What types of damage/loss can be compensated and what is the measure of damages? Are punitive damages available?
The damages which can be awarded in an action based on tort may be contemptuous, nominal, ordinary or exemplary. The primary object of award of damages is to compensate the aggrieved party for the harm suffered, while the secondary object is to punish the breaching party for its conduct in inflicting such harm. The secondary object is achieved in certain cases by awarding, in addition to compensatory damages, damages which are termed as exemplary, punitive, vindictive or retributory damages. In awarding punitive or exemplary damages, the emphasis is not on the injury caused, but on the breaching party and its conduct.
However, in product liability claims under the principles of tort law, practically there is limited jurisprudence available as aggrieved parties usually seek redressal under the CPA or under the Contract Act. This is also due to reluctance of Indian courts to award considerably significant amounts of exemplary or punitive damages in claims under tort law. The CPA permits awards of punitive damages in circumstances deemed fit by the consumer courts. Damages have been awarded by Indian courts under the CPA in exceptional cases by way of compensation where it has been established that the aggrieved party suffered harassment and extreme pain and suffering as a result of the conduct of the manufacturer, supplier or distributor, pursuant to being notified about the defective product. However, the quantum of damages awarded under the CPA or by a civil court is much lower than and not comparable with punitive damages that are awarded in other developed countries.
Both direct and indirect damages/loss can be compensated, but only actual damages/loss can be compensated. Mental suffering also can be compensated. Punitive damages are not available under Japanese law. Reasonable attorney’s fees (about 10% of total actual damages) can be included in a victim’s award of damages, even though the general rule in Japan is for each party to bear its own fees and costs.
Damages will be measured whether such damages would ordinarily arise from such alleged acts or from a failure to act (Article 416 (1) of the Civil Code). Also, damages that arise from special circumstances may also be demanded, if the party foresaw or should have foreseen such circumstances (Article 416(2) of the Civil Code).
Although there are no clear objective standards for calculation of damages, etc., calculation standards for damages in traffic accident cases will often be referenced.
Tangible damages can be compensated in monetary terms. In order to compensate this damage, the claimant must prove that loss or damage occurred. In Turkish jurisdiction, courts frequently demand expert examination to calculate the amount of the damage. When calculating the compensation the degree of fault, consent of injured party to the action which caused the loss, other circumstances.
The courts rarely allow punitive damages. Instead:
- the relevant authorities order administrative fines under the Law on the Preparation and Application of Technical Legislation for Products; or
- where material or non-material damages are proven, the courts can order indemnifications under the Code of Obligations (6098) or the Criminal Code.
Damages that can be compensated include (i) expectation damages and (ii) special damages only to the extent that they were known or could have been known by the party who engaged in the illegal conduct. Further, a person who has caused the death of another person can be liable for economic and consolatory damages to the lineal ascendants, lineal descendants and the spouse.
The amended Product Liability Act enacted on April 19, 2018, includes a punitive damages provision. The Act provides that (i) if the manufacturer is aware of the defect in the product but fails to take necessary measures to correct the defect and (ii) serious damage occurs to the consumer’s life or body as a result thereof, the manufacturer can be liable for punitive damages of up to three times the amount of damages incurred by the injured person (i.e., treble damages). The exact amount of damages to be awarded to the claimant is determined by considering a number of factors such as the degree of intention/fault, degree of damage, economic benefit, the degree of criminal punishment or administrative disposition, and the duration and volume of the supply.
The following compensatory damages are available for claims of bodily injury:
- general damages, including pain and suffering, loss of amenities and loss of expectation of life; and
- special damages, including loss of wages (both past and future), medical and hospital expenses and the like.
The Tort Reform Process has resulted in caps, thresholds and other limitations being placed on the amount of such damages that can be recovered.
Damages are assessed on a once and for all basis.
Damages are also recoverable for mental damage, provided it can be established that the claimant is suffering from a diagnosed psychiatric condition. In addition, common law damages are available for damage to the product itself, or other consequential damage to property. One can recover damages for “pure economic loss” but the nature and extent of such damages is extremely complex.
While rare, exemplary, punitive or aggravated damages can be awarded by the courts, although in some jurisdictions (as a result of the Tort Reform Process), not in negligence actions seeking damages for personal injury.
The types of damages/losses that can be compensated are as follows:
- Pecuniary damages/losses, for example loss of professional earnings;
- Physical damages suffered by the claimant, such as bodily injury;
- Damages caused to the claimant’s mental integrity;
- Loss of opportunity to obtain a future benefit;
- Anxiety caused by the exposure to a defective product.
Under French law, the principle is a full compensation of the damages/losses suffered by the claimant, upon the condition that they be certain, direct and determined.
Damages granted to the claimant are intended to solely compensate the claimant for the damage(s) suffered, and not to punish the defendant.
Punitive damages are not available under French civil law.
The Brazilian law admits the compensation of material and moral damages. The material damages encompass everything that the consumer effectively lost plus everything that he was prevented from profiting. Such losses are measurable.
The moral damages, on the other hand, can be defined as psychological damages caused to the consumer. Due to its abstract nature, it cannot be monetarily measured. The judges commonly use other decisions previously rendered in similar cases to establish the parameters of the moral damages.
Punitive damages are not established in the Brazilian law, since our civil liability system is based in the concept that the victim shall be indemnified to the extent of the damages suffered, and shall not be cause of unlawful enrichment. Nonetheless one of the elements used by judges to fix the indemnification of moral damages is the pedagogical, which increases the amount of the condemnation.
The types and scope of compensation recoverable through product liability suits depend on the nature of damage suffered by the infringed party.
In the event that a defective product causes personal injury, the tortfeasor is liable for a variety of compensations, including the medical expenses and nursing expenses of medical treatment, and lost income caused by absence from work. If the injury results in disability, the tortfeasor would also be responsible for other expenses including the cost of self-supporting equipment, subsistence allowances, and the living expenses of the disabled person’s dependants. If the infringed party deceases, the tortfeasor would further be responsible for funeral expenses, an additional compensation, and additional living expenses of the deceased’s dependants. An infringed party is also entitled to compensation for mental distress in most personal injury cases.
In the event that a defective product causes property loss (including damage to the product itself), the tortfeasor is responsible for restoration of the damaged property or compensation for its lost value.
Punitive damages are available only under special circumstances, such as when the tortfeasor acts in malice. For instance, according to the Consumer Rights and Interests Protection Law, in the event that a producer or seller knowingly sells defective products and causes death or serious damage to personal health, purchaser is entitled to punitive damages not exceeding twice the amount of its actual loss. If under the Food Safety Law, similar conduct is subject to punitive damages ten times the amount of actual loss.
The law aims to put the victim of negligence in the position he/she would have been in had the negligence not occurred.
Damages are available to compensate the claimant for losses that were a direct and reasonably foreseeable consequence of the injury. As a general rule, in the sphere of product liability, no claim can be made for negligence causing pure economic loss, that is, financial loss that does not arise from physical injury or damage to property.
Broadly speaking, an injured consumer may be entitled to damages under any/all of the following categories:
- special damages, awarded in respect of the actual losses suffered by the claimant, such as loss of earnings, damage to property etc.;
- general damages, often awarded in personal injury cases for pain, suffering and loss of amenity; and
- provisional damages, for which a claimant will be eligible if it is shown that there is a chance that at some definite or indefinite time in the future he/she may, as a result of the act or omission which gave rise to the cause of action, develop some serious disease or suffer some serious deterioration in his physical/mental condition.
The approach of the courts in such cases is: (a) to award immediate damages assessed on the usual compensatory basis (see above), assuming that the injured person will not develop the disease or suffer the deterioration in his/her condition; and (b) to award the claimant entitlement to further damages at a future date if the claimant develops the disease or suffers the deterioration.
Damage compensation principally follows the full compensation principle, i.e. claimant may recover all losses incurred due to the damaging event. In product liability cases, the court will usually order declaratory relief in respect of future damage caused by a defective product. Damages may even extent to loss of profits. However, punitive damages are not granted under German tort law.
