the European Courts, but a major development on a national level was reported from Poland.9 The Polish Supreme Court, considering the liability of the state for unlawful court judgments, expressly relied on the ECJ’s jurisprudence on the liability of Member States for breach of EC law, with particular reference to the Court’s judgment in C – 224/01 Köbler v Austria.10 “In the court’s view,” notes the country reporter, “the proposed interpretation of the notion ‘unlawfulness’ brings the new Polish rules on public liability (including the liability of the judiciary) in line with European law.”11 The case is then a very good illustration of how principles of EC law can exert a harmonising influence even beyond areas strictly governed by EC law.

C. ECHR TORT LAW 4

A second reference point for the concept European Tort Law is to be found in the European Convention of Human Rights (ECHR) and the jurisprudence of the European Court of Human Rights (ECtHR). Though not conceived in terms of private law, it is increasingly recognised that the Convention performs a dual role: not simply as the upholder of fundamental rights but also as a source of compensation (just satisfaction) for human rights violations without effective remedy in national courts. Like EC Tort Law, the tort law of the ECHR also impacts upon national systems.

5

In Sweden, the influence of the ECHR on the tort law decisions of the Supreme Court was so great that the country reporter has sub-titled his paper “Human Rights in Tort Law – Development of National Discourse in the Light of International Conventions and Patterns of Reasoning.”12 The country reporter notes the Supreme Court’s further recognition of the direct applicability of the ECHR, going beyond its previous jurisprudence, which concerned only art. 6 ECHR.13 In 2007, the Court recognised the direct enforceability of rights under art. 5 and 8 ECHR.14 The practical effect of these decisions was to allow the recovery of damages for non-pecuniary loss in cases involving, respectively, 6 7

8

9 10 11 12 13 14

B.C. Steininger, Austria (supra 134), no. 11 ff.; J. Ribot/A. Ruda, Spain (supra 541), no. 4 ff. I.C. Durant, Belgium (supra 173), no. 21 ff.; A. Bitāns, Latvia (supra 389), no. 1 ff.; E. Bagińska, Poland (supra 451), no. 12; A. Dulak, Slovakia (supra 521), no. 17 ff. I.C. Durant, Belgium (supra 173), no. 12 ff.; J. Lahe/I. Kull, Estonia (supra 255), no. 1 ff.; J. Fedtke, Germany (supra 288), no. 1 ff.; A. Menyhárd, Hungary (supra 339), no. 2 f.; C. Alunaru/L. Bojin, Romania (supra 497), no. 4 f.; A. Dulak, Slovakia (supra 521), no. 6 ff.; J. Ribot/A. Ruda, Spain (supra 541), no. 1 ff. E. Bagińska, Poland (supra 451), no. 75 ff. [2003] ECR I-10239. E. Bagińska, Poland (supra 451), no. 78. H. Andersson, Sweden (supra 572), no. 1. See H. Andersson, Sweden, YB 2005, 557 (no. 3 ff.). H. Andersson, Sweden (supra 572), no. 3 ff. and 7 ff.

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619

wrongful imprisonment and wrongful interference with family life (a coerced medical examination of children suspected of having suffered sexual abuse). The Swedish Court expressly followed the jurisprudence of the ECtHR, and thus sidestepped the limitations on the recovery of such damages in the Swedish Tort Liability Act. In effect, as the country report put it, the ECHR was “used as a trump-card.”15 It seems, however, that this use is limited to cases of vertical, as opposed to horizontal, effect. The influence of the Strasbourg Court was also apparent in developments concerning damages for non-pecuniary loss elsewhere. Lithuania for the first time awarded damages for non-pecuniary loss resulting from an unreasonably protracted criminal investigation, expressly following the jurisprudence of the ECtHR,16 and again relied upon ECtHR jurisprudence in indicating the criteria under which a bereaved person can claim non-pecuniary damages for the death of a family member.17 In the latter case, the Lithuanian reporters note that the result was the introduction of clarity into a previously confused area of national law, and the establishment of clear guidelines for the future.18 In Slovakia,19 also in the context of non-pecuniary damages for the loss of a close relative, the national reporter observes that “the Court went beyond the previously narrow understanding of the damage caused by unlawful and unauthorized interference with privacy, invoking, in its reasons for decision, … the case law of the European Court of Human Rights.”20 And in Italy it was noted that the decision to recognize non-pecuniary loss suffered by a corporation was “strongly influenced” by decisions of the ECtHR.21

6

Another context where the ECHR is playing an increased role in national court deliberations is in respect of the balance to be drawn between freedom of speech (art. 10 ECHR) and the right to private and family life (art. 8 ECHR), as noted this year (for example) in the Big Brother case from Norway.22

7

D. PRINCIPLES OF EUROPEAN TORT LAW A third level of existence for European Tort Law takes the form of the idealised statement or restatement of common rules and principles of tortious liability, exemplified of course by the European Group on Tort Law’s Principles of European Tort Law,23 and by the provisions on non-contractual liability in the Draft Common Frame of Reference for a European Civil Code, of which an 15 16 17 18 19 20 21 22 23

Ibid., no. 9. H. Gabartas/G. Bžozeckaitė, Lithuania (supra 400), no. 7 ff. Ibid., no. 17 ff. Ibid., no. 22. A. Dulak, Slovakia (supra 521), no. 20 ff. Ibid., no. 28. E. Navarretta/E. Bargelli, Italy (supra 373), no. 19 ff. B. Askeland, Norway (supra 440), no. 4 ff. European Group on Tort Law, Principles of European Tort Law: Text and Commentary (2005).

8

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advanced interim outline draft24 was released in early 2008, with a view to full publication later in the year. It is hoped that, amongst other things, these documents will come to play a role in national court deliberations on the future case-law development of tort.

9

In 2007, there was striking early validation of this objective in three decisions of the Spanish Supreme Court, which explicitly relied on the Principles of European Tort Law as an aid to the resolution of disputed questions of Spanish law. In one case,25 the Supreme Court took the Principles criteria governing the required standard of conduct as a reference to fill in or develop the wording of the general fault liability provision of the Spanish Civil Code (Art. 1902 CC). The Court considered that the Principles could be used as an integration or supplementation device in the same way as could other provisions of the Code itself. In the second and third cases,26 the Supreme Court quoted chapter 6 of the Principles on Liability for Others in formulating the test to be applied, namely, “the required standard of conduct in supervision.” As the Spanish reporters note,27 it is indeed remarkable that the highest court in Spain should put the Principles “on an equal footing” with the provisions of the Civil Code so as to explicate the content of domestic liability rules and fill in the gaps between them.

E. THE COMMON CORE 10

A fourth layer of meaning in the concept of European Tort Law refers to the search for a common core of principles in the court practice of different national systems. One of the great virtues of this Yearbook is that it provides a panoramic view over developments throughout the continent, and facilitates the identification of trends, the adoption of common solutions to common problems, or – as the case may be – the divergence of national systems. As comparative reporter, it falls to me to sift through the country reports – some 27 in all, if we include the report for the EU – to produce a meaningful synthesis of developments in 2007. Nevertheless, these comparative remarks – for reasons of time, space and my own limited competence – can only be a partial and personal set of reflections on last year’s European Tort Law highlights. To give my discussion some degree of order, I have chosen to follow the scheme of the three key elements of liability set out in the Principles of European Tort Law, namely Damage, Causation and Basis of Liability. I regret that this precludes analysis of many important national developments which do not fit into the Principles template, most notably, state liability – an area of considerable activity in many jurisdictions in 2007. 24

25 26 27

Study Group on a European Civil Code/Research Group on EC Private Law, Principles, Definitions and Model Rules of European Private Law. Draft Common Frame of Reference: Interim Outline Edition (2008). J. Ribot/A. Ruda, Spain (supra 541), no. 27 ff. Ibid., no. 33. Ibid., no. 32.

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1. Damage The value of approaching developments with the analytical framework of the Principles in mind was quickly made clear to me, as an English lawyer, by considering case-law developments in 2007 in England and Wales. Damage is not conventionally discussed as a separate requirement of liability in English tort law, and tends instead to lie submerged under discussions of the Duty of Care or Causation or some other surrogate concept. The House of Lords’ Pleural Plaques decision of 2007 was arguably its first to address directly the question of actionable damage as a general element of tortious liability.28 In traditional English terms, it poses considerable difficulties of classification. Viewed through the lens of the Principles, however, both the nature of the issue arising and its resolution appear relatively straightforward.

11

In 2007, cases in numerous jurisdictions dealt with rights in personality and liberty as protected interests – the latter, as in previous years, raised in several cases of unlawful arrest, detention or prosecution (state liability).29 There were also interesting developments in the area of purely financial interests, confirming the statement in the Principles that the protection of such interests may be “more limited in scope” (Art. 2:102(4)). In Norway, the case of an aggrieved horse-racing gambler demonstrates the widely-shared view across European jurisdictions that there is no automatic compensation for pure economic loss but only where there are special reasons for it.30 The Principles proceed to state (Art. 2:102(5)): “The scope of protection may also be affected by the nature of liability, so that an interest may receive more extensive protection against intentional harm than in other cases.” Again, the reported national decisions bear this out, with English31 and Swiss32 cases demonstrating that liability in those systems for the intentional infliction of economic loss is wider than that for mere negligence. Liability based on reliance is recognised as an exception from the general exclusionary rule applied to negligently inflicted economic loss, and this was considered in another case from Switzerland in 2007,33 and one from Ireland.34

12

As in previous years, a very large proportion of the reported developments concerns non-pecuniary damage. On this, I must begin by confessing to some uncertainties as to precisely what the term, and other related terms, mean in different national systems. One possible confusion, which may be avoided by adhering to the structure of the Principles, is between “immaterial harm” to a protected interest, constituting Damage, and the compensation payable – as Damages – in respect of that damage. It is important to remember, not only

13

28 29

30 31 32 33

34

K. Oliphant, England and Wales (supra 237), no. 5 ff. H. Gabartas/G. Bžozeckaitė, Lithuania (supra 400), no. 7 ff.; C. Alunaru/L. Bojin, Romania (supra 497), no. 15 ff.; H. Andersson, Sweden (supra 572), no. 3 ff. B. Askeland, Norway (supra 440), no. 8 ff. K. Oliphant, England and Wales (supra 237), no. 19 ff. P. Loser, Switzerland (supra 586), no. 15 ff. Ibid., no. 20 ff. (considering the conditions under which liability may arise on the basis of noncontractual reliance). E. Quill, Ireland (supra 352), no. 27 ff. (liability despite purported disclaimer).

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that material harm may attract the award of damages for non-pecuniary loss (e.g. pain and suffering consequent on personal injury), but also that immaterial harm may attract the award of damages for pecuniary loss (e.g. loss of earnings or profits consequent on damage to reputation). In this year’s country reports, several cases dealt with non-pecuniary loss as a head of damages – considering, for example, questions of assessment and the scope for appeal court reversal of awards;35 I regret I do not have time to consider them at any depth in these remarks. Instead, I shall pass a few brief comments on case developments which consider immaterial harm as Damage, without pretence at exhaustive consideration of all the issues that may arise.

14

For me, a useful starting question is whether simple emotional disturbance such as anxiety, distress or (mild) depression can amount to “injury to health”. In other words, are one’s feelings an interest to be protected in the law of tort? Typically, in European systems, emotional harm not resulting from physical harm does not constitute harm to a protected interest, and so does not entitle the claimant to recover even pecuniary loss arising as a consequence. An example is provided by a case last year before the Danish Supreme Court.36 The claimant’s daughter died as a result of medical negligence (failure to diagnose meningitis). The mother was unable to work in the ensuing period due to her mental anguish and grief. The court rejected her claim for damages, drawing a distinction between psychiatric conditions amounting to “proper” emotional harm and mere anguish and grief. Other country reports reinforce the general need for something more than emotional upset. In Italy, for example, the death of the claimant’s horse was not an injury to his constitutionally protected sphere of feelings.37

15

Of course, even where there is no physical harm, liability may be established – and damages awarded for emotional harm – where some other protected interest is violated, for example, physical integrity,38 liberty39 or privacy.40 It bears repeating, once again, that damages in such cases may also be granted for pecuniary loss, for example, loss of income during a period of unlawful detention.41

35

36 37

38

39

40

41

See, e.g., B.C. Steininger, Austria (supra 134), no. 40 ff.; E. Dacoronia, Greece (supra 309), no. 60 ff.; A. Menyhárd, Hungary (supra 339), no. 5 ff. V. Ulfbeck/S. Bergenser, Denmark (supra 232), no. 11 ff. E. Navarretta/E. Bargelli, Italy (supra 373), no. 35 ff. Cf. O. Moréteau, France (supra 274), no. 33 ff. (shock and distress following discovery of risk from faulty pacemaker), suggesting a possibly different approach in that jurisdiction. C. Takoff, Bulgaria (supra 206), no. 15 (rape). It seems that the sum awarded for non-pecuniary damage was not exclusively referable to the victim’s post-traumatic stress syndrome but also reflected the infringement of her bodily and sexual inviolability. C. Alunaru/L. Bojin, Romania (supra 497), no.15 ff.; H. Andersson, Sweden (supra 572), no. 3 ff. E. Quill, Ireland (supra 352), no. 18 ff.; A. Bitāns, Latvia (supra 389), no. 37 ff.; B. Askeland, Norway (supra 440), no. 4 ff. H. Gabartas/G. Bžozeckaitė, Lithuania (supra 400), no. 7 ff.; C. Alunaru/L. Bojin, Romania (supra 497), no.15 ff.

