Resolution 02/2022/NQ-HDTP application of provisions on liability to compensate for non-contractual damage

 RESOLUTION

Guiding the application of a number of provisions of the Civil Code on liability to compensate for non-contractual damage

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THE JUDICIAL COUNCIL OF THE SUPREME PEOPLE’S COURT

Pursuant to the Law on Organization of the People’s Courts dated November 24, 2014;

To properly and consistently apply a number of provisions in Chapter XX on liability to compensate for non-contractual damage of the Civil Code dated November 24, 2015;

After receiving opinions from the Procurator General of the Supreme People’s Procuracy and the Minister of Justice,

RESOLVES:

Article 1. Scope of regulation

This Resolution guides a number of provisions on liability to compensate for non-contractual damage of the Civil Code No. 91/2015/QH13 dated November 24, 2015 (hereinafter referred to as the Civil Code).

Article 2. Grounds for liability to compensate for damage specified in Article 584 of the Civil Code

1. The cases specified in Clause 1, Article 584 of the Civil Code shall be liable to compensate for damage when involving all of the following elements:

a) Committing acts that infringe upon the life, health, honor, dignity, reputation, property, rights, or other legitimate interests of other persons;

b) Causing damage, including material damage and spiritual damage;

Material damage means the identifiable actual material loss of infringed persons, covering irremediable loss of property; reasonable expenses for prevention, limitation and remediation of damage; and actually lost or decreased income, caused by the infringement upon property, health, life, honor, dignity, reputation, rights and other legitimate interests.

Spiritual damage means the spiritual loss caused by the infringement upon the life, health, honor, dignity, reputation, rights and other personal interests that the infringed persons or their relatives must suffer from and need to be compensated a sum of money for such loss.

c) There is a cause and effect relationship between the damage and the act of infringement. The damage must be the inevitable result of the act of infringement; conversely, the act of infringement must be the cause of the damage.

2. If a property causes damage, its owner or possessor shall compensate for damage, except for the cases guided in Clause 3 of this Article.

a) The property owner must compensate for damage caused by the property, except for the cases where its possessor is liable to compensate as guided at Point b, Clause 2 of this Article.

The property owner is determined at the time when the property causes damage in accordance with the law provisions. In the cases where the property is being traded, the time of transfer of ownership must be identified to determine the property owner causing the damage.

Example: A sold a house to B under a notarized house sale contract and B paid 80% of the house purchase price to A. However, before the house was handed over, it caught fire and spread to C's house, causing damage. In accordance with Clause 1, Article 12 of the 2014 Housing Law, the time of transfer of ownership is the time when the buyer has paid in full and received the house, unless otherwise agreed upon. In this case, B has not paid in full and has not yet received the house handover, so A has not transferred the ownership of the house to B. Therefore, A is still the legal owner of the house and must be liable to compensate for damage to C.

b) The property possessor other than the property owner must compensate for damage if he/she is holding or controlling the property directly or indirectly as the entity with rights to the property at the time of causing the damage.

Example: A is the owner of a car and has delivered that car to B. B drives the car in traffic and causes an accident and damage, it is necessary to distinguish:

- If A hires B as the car driver and makes payment to B, the use of the car is decided by A. In this case, A is the possessor and controller of the car. Therefore, A must be liable to compensate for damage, unless otherwise agreed upon.

- If A delivers the car to B under a legal property lease contract, the use of the car is decided by B. In this case, B is the possessor and controller of the car. Therefore, B must be liable to compensate for damage, unless otherwise agreed upon.

3. The person causing the damage, the property owner, or the property possessor is not liable for compensation in cases where the damage is caused in a force majeure event or entirely caused by the fault of the victim, unless otherwise agreed upon or otherwise specified by law.

a) A force majeure event means an event which occurs objectively and unpredictably and cannot be overcome although all necessary measures have been applied and all the permitted capability has been used.