The party that was affected by a defective product is to be set as it was before the damaging event (restitution ad integrum). If in rem restitution is not possible, the party can claim all costs necessary for restoring the previous position as damages. Damages for emotional distress or pure economic losses can usually not be claimed, though.
In Virginia, a plaintiff may recover compensatory damages for past, present, and future medical expenses; lost earnings; pain and suffering; impaired future earning capacity; and permanent disability as long as it can be proven to a reasonable degree of certainty. See, e.g., Hailes v. Gonzales, 207 Va. 612, 614 (1996). Proof with mathematical precision is not required; however, a plaintiff must provide sufficient evidence to support an intelligent and probable estimate of damages. Id. at 614. Punitive damages are recoverable if the plaintiff can prove the defendant’s conduct was wanton, willful, malicious, and/or evinces a conscious disregard of the rights of others. See Doe v. Isaacs, 265 Va. 531, 535 (2003). “[A]n award of compensatory damages . . . is an indispensible predicate for an award of punitive damages, except in actions for libel and slander.” Syed v. ZH Techs., Inc., 280 Va. 58, 74-75 (2010).
Both claims for property damage and claims for damages or compensation for personal injury caused by product liability may be raised.
The various claims are subject to various calculation rules. Liability for property damage is subject to no cap. In regard to personal injury, the Act on the Liability to Pay Compensation stipulates certain caps as to the amount of the claim for damages.
The Act contains a general mitigation rule which stipulates that damages may be reduced in respect of both property damage and personal injury in special circumstances.
The Products liability Act applies only to personal injury and consumer property damage, whereas the scope of application of the product liability developed in case law is broader. The injured party is free to decide which set of rules to rely on in support of its product liability damage or injury claim (provided that both sets of rules apply to the damage or injury in question).
Punitive damages are not allowed under Danish law. Damages are paid only for the loss suffered, and loss arising out of a fine is not compensated.
In the event of bodily injury, the injured person may claim a full, lifelong compensation of the loss of its average salary (professional revenue) and compensation of other losses incurred as a result of the injury (eg, medical expenses); this amount may be increased or decreased based on the medical conditions of the injured person; this amount is also index-linked.
Financially dependent persons may claim loss of revenue incurred by the death of the person who is the earner (supporter). Where the injury or death was caused by deficient goods, either the producer or the seller of the goods may be held liable for the loss. The liable entity must also reimburse the burial expenses.
The principle of full compensation applies to compensation for the losses caused to the property of the consumer.
Where the producer is found to be guilty for the defect that caused moral harm, moral harm may be compensated in addition to compensation of the other losses.
Payments with respect to moral harm may be awarded on the conditions set above in question 12.
The LCRP prescribes in certain cases the penalty of 1 per cent of the product’s price for each day of the delay caused by not satisfying the consumer’s claim, which can be reduced in exceptional cases.
A fine of 50 per cent of the amount awarded to the consumer may follow the court’s decision in favour of the consumer.
The amount of ‘compensation’ for the loss of salary (professional income) is not decreased in the case of subsequent growth of income of the injured person. Equally, the ‘compensation’ for burial expenses is not decreased in the case the same person gets monetary aid for burial from the state. Thus, the sums to be paid in both cases are not of purely compensatory nature.
Typically, the highest claims stem from loss of income, health care related costs and compensation for personal suffering. Punitive damages are not available.
Compared to the US health related costs and compensation for personal suffering are not very high. Regarding loss of income, courts typically ask for a high probability that the claimant would have had the income if not for the suffered injuries caused by the defective product (which can be hard to prove especially for the self-employed).
Under the Product Liability Act, damage to the product itself is not eligible for compensation. Thus this will only be compensated based on general tort law (with some kind of negligence as a precondition). Under the product liability act, material damage is only covered by the amount that is exceeding EUR 500,-.
Other damages than already mentioned play a limited role within the realm of product liability proceedings. Some cannot be compensated at all (i.e. emotional distress not rising to the level of a medically accepted disease).