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Where the victim’s mental disturbance amounts to a “proper” psychiatric illness – to use the descriptor applied in the Danish case I have just mentioned42 – there appears to be no doubt that it amounts to actionable damage, and damages (both pecuniary and non- pecuniary) are routinely awarded to direct or primary victims. A Hungarian example from 2007 concerned the harassment of tenants.43 It was found that the plaintiffs had suffered psychic damage and had need of regular mental health maintenance as a result of the defendants’ aggressive and unlawful behaviour. The court awarded non-pecuniary damages for mental harm. Another situation of liability to a primary or direct victim is where an employee suffers a stress-related illness attributable to excessive demands at work, as instantiated last year by cases from the Netherlands.44

16

In several countries, however, the scope of protection against psychiatric harm is limited, for example, for fear of opening the floodgates of liability. In Germany, the Bundesgerichtshof rejected a claim in respect of psychiatric harm suffered by a police officer who witnessed a fatal road collision and then attempted unsuccessfully to rescue passengers trapped in the wreckage. His injury was not within the protective scope of the general liability clause of the BGB (§ 823(1)) or the Road Traffic Act.45 In Austria,46 the Oberster Gerichtshof declined to extend the categories of “shock damage” to the situation where a wife suffered depression amounting to an injury to health consequent on her husband’s unlawful arrest and criminal prosecution. The contrary decision would have entailed an unacceptable opening of the floodgates of liability. And, in Ireland, the Supreme Court rejected a claim for damages by a parent who suffered post-traumatic stress disorder (PTSD) following her discovery that her recently-deceased daughter’s organs had been removed post mortem and retained without the mother’s consent.47 The psychiatric injury resulted from the communication of information and not from the claimant’s perception of an actual or apprehended injury to the daughter, and so the national criteria applicable to negligently-inflicted psychiatric harm were not satisfied.

17

The nature of these “scope of protection” restrictions on liability varies from system to system, reflecting the different weight attached to the relevant policy considerations. An illuminating contrast can be made between cases in England and Spain. The English House of Lords ruled that psychiatric illness caused by the victim’s fear of contracting asbestosis or mesothelioma in the future was not reasonably foreseeable, so his employer owed him no duty of care.48 In the Spanish case, however, the claimant was awarded damages for having had to live for almost 4 years with the fear of dying from AIDS following his misdi-

18

42 43

44 45 46 47 48

V. Ulfbeck/S. Bergenser, Denmark (supra 232), no. 11 ff. A. Menyhárd, Hungary (supra 339), no. 5 ff. See also the award for post-traumatic stress disorder in E. Quill, Ireland (supra 352), no. 18 ff. M.G. Faure/T. Hartlief, The Netherlands (supra 416), no. 21. J. Fedtke, Germany (supra 288), no. 10 ff. B.C. Steininger, Austria (supra 134), no. 34 ff. E. Quill, Ireland (supra 352), no. 12 ff. K. Oliphant, England and Wales (supra 237), no. 5 ff.

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agnosis as HIV-positive, leaving him with permanent psychological effects.49 Some may still count his fate preferable to that of the English claimant, who after all must live with both his current clinical depression, and the still active risk that he may develop a fatal condition in future.

19

A final set of claims last year concerned bereavement at the death of a relative or loved one. In many systems, the resulting liability is exempted from the normal requirement of a “proper” psychiatric illness, and raises questions as to the precise nature of the claimant’s protected interest. But the main question for the courts in 2007 was, as usual, the class of person entitled to sue for damages. The year’s cases provide further evidence of the idiosyncratic approach to such matters of the Greek courts50 (we receive reports about it every year!), and also of analysis of the question in several other national systems, for example, Bulgaria51 and Lithuania.52 Going against the general trend, a Danish court rejected a claim by a mother in respect of the death of her young daughter in hospital.53 By contrast, in Poland, legislative reform extended the right to non-pecuniary damages to bereaved relatives whether or not, as previously required by national law, they also suffered pecuniary loss.54 English reforms too are proposed which, if enacted, would extend to some extent the class of those entitled to damages for bereavement.55 2. Causation

20

In considering factual (or natural) causation, 2007 was a less exciting year than 2006, when the highest appellate courts of England and the Netherlands broke with tradition and adopted the concept of proportional liability in cases of uncertain alternative causation.56 But 2007 did see some interesting followup in those two jurisdictions, as the effects of the landmark cases were worked out in the lower courts. In England, the Court of Appeal rejected the application of proportional liability to a case57 in which the claimant suffered bladder cancer for which there were two contributory causes: first, his exposure to carcinogens in his employment in the defendant’s dye plant; secondly, his moderate smoking for some 20 years. The preferred scientific evidence was that the occupational exposure was the major contributing cause, contributing 70% of the total risk. On those facts, said the Court, the natural inference was that the claimant would not have developed cancer if it had not been for the oc49 50 51 52 53 54 55 56

57

J. Ribot/A. Ruda, Spain (supra 541), no. 37 ff. E. Dacoronia, Greece (supra 309), no. 46 ff. C. Takoff, Bulgaria (supra 206), no. 18. H. Gabartas/G. Bžozeckaitė, Lithuania (supra 400), no. 17 ff. V. Ulfbeck/S. Bergenser, Denmark (supra 232), no. 11 ff. E. Bagińska, Poland (supra 451), no. 6 ff. K. Oliphant, England and Wales (supra 237), no. 1. In England: Barker v Corus (UK) Ltd [2006] United Kingdom House of Lords (UKHL) 20, noted by K. Oliphant, England and Wales, YB 2006, 153 (no. 20 ff.). The application of this analysis to mesothelioma claims was promptly reversed by Compensation Act 2003, sec. 3, noted by K. Oliphant, England and Wales, YB 2006, 153 (no. 1 ff.). In the Netherlands: Hoge Raad, 31 March 2006, noted by M.G. Faure/T. Hartlief, The Netherlands, YB 2006, 338 (no. 22 ff.). K. Oliphant, England and Wales (supra 237), no. 15 ff.

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cupational exposure, so he was entitled to undiscounted damages for his injury. In the Netherlands, by contrast, proportional liability was applied in a case of congenital disability which could not be attributed with certainty to either clinical negligence or natural causes.58 In another Dutch decision, a secretary who was subjected to passive smoking in the workplace recovered 50% of the value of her injury, even though she already suffered from asthma and would therefore probably have suffered a disabling injury anyway. The country reporters note criticism of the decision for too easily applying the proportional liability solution.59 These decisions, in both jurisdictions, demonstrate that causal innovations such as proportional liability are liable to lead to periods of uncertainty in national systems – and possible errors or, at least, divergences of view – as the proper scope of the exceptional approach is determined relative to the orthodox requirements of causation So far as I can see, no other jurisdiction newly embarked along the road of causal innovation in 2007, but it appears that a decision of the Italian Supreme Court has at least left the door ajar for liability based on increased risk in the future. The Court rejected the application of its jurisprudence on causation in criminal law to the law of civil liability.60 Criminal liability based on increased risk was rejected by the Court in 2002. In civil law, by contrast, said the Court in 2007, “the causal judgment should be less severe.” The decision thus paves the way for the development of “an autonomous conception of causal link in tort law.”61 Where this will lead remains to be seen.

21

Though claims for loss of chance may more correctly be viewed as cases which redefine the damage requirement for tortious liability, rather than the requirements of causation, it is convenient to consider them here for their effect is to sidestep limitations inherent in the traditional sine qua non or “but for” test. Though some country reporters reported judicial reliance on the “loss of chance” analysis in 2007 (e.g. in the context of negligence by a legal attorney),62 the most important decision in 2007 was in fact opposed to its recognition. In a case of serious injury from meningitis, where the hospital was at fault in failing to diagnose it on the claimant’s initial presentation, the Swiss Federal Court upheld the decision of the cantonal court that the claim failed for want of causation, there being no proof that earlier treatment – from the time of the initial non-diagnosis – would have prevented the injury.63 The Federal Court rejected the “loss of chance” analysis because the chance could not be regarded as an asset that the injured party would otherwise have been able to dispose of. In addition, the award of proportional damages would conflict with the normal requirement of natural causation by which the defendant’s tortious conduct had to be the predominantly probable cause of the injury. Though the

22

58 59 60 61 62

63

M.G. Faure/T. Hartlief, The Netherlands (supra 416), no. 30. Ibid. E. Navarretta/E. Bargelli, Italy (supra 373), no. 38 ff. Ibid., no. 44. M.G. Faure/T. Hartlief, The Netherlands (supra 416), no. 29. Cf. O. Moréteau, France (supra 274), no. 8 ff. P. Loser, Switzerland (supra 586), no. 26 ff.

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particular procedural context of the case prevents us from concluding that the theory of loss of chance has been unequivocally rejected in Swiss law – the Federal Court had to determine whether the cantonal court’s rejection of the theory was “grossly incorrect” – the Swiss reporter gives “no great odds” that the theory has any future, at least in the context of physical injuries.64 3. Basis of Liability

23

My remarks here address two particular issues that were thrown up by last year’s cases, both relating to the concept of risk. The first is the distinction drawn, in both fault-based and strict liability, between risks that are fairly allocated to the defendant, and those deemed to fall within the victim’s sphere. The second is the duty to disclose risks inherent in medical treatment. a) Risks in the Victim’s Sphere

24

We have already noted the decision of the Spanish Supreme Court which makes explicit reference to the Principles of European Tort Law to elucidate the meaning of “fault”. The Court’s own analysis, however, hits on what was a theme of several cases in 2007: it is not the taking of every risk that warrants a finding of fault; instead there are certain risks that form part of the ordinary hazards of life, or that otherwise fall within the victim’s sphere. On the facts, the risk that a dinner guest might fall over a small toy left on the floor by her hosts’ child was not one that required the hosts to take special precautions. The injury was attributable to the claimant alone, and there was no negligence on the part of the hosts. The Spanish reporters describe the stance of the Court as “restrictive”, noting that this and other decisions in 2007 mark the reversal of the approach of recent decades under which the standard of care was raised to such an extent that the general liability for fault under the Spanish Civil Code (Art. 1902 CC) came quite close to becoming a strict liability, in substance if not in form.

25

Another decision in similar vein comes from Slovenia: the management of a ski track does not have to guard against the ordinary risks of the sport by cushioning trees or clearing the edge of the forest through which the track runs.65 Those engaging in outdoor pursuits cannot expect the removal of all natural hazards.

26

We also find similar cases in the area of liability for others, particularly concerning the content of duties of supervision. The Swiss Federal Court, for example, in a case where a woman was knocked down by a bobsleigh ridden by the defendant’s four- and two-year-old children, made clear that it cannot be expected that parents taking their children sledding should have to run down the slope alongside the sled to prevent collision with other persons.66 As the Swiss commentator notes, the possible victim must either adopt precautionary measures or put up with the injury as a hazard of life. 64 65 66

Ibid., no. 30. R. Lampe, Slovenia (supra 526), no. 32 ff. P. Loser, Switzerland (supra 586), no. 31 ff.

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A Swedish decision67 rejecting tort liability for the suicide of a prisoner whilst under lawful custody can also be seen to highlight the issue of victim responsibility. The deceased hanged himself with his belt, which should have been removed from his trousers before he was put in the cell. However, the custody officers had no reason to know he posed an acute suicide risk, and there was therefore no basis on which they could be liable.

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Even in cases on strict liability are such ideas of everyday risk and victim responsibility to be found. In Estonia, in a case involving a fall in the course of a horseback riding trip, the Supreme Court specifically observed that risks voluntarily assumed by the victim may fall outside the protective purpose of strict liability rules.68 So “individuals participating in managing a major source of danger, temporarily subduing the major source of danger to their management, or benefiting from the management of the major source of danger are not entitled to demand from the person managing the major source of danger compensation for damage caused to them by the major source of danger on the basis of strict liability provisions.”69 In this context, we may also note a decision in Sweden, finding that fire from leaking gas was not a special risk warranting the imposition of strict liability,70 and two Slovenian decisions rejecting somewhat optimistic claims which alleged respectively that football71 and skiing72 were dangerous activities and therefore attracted strict liability. However, in another Slovenian case,73 it was found that a military exercise with live guns and ammunition was hazardous as regards hearing loss suffered by a participating soldier even though the latter had discarded the ear plugs with which he was provided. The protection did not take away the hazardous characteristics of the weaponry, though the failure to make use of the protection could be reflected in a finding of contributory negligence. And in Austria, in a case where it was assumed that the defendant had deliberately driven his car at speed into a wall pursuant to a suicide pact with the plaintiff, his passenger, the Oberster Gerichtshof stated that the victim’s voluntary assumption of risk cannot exclude the wrongfulness of the injurer’s act, and made an award of damages (albeit reduced for contributory negligence).74

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The limits of the victim’s self-responsibility were also explored in Switzerland75 where a woman was injured when she fell from the ladder giving access to the raised gallery in her boyfriend’s flat. The ladder was not securely fixed and it slipped as she tried to descend. She brought an action against the building owner, her boyfriend’s landlord. Although the relevant Code provision (Art. 58 CC) expressly limits the responsibility of the owner by reference

29

67 68 69 70 71 72 73 74 75

H. Andersson, Sweden (supra 572), no. 19 ff. J. Lahe/I. Kull, Estonia (supra 255), no. 18 ff. Ibid., no. 21. H. Andersson, Sweden (supra 572), no. 28 ff. R. Lampe, Slovenia (supra 526), no. 41 ff. Ibid., no. 32 ff. Ibid., no. 57 ff. B.C. Steininger, Austria (supra 134), no. 47 ff. P. Loser, Switzerland (supra 586), no. 35 ff.

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to the victim’s self-responsibility, the Federal Court found that this limitation was not applicable on the facts as neither the tenant nor his girlfriend could have detected the ladder’s faulty condition.

30

It cannot be said that there is a universal trend that can be discerned in these decisions on the basis of liability, but it certainly appears to be the case that the hazards of ordinary life and risks in the victim’s sphere were cited more frequently in 2007 than in previous years as factors justifying limits on liability, whether fault-based or strict. Depending on one’s perspective, it is certainly possible to see such cases as protecting the defendant at the expense of the victim.76 b) Disclosure of Treatment Risks

31

To me, a striking illustration of this phenomenon is provided by cases in Ireland, Poland and Spain on the medical law concept of informed consent. Here, there seems to be the beginning of an undesirable international trend to water down the safeguards intended to protect the patient, by taking an especially lenient view of what constitutes an unreasonable failure to warn of treatment risks. Thus the Irish Supreme Court found it sufficient to warn the patient 30 minutes before the operation, when he was in a hospital gown in a bed in a ward, though not yet sedated.77 In Poland,78 the Supreme Court disregarded the doctor’s failure to get full written consent (required by statute) prior to an operation in which the claimant’s uterus and ovaries were removed, and found that oral information she was given about the scope of the operation was enough. The written consent was limited to removal of the patient’s uterus, and precisely what was said to her was a matter of dispute between the parties. In Spain, the reporters express concern about a distinction drawn by the Supreme Court79 between “curative” and “voluntary” procedures in terms of the extent of the duty of disclosure. In curative medicine, where surgery is considered necessary, “there is no need to warn about every possible or potential risk that may eventuate.”80 On the facts, the risk was considered too remote to require a warning. To the reporters, the decision blurs the line between the standard of care and causation, and represents a very inauspicious development for claimants.81

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Of course, the differences between national systems in this area are very great, and it would be misleading not to mention two German cases82 that demonstrate, in the view of the country reporter, “the high standards established by 76

77 78 79 80 81 82

We may also note the view of the reporters from the Netherlands that the Hoge Raad, in employer’s liability cases, seems to have moved in favour of the employer, as least insofar as the burden of proof is concerned: M.G. Faure/T. Hartlief, The Netherlands (supra 416), no. 16. E. Quill, Ireland (supra 352), no. 15 ff. E. Bagińska, Poland (supra 451), no. 82 ff. J. Ribot/A. Ruda, Spain (supra 541), no. 44 ff. Ibid., no. 45 (translating the Court’s own words). Ibid., no. 49. J. Fedtke, Germany (supra 288), no. 18 ff. and 21 ff.

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the Bundesgerichtshof in the area of informed consent.”83 In Austria, too, the patient’s right to self-determination has been reinforced in the difficult situation where, in the course of surgery to which the patient has consented, the initial diagnosis is found to have been wrong or incomplete, and the doctors have to decide whether to proceed in line with the new diagnosis or to terminate the surgery and get further consent. If the risks of terminating the operation outweigh those of continuing, the patient’s consent may be presumed, but, if they are equally balanced, the patient’s consent has to be acquired.84 It would be good if the high standards of patient protection in such countries were to serve as a model for those where disclosure duties are as yet not so developed.

F. LITERATURE The collaborating entities that organise this Yearbook – the European Centre of Tort and Insurance Law (ECTIL) and the Institute for European Tort Law (ETL) – continue to make an outstanding contribution to the literature of European Tort Law. Perhaps their major achievement of 2007 was the publication of the first instalment of the new Digest of European Tort Law, an ongoing project under ETL editorial supervision.85 I was guilty of jumping the gun by mentioning it in my comparative remarks last year – it came out in early 2007 – but such is the project’s importance that I make no apology for mentioning it again. The aim is to produce English-language summaries and analyses of court decisions in current European legal systems (including decisions of the ECJ), organised by topic, with supplementary reports from historical and comparative perspectives. The Digest thus complements the European Group’s Principles of European Tort Law86 by providing for the easy comparison of national solutions to recurring issues of tortious liability, and for the assessment of the extent of the common ground between national systems. For each sub-topic addressed in the Digest volumes, there is analysis of how selected cases would be resolved under the Principles. Volume 1, published last year, is titled Essential Cases on Natural Causation. Volume 2, on which work is now beginning, will deal with the concept of damage.

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Other important work published in 2007 includes four volumes in the series Tort and Insurance Law jointly published by ECTIL and ETL. The first to appear was Tort and Regulatory Law, edited by W.H. van Boom, M. Lukas and C. Kissling.87 The other three emerged from a single project on the theme of Shifts in Compensation, which considered the historical shifts between private

34

83 84 85

86 87

Ibid., no. 20. B.C. Steininger, Austria (supra 134), no. 47 ff. B. Winiger/H. Koziol/B.A. Koch/R. Zimmermann (eds.), Digest of European Tort Law, vol. I: Essential Cases on Natural Causation (2007). Reviewed by J. Scherpe [2007] CLJ 719. European Group on Tort Law (fn. 23). W.H. van Boom/M. Lukas/C. Kissling (eds.), Tort and Regulatory Law (2007), Tort and Insurance Law, vol. 19. Relevant cases this year include: A. Menyhárd, Hungary (supra 339), no. 21 ff. (statutory planning permission not preventing liability for diminution of property value caused by near-by mobile phone mast).

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and public compensation systems that have occurred both generally, and in the specific areas of work-related injuries and diseases and environmental damage. The project was co-ordinated by W.H. van Boom and M. Faure, but others also took responsibility for the editing of individual volumes.88 The topical importance of these issues is underlined by the adoption last year by the Belgian Parliament of an Act establishing a no-fault public compensation scheme for the victims of injury resulting from medical care.89 The scheme largely displaces the private law compensatory remedy in tort, though the tort remedy remains in cases of gross negligence and intentional fault. The victim in such a case remains entitled to no-fault compensation, but must repay it out of such damages as he or she recovers through ordinary tort litigation. The country reporter notes that the reform responds to dissatisfaction with the tort system of compensating for medical injuries, and identifies a number of contributing factors:90 the difficulty in proving fault, the slowness of the legal proceedings, the non-granting of compensation in too many cases of medical accidents, the feeling among practitioners that they are treated in an unfair and repressive manner, the risk of the development of defensive medicine, the increase in the frequency of legal proceedings, the increase of the premiums paid by practitioners and hospitals… Other country reporters also note academic support for no-fault systems in their jurisdiction, both for medical injuries91 and in other contexts.92 These reports provide a salutary reminder that, as we embark on further exploration of the field of European Tort Law, the answer to the challenges that face us may well be found – at least on occasion – in non-tortious, no-fault systems of compensation.

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Turning to scholarly work published outside the confines of ECTIL/ETL, we may note in the first place the number of country reporters who cited literature published in their national systems which expressly addresses the Principles of European Tort Law.93 Of particular note is the inauguration in the Netherlands of a new journal series devoted to discussion of the Principles.94 The Yearbook 88

89 90 91

92 93

94

S. Klosse/T. Hartlief (eds.), Shifts in Compensating Work-Related Injuries and Diseases (2007), Tort and Insurance Law, vol. 20; M. Faure/A. Verheij (eds.), Shifts in Compensation for Environmental Damage (2007), Tort and Insurance Law, vol. 21; W.H. van Boom/M. Faure (eds.), Shifts in Compensation between Private and Public Systems (2007), Tort and Insurance Law, vol. 22. I.C. Durant, Belgium (supra 173), no. 28 ff. Ibid., no. 29. E. Bagińska, Poland (supra 451), no. 100 f. See also V. Ulfbeck/S. Bergenser, Denmark (supra 232), no. 11 ff., discussing the assessment of compensation under the Danish Patient Insurance Act 1997. J. Ribot/A. Ruda, Spain (supra 541), no. 67 (compensation for asbestos victims). B.C. Steininger, Austria (supra 134), no. 74; E. Navarretta/E. Bargelli, Italy (supra 373), no. 64; H. Gabartas/G. Bžozeckaitė, Lithuania (supra 400), no. 35 ff.; B. Askeland, Norway (supra 440), no. 28; A.G. Dias Pereira, Portugal (supra 476), no. 81 and 90; C. Alunaru/L. Bojin, Romania (supra 497), no. 28 ff.; and J. Ribot/A. Ruda, Spain (supra 541), no. 72. No doubt the Principles were also addressed in many works where the influence was not specifically noted by the country reporter. M.G. Faure/T. Hartlief, The Netherlands (supra 416), no. 34.

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“family” of country reporters also continues to make its own personal mark, for example, through monographs published last year by B.C. Steininger, on dangerousness in both fault-based and strict liability,95 and V. Ulfbeck, on product liability issues in transport law.96 Looking ahead, the great publishing event of 2008 – for those interested in any aspect of European Private Law – will no doubt be the appearance of the Draft Common Frame of Reference prepared by the Study Group on a European Civil Code and the Research Group on EC Private Law (Acquis Group). It will be titled Principles, Definitions and Model Rules of European Private Law. An interim outline edition97 has already been made available, but we eagerly await the full publication – containing commentary and notes – which is expected before the year’s end.

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G. CONCLUSIONS Changes in technology, society, culture and the physical world around us present the same or similar problems for all the nation states of Europe, as new forms of injury, and new ways of causing injury, are identified. The national reports show individual systems grappling with new technologies, for example, genetic engineering98 and mobile phones (and their masts).99 Society demands responses that are sometimes irrational, or at least unscientific (e.g. alternative medicine100), and this poses new challenges for tort law too. The same can be said of changes in global culture, for example, the cult of instant celebrity instantiated by the global televisual success of Big Brother, this year in the legal spotlight in a case reported from Norway.101 In the face of these common challenges, developments in national legal systems – noted in the various country reports – show further evidence of a soft harmonisation as national systems adopt solutions that have been tried and tested elsewhere, or simply appear to be the “best” answer to the problem, whether or not the decision-maker in question sees value in a common solution across nation states. And increasingly apparent is the harmonising pull exerted by the supranational legal systems of the EC and ECHR, whose own emerging tort laws act as outliers for the European Tort Law project as a whole.

95 96 97 98 99 100 101

B.C. Steininger, Austria (supra 134), no. 73. V. Ulfbeck/S. Bergenser, Denmark (supra 232), no. 21. Study Group on a European Civil Code/Research Group on EC Private Law (fn. 24). I.C. Durant, Belgium (supra 173), no. 44 ff.; J. Fedtke, Germany (supra 288), no. 5 f. A. Menyhárd, Hungary (supra 339), no. 21 ff. See R. Lampe, Slovenia (supra 526), no. 1 ff. B. Askeland, Norway (supra 440), no. 4 ff.

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Contributors Christian ALUNARU Western University “Vasile Goldis”, Arad Faculty of Law Bdul Revolutiei, 94-96 310025 Arad Romania Tel./Fax: (+40) 257 210171 christian.alunaru@ gmail.com

Håkan ANDERSSON Uppsala University, Faculty of Law P.O. Box 512 SE-751 20 Uppsala Sweden Tel.: (+46) 18 471 2001 hakan.andersson@ jur.uu.se

Christian Alunaru is an Associate Professor and Chair of Private Law at the Faculty of Law, Western University “Vasile Goldis”, Arad, Romania. He is also a practising barrister and a member in the National Council of the Romanian Bar Association. He has a PhD in civil law from “Babes-Bolyai” University, Cluj, Romania. In 1998, he was awarded a scholarship to study at the University of Freiburg, Germany. He has published papers on real rights and liability for defective products in a number of Romanian journals. In Austria, he has published a paper on the influence of the Austrian ABGB on the civil law in Transylvania, in a collection of articles at Manz (2004), and the chapter on the Romanian Legal System in the encyclopedia of Romania, published by LIT (Vienna, 2006). He authored a book on foreigners’ rights concerning real property in Romania. He is a member of the German Jurists’ Forum and also of the Austrian Jurists’ Forum. Since 1994, he has taken part in all congresses and conferences organised by the two professional associations. He has been a participant at ECTIL’s conferences since 2004. Håkan Andersson is a Professor of Private Law at Uppsala University. After graduating (LL.D, Dr juris) in 1993 on a thesis in tort law (The Purpose of Protection and Adequacy. On the Limits of Liability in Tort Law), he has developed his interest in the constructive use of newer philosophy in the field of private law, especially tort law. His research project “Transformation of the Legal Argumentation in Late Modernism” is developing discoursive theory and philosophy of language in direct contact with private law. He has written more than 95 opuses.

Contributors

Bjarte ASKELAND Faculty of Law University of Bergen Magnus Lagabøtes plass 1 5010 Bergen Norway Tel.: (+47) 55 58 95 84 Fax: (+47) 55 58 95 71 bjarte.askeland@ jur.uib.no

Ewa BAGIŃSKA Uniwersytet Mikolaja Kopernika ul. Gagarina 15 87-100 Torun Poland Tel.: (+48-56) 611 4095 Fax: (+48-56) 611 4005 baginska@ uni.torun.pl

Elena BARGELLI Faculty of Political Science Pisa University Via Serafini, 3 56126 Pisa Italy Tel.: (+39-050) 2212458 Fax: (+39-050) 2212470 [email protected]

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Bjarte Askeland studied law at the University of Bergen and finished as cand. jur. in 1991. From 1992– 1994 he worked as an assistant judge and as a judge in Jæren district county court, Norway. He later worked at the University of Bergen, since 2005 as professor. He became doctor juris in 2001 on a thesis on vicarious liability, published in 2002. In 2006 he published a book with the title “Loss Allocation and Right of Recourse in Tort Law”. Askeland has additionally written a number of articles, mainly within tort law and legal theory. He has also contributed to several comparative projects organised by ECTIL and ETL. As of September 2008 Askeland is the leader of a research project (funded by the Norwegian Research Council) named “The Temporal Dimension of Tort Law”. Ewa Bagińska completed her PhD in law in 1999 and habilitated in 2006. She is a Professor in the Department of Civil and International Commercial Law at the Nicholas Copernicus University in Torun and holds the Chair of Civil Law at the University in Gdansk. Prof. Bagińska was a Fulbright Visiting Scholar (1998/1999) and NATO Science Fellowship grantee (2000/2001) at The Catholic University of America, Washington, DC. Author of the book Odpowiedzialnosc za produkt w USA (Products liability in the USA), Torun 2000, Odpowiedzialnosc odszkodowawcza za wykonywanie wladzy publicznej (Public liability), Warsaw 2006 and several articles about civil liability, consumer protection and medical law. In 2007 she joined two teams of the Commission for the Codification of Civil Law working on the new civil code (tort liability and consumer contracts). Elena Bargelli has been Associate Professor of Private Law at the Faculty of Political Science (University of Pisa) since 2006. She graduated in Law at the University of Pisa in 1993, got a PhD in Private Law in 1999, and became lecturer at the Faculty of Economics in Pisa in 2001. She is author of a book on Property and Tenancy Law, and of several articles concerning Tort Law (with particular regard to nonpecuniary losses), Contract Law and Family Law.

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John BELL Faculty of Law University of Cambridge 10 West Road, Cambridge CB3 9DZ UK Tel.: (+44)1223330074 [email protected]

Søren BERGENSER University of Copenhagen Studiestraede 6, 1455 Copenhagen Denmark Tel.: (+45) 26 14 71 17 [email protected]

Agris BITĀNS University of Latvia, Lecturer at Faculty of Law, Attorney at Law Kr.Valdemara iela 19, Riga, Latvia, LV 1010 Tel.: (+37 1) 7280102 Fax: (+37 1) 7504566 agris.bitans@ baltmanebitans.com

Contributors

Professor John Bell FBA QC is Professor of Law at the University of Cambridge and Chair of the School of Humanities and Social Sciences. He chairs the Joint Academic Stage Board of the English legal professions and is a member of the Legal Services Consultative Panel of the Ministry of Justice. He teaches and researches in comparative law in Europe, particularly in French law. His recent publications include Judiciaries within Europe (Cambridge University Press 2006). With Professor David Ibbetson, he has recently led a collaborative research project on “European Legal Development”, funded by the Arts and Humanities Research Council in the UK. Søren Bergenser is an Assistant Professor at the University of Copenhagen, Institute of Private Law under Professor Vibe Ulfbeck, where he deals with professional and product liability and the liability of public authorities. Søren Bergenser graduated from Aarhus University in 1999 where he also worked as an Assistant Professor from 1997–1999. Søren Bergenser is also a practising lawyer and has liability and insurance law, litigation and arbitration as his expertise areas. Agris Bitāns graduated from the Faculty of Law at the University of Latvia with a Bachelor’s degree in law in 1993 and with a Master’s degree in law in 1995. Apart from practising as an attorney at law, he continues his academic studies at the University of Latvia for a doctorate degree. He also lectures at the Civil Law Department, Faculty of Law, University of Latvia. His area of expertise is the law of obligations, with a focus on contract law and civil liability, tort law and intellectual property law. He is a co-author of the commentary on the Latvian Civil Code. He is the author of the book “Civil liability and its kinds” (Civiltiesiskā atbildība un tās veidi) and of many articles relating to law issues. He is a member of the Latvian Bar, International Bar Association and AIPPI (International Association for the Protection of Industrial Property). Since his admittance to the Latvian Bar in 1998, he has been practising mostly in civil (contracts and tort),

Contributors

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intellectual property, commercial and administrative matters. His fields of legal research include contract and tort law, personality law, medical law and media law. He is also a regular participant at international conferences and workshops dealing with intellectual property law, civil law, litigation and arbitration. Lucian BOJIN Western University of Timisoara Faculty of Law Bd. Eroilor de la Tisa nr. 9/A 300557 Timisoara Romania Tel./Fax: (+40 256) 592400 lucianbojin@ valentin-asociatii. com

Lucian Bojin was born in 1975 in Timisoara. He graduated from the University of Timisoara in 1998 and pursued postgraduate studies in Business Law. He is a Teaching Assistant at the Western University of Timisoara in Business Law and International Law. He is also a practising barrister and a partner in the law firm “Valentin & Asociatii”. He was part of the team that first translated the Treaties instituting the European Communities (published in 1999) into Romanian. He has published papers on European Law, International Law, Business Law and Human Rights.

Greta BŽOZECKAITĖ Ozo str. 25 Greta Bžozeckaitė graduated from the Mykolas RomLT-07150 Vilnius eris University, Faculty of Law (Vilnius, Lithuania) Lithuania in 2007. Since autumn 2007, she has been pursuing Tel.: (+370) 659 her Masters Degree in Business Law. She has been 38289 a lawyer’s assistant in a private company since 2007 Fax: (+370) 5 204 and her areas of expertise include contract law, com4283 pany law and commercial law. greta.bzozeckaite@ akropolis.lt Eugenia G. DACORONIA Attorney-at-Law Eugenia Dacoronia was born of Greek nationality in Assistant Professor Cairo (Egypt) in 1958. She graduated with excellence of Civil law at the in 1979 from the Athens Faculty of Law, where she Athens University also received her doctorate with excellence in 1994. Department of Law She has attended several courses abroad (Amster312, Patission Str. dam, King’s College London, Tulane University). GR-11141 Athens Since her admittance to the Athens Bar in 1981, she Greece has been practising mostly in civil (contracts and real Tel.: (+30) 210 property), intellectual property, commercial and ad2010011 ministrative matters. She is also a European Patent Tel./Fax: (+30) 210 Attorney. 223-7150 Since September 2005, Eugenia Dacoronia has been dacoronia@ an Assistant Professor of Civil Law at the Athens yahoo.com University Department of Law, where she has been

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Contributors

lecturing Civil Law since 1995 and has worked as an assistant since 1980. She teaches, among other subjects, General Principles of Civil Law, Real Property Law, Law of Environment, Torts in the legal system of the U.S.A. She is the author of two books “Sublease of Movables” (in Greek) and “The Issue of Construction of Wills under Greek law” (in Greek) and she has published various articles and notes on Court decisions in Greek legal periodicals and in the European Review of Private Law (in English and French). Eugenia Dacoronia has taken part in international congresses as a national representative, and has participated in the Trento Common Core project as well as in the Study Group on a European Civil Code as a member of the Advisory Council on: a) Torts and b) Lease of movables. Since 2007, she participates in the Torino Common Core project. Since December 2006, Eugenia Dacoronia has also been a member of the Central Codification Committee of the Greek Parliament. Anton DULAK Univerzita Komenského v Bratislave Právnická fakulta Šafárikovo nám. 6 818 05 Bratislava Slovakia Tel./Fax: (+42 1) 2 434 26 611 anton.dulak@ flaw.uniba.sk Isabelle C. DURANT Université catholique de Louvain Faculté de droit Place Montesquieu 2/38 B-1348 Louvain-laNeuve Belgium Tel.: (+ 32 10) 47 47 41 Fax: (+ 32 10) 47 47 32

Anton Dulak was born in 1963 in Košice. After graduating in law in 1985, he started to work at the Department of Civil Law at Commenius University, Bratislava as an assistant. In 2001 he obtained his PhD degree. In 2003, Anton Dulak habilitated with a thesis on Product Liability Law and was promoted to an associate professor. His main fields of research include Tort Law and Consumer Protection Law.

Isabelle Claire Durant studied law at the Université catholique de Louvain (UCL), where she was a teaching and research assistant from 1991 until 2004. She got her PhD Degree in law in 2003 at this university and is currently professor at the Department of Private Law. She teaches the law of obligations, contract and real property law and publishes mainly in the areas of contract and tort law. She also contributes to several research projects for the Austrian Academy of Sciences’ Institute for European Tort Law and for the European Centre of Tort and Insurance Law in Vienna

Contributors

Isabelle.Durant@ uclouvain.be

Michael G. FAURE METRO, Faculty of Law Maastricht University P.O. Box 616 6200 MD Maastricht The Netherlands Tel.: (+31-43) 3883028 Fax: (+31-43) 3259091 Metro.Institute@ facburfdr.unimaas.nl

Jörg FEDTKE University College London Institute of Global Law Faculty of Laws Bentham House Endsleigh Gardens London, WC1H OEG United Kingdom Tel.: (+44 2) 76791474 Fax: (+44 2) 76791502 [email protected]

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where she was on leave for work from October 2004 to March 2005. In addition, she was attorney at the Brussels Bar from 1991 until 2004. Michael Faure studied law at the University of Antwerp (licenciate in law 1982) and criminology at the University of Gent (licenciate in criminology 1983). He obtained a Master of Laws from the University of Chicago Law School (1984) and a doctor iuris from the Albert Ludwigs Universität Freiburg im Breisgau. He was first a lecturer and then a senior lecturer at the department of criminal law of the law faculty of Leiden University (1988–1999) and became academic director of the Maastricht European Institute for Transnational Legal Research (METRO) and professor of Comparative and International Environmental Law at the law faculty of Maastricht University in September 1991. He still holds both positions today. Since 1 February 2008 he was equally nominated as Professor of Comparative Private Law and Economics at the Rotterdam Institute of Law and Economics (RILE) at the Erasmus University of Rotterdam. In addition, he is academic director of the Ius Commune Research School and a member of the board of directors of Ectil. Since 1982 he is equally attorney at the Antwerp Bar. He publishes in the areas of environmental (criminal) law, tort and insurance and economic analysis of (accident) law. Jörg Fedtke joined the University of Hamburg in 2001, where he worked as a researcher at the Seminar für ausländisches und internationales Privat- und Prozessrecht for two years. He moved to University College London in 2002, where he is now Professor of Comparative Law and Director of the Institute of Global Law. Since 2003, he also holds a post as Visiting Professor at The University of Texas at Austin. Professor Fedtke teaches and publishes in the areas of tort law, constitutional law, and comparative methodology. He is a fellow of the European Centre of Tort and Insurance Law (ECTIL).

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Federico FUSCO Bocconi University School of Law Via Gobbi, 5 20136 Milano Italy Tel.: (+39 2) 5836 5215 Fax.: (+39 2) 5836 5202 federico.fusco@ unibocconi.it

Herkus GABARTAS Mykolas Romeris University Department of European Union Law Ateities st. 20, Room C-518 LT-08303 Vilnius Lithuania Tel.: (+370 5) 2042340 Fax: (+370 5) 2042271 [email protected]

Israel GILEAD The Hebrew University of Jerusalem Faculty of Law Mt. Scopus

Contributors

Federico Fusco was born in Milan, where he graduated in law from Bocconi University School of Law in 2003. He holds an LL.M. from the New York University School of Law (2007), and a PhD in Comparative Law from the University of Florence (2008). Since 2003 he has been a research and teaching assistant at Bocconi University, where he researches under Prof. Alberto Monti on topics of civil liability and copyright law and he lectures in Private Law, Comparative Law and Economic Analysis of Law. He is taking part in a research project on legal terminology in European tort law, sponsored by the Italian Government. He has contributed to a study realised by the Institute for European Tort Law of the Austrian Academy of Sciences in cooperation with ECTIL, on the liability for damage resulting from the presence of GMOs in non-GM crops. He has also published several articles on contract law, tort law, and IP law. Federico Fusco is managing editor of the electronic journal Global Jurist (Berkeley Electronic Press). He is also an attorney at the Milan Bar, practising in the areas of contracts, torts, and intellectual property. Herkus Gabartas has been an assistant professor at the European Union Law Department of Mykolas Romeris University (Vilnius, Lithuania) since 2006. He graduated in Law from Vilnius University (Lithuania) in 1999, acquired his LL.M. degree in Comparative Law at the University of Florida (Gainesville, Florida, USA) in 2001 and his doctorate degree at Mykolas Romeris University in 2004. He was also a visiting scholar at the University of Gent (Belgium, 2002) and Vienna University of Economics and Business Administration (Austria, 2004). Herkus Gabartas has also been a practising attorney at the Lithuanian Bar since 2002 and a partner in the law firm “Vėgėlė, Gabartas, Šidlauskas LAWHOUSE”. The areas of his particular interest are tort, contract, real estate and tax law. Israel Gilead is Bora Laskin Professor of Law, Faculty of Law, The Hebrew University of Jerusalem. He graduated from the Faculty of Law of The Hebrew University of Jerusalem in 1979 (LL.B.), in 1983

Contributors

Jerusalem 91905 Israel Tel.: (+972 2) 882526 msigms@ mscc.huji.ac.il

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from the Faculty of Economics (B.A.) and in 1984 he obtained his LL.D. Professor Gilead held various academic positions at the Hebrew University where he was Dean of the Faculty from 1999–2002. Professor Gilead has been a member of the Codification Committees in Israel, a member of the European Group on Tort Law and of the European Centre of Tort and Insurance Law since 1999, and since 2003 a member of the American Law Institute. His major fields of research and teaching have been tort law, limitation of civil actions and economic analysis.

Suvianna HAKALEHTO-WAINIO University of HelSuvianna Hakalehto-Wainio was born in Helsinki in sinki 1966. She works as a lecturer in administrative law in Department of Public the Department of Public Law, Faculty of Law, UniLaw versity of Helsinki. She has been working there in variP.O. Box 4 ous research projects since 1996. Suvianna HakalehtoFI-00014 Wainio spent the academic year 1994–1995 in Estonia Finland lecturing at the University of Tartu (Eurofaculty proTel.: (+35 8) 44 344 gram). She is currently working on her PhD on the 7768 tort liability of public authorities. Suvianna Hakalehtohakaleht@mappi. Wainio’s main fields of interest are tort law, administrahelsinki.fi tive law, education law, child law and human rights. Ton HARTLIEF University of Maastricht Postbus 616 NL-6200 MD Maastricht The Netherlands Tel.: (+31-43) 3883104 Fax: (+31-43) 3258981 t.hartlief@ pr.unimaas.nl Jiří HRÁDEK Přecechtělova 16/2393 155 00 Praha 5 Czech Republic Tel.: (+42 0) 728 228224 [email protected]

Ton Hartlief is professor of private law at the University of Maastricht.

Jiří Hrádek graduated in law from the Charles University in Prague in 2002. He studied at the University of Hamburg (2000–2001), LL.M. programme at the University of Tübingen (2002–2003) and is currently working on his PhD at the Charles University in Prague. Since 2007 he has been an advocate at Gleiss Lutz in Prague.

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Contributors

Jiří Hrádek’s current research focuses on the area of EC law, particularly in relation to liability issues, conflict of laws and consumer protection. He is a regular participant in international conferences and workshops dealing with EC law and civil law. Jens KLEINSCHMIDT Max-Planck-Institut Jens Kleinschmidt (*1975) studied law in Cologne, für ausländisches und Geneva, Freiburg (First State Examination 1999), internationales PriBerkeley (LL.M. 2000) and Regensburg (Dr. jur. vatrecht 2003; published by Mohr Siebeck under the title “Der Mittelweg 187 Verzicht im Schuldrecht”). His studies were supportD-20148 Hamburg ed by the German National Academic Foundation and Germany the German Academic Exchange Service. He obtained Tel.: (+49 40) 41900 his Second State Examination in 2004. Since 2000 he 410 has been working as a research assistant for ProfesFax: (+49 40) 41900 sor Dr. Dr. h.c. mult. Reinhard Zimmermann. He is 288 currently a senior research fellow at the Max Planck kleinschmidt@ Institute for Comparative and International Private mpipriv.de Law in Hamburg where he works on his habilitation on the delegation of private autonomy to third parties. Jens Kleinschmidt teaches comparative law. His main areas of interest include the law of obligations in comparative and historical perspective, European private law and civil procedure. Bernhard A. KOCH University of Innsbruck Innrain 52 A-6020 Innsbruck, Austria Tel.: (+43-512) 5078110 Fax: (+43-512) 5079885 bernhard.a.koch@ uibk.ac.at http://www. zivilrechts.info

Bernhard A. Koch was born in 1966 in Feldkirch (Austria). He studied law in Innsbruck (Mag. iur. 1989), Tübingen (Germany, Dr. iur. summa cum laude 1992), and Michigan (USA, LL.M. 1993). He completed his habilitation for private law and comparative law in 1998. Bernhard A. Koch started to work as an assistant at the University of Innsbruck in 1985, where he was awarded tenure in 1999. After two years on leave for work at ECTIL and the Austrian Academy of Sciences, he returned to Innsbruck, where he holds a chair in civil law. Since 2004, Koch is the Vice Director of the Austrian Academy of Sciences’ Institute for European Tort Law (ETL). Bernhard A. Koch’s main fields of research are tort, contract, real property and family law. He is a member of the European Group on Tort Law.

Contributors

Helmut KOZIOL Institute for European Tort Law/ European Centre of Tort and Insurance Law Reichsratsstraße 17/2 A-1010 Vienna, Austria Tel.: (+43-1) 427729650 Fax: (+43-1) 427729670 helmut.koziol@ oeaw.ac.at [email protected] Irene KULL University of Tartu Faculty of Law Näituse 20 50416 Tartu Estonia Tel.: (+ 37 2) 7 375 385 Fax: (+ 37 2) 7 375 983 www.iuridicum.ee www.ut.ee [email protected]

Janno LAHE University of Tartu Faculty of Law Näituse 20 50416 Tartu Estonia Tel.: (+ 37 2) 737 5992

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Helmut Koziol is currently Executive Director of the European Centre of Tort and Insurance Law as well as Director of the Institute for European Tort Law of the Austrian Academy of Sciences. He was born in 1940 in Vienna and, after graduating (Dr. iuris) from the University of Graz in 1963, he worked as an assistant at the Law Faculty in Bonn. Helmut Koziol returned to Austria in 1967 when he became Professor of Private Law at the University of Linz (1967–1969), subsequently being offered a chair at the University of Vienna which he held until 2000. His main fields of legal research include Tort Law and Banking Law.

Irene Kull obtained her PhD in Civil Law at the University of Tartu in 2002. She became professor of civil law in 2007 and holds the position of the head of the chair of commercial and intellectual property law. Irene Kull participated in the Study Group of European Civil Code as an advisor on the Working Team on Rental of Movable Property, Trust and Donation Contracts. She was a member of the group working on the draft of Estonian Law of Obligations Act. Among her publications there are commentaries on the Estonian Law of Obligations (general part), two textbooks and a variety of journal articles on issues in contract law and the harmonisation of European private law. She lectures on contract law, law of obligations and European contract and commercial law. Her main interests include the general principles of contract and tort law, harmonisation of European private law and comparative contract law. Since 1995 she has worked as an advisor on the civil chamber of the Estonian Supreme Court. Janno Lahe obtained his PhD in Civil Law at the University of Tartu in 2005. Since September 2007 he has been a “dozent” (assistant professor) of civil law. Since 2006 he has worked as an advisor to the civil chamber of the Estonian Supreme Court. Among his publications there are a variety of journal articles on issues in tort and insurance law. He lectures on insurance

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Fax: (+ 37 2) 7 375 983 www.iuridicum.ee www.ut.ee [email protected] Rok LAMPE University of Primorska Faculty of Management Cankarjeva 5 6105 Koper Slovenia Tel.: (+38 6) 2 2512 024 (+38 6) 40 84 66 21 rok.lampe@ uni-mb.si

Peter LOSER University of Basel St.Galler Kantonalbank Legal & Compliance St. Leonhardstrasse 25 CH-9000 St. Gallen Switzerland Tel.: (+41-71) 231 3131 [email protected]

Attila MENYHÁRD ELTE Faculty of Law, Civil Law Department Egyetem tér 1–3

Contributors

law and non-contractual obligations. His main interests include the law of obligations, insurance law and harmonisation of European tort law

Rok Lampe is currently lecturer of law at the University of Primorska. He was born in 1973. He graduated from the Faculty of Law, University of Maribor (Slovenia) and obtained an LL.M. from the University of Utah. He defended his PhD thesis at the Faculty of Law, University of Maribor where he worked as an assistant. Research Stays: 1996 – European Law at the University of Amsterdam, Tempus scholarship programme. 1999 – Governmental scholarship of the Czech Republic for PhD research at the Charles University in Prague. 2001 – Visiting researcher at Yale Law School under tutorship of Prof. Anita L. Allen for the PhD thesis “The Right of Privacy, In Defence of a Broad Concept of the Right of Privacy”. His fields of legal research include tort law, personality law, medical law and media law. Peter Loser was born in 1964. He studied law in St. Gallen and Lausanne, Switzerland (University of St. Gallen, lic.iur. 1990; Dr.iur. summa cum laude 1994) and has habilitated at the University of Basel (“Privatdozent” for Private, Commercial and Comparative Law, 2006). He was a visiting scholar at Yale University in 1992/93 and did research at the UNIDROIT in Rome and at the University of Oxford. Currently Peter Loser teaches private, company and tort law at the Universities of Basel and St. Gallen. He is an active participant of the project “The Common Core of European Private Law” (University of Trento, Italy). Peter Loser has also worked as a lawyer since 1995 and is legal counsel and member of the Senior Management of a bank. Attila Menyhárd was born in 1968. He works at the University of Eötvös Loránd, Faculty of Law, Civil Law Department (Budapest) and he is also a practising lawyer. Special research fields are: contract law, tort law and property law. Attila Menyhárd has been

Contributors

H-1364 Budapest Hungary Tel.: (+36-1) 411 6510 [email protected] Olivier MORÉTEAU Paul M. Hebert Law Center Louisiana State University W323 Law Center Baton Rouge, LA 70803 United States Tel.: +1 225 578 1126 Fax: +1 225 578 3677 [email protected]

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a participant in several international projects on contract and tort law. He completed his PhD degree in 2003.

Olivier Moréteau was born in 1956 in Lyon. He studied law at the Université Jean Moulin Lyon 3 where he completed his doctorate (Estoppel and protection of reliance in comparative law), after research in Cambridge with a British Council scholarship. He worked as an assistant and then lecturer at the Université Jean Moulin Lyon 3. He was appointed professor (agrégation de droit privé) at the University of Grenoble 2 and then Lyon 3. He served as a Director and VicePresident for International Relations at Université Jean Moulin Lyon 3 (1993–1999) and as the Director of the Edouard Lambert Institute of Comparative Law (Deputy Director 1985–2000, Director 2000–2005). He was Visiting Professor at the University of Minnesota (1992), Boston University (almost every year between 1993 and 2004) and the University of Melbourne (2002, 2004). In 2005, he was appointed Professor of Comparative Law on the newly created Russell Long Chair of Excellence, at Louisiana State University (Baton Rouge) where he is the Director of the Center of Civil Law Studies. He teaches comparative law and the law of obligations. He publishes books and articles on English law and comparative law, especially in the field of obligations and the relationship of law and languages. He is a member of the European Group on Tort Law, the International Academy of Comparative Law and the American Law Institute.

Emanuela NAVARRETTA Università di Pisa Professor of Private Law at the Faculty of Law of Palazzo della Sapithe University of Pisa. Professor of Civil Law at the enza post-graduate course for forensic professions at the Via Curtotone e University of Pisa. Professor of Person and Family Montanara 15 Law at the post-graduate course for notary profesI-56100 Pisa sion of the Council of notaries in Florence. Member Italy of Board of Directors of the review “Responsabilità navarretta@ civile e previdenza” (“Tort Liability and Insurance”). ddpriv.unipi.it National coordinator of the research “Non-pecuniary losses in recent laws and judgments” financed by the Ministry of Scientific Research. Member of the parliamentary commission for the reform of the law on the protection of privacy.

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Ken OLIPHANT Institute for European Tort Law Reichsratsstraße 17/2 A-1010 Vienna Austria Tel.: (+43-1) 427729650 Fax: (+43-1) 427729670 Ken.Oliphant@ oeaw.ac.at

Contributors

Ken Oliphant was born in Glasgow but educated in England. He is now employed at the Institute for European Tort Law of the Austrian Academy of Sciences, whilst on extended leave from the University of Bristol where he is Professor of Tort Law. Previously he lectured at King’s College London (1988–99) and Cardiff University (1999–2006). He has written extensively in the fields of tort law and compensation for incapacity. He is the joint author of Tort Law: Text & Materials, Oxford University Press, 3rd edn., 2008 (with Mark Lunney) and Torts, Palgrave MacMillan, 3rd edn., 2003 (with Alastair Mullis), and general editor of the practitioners’ reference work, Tort Law (2nd edn., 2007), in the Butterworths Common Law Series. He is also UK correspondent for the Torts Law Journal and on the editorial advisory board for the Journal of Law and Society.

André G. Dias PEREIRA University of CoimAndré Dias Pereira graduated in Law at the Univerbra sity of Coimbra in 1998. He also attended courses Faculy of Law abroad in Göttingen (1996/97), Utrecht (1993 and P-3004-545 Coimbra 1999) and Helsinki (2000). In Coimbra, he comPortugal pleted a Post-graduation in Medical law (1999) and Tel.: (+351) 239a Post-graduation in Civil Law (2002). He defended 859801 his thesis “Informed Consent within the Patient-DocFax: (+351) 239tor Relationship” in 2003 and was awarded the Prof. 821043 Manuel de Andrade Prize for the best thesis in Civil andrediaspereira@ Law in 2003. His languages skills, besides his mother hotmail.com language (Portuguese), include fluency in English, Spanish, German and French. Pereira is Professor of Law at the University of Coimbra (Portugal), Scientific Secretary of the Centre for Biomedical Law, Fellow of ECTIL (European Centre of Tort and Insurance Law – Vienna, Austria), invited Professor at the Summer School on European Private Law (Salzburg, Austria); Vice-President of the Institutional Review Board of AIBILI and was a member of the National Council of Forensic Medicine. He has been invited for lectures and published more than 50 articles in legal journals or collective books in several European countries, in Brazil, China and Japan.

Contributors

Eoin QUILL University of Limerick School of Law Limerick Ireland Tel.: (+353-61) 202220 Fax: (+353-61) 202682 [email protected]

Jordi RIBOT University of Girona Facultat de Dret Campus de Montilivi E-17071 Girona Spain Tel.: (+34-972) 418 140 Fax: (+34-972) 418 146 [email protected] Website: civil.udg.es/ members/ Pages/jribot.htm

Albert RUDA University of Girona Facultat de Dret Campus de Montilivi E-17071 Girona Spain Tel.: (+34-972) 418 142

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Eoin Quill was born in Limerick in 1965. He studied law at University College Cork, a constituent college of the National University of Ireland, between 1982 and 1988 obtaining two bachelors and a masters degree – BCL; LLB; LLM. He lectured at the School of Professional and Management Studies in Limerick from 1988–1990 and has been lecturing in the University of Limerick since 1991 in a variety of subjects including Tort, Commercial law and Comparative Civil Obligations. His publications include a textbook – Torts in Ireland (Gill & Macmillan 1999, 2nd edn. 2004) – and a variety of journal articles on issues in tort and contract. He was treasurer of the Irish Association of Law Teachers from 1997 to 2000 and is currently an examiner in Tort for the Law Society of Ireland. Jordi Ribot was born in 1966. He graduated from the Autonomous University of Barcelona in 1989 and obtained his PhD in 1993. He became lecturer in Civil Law at the Autonomous University of Barcelona in 1994 and at the University of Girona in 1996, where he teaches Spanish and Catalan Civil Law. He is a member of the Observatory of Catalan Private Law, dependent on the Department of Justice of Catalonia, where he currently coordinates the Working Group on Family Law. He is also a member of the “Observatory of European and Comparative Private Law” of the University of Girona and of the “International Society of Family Law” and fellow of the European Centre of Tort and Insurance Law (ECTIL, Vienna). He has done research stays at the Max Planck Institute for International and Comparative Private Law (1995), the Swiss Institute of Comparative Law (1998) and the University of Cambridge (2006). His main fields of research are tort law, family law and contract law. Albert Ruda is currently Reader in Private Law at the University of Girona. He submitted his Doctoral Thesis on liability for pure ecological damage (2006) under the direction of Prof. Miquel Martín-Casals. It was given the “IX Francisco Sancho Rebullida” award for the best Spanish Thesis on a private law topic, the award for the best Spanish Thesis on civil

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Fax: (+34-972) 418 121 [email protected] Website: civil.udg. edu/ruda

Contributors

protection (General Directorate for Civil Protection, Ministry of Internal Affairs, 2006) and the Extraordinary Doctorate Prize (University of Girona, 2008). He is a member of the Observatory of European and Comparative Private Law of the University of Girona and fellow of the European Centre of Tort and Insurance Law (ECTIL, Vienna). He has done research stays at the Swiss Institute of Comparative Law (Van Calker scholarship, 2001), ECTIL (2001 and 2003), the Centre for Liability Law at the Tilburg University (2004) and the Faculty of Law of the University of Cambridge (2006).

Barbara C. STEININGER Institute for EuroBarbara Steininger is researcher at the Institute for Eupean Tort Law ropean Tort Law of the Austrian Academy of Sciences Reichsratsstraße 17/2 (ETL). She was born in Feldkirch (Austria) and was A-1010 Vienna, brought up bilingually (German/Dutch). She studied Austria law in Vienna and Leiden and graduated in 1999. BeTel.: (+43-1) 4277tween 1998 and 2000 she worked as a student assistant 29661 at the Institute of Roman Law, University of Vienna. Fax: (+43-1) 4277Between 1999 and 2003 Barbara Steininger worked at 29670 the European Centre of Tort and Insurance Law (ECbarbara.steininger@ TIL) in Vienna. Since 2002 she has been employed at oeaw.ac.at ETL. From June to December 2004 she was on leave for an employment at the University of Geneva. In 2005 she completed a nine month full-time court internship at various courts in Vienna and finished her doctoral thesis under the supervision of Prof. Helmut Koziol (“Verschärfung der Verschuldenshaftung”), an extended version of which was published in 2007. Barbara Steininger is a fellow of ECTIL. Christian TAKOFF University of Sofia Zar Osvoboditel Blvd. 15 1000 Sofia Bulgaria christian_takoff@ yahoo.com www.geocities.com/ christian_takoff

Christian Takoff (1965) was born in Sofia, Bulgaria, where he enjoyed his legal education as well. He acquired his Master degree in law at the University of Sofia (1992), his Legum magister degree (LL.M.) in Hamburg, Germany (1995) and his doctorate at the University of Sofia (1997). His thesis “The Bank Guarantee” (1997) dealt with doctrinal and practical issues concerning the respective ICC-Rules and the Bulgarian banking legislation. Christian Takoff was a Alexander von Humboldt Fellow in Hamburg (2004–2006). As of 1992 he is assistant professor at the University of Sofia (since 1996 major assistant professor). Since

Contributors

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1997, Christian Takoff holds tenure as the main lecturer at the Veliko Turnovo University (Bulgaria) in Civil Law as well. His current field of interest covers the general part of civil law, law of contracts and comparative law. He has more than 20 publications and 3 monographs. The latest, “Voluntary representation”, deals with the problems of agency in Bulgarian law from a comparative perspective, and “Method for solving of civil cases” deals with theoretical and practical issues of legal methodology. Christian Takoff also works as a legal advisor and arbitrator at the Arbitration Court of the Bulgarian Chamber of Commerce and Industry. Christian Takoff participated at the Supervisory Board of the State Agency for Postprivatisation Control (2000–2004). Vibe ULFBECK University of Copenhagen Studiegaarden, Studiestraede 6, 1455 Copenhagen, Denmark Tel.: (+45) 35323148 Vibe.Ulfbeck@ jur.ku.dk

Vibe Ulfbeck was born in 1966 and graduated as a lawyer at the University of Copenhagen in 1990. In 1991 she obtained an LL.M. degree at the University of Cambridge, UK. From 1991–1992 she was employed in the Danish Justice Department and since 1993 she has been at the University of Copenhagen where she obtained her doctorate in 2000. In 2004 she was appointed professor of private law.

Reinhard ZIMMERMANN Max-Planck-Institut Reinhard Zimmermann (*10.10.1952) obtained his für ausländisches und state examinations in law in 1976 and 1979; in 1978 he internationales graduated as Dr. jur. from the University of Hamburg. Privatrecht After having held posts in the universities of Hamburg Mittelweg 187 and Cologne, he was called to the W.P. Schreiner chair D-20148 Hamburg of Roman and Comparative Law at the University of Germany Cape Town in 1981. He was Deputy Dean and Dean Tel.: (+49 40) 41900 of his faculty as well as Vice-President and President 401 of the Society of South African Teachers of Law. In Fax: (+49 40) 41900 1988, Reinhard Zimmermann accepted a call to the 402 chair of Roman Law, Comparative Legal History and r.zimmermann@ Private Law at the University of Regensburg. Here, mpipriv.de too, he served as Deputy Dean and Dean of his faculty. In 2002, he was appointed Academic Member and Director of the Max Planck Institute for Comparative and International Private Law in Hamburg. He has been Visiting Professor at the Universities of Edinburgh, Tulane, Berkeley, Stellenbosch, Yale,

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Contributors

Cornell and Auckland. In 1993 he served as Max Rheinstein Professor at the University of Chicago, and he spent the academic year of 1998/99 as A.L. Goodhart Professor of Legal Science and Fellow of St. John’s College, Cambridge. In 2006 he was a Visiting Fellow of All Souls College, Oxford. In 2006 he was elected chairman of the humanities division of the Max Planck Society. Reinhard Zimmermann holds honorary doctorates from the Universities of Chicago, Aberdeen, Maastricht, Lund, Edinburgh, Cape Town and Lleida. He is an ordinary member of the Academy of Arts and Sciences of Göttingen and corresponding member of the Bavarian Academy of Arts and Sciences, the Royal Dutch Academy of Arts and Sciences, the Accademia delle Science di Torino and the Austrian Academy of Sciences. He is corresponding fellow of the Royal Society of Edinburgh and the British Academy. His main areas of interest include the law of obligations in historical and comparative perspective, the relationship between the English common law and the continental civil law, mixed jurisdictions (Scotland, South Africa) and the harmonization of European private law.

Index The numbers refer to the marginal notes and the letters refer to the reports; A stands for Austria, AS for the Report of Bjarte Askeland, B for Belgium, BE for the Report of John Bell, BU for Bulgaria, CH for Switzerland, CR for the Comparative Remarks, CZ for the Czech Republic, D for Germany, DK for Denmark, E for Spain, EST for Estonia, EU for European Union, EW for England and Wales, F for France, FIN for Finland, FU for the Report of Federico Fusco, G for the Report of Israel Gilead, GR for Greece, H for Hungary, I for Italy, IRL for Ireland, LT for Lithuania, LV for Latvia, N for Norway, NL for the Netherlands, P for Portugal, PL for Poland, RO for Romania, S for Sweden, SK for Slovakia, SLO for Slovenia and ZK for the Report of Reinhard Zimmermann and Jens Kleinschmidt. ability to work, see earning capacity abuse of rights PL 91–92; RO 2 act of God, see force majeure adequacy N 17–18, 21; S 19, 23 administrative acts, see public liability administrative law CZ 50; H 23 adventure activities EST 18 affection damage, see psychological harm agreement on the applicable law EU 18 agriculture GR 4 AIDS, see HIV allegations EST 35–37 alternative medicine SLO 1–8 animals B 85; DK 5–7; EST 10–12, 19; GR 6; I 37; SLO 9–28 keeper of ~ EST 15; SLO 11, 28 anorexia nervosa A 42 armed forces EU 31 asbestos E 67; EW 5; IRL 35; NL 47, 57 assessment of damages, see damages, calculation of ~ assignment BU 19 associations E 73 auction sales IRL 27 auditors E 69; N 27; PL 26 authorisation CZ 42

bank CH 51; GR 80 bankruptcy CZ 70–93; NL 32 barristers, see lawyers battery IRL 18 bereavement A 42; CR 19; DK 11; PL 9 betting N 18 Big Brother N 4 breach of duty CZ 74; EW 9, 18; IRL 19, 25 Brussels I Regulation A 54; EU 62–63 Brussels Convention EU 30 burden of proof CZ 71; D 37; E 16; EST 54; GR 67; I 55; NL 16; P 3, 18, 64; PL 88 reversal of the ~ A 50; D 24; E 20; FIN 14; S 4, 36 business judgment rule RO 1 cancer EW 15 care, cost of LT 28 catastrophes IRL 14; NL 48, 62 causal uncertainty B 110; E 71; NL 54 causation A 52; B 6, 73, 77–84, 101; CH 27, 41; CZ 26, 31–36, 77; E 51, 57; EST 45, 56; EW 16; I 42–46, 63; IRL 17; LV 55–56; N 2, 17, 20; NL 28–32; P 19, 72; PL 50; RO 33; S 10, 30, 41

650 alternative ~ CR 20; EW 18 legal ~ E 54, 57 proof of ~ E 71; F 47; NL 54; P 72 cheque GR 69 child abuse, see sexual abuse children, see minors cigarettes, see smoking civil code reform RO 46–55 cohabitants BU 11, 18; GR 46 collateral benefits A 71; EW 4 compensation, see damages compensation funds B 39–43; E 67; GR 72; H 1; P 4 competition CZ 24; EU 11; I 47, 54; N 24 conflict of laws BU 4; EU 1 ff consent hypothetical ~ A 29–33; D 18; E 51 informed ~ A 27, 29; CR 31; D 19–20; E 24, 50; IRL 15–17; PL 82–89, 103; SLO 3 constitutional rights IRL 21 consumer protection BU 4; DK 19; E 14–17; I 1–6, 48; LT 2, 4–6; NL 53; RO 31 contra bonos mores, see good faith contract BU 19–22 breach of ~ EST 21; EW 10, 14; GR 13; PL 28 inducing a breach of ~ EW 19, 22 contractual liability B 96; EST 19; GR 12–16; I 59; N 13, 15; P 46; RO 24, 32, 57 contribution EU 50, 52; EW 5; IRL 27; LV 21; SLO 56 contributory negligence A 7, 17, 51–52; B 10; BU 22; CZ 66; DK 6, 10; E 17, 35, 57; EST 25; F 47; GR 57; H 9; NL 31; PL 46; RO 54 corporations P 94; PL 102 corruption B 1–11; N 2; PL 44 counterfeiting B 22–23, 27 court expert, see expert crime victims RO 11 criminal act CH 15; LT 31; N 14; P 29, 36; PL 2 criminal liability BE 18; FIN 10; PL 41 criminal procedure A 34; BU 5; CZ 10; LT 7; RO 7, 10, 22, 61–66, 76 culpa in contrahendo H 17 culpa in eligendo E 54; GR 29; H 10; PL 31 cyclist D 15

Index damage actual ~ F 34 aggravation of ~ B 10 continuing ~ A 8 direct ~ GR 74; S 11 existential ~ I 58, 62 future ~ D 23; GR 67; LT 28; PL 14 hypothetical ~ F 34–36 indirect ~ EST 9; GR 74 iure ipsa ~ I 23, 26, 38 to health CZ 2, 99–100; H 18 unforseeable ~ E 35; GR 66 damages adjustment of ~ A 70; BU 22; EST 14; FIN 14 aggravated ~ EW 3; IRL 5, 7 bereavement ~ EW 1; GR 49 calculation of ~ B 27, 100; BU 9; CH 29; CZ 1; GR 58; I 8; IRL 1–2, 5; NL 41; P 57; PL 54; RO 19, 21 exemplary ~, see punitive damages general ~ F 49 mass ~ D 43; I 1–6; NL 27, 48, 51, 53, 55 provisional ~ EW 11 quantum of ~ A 44–46; BU 9–10; EU 47; H 6–7; I 51; LT 24, 26; LV 5; P 62; PL 16–17; SK 19, 29 danger A 22, 73; D 17; IRL 32; NL 18; S 30; SLO 30, 50 increased ~ A 24; NL 10; PL 85 major source of ~ CR 28; EST 14– 17, 21; SLO 49 dangerous activities CR 28; E 28; H 27; P 43; SK 9; SLO 40, 56, 58 danno biologico P 81 danno conseguenza I 30, 39 death BU 11–14, 18–22; DK 11; E 10; EST 42; GR 43, 53; LT 17; P 47, 50; S 37; SK 20 wrongful ~ EW 1; PL 6 defamation EST 33, 35, 50–51; EW 38; FIN 5, 8; GR 20; IRL 6, 21, 33 delictual capacity CZ 5; F 26; P 27; RO 49–55 disclaimer, see waiver of liability discrimination D 38 dismissal BU 16; D 38 divorce LT 30; PL 62 domain names IRL 37 domestic accident CH 35; E 27–36 drugs E 40