Example 1: A's house is built and in normal use, showing no signs of damage. A sudden, unforeseen tornado blows away the roof of A's house, hitting passersby and causing damage. This case is a force majeure event, thus A is not liable for compensation.

Example 2: After receiving information about a storm, A has taken storm prevention measures according to the instructions of local authorities. However, the storm is so strong that it blows away the roof of A's house, causing damage to passersby. This case is a force majeure event, thus A is not liable for compensation.

b) The fault entirely caused by the victim means that the entire damage is caused by the fault of the person who suffered the damage; the person causing the damage is not at fault.

Example: A drives a car (under his/her ownership) in accordance with the Law on Road Traffic, C crashes into A's car on the road to commit suicide. In this case, A is not liable to compensate for damage entirely caused by C's fault.

Article 3. Principles of compensation for damage specified in Article 585 of the Civil Code

1. Regarding Clause 1, Article 585 of the Civil Code

a) “Actual damage” means the damage that has occurred as guided at Point b, Clause 1, Article 2 of this Resolution, and is calculated into money at the time of compensation settlement. Damage arising after the time of the first compensation settlement shall be determined at the time of the next compensation settlement if requested by the victim.

Example: A has caused injury to B and B must undergo long-term treatment. At the time the Court settles compensation, the total actual damage is VND X, including: treatment cost, lost or decreased income; cost for caregivers and spiritual loss. After that, if B still has to continue treatment, the costs incurred after the Court’s settlement will be resolved in another case if requested by the victim.

b) “Damage shall be compensated fully” means that all actual damages that have occurred must be compensated.

c) “Damage shall be compensated in time” means that the damage must be compensated promptly in order to prevent, limit, and overcome damage.

During the process of resolving the case, the Court may apply one or several temporary emergency measures under the civil procedure law to resolve urgent requests of the victim (such as forcible performance in advance of part of the obligation to compensate for damage caused by infringement upon life or health; forcible performance in advance of part of the obligation to provide support money, etc.).

d) To ensure full and timely compensation for damages, the settlement of compensation issues in criminal cases and administrative cases must be carried out together with the settlement of criminal cases and administrative cases.

In cases where a criminal case or administrative case concerns the settlement of compensation for damages but there are no conditions to prove it and it does not affect the settlement of the criminal case or administrative case, the compensation may be separated to be resolved according to civil proceedings.

dd) The person claiming compensation must clearly state each actual amount of damage that has occurred, amount of compensation requested and documents and evidence proving that his/her claim is well-founded.

In cases where the person claiming compensation is unable to collect documents and evidence himself/herself, he/she has the right to request the court to collect documents and evidence under the Civil Procedure Code.

2. Regarding Clause 2, Article 585 of the Civil Code

“The damage is too big as compared to financial condition of the person liable for compensation” refers to the case where there is evidence to prove that if the court orders compensation for all damages, there will be no conditions for enforcement of the judgment.

Example: A person accidentally sets another person's house on fire, causing VND 1,000,000,000 in damage. The person causing the damage has total property of VND 100,000,000 and an average monthly income of VND 2,000,000. This level of damage is too big as compared to the financial condition of the person causing the damage.

3. Regarding Clause 3, Article 585 of the Civil Code

“The compensation level becomes impractical” means due to changes in the socio-economic situation; price fluctuations; changes in the victim's disability and working ability; changes in the financial condition of the person liable for compensation, the compensation level is no longer consistent with such changes.

When the party suffering from the damage or the party causing the damage requests to change the compensation level, such party must submit a written request to change the compensation level, enclosed with documents and evidence as a basis for requesting a change in the compensation level.

4. Regarding Clause 4, Article 585 of the Civil Code

When a person who suffers from damage is partly at fault in causing the damage, he/she shall not be entitled to compensation for the part of damage caused due to his/her fault.

Example: A and B drive a car in traffic and cause an accident due to colliding with each other, resulting in A suffering a damage of VND 100,000,000. The competent authority determines that A and B are both at fault with each person's level of fault being 50%. In this case, B must compensate VND 50,000,000 to A (50% of the damage).

5. Regarding Clause 5, Article 585 of the Civil Code

“A party having its lawful rights or interests infringed upon is not entitled to compensation if the damage is caused due to its failure to apply necessary and reasonable measures to prevent and reduce such damage” means the case in which the party having the rights and interests infringed upon knows and foresees that if preventive measures are not taken, the damage will occur, and such party has the conditions to apply measures to prevent and reduce the damage but fails to do so, causing the damage. In such case, the party having the rights and interests infringed upon shall not be entitled to compensation for the damage.

Example: A's house is on fire, B parks his/her car near A's house and he/she knows that if the car is not moved, the fire is likely to spread to his/her car and B has the conditions to move the car but B fails to do so, putting the car on fire. In this case, B shall not be entitled to compensation for the damage.

Article 4. Determination of age of the person causing the damage specified in Article 586 of the Civil Code

The age of the person causing the damage shall be calculated at the time of causing the damage. In cases where the exact age of the person causing the damage cannot be determined, their date, month and year of birth shall be determined as follows:

1. In the case where the month may be determined but the day cannot be determined, take the last day of that month as the date of birth;

2. In the case where the quarter may be determined but the day and month cannot be determined, take the last day of the last month in that quarter as the day and month of birth;

3. In the case where the half of the year may be determined but the day and month cannot be determined, the last day of the last month in that half of the year is taken as the day and month of birth;

4. In the case where the year may be determined but the day and month cannot be determined, take the last day of the last month in that year as the day and month of birth;

5. In cases of failure to determine the year of birth, an assessment must be performed to determine age.

If the age assessment results only determine the age range of the person causing the damage, the court will take the lowest age within the determined age range to determine their age.

Example: The assessment concludes that M's age ranges from 13 years 6 months to 14 years 2 months, then M's age is determined to be 13 years 6 months.

Article 5. Statute of limitations for initiating lawsuits to claim compensation for damage specified in Article 588 of the Civil Code

1. The compensation for non-contractual damage arising before or after January 1, 2017 (the effective date of the Civil Code) and the litigant initiates a lawsuit from January 1, 2017, the statute of limitations for initiating a lawsuit to claim compensation is 03 years counting from the date a person having the right to claim compensation knows or should have known the infringement upon his/her lawful rights and interests.

2. The time a person having the right to claim compensation knows the infringement upon his/her lawful rights and interests is when he/she realizes or confirms that his/her lawful rights and interests have been infringed.

Example: On July 2, 2022, A discovered that fish in his pond had died en masse. A suspected that the cause was wastewater from B's house, so A requested the environmental inspection agency to conduct an assessment of the cause. On August 15, 2022, A received the inspection results showing that the cause of the damage was due to wastewater from B’s house. In this case, the time A knew that his rights and interests were infringed was August 15, 2022.

3. The case where the person having the right to claim compensation should have known the infringement upon his/her lawful rights and interests is that under normal conditions and circumstances, if the damage occurs, that person knows that his/her lawful rights and interests are being infringed or in cases where he/she should have known the infringement as specified by the law provisions.

Example 1: On June 20, 2022, A injured B and on the same day B had to be hospitalized for injury treatment. In this case, the time B should have known the infringement upon his rights and interests is June 20, 2022.

Example 2: A entrusts B to take care of A's car under a property bailment contract. During the term of the contract, the car was destroyed by C. At the time the car was damaged, B was not present at the place where the damage occurred but B still should have known about the damage. The time B should have known the infringement upon his rights and interests is the time C causing damage.

Article 6. Determination of damage caused by infringement upon property as specified in Article 589 of the Civil Code

1. The compensation for lost, destroyed or damaged property specified in Clause 1, Article 589 of the Civil Code is based on the agreement of the parties. In cases of failure to reach an agreement, the damage shall be determined as follows:

a) If the property is an object, determine the damage for lost or destroyed property based on the market price of property of the same type or property with the same features, technical standards, effects and level of wear and tear as the lost or destroyed property at the time of compensation settlement.

For the property valued in money, the damage shall be determined as the amount of money lost or damaged.

For valuable documents that are lost or damaged and cannot be restored, the damage shall be determined as the value of the lost or damaged documents at the time of compensation settlement. If valuable documents that are lost or damaged can be restored, the damage shall be determined as the costs necessary to restore those documents.

b) For damaged property, the damage is the cost to repair and restore the property to its pre-damaged condition at the market price at the time of compensation settlement to determine the damage; If the damaged property cannot be repaired or restored, the damage shall be determined as guided at Point a, Clause 1 of this Article.

2. Lost or reduced benefits associated with the use or exploitation of the property specified in Clause 2, Article 589 of the Civil Code are the profits and income that the victim is receiving or will receive if the property is not lost or damaged.

Yields and profits are calculated according to the actual applicable price, if not yet collected, then according to the market price of the same type, or the average monthly rental price of the property of the same type, or the property with the same technical standards, features, effects and quality at the time the Court of first instance determines the damage; For the property on the market that are not for rent, yields and income are determined on the basis of the average income of the 3 consecutive months brought by the damaged property under normal conditions before the damage occurs.

3. Reasonable expenses for preventing, reducing and remedying the damage specified in Clause 3, Article 589 of the Civil Code are actual and necessary expenses at the time of expenditure under normal conditions for applying necessary measures to prevent further damage; repair and restore the initial condition of the damaged property.

Example: T committed an act of setting fire to H's house. The expense of extinguishing the fire was VND X; The expense of repairing and restoring the house to its initial condition is VND Y. In this case, VND X is the expense of preventing and restricting the damage. VND Y is the expense of repairing the damage.

Article 7. Damage caused by infringement upon health specified in Article 590 of the Civil Code

1. Reasonable expenses for treatment, nursing, and the rehabilitation of health and/or lost or impaired functions of the victim include:

a) The expenses for health examination and treatment in accordance with the law provisions on health examination and treatment for the victim; expenses for renting a vehicle to take the victim to the medical examination and treatment establishment and back to his/her place of residence;

b) The expenses for health nursing for the victim is determined as 01 day of regional minimum wage at the health examination and treatment establishment for 01 day of health examination and treatment according to the number of days in the health record;

c) The expenses for rehabilitation of health and/or lost or impaired functions are costs for rehabilitating, supporting, and replacing part of the lost or impaired body functions of the victim.

2. Lost or reduced actual income of the victim is determined as follows:

a) If the victim’s actual incomes are stable from salary or wages, it is determined according to the victim’s salary or wages during the time the salary or wages are lost or decreased;

b) If the victim’s actual incomes are not stable from salary or wages, it is determined based on the average salary and wages of the 03 consecutive months before the time the damage occurs. In cases where the 03 consecutive months' salary before the time the damage occurs cannot be determined, it is based on the average income of workers of the same type in the locality during the period of actual loss or decrease in income. If the average income of workers of the same type in the locality cannot be determined, the actual lost or decreased income shall be compensated at the rate of 01 day of the regional minimum wage in the place where the victim resides for 01 day of damage.

A day of regional minimum wage is determined as 01 month of the regional minimum wage specified by the State divided by 26 days.

3. Reasonable expenses and the lost actual income of the person who takes care of the victim as specified at Point c, Clause 1, Article 590 of the Civil Code are determined as follows:

a) Reasonable expenses for the person who takes care of the victim during the treatment period include: travelling expenses and accommodation expenses at the average price in the locality where the victim is treated (if any);

b) The actual lost income of the person who takes care of the victim during the treatment period as guided in Clause 2 of this Article;

c) If the victim who loses his/her working capacity needs regular care, the reasonable expenses of taking care of the victim are determined as 01 day of the regional minimum wage in the place where the victim resides for 01 day of taking care of the victim.

Article 8. Damage caused by infringement upon life specified in Clause 1, Article 591 of the Civil Code

The damage caused by the infringement upon life as specified Points a, b and c, Clause 1, Article 591 of the Civil Code is determined as follows:

1. The damage caused by infringement upon health as specified in Article 590 of the Civil Code, guided in Article 7 of this Resolution, is calculated from the time the victim’s health is infringed until the time that person died.

2. Reasonable expenses for burial include: cost of purchasing a coffin; cremation and burial costs; expenses for items necessary for shrouds, funeral towels, incense, candles, flowers, hearse rental and other expenses for the burial or cremation of the victim according to local customs and practices. Do not accept requests for compensation for the costs of offerings, worship, meals, tomb construction, or grave digging.

3. Support money for persons whom the victim has the obligation to support or nurture before death is determined as follows:

a) The level of support money is based on the income, actual ability of the person obliged to support and the essential needs of the persons receiving support, but not lower than 01 month of regional minimum wage in the place where the persons receiving support reside for each month;

b) The time of providing support money is calculated from the time when the victim's health is infringed upon;

c) The persons receiving compensation for support money are those whom the victim is obliged to support according to the law provisions on marriage and family.

Article 9. Damage caused by infringement upon honor, dignity or reputation as specified in Article 592 of the Civil Code

The damage caused by infringement upon honor, dignity or reputation as specified in Article 592 of the Civil Code is determined as follows:

1. Reasonable expenses to limit and remedy damages include: necessary costs for recalling and removing items, publications, and data with content that offends the honor, dignity, and reputation of the victim; expenses for collecting documents and evidence to prove that honor, dignity, and reputation have been infringed; travelling expenses and accommodation expenses (if any) must be paid at the average price in the locality where the victim is required to request the authorities to verify the incident and make corrections on the mass media; costs of organizing a public apology and correction at the residence or workplace of the victim and other actual and necessary costs to limit and remedy the damage (if any).

2. Actual lost or decreased income is determined as follows:

a) Before honor, dignity, and reputation are infringed, the victim has actual income; however, because honor, dignity, and reputation are infringed, the victim must perform work to limit and overcome damage if their actual income is lost or decreased, then they will be compensated for such lost or decreased actual income;

b) The determination of the actual lost or decreased income of the victim is carried out as guided in Clause 2, Article 7 of this Resolution.

Article 10. Compensation for damage caused by persons on official duties specified in Article 598 of the Civil Code

If the damage caused by illegal acts of persons on official duties falls within the scope of the State's compensation liability, the State shall be responsible for compensating for the damage in accordance with the law provisions on State Compensation Liability. In the case where the victim files a lawsuit for compensation, the court shall consider, accept and resolve the matter in accordance with the Law on State Compensation Liability.

Article 11. Compensation for damage caused by under-fifteen persons, persons having lost their civil act capacity while under direct management of schools, hospitals or other legal persons specified in Article 599 of the Code Civil

1. “While under direct management of school” specified in Clause 1, Article 599 of the Civil Code means within the time and space that the school has received and is responsible for managing, taking care of, and teaching under-fifteen persons.

2. “While under direct management of hospital or other legal person” specified in Clause 2, Article 599 of the Civil Code means within the time and space that the hospital or other legal person has received and is responsible for managing persons having lost their civil act capacity.

Article 12. Compensation for damage caused by sources of extreme danger specified in Article 601 of the Civil Code

1. Sources of extreme danger are determined in accordance with Article 601 of the Civil Code and relevant legal documents.

Example 1: Road motor vehicles include cars; tractors; trailers or semi-trailers pulled by cars or tractors; two-wheeled motorbikes; three-wheeled motorbikes; motorcycles (including electric motorbikes) and similar vehicles as specified in Clause 18, Article 3 of the 2008 Law on Road Traffic are sources of extreme danger.

Example 2: Weapons in accordance with the 2017 Law on Management and Use of Weapons, Explosives and Combat Gears, amended and supplemented in 2019 are sources of extreme danger.

2. A person assigned by the owner of a source of extreme danger to possess and use the source of extreme danger in accordance with the law provisions must compensate for damage caused by the source of extreme danger, unless the owner and the assignee reach agreements that are not against the law provisions and social ethics or not intended to avoid compensation:

Example: The following agreements are not against the law provisions and social ethics or not intended to avoid compensation:

- Agreement to jointly bear responsibility for compensation for damage;

- Agreement that the owner compensates for damage in advance with legal property, then the assignee reimburses the owner for the compensation amount in the case where the owner has compensation conditions.

3. In the case where the owner of a source of extreme danger assigns another person to possess and use the source of extreme danger in contravention of the law provisions and causes damage, the owner must compensate for the damage.

Example: If the owner knows that a person does not have a driving license, but still gives him/her the right to possess and use the vehicle, causing damage, the owner must compensate for the damage.

4. The owner, possessor, and user of a source of extreme danger must compensate for the damage caused by the source of extreme danger even when not at fault, except in the following cases:

a) The damage is entirely caused by the intentional fault of the victim;

Example: An area has been installed with signs stating that there is a high voltage electricity source of mortal danger, but A still trespasses and steals things, then is electrocuted to death. This case is entirely caused by the intentional fault of the victim.

b) The damage in force majeure events or emergency circumstances, unless otherwise specified by the law provisions.

An emergency circumstance is a circumstance where in order to avert a danger actually and directly threatening the public interests or lawful rights or interests of his/her own or of other persons, a person has no alternative but to take an act which would cause lesser damage than the damage to be prevented.

Compensation liability in emergency circumstances shall comply with Article 595 of the Civil Code.

Example: A is driving a car in accordance with the Law on Road Traffic, B is driving a motorbike in the opposite direction to A and encroaching on A's lane. To avoid causing an accident for B and having no alternative, A rams his/her car into a motorbike owned by C that is parked on the sidewalk, causing damage to C. This case is an emergency circumstance, A does not have to compensate C for the damage, but B must compensate C for the damage because B causes an emergency circumstance in accordance with Clause 2, Article 595 of the Civil Code.

5. In the case where a source of extreme danger is illegally possessed or used, and causes damage, it shall be resolved as follows:

a) If the owner or the person assigned by the owner to legally possess or use the source of extreme danger is not at fault in allowing the source of extreme danger to be possessed or used illegally, then the person possessing or using it illegally must compensate for all damages.

b) If the owner or the person assigned by the owner to legally possess or use the source of extreme danger is at fault in allowing the source of extreme danger to be possessed or used illegally, the owner, legal assignee, and illegal possessor and user must jointly compensate for the damages.

Article 13. Effect

1. This Resolution is passed by the Judicial Council of the Supreme People’s Court on September 6, 2022 and takes effect from January 1, 2023.

This Resolution replaces the Resolution No. 03/2006/NQ-HDTP dated July 8, 2006 of the Judicial Council of the Supreme People’s Court guiding the application of a number of provisions of the 2005 Civil Code on compensation for non-contractual damages.

2. For cases of compensation for non-contractual damages arising before January 1, 2017 (the effective date of the Civil Code), the 2005 Civil Code, legal documents guiding the application of the 2005 Civil Code and the Resolution No. 03/2006/NQ-HDTP dated July 8, 2006 of the Judicial Council of the Supreme People’s Court shall apply, except for instructions on statute of limitations in Article 5 of this Resolution.

3. For judgments and decisions of the Court that have taken legal effect before the effective date of this Resolution, the instructions in this Resolution, do not apply to protest according to cassation or reopening procedure, unless the protest against the judgments or decisions has other grounds.

4. Any problems arising in the course of implementation shall be reported to the Supreme People's Court (via the Department of Legal Affairs and Scientific Management) for timely guidance.

For the Judicial Council
The Chief Justice
NGUYEN HOA BINH