Учебный год 22-23 / William_Simons_Private_and_Civil_Law_in_the_R

compensation for damages. This distribution of risks is fair to both parties, creates incentives for proper performance, and makes it an essential part of the sphere of the contractor without overburdening him beyond normal means: if he is diligent, he does not have to fear compensation claims.

Article 401 establishes a completely different type of distinction, the economic and social rationality of which remains obscure to me. It establishes liability for the non-entrepreneurial contracting party only in cases of intent and negligence. The guarantee of proper performance of contractualobligations—acornerstoneofthelawofonerouscontracts— has gone. The risk of non-performance is with the customer, even though its roots fall clearly within the contractor’s sphere.The normality of per- formance of contractual obligations should not be subject to fault. Any other solution is utterly unfair and far from a correct balancing of risks. This is all the more so in the context of the Civil Code, since Article 720 does not confer the right on the customer simply to refuse the improper workuntilacceptanceandkeephismoney.Thisis,initself,quiteanunusual arrangement: the customer is obliged to inspect and accept the work and cannot simply reject it even if it is apparently not up to contractual or usual standards. He is exclusively referred to the set of secondary rights as established in Article 723. All in all, this interplay of rules may lead to grossly unjust situations for the customer. Only by way of overstretching Article 715 might a customer get out of the contract by cancelling it before completion of the work.

It is worth noting in this context that even the non-professional customer has an obligation to inspect the work if he does not want to lose the rights thatArticle 723 confers upon him—a burden that in other codes is only imposed on the entrepreneurial customer.

Contrary to the foregoing,Article 401(3) establishes strict liability for the entrepreneur. As much as this is correct for initial contractual performance, it seems to overburden him in case of damage claims. This is all the more so since Article 402 extends strict liability to the unintentional and non-negligent actions of employees. Note how long it took many traditionally capitalist countries to introduce strict liability for limited configurationsandnotealsothattherehasbeenacoincidenceinextend- ing liabilities and the possibility of risk insurance. Of course, the norm is partly dispositive and well-organized enterprises with market power that canaffordtopaylawyerswillcertainlyplayonthat,unfortunately,alsoby limiting liability for initial performance, which is equally not ius cogens. The same will most probably not be true for the small and even for the medium-sized enterprises. Instead of encouraging these newly emerging

market participants, as is politically proclaimed, they risk being submerged by claims of strict liability.

As has been stated before, the choices of remedies as exposed in Article 723 itself correspond to well-established practice and balancing of interests between contracting parties. There is one exception, though, which unnecessarily complicates the situation where the contractor has to provide material.This corresponds, by the way, to the basic concept of the work contract as conceived in Article 704 and there is no need to consider it as a “mixed contract” (Art.421). According to Article 723(5), however, remedies for improper material are provided by reference to Article 475, while remedies for improper work continue to be regulated by Article 723. This split is far from necessary and not at all easy to operate, inasmuch as Articles 475 and 723 come to different conclusions. This is—despite much overlap (which, in turn, renders the reference superfluous)—partly the case since only the buyer has the right to declare the contract at an end and to reinstate the parties in their respective pre-contractual positions. In practice, the normal situation will occur where the material is transformed during the work process; it will be very difficult to clearly distinguishthedifferentspheresandseparateclaimsaccordingly.Itseems, therefore, to be more appropriate to recognize the economic unity (as Art.704 does) and establish one identical claim. It may be sought either in the law of the contract of sale or in that of the work contract, depending on the characteristic obligation. As a result, the meaning of Article 723(5) should be restricted as much as possible.

“St. Petersburg Governor Settles Suit Against Sobchak”;6 “The State will pay citizen V.G. Panskov 4,714,150 rubles and 79 kopeks for an illegal accusation of bribe taking”.7 Such headlines now appear regularly in the Russian and foreign press, demonstrating that tort law has come to occupy a significant place in the life of the law in Russia.

In this chapter, several aspects of the new tort law will be analyzed. First, a brief overview of the tort law provisions of the Russian Federation Civil Code will be given. Second, a more detailed examination of the code provisions on the tort liability of the state will be made. And third, some of the judicial practice in cases involving state tort liability will be reviewed.

The New Code Provisions: An Overview

Chapter 59 of the Civil Code (“Obligations Arising from the Causing of Harm”) is composed of four parts: general principles of liability (Arts.10641083); compensation for harm caused to the life or health of a citizen (Arts.1084-1094); compensation for harm resulting from defects in goods, work, or services (Arts.1095-1098); and compensation for moral harm (moral’nyi vred) (Arts.1099-1101). Many of the 38 articles in the chapter are composed of multiple sections and sub-sections, thus yielding about one hundred separate provisions on tort.

General Principles of Liability

The most important provisions among the general principles in part one are these:

(1)That harm to the person or property of a citizen8 or to the property of a legal person is subject to full compensation by the person who caused the injury (Art.1064).

6“St. Petersburg Governor Settles Suit Against Sobchak”, RFE/RL Newsline, No.188, Part I, 5 January 1988.

7Sergei Mostovshchikov, “Za nezakonnoe obvinenie v poluchenii vziatok gosudarstvo zaplatit grazhdaninu Panskovu V.G. 4.714.150 rublei 79 kopeek”, Izvestiia 15 October 1994, 5.

8Typically (i.e., in the 1961 USSR Principles, the 1964 RSFSR Civil Code, and the 1991 USSR Principles) the word “citizen” rather than “person”, “individual”, or some other more general term has been used in this context. Only in the 1922 RSFSR Civil Code (Art.403) was there reference to the causing of harm to “another person”. Art.2 of the present Civil Code reads in part as follows: “The rules established by civil legislation apply to relations in which foreign citizens, stateless persons, and foreign legal persons participate unless otherwise provided for by a federal law.” For a further discussion of this point with regard to the 1991 USSR Principles, see this author’s “Tort Law”, 2 Soviet and East European Law 1991 No.6, 9.

(2)That the basis for awarding compensation is fault on the part of the causer of the harm (Art.1064), although in some circumstances— principally where harm is caused by activity that creates increased dangerforthosecomingintocontactwithit—compensationmaybe assessed regardless of fault (Art.1079). In cases involving increased danger, liability will not ensue if it is shown that the harm resulted from irresistible force or the intent on the part of the victim. In general, harm occurring as a result of the victim’s intent is not sub- ject to compensation (Art.1083).9

Beyond these general principles, a number of narrower provisions familiar to tort law are to be found in part 1:

—On the joint liability of two or more causers of harm (Art.1080);

—On vicarious liability of several kinds (of legal persons for their employees—Art.1068; of parents for minor children—Arts.1073-

1075; of those responsible for the supervision of citizens who are adjudgedincompetentoroflimitedcompetence—Arts.1076-1078); ontherighttoseekindemnification—therightof“regress”inRus- sianterminology—bythepersonwhohasbeenrequiredtopaydam- ages against the person who actually caused the harm—Art.1081);

9Moreover, it is interesting to note that the new civil code contains several “socialist” elements that parallel provisions found in Soviet-era civil codes. Article 1064(3) provides: “Harm caused by lawful action is subject to compensation in cases speci- fiedbylaw”,echoingvirtuallyword-for-wordArt.444ofthe1964RSFSRCivilCode and Art.126(4) of the 1991 USSR Principles. Art.1083(3) states: “A court may lower the amount of compensation for harm caused to a citizen with consideration of his property status, with the exception of cases when the harm was caused by intentionally committed acts.” The second section of Art.458 of the 1964 RSFSR Civil Code contained a similar provision regarding lowering the amount of compensation, with the exception concerning intentionally caused acts.Art.132(2) of the 1991 USSRPrinciples contained almost identical language (using the word “crime” instead of “acts”). Art.1064(1)(3) states: “It may be provided by statute or contract that the causer of harm must pay the injured party compensation above actual damages.” Although there is no precise equivalent in the 1964 Civil Code, the 1922 RSFSR Civil Code contained two provisions arguably designed to achieve similar ends.Art.406 provided that based on the economic situation of the causer of harm and the injured party, a causerofharmwhowouldotherwisenotbeliablecouldneverthelessberequiredto pay compensation. Art.111 stated that in determining the amount of compensation, the court in all cases should consider the economic situation of the causer of harm and the injured party. Contemporary sources indicated that in the later years of the operation of the 1922 Civil Code, these provisions (and, especially Art.406) were seldom applied. See, for instance, P.E. Orlovskii, (ed.), Sovetskoe grazhdanskoe pravo: Tom II, Moscow 1961, 395-396.

—Onrulesregardingcontributorynegligenceonthepartofthevictim

(Art.1083);

—On compensation beyond the amount of insurance (Art.1072);

—On compensation below the amount of actual damages, based on the economic situation of the causer of harm (Art.1083);

—On liability for the torts of state organs (Arts.1069-1071); and

—On certain defenses, such as necessary defense (Art.1066) and ex- treme necessity (Art.1067).