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duration of a trial, excessive ~ I 28; P 14 duty of care CH 57; D 47; EW 9, 15; FIN 14; H 19; IRL 10, 19, 32; NL 15, 56, 66; PL 30 delegation of duty to inform D 19 to inform D 18, 25; E 44, 51, 56, 66; H 16; LT 5; NL 30; PL 88; S 12–18 legal ~ CZ 40, 51, 58, 72; PL 21 to mitigate the loss F 38; FIN 14–16; P 68 to supervise CH 32; CZ 5–6, 9; GR 47; NL 11–13, 39; P 24, 26; RO 53; SLO 53

fire F 4; S 28 foetus GR 52 force majeure EU 54; F 24; NL 25; RO 54 foreign law D 41 foreseeability EW 34; LV 56 forgery PL 44 fraud CH 15; N 24 freedom of expression CR 7; EU 35; FIN 8–10; N 6 freedom of the press GR 19; N 5 free market FIN 19 full compensation principle B 7; LT 26; PL 42 funeral costs B 33

earning capacity CH 35; CZ 1; H 18; LT 23; P 5 EC Law A 55; CR 2; CZ 93, 99; DK 2–4; LT 40, 44, 51; N 30; NL 52 ECHR, see human rights economic torts EW 22–31 emotional harm, see psychological harm employees’ liability CH 50; CZ 7; F 31– 32; RO 23, 71 employers’ liability CZ 7; EU 53–61; GR 36; NL 16–24, 26 employment BU 21–22 enterprise liability A 3, 68 environment DK 20; GR 86 environmental liability B 12–20, 44–46, 50–66; CZ 9; D 1–4; E 1–3, 67; EST 1–8, 46–48; EU 13–14; F 53; GR 89; H 1–3, 31, 33, 38; RO 4–5; S 28–31; SK 6–16 epilepsy D 21; EST 55 equal treatment of men and women E 18–22 exercise of legally enshrined rights RO 11, 68 expert E 45; H 12; P 7; RO 19; SLO 52

GMO’s B 45, 111; D 5–6, 44–46; E 2 good faith EST 21; FIN 11; GR 82

family life S 11 family of the victim, see persons close to the victim fault A 2, 24; B 24, 29, 32, 54, 79, 90; BU 8; CZ 55, 59; EST 28, 53–56; EU 57, 60; F 20–25; H 13; LV 25; N 2; RO 32, 49, 59, 70; SK 10; SLO 33 inexcusable ~ F 44 organisational ~ D 37 financial market CH 4; N 34

harassment E 21 harmonization of tort law FIN 18–25; NL 34 heirs B 33; D 7–9 hepatitis P 41; PL 90 HIV E 37–43 homicide N 33 hospital B 109 human rights A 36; CR 4; CZ 19; FIN 8, 11; I 64; LT 10, 19; LV 41; N 5; RO 62, 76; S 1 ff.; SK 1, 27 hunt F 31 illegal, see wrongfulness immovables CZ 65; DK 19 imprisonment A 34; CZ 11; IRL 4; RO 15, 22; S 3, 20 independent contractor HU 8; PL 31 indirect loss, see damage, indirect ~ information, see also duty to inform incorrect ~ A 9; E 27, 51; I 20; N 8, 34 injunction B 57; D 45 injury bodily ~ CZ 51; D 13; DK 16; E 27, 51; EST 22, 27, 43; LT 48 permanent ~ GR 66 personal, see personal injury serious ~ A 16, 47 insolvency PL 75; RO 56–60 insurability NL 60 insurance B 38; BE 26; BU 7; CH 1–3; H 8; P 8, 66–67; RO 42; S 24

652 compulsory ~ B 38; BU 7–8; E 9, 12; EU 44; P 36; RO 41, 55 first party ~ D 17 law I 57; N 18; PL 11; RO 41–45 liability ~, see liability insurance public health ~ CZ 83; EU 64 third party ~ D 17 intellectual property B 21–27; EU 15; I 15; LV 1–19, 29–36; PL 12; SK 17–19 intent A 49; B 37, 43; CH 18; EW 22, 29; FIN 5, 7; N 12, 32; NL 25; P 36, 39 internet CH 52 intoxication A 47, 52; B 37; E 36; F 41–42; S 34 investment H 8 kidnapping A 39 labour law LT 39 landlord’s liability CH 38 lawyers CH 50; CZ 20; F 10 leasing GR 72 legal certainty CZ 14–15, 50 legal person GR 21; I 28; P 74 liability contractual, see contractual liability insurance A 14, 49; B 37, 97; E 4–13, 26; EU 54; FIN 13–17; G 21; H 15; P 1, 37; RO 3 for jurisdictional acts IRL 4; LT 44; P 14; PL 77; RO 17–22, 61–66, 76; S 12–18 joint ~ B 70–74, 89–91; GR 6; RO 70 joint and several ~ B 9, 67; CZ 70; D 5; E 26; EST 9, 11, 13; F 5–7, 30; GR 2, 5, 24; H 3, 8; I 68; P 2, 47; PL 47; SLO 46 for legislative acts B 115–118; CZ 87, 89, 92; P 15; PL 19, 21, 25 for other persons A 17, 20, 74; B 93; CR 26; CZ 4, 6; E 54, 59; EST 39; F 4, 13–28; H 29; N 3, 11–12, 14; NL 23; P 46; RO 46–55 release from ~ CZ 61, 63; RO 48 for things F 5–6; P 73; SLO 49 limitation, see prescription loan F 9; I 20 loss allocation N 24 of amenities of life P 22

Index of chance B 110, 114; CH 28, 30; CR 22; E 71; F 9–12; IRL 36; NL 29; P 72 of earnings B 33; CZ 1, 51; D 23; DK 12; LT 16, 25; NL 14; PL 14 of profit B 6; CH 30; CZ 38; GR 44; N 9; PL 18; RO 59 of use P 51–54, 60 of value E 61; PL 50 lump sum B 27; LV 10, 19 maintenance A 62–65; BU 11, 18; EW 1; GR 41 manager’s liability B 95, 112; CZ 70; EST 9; PL 75; RO 1, 57 marine pollution B 47–49 market value P 51, 58–59 media CH 40; EW 21; FIN 4–12; GR 88; IRL 18; LV 37; SK 23 medical error A 26; DK 11 medical law PL 98 medical liability A 25–33, 70; B 28–43; CZ 98; D 20, 24; E 41, 46, 66; EW 36; GR 24, 27; H 12, 18; I 40, 59; IRL 36; NL 8, 28, 40; P 44–45, 82– 92; PL 13, 82, 100 medical treatment B 29; CH 28; E 37; IRL 15; SLO 2 meningitis CH 26; DK 11 mental retardment A 40 mental shock A 35, 38, 42; D 13; F 33; H 5; LT 17 military service CZ 3; SLO 54 mining S 12 minors A 2; BU 12, 14; CH 31; CZ 5–7; D 15–17; DK 11; E 35, 52; EST 43; F 4, 25, 28; GR 18, 57; I 18; NL 41; P 22; PL 4, 14, 70, 90; RO 50 misfeasance in public office EU 33; H 35; RO 7 misstatement IRL 29 money laundering CH 15, 19 moral hazard FIN 13, 17 motor insurance A 12; E 4; EU 44, 64; GR 1–3; LV 27; P 4, 18, 39; PL 36, 39–40, 43, 56; S 32 motor vehicles A 18; PL 54; RO 3; S 32; SLO 40 motor ways P 3 multiple tortfeasors AS 1 ff.; E 68; EST 45; EU 11; F 31; PL 51 municipality CZ 23, 28, 51, 57

Index negligence D 17; DK 3, 6; E 53, 55; EW 29, 34; FIN 5, 14; GR 12; IRL 11, 20; N 13; NL 23, 25; S 20 cumulative ~ FIN 7 evident ~ S 15 gross ~ B 43; FIN 7; GR 23; N 32; S 39 nervous shock, see mental shock non-pecuniary loss A 8, 35, 37, 41, 46; B 7, 33; BU 11, 15; CR 5–6, 13; CZ 99; E 16, 60; F 34; GR 14, 20, 62; H 2, 7, 34; I 31, 38, 62, 64; IRL 6; LT 6, 8, 11, 18, 36, 39, 49; LV 5, 19, 37; N 32; NL 5, 32; P 56, 74; PL 7, 13–17, 69, 72, 104; RO 16, 23, 25; S 4, 37–40; SK 18, 20, 25 nosocomial infection B 31 notaries B 108 nuclear liability P 1, 66 nuisance E 61–65 private ~ IRL 21 occupational activities SK 7 diseases EW 15; NL 3, 21; P 5 safety EU 53; IRL 3 omission CZ 73; FU 1 ff.; I 42; S 20 OPS (organo psycho syndrome) NL 21 ordre public D 39; EU 22; I 8 organ retention IRL 12 ownership rights CZ 14, 20; LT 7 pacemaker F 33 pain and suffering A 70; D 23; GR 53; H 36; LT 33; P 22; PL 15, 83; S 37, 40 parallel import DK 2 parental custody I 18; PL 62 parents’ liability CH 32; F 4, 25, 28; NL 2; P 26 passenger E 7; EU 46, 51; IRL 9 passing off IRL 37 passing-on N 24 pecuniary loss CH 22, 29; CR 15; H 22; I 21, 27; IRL 25, 27; LT 16–17; LV 5, 19; P 54, 57; PL 6, 69, 72 pension scheme advisers IRL 38 performance agent A 6 periodical payments A 8; BU 17; LT 23 permit defence B 59, 66; EST 5; H 22 personal injury A 12; CH 45; D 2; DK 5, 18; E 6, 10, 12; EU 21, 26; IRL 1–2; NL 5, 9, 27; PL 3, 94; S 24

653 personal integrity CH 40; P 28, 30 personality rights EST 50; EU 2; FIN 5; GR 18, 78, 88; H 34; I 20, 29; IRL 34; N 4–5; PL 97; SK 20, 25 post mortem ~ D 8–9 persons close to the victim A 37–38, 40, 42; DK 15–16; E 7; GR 46, 52–53; LT 17–22, 35–38; N 33; NL 5; PL 6; S 37; SK 20, 29 perte d’une chance, see loss of chance pharmaceuticals D 21–27; DK 2–4 police D 10–14; IRL 9 polluter pays principle B 12, 56; EST 2–3; F 53; SK 6 post-traumatic stress disorder BU 15; D 10–11; IRL 12, 18 precaution CZ 9; FIN 15–16 precautionary measures B 43; D 3; E 2; EST 6; EU 59; F 37, 40; N 28; NL 18, 20; SLO 58 principle EST 6; F 54 prescription AS 1 ff.; B 11, 13–18, 113; BU 5–6; CZ 11–22; D 30; DK 20; E 41; EST 4, 8; EU 25–29; FU 1 ff.; G 1 ff.; GR 66–68, 83–85; I 52; P 29–34, 69– 71; PL 1–5, 91–95; RO 6–14; ZK 1 ff. press, see media presumption of causation E 3, 26; F 46; I 49; P 20 of fault CZ 74; E 36; LT 34; P 24–26, 43, 73 of liability B 72, 88; F 15 pre-trial discovery D 42 Principles of European Tort Law A 74; B 84; CR 8; E 30, 32; EW 41; F 28, 38–40; I 66; N 28; NL 34, 42; P 80 privacy FIN 4–12; IRL 18; LV 37; S 7, 27 prize promise A 54 product liability B 94; BE 48–60; CH 5–14; CZ 99; DK 9, 21; E 14–17, 70; EST 39; EU 7–9; I 7; RO 28–40 product safety CH 9; EU 33, 36 professional liability NL 29 professional risk B 102 property damage A 12; CZ 86; D 2; H 24; PL 57; E 10 proportionality principle GR 63 proportionate liability CR 20; E 71; EW 17; I 68; N 28; NL 28

654 protected interest N 9 protective norm A 50; D 26 protective purpose A 19, 36; CH 22; CR 17; D 8, 11; NL 14 protractions D 32, 36; LT 8–16 psychiatric illness CR 16, 18; EW 2, 5, 13; N 16, 18 injury IRL 13; S 39 psychological harm A 40; BU 16; CR 14–15; DK 15–17; E 37, 41, 43; F 35; H 6; NL 21; S 8; SK 20, 25 public interest CZ 44; EST 2; H 21; P 16 public liability A 56–60; CZ 10–22, 25, 27–29, 41–50, 89; D 33–37, 49; DK 3–4, 10; E 2, 31, 39–43; GR 85; I 56; IRL 8–9, 19; LT 10, 44, 51; LV 44; NL 3, 6–7, 14; P 9; PL 20, 78, 99; RO 18, 20, 61–78; S 3 ff.; SLO 59 public procurement CZ 23–36 public tender B 8; CZ 23, 37, 39 punitive damages D 38, 42; EST 49–52; EU 22; EW 3; I 8–16, 19; IRL 5, 8; NL 35; P 56 pure economic loss A 9, 12; CH 16, 18; CR 12; D 2; EU 41; IRL 25; N 10; NL 27, 37 railways E 60; GR 54 rape BU 15; N 33 recourse B 74; CZ 60, 69; GR 70; P 18, 39; PL 37; RO 21, 25 redress, see recourse reduction clause A 69 refugee NL 14 relationship, special GR 28, 31 reliance CH 23–24, 49; E 34, 58 remoteness IRL 25; LV 56 rescuer IRL 30–32 restitution in kind D 29–31; EST 7; EW 35 retroactive effect D 1; RO 4 reversal rule, see burden of proof, reversal of the ~ risk BE 20–23; CR 23–24; E 2, 55, 57; EW 5, 8; F 33–34, 39; RO 36, 43; S 21 assumption of ~ A 51–52; CH 39; DK 9; E 28; F 27; N 34; SLO 35 liability for ~ RO 69 obvious ~ EST 5 robbery RO 22

Index Rome II EU 1 ff RSI (repetitive strain injury) NL 21 safety of premises E 28, 36 of roads CZ 51–69; D 47; P 3 satisfaction PL 38; SK 18 schizophrenia E 52; N 18 schools CZ 4–9 secondary victim A 39 self-determination A 31, 33 service providers, see internet sexual abuse E 59; EW 37; S 7 shareholders’ liability RO 2 ship DK 8 ski resorts SLO 29 smoking EW 15; NL 47 social insurance GR 40 solicitors, see lawyers sport clubs F 20, 27 sports CZ 96; F 18–19; SLO 38, 50 standard of care E 30–34; EST 9; H 24; PL 26, 34 of living CZ 2 state liability, see public liability state of the art defence B 60, 66 statutory duty, breach of ~ IRL 3 strict liability A 5, 21–22, 68, 73; B 55, 72, 90; CH 34, 39; CR 28; CZ 49, 52, 55, 63, 97; DK 7, 9–10; E 36, 62; EST 14, 17, 24, 45; EU 60–61; F 26; H 25, 27; LT 11; NL 2; P 1, 13, 26, 36; RO 5, 34–40; S 28, 36; SK 30 strike EU 16 subcontractor CH 20; E 59; GR 37 subrogation B 104; GR 70; N 26 suicide A 47; E 52; S 19 surrender of profits CH 41–44 tables BU 17; E 12; P 6; S 38 tax S 3 television P 2 third party CZ 57, 69; FIN 13; NL 50; P 66 tort law reform A 1–11, 67–69 trade unions E 21; F 13–14, 18; GR 20 traffic liability A 11–14, 15–24, 49; D 15–17, 28–31; E 4–13; EU 5, 24, 44, 62; F 41–48; GR 41, 53, 77; LT 28; LV 20–28; NL 25, 49; P 18, 36, 51, 93; PL 36, 96; S 37

Index trespass IRL 21 tuberculosis GR 17 ultra vires H 9; RO 73 unavoidable event A 5 unfair competition EST 3; EU 10–12; LT 1–3 unjust enrichment H 30 VAT (value-added tax) PL 31, 45, 54 vicarious liability A 21; E 59; GR 26–34, 36–40; H 8–11; I 60; IRL 23, 26, 31, 39; PL 31, 46, 48; S 27 vis maior, see force majeure visual pollution E 60

655 waiver of liability CZ 94; IRL 27–29 whiplash D 10 witness of an accident D 11, 13 work accidents BU 11, 13; GR 35; N 16; P5 working rules CZ 4–9 World War II EU 30 wrongful birth A 9, 61–67; B 32; EW 40; H 32 wrongful claim N 24 wrongful conception A 64–67; EW 40; IRL 23–26 wrongfulness A 51; CH 18; EST 27, 30, 43; EW 22, 31; H 23, 37; I 48, 57, 61, 64; NL 9, 38; P 49; PL 34, 77, 79; RO 39, 59; S 19; SLO 33

Publications Principles of European Tort Law Volume 1: The Limits of Liability: Keeping the Floodgates Shut. Edited by Jaap Spier. Kluwer Law International, The Hague. Hardcover. ISBN 90-411-0169-1. 1996, 162 pp. Volume 2: The Limits of Expanding Liability. Eight Fundamental Cases in a Comparative Perspective. Edited by Jaap Spier. Kluwer Law International, The Hague. Hardcover. ISBN 90-411-0581-6. 1998, 244 pp. Volume 3: Unification of Tort Law: Wrongfulness. Edited by Helmut Koziol. Kluwer Law International, The Hague. Hardcover. ISBN 90-411-1019-4. 1998, 144 pp. Volume 4: Unification of Tort Law: Causation. Edited by Jaap Spier. Kluwer Law International, The Hague. Hardcover. ISBN 90-411-1325-8. 2000, 161 pp. Volume 5: Unification of Tort Law: Damages. Edited by Ulrich Magnus. Kluwer Law International, The Hague. Hardcover. ISBN 90-411-1481-5. 2001, 225 pp.

Volume 6: Unification of Tort Law: Strict Liability. Edited by Bernhard A. Koch and Helmut Koziol. Kluwer Law International, The Hague. Hardcover. ISBN 90-411-1705-9. 2002, 444 pp. Volume 7: Unification of Tort Law: Liability for Damage caused by Others. Edited by Jaap Spier. Kluwer Law International, The Hague. Hardcover. ISBN 90-411-2185-4. 2003, 335 pp. Volume 8: Unification of Tort Law: Contributory Negligence. Edited by Ulrich Magnus and Miquel Martín-Casals. Kluwer Law International, The Hague. Hardcover. ISBN 90-411-2220-6. 2004, 300 pp. Volume 9: Unification of Tort Law: Multiple Tortfeasors. Edited by W.V. Horton Rogers. Kluwer Law International, The Hague. Hardcover. ISBN 90-411-2319-9. 2004, 313 pp.

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Volume 10: Unification of Tort Law: Fault. Edited by Pierre Widmer. Kluwer Law International, The Hague. Hardcover. ISBN 90-411-2098-X. 2005, 393 pp. Tort and Insurance Law Volume 1: Cases on Medical Malpractice in a Comparative Perspective. Edited by Michael Faure and Helmut Koziol. Springer, Vienna/New York. Softcover. ISBN 3-211-83595-4. 2001, 331 pp.

Volume 5: Deterrence, Insurability and Compensation in Environmental Liability. Future Developments in the European Union. Edited by Michael Faure. Springer, Vienna/New York. Softcover. ISBN 3-211-83863-5. 2003, 405 pp.

Volume 2: Damages for NonPecuniary Loss in a Comparative Perspective. Edited by W.V. Horton Rogers. Springer, Vienna/New York. Softcover. ISBN 3-211-83602-0. 2001, 318 pp.

Volume 6: Der Ersatz frustrierter Aufwendungen. Vermögens- und Nichtvermögensschaden im österreichischen und deutschen Recht. By Thomas Schobel. Springer, Vienna/New York. Softcover. ISBN 3-211-83877-5. 2003, 342 pp.

Volume 3: The Impact of Social Security on Tort Law. Edited by Ulrich Magnus. Springer, Vienna/New York. Softcover. ISBN 3-211-83795-7. 2003, 312 pp. Volume 4: Compensation for Personal Injury in a Comparative Perspective. Edited by Bernhard A. Koch and Helmut Koziol. Springer, Vienna/New York. Softcover. ISBN 3-211-83791-4. 2003, 501 pp.

Volume 7: Liability for and Insurability of Biomedical Research with Human Subjects in a Comparative Perspective. Edited by Jos Dute, Michael G. Faure and Helmut Koziol. Springer, Vienna/New York. Softcover. ISBN 3-211-20098-3. 2004, 445 pp. Volume 8: No-Fault Compensation in the Health Care Sector. Edited by Jos Dute, Michael G. Faure, Helmut Koziol. Springer, Vienna/New York. Softcover. ISBN 3-211-20799-6. 2004, 492 pp.

Publications

Volume 9: Pure Economic Loss. Edited by Willem H. van Boom, Helmut Koziol and Christian A. Witting. Springer, Vienna/New York. Softcover. ISBN 3-211-00514-5. 2004, 214 pp. Volume 10: Liber Amicorum Pierre Widmer. Edited by Helmut Koziol and Jaap Spier. Springer, Vienna/New York. Softcover. ISBN 3-211-00522-6. 2003, 376 pp. Volume 11: Terrorism, Tort Law and Insurance. A Comparative Survey. Edited by Bernhard A. Koch. Springer, Vienna/New York. Softcover. ISBN 3-211-01867-0. 2004, 313 pp. Volume 12: Abschlussprüfer. Haftung und Versicherung. Edited by Helmut Koziol and Walter Doralt. Springer, Vienna/New York. Softcover. ISBN 3-211-20800-3. 2004, 180 pp. Volume 13: Persönlichkeitsschutz gegenüber Massenmedien/The Protection of Personality Rights against Invasions by Mass Media. Edited by Helmut Koziol and Alexander Warzilek. Springer, Vienna/New York. Softcover. ISBN 3-211-23835-2. 2005, 713 pp.

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Volume 14: Financial Compensation for Victims of Catastrophes. Edited by Michael Faure and Ton Hartlief. Springer, Vienna/New York. Softcover. ISBN 3-211-24481-6. 2006, 466 pp. Volume 15: Entwurf eines neuen österreichischen Schadenersatzrechts. Edited by Irmgard Griss, Georg Kathrein and Helmut Koziol. Springer, Vienna/New York. Softcover. ISBN 3-211-30827-X. 2006, 146 pp. Volume 16: Tort Law and Liability Insurance. Edited by Gerhard Wagner. Springer, Vienna/New York. Softcover. ISBN 3-211-24482-4. 2005, 361 pp. Volume 17: Children in Tort Law. Part I: Children as Tortfeasors. Edited by Miquel Martín-Casals. Springer, Vienna/New York. Softcover. ISBN 3-211-24480-8. 2006, 476 pp. Volume 18: Children in Tort Law. Part II: Children as Victims. Edited by Miquel Martín-Casals. Springer, Vienna/New York. Softcover. ISBN 3-211-31130-0. 2007, 320 pp. Volume 19: Tort and Regulatory Law. Edited by Willem H. van Boom, Meinhard Lukas and Christa Kissling. Springer, Vienna/New York. Hardcover. ISBN 978-3-211-31133-2. 2007, 477 pp.

660

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Volume 20: Shifts in Compensating Work-Related Injuries and Diseases. Edited by Saskia Klosse and Ton Hartlief. Springer, Vienna/New York. Hardcover. ISBN 978-3-211-71555-0. 2007, 236 pp.

Volume 23: Tort Law of the European Community. Edited by Helmut Koziol and Reiner Schulze. Springer, Vienna/New York. Hardcover. ISBN 978-3-211-77585-1. 2008, 693 pp.

Volume 21: Shifts in Compensation for Environmental Damage. Edited by Michael Faure and Albert Verheij. Springer, Vienna/New York. Hardcover. ISBN 978-3-211-71551-2. 2007, 338 pp.

Volume 24: Economic Loss Caused by Genetically Modified Organisms. Liability and Redress for the Adventitious Presence of GMOs in Non-GM Crops. Edited by Bernhard A. Koch. Springer, Vienna/New York. Hardcover. ISBN 978-3-211-77987-3. 2008, approx. 750 pp.

Volume 22: Shifts in Compensation between Private and Public Systems. Edited by Willem H. van Boom and Michael Faure. Springer, Vienna/New York. Hardcover. ISBN 978-3-211-71553-6. 2007, 246 pp. European Tort Law Yearbook European Tort Law 2001. Edited by Helmut Koziol and Barbara C. Steininger. Springer, Vienna/New York. Softcover. ISBN 3-211-83824-4. 2002, 571 pp.

European Tort Law 2004. Edited by Helmut Koziol and Barbara C. Steininger. Springer, Vienna/New York. Softcover. ISBN 3-211-24479-4. 2005, 674 pp.

European Tort Law 2002. Edited by Helmut Koziol and Barbara C. Steininger. Springer, Vienna/New York. Softcover. ISBN 3-211-00486-6. 2003, 596 pp.

European Tort Law 2005. Edited by Helmut Koziol and Barbara C. Steininger. Springer, Vienna/New York. Softcover. ISBN 3-211-31135-1. 2006, 711 pp.

European Tort Law 2003. Edited by Helmut Koziol and Barbara C. Steininger. Springer, Vienna/New York. Softcover. ISBN 3-211-21033-4. 2004, 493 pp.

European Tort Law 2006. Edited by Helmut Koziol and Barbara C. Steininger. Springer, Vienna/New York. Softcover. ISBN 978-3-211-70937-5. 2008, 576 pp.

Publications

Principles of European Tort Law Text and Commentary. Edited by the European Group on Tort Law. Springer, Vienna/New York. Softcover. ISBN 3-211-23084-X. 2005, 282 pp. Digest of European Tort Law Volume 1: Essential Cases on Natural Causation. Edited by Bénédict Winiger, Helmut Koziol, Bernhard A. Koch and Reinhard Zimmermann. Springer, Vienna/New York. Hardcover. ISBN 978-3-211-36957-9. 2007, 632 pp.

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