As suggested, by and large these provisions are not novel developments of the post-Soviet period. It is not surprising, therefore, that parallels are also to be found between Soviet and post-Soviet scholarly commentary on tort law. Perhaps most striking is the doctrinal analysis of the main conditions required for a finding of tort liability, the composite parts or elements of a tort (sostav pravonarusheniia). These are, according to a 1996 commentary on the new civil code:10

—The incidence of harm or damage;

—Illegal behavior on the part of the causer;

—A“causalconnection”betweentheillegalbehaviorandthedamage; and

—Faultonthepartofthepersoncausingdamage(exceptwhenliability ensues regardless of fault).

The same four conditions were typically cited in analyses of tort law during the Soviet period,11 and even in pre-Revolutionary Russia.12

Compensation for Injury to Life or Health

Part two of Chapter 59 deals strictly with compensation for personal in- jury and death—excluding property damage and other kinds of delictual liability. Although this part of the chapter is not restricted to circumstances where the injured party or decedent had a work relationship with the party required to pay the compensation, the implicit assumption of

10O.N. Sadikov, (ed.), Kommentarii k Grazhdanskomu kodeksu Rossiiskoi Federatsii, chasti vtoroi (postateinyi), Moscow 1996, 655. See, also, M.Iu.Tikhomirov, (ed.), Iuridicheskiia entsiklopediia, Moscow 1997, 285.

11See, e.g.,V. Maslov, Obiazatel’stva iz prichineniia vreda,Khar’kov1961,9;L.A.Maidanik and N.Iu Sergeeva, Material’naia otvetstvennost’ za povrezhdenie zdorov’ia, Moscow 1968, 14. This book also appeared in 1953 and 1962 editions and listed the same tort elements.

12See, e.g., G. F. Shershenevich, Uchebnik’ Russkago grazhdanskago Prava, 10th edition, Moscow 1912, 652-654.

these articles seems to be that this work relationship will exist much of the time. Among the matters covered are injury or death sustained in the course of employment or other contractual relationships (Art.1084); the scope and character of compensation, including the calculation of lost earnings and future earning potential (Arts.1085 and 1086); compensation to a minor and to those who have lost a breadwinner (Arts.1087, 1088, and1089);subsequentchangesintheamountofcompensation,including increases based on a rising cost of living or a raise in the minimum wage (Arts.1090 and 1091); compensation of burial expenses (Art.1094); rules regarding the frequency of payments (Art.1092); and rules that apply in the event of reorganization of a legal person that is responsible for the payment of damages (Arts.1092 and 1093).13

As with part one of Chapter 59, the provisions in this part are considerably more detailed than in the earlier civil codes. Among the important innovations in the new provisions is the allowance of compensation for the future income that an injured party could have reasonably been expected to earn. As a 1996 commentary on the code put it, a provision of this kind “was unknown in [our] legislation earlier”.14

Product Liability

Part three of Chapter 59 contains four articles on product liability (“compensation for harm resulting from defects in goods, work, or services”). The 1991 USSR Principles contained an article on this subject (Art.129). But the new provisions go further in several ways, most importantly by including defects in services (uslugy), in addition to goods and work, as a basis for possible liability, and by premising liability not on fault but on causation. A defendant may be released from liability by showing that the harm resulted from either irresistible force or from violation by the consumer of rules established for the use of the product or the results of the work or service. The new code provisions supplement and extend relevant provisions (Arts.12-14) of the 1992 Law “On Protecting the Rights of Consumers”.15 This law has been the subject of two important decrees

13Two of the analogous articles in the 1964 RSFSR Civil Code (Arts.460 and 461, which were deleted from the code in December 1992) made the distinction between those tortfeasors who were and those who were not responsible for making the social insurance payments for the injured party. That distinction is not to be found in the new tort provisions.

14Sadikov, op.cit. note 10, 687.

15Vedomosti S”ezda narodnykh deputatov Rossiiskoi Federatsii i Verkhovnogo Soveta Rossiiskoi Federatsii 1992No.15item766.Amongtheimportantdifferencesbetweenthe1992law and the 1994 Civil Code: the latter specifies that the injured party may be a natural orlegalpersonwhiletheformeronlyspeaksofa“consumer”;andthelatterspecifies

of the Plenum of the Russian Federation Supreme Court, one before and one after the adoption of the new civil code.16

Compensation for Moral Harm

For most of the Soviet period, compensation was not allowed for “moral harm”, i.e., non-material injuries such as psychological damage, emotional distress, or injury to the honor or good name of a person. Compensation of this kind was seen as a “bourgeois” institution, and some writers were most vehement in condemning the practice.17 Other scholars, however, took a different view. Particularly during more liberal periods a number of writers expressed support for compensation for moral harm, finding nothing alien to Soviet socialism in it.18

Once political restraints were loosened, therefore, it was not sur- prising to find that opposition to this form of compensation diminished.

Article 131 of the 1991 USSR Principles contained a provision that for the first time allowed compensation for moral harm. Prior to this time, the only concession in the law with regard to non-material damage was the provision in Article 7 of the 1961 USSR Principles on protecting the honor and dignity of a citizen or organization. But the only remedy available to the injured party in that article was a court-ordered retraction of harmful untrue statements. An analogous provision was written into the 1991 Principles (Art.7). This article covered not only honor and dignity, but also “business reputation”—delovaia reputatsiia. And it provided not just for a retraction and a right to rebut libelous information, but also to

that liability to compensate will ensue regardless of fault. Both laws indicate that liability will be excused on the basis of irresistible force or the failure on the part of the consumer to follow the rules specified for the use of the product.

16Decree No.7 of the Plenum of the Russian Federation Supreme Court, of 29 September 1994, “O praktike rassmotreniia sudami del o zashchite prav potrebitelei”,

Biulleten’Verkhovnogo Suda Rossiiskoi Federatsii 1995 No.1, 4-10. See, particularly,Art.13, 7. Decree No.2 of the Plenum of the Russian Federation Supreme Court, of 17 January 1997, “O vnesenii izmenenii i dopolnenii v postanovlenie Plenuma Verkhovnogo Suda Rossiiskoi Federatsii ot 29 Sentiabria 1994 g. No.7 ‘O praktike rassmotreniia sudamidelozashchitepravpotebritelei’(sizmeneniiami,vnesennymipostanovleni- iami Plenuma ot 25 aprelia 1995 g. No.6 i ot 25 Oktiabria 1996 g. No.10)”, Biulleten’ Verkhovnogo Suda Rossiiskoi Federatsii 1997 No.3, 4-7. See, particularly, 6.

17See, e.g., Maslov, op.cit. note 11, 9-10. Some pre-Revolutionary writers took the same position. See ibidem, 10 (quoting from a work by the writer G.F. Shershenevich) and also the sources cited in Donald D. Barry, “Soviet Tort Law”, in Ralph A. Newman, (ed.), The Unity of Strict Law: A Comparative Study, Brussels 1978, note 18, 323.

18See, e.g., Maidanik and Sergeeva, op.cit. note 11, 8, 14-15, and sources cited at 15. The earlier editions of this book do not advocate compensation for moral harm.

“claim compensation for damages and moral harm incurred through the dissemination of such information”.19

The new civil code provisions address the subject of moral harm more thoroughly. Two parts of the code are involved.20 Chapter 8, which is found in Part One of the code, contains three articles on “Non-Material

Assets and the ProtectionThereof”.Article 150 defines non-material as- sets (nematerial’nye blaga) broadly (to include “life and health, the dignity of the person, honor and good name, business reputation, the inviolability of private life, personal and family secrets, the right to free movement, the choice of a place of habitation and residence, the right to one’s name, the right to authorship, other personal and non-property rights, and other non-material assets”) and guarantees their protection. Article 152, “Protection of Honor, Dignity, and Business Reputation”, parallels in many respects the just-discussedArticle 7 of the 1991 Principles, including the provision allowing a suit for damages for moral harm. Article 151, on “Compensation for Moral Harm”, states the general rule on the subject and provides a broad definition of moral harm:

“Ifmoralharm(physicalormoralsuffering)hasbeeninflicteduponacitizenbyacts violating his personal non-property rights or infringing on other non-material assets belonging to a citizen, as well as in other cases provided for by law, a court may impose the duty of monetary compensation for said harm on the offender.”

The rest of Article 151 provides instructions to the court for determining the amount of compensation.

Part Four of Chapter 59 of the code, “Compensation for Moral Harm”, supplements Article 151 with three further articles.

Part one of Article 1099 states that the grounds for, and the amount of compensation for, moral harm will be based on the rules provided in Chapter 59 of the code as well as the just-mentioned Article 151. Part two addresses the situation where moral harm arises from actions (inaction) that violate the property rights of a citizen. In such circumstances, compensation will be due “in cases specified by law”. A commentary on the code notes that this formulation is more restrictive than Article 131

19But as just indicated, not for the first time, as appears to be suggested in this recent commentary on tort law in the new civil code: “In this context [the ability to calculate material harm in monetary terms] the Russian Federation Civil Code has adopted the useful experience of developed foreign legal systems and now provides for monetary evaluation and, therefore, compensation also for moral harm.” Tikhomirov, op.cit. note 10, 285.

20Protection of dignity, honor and good name are also provided for in the 1993 Russian Federation Constitution. Art.21(1) states: “Human dignity shall be protected by the state. Nothing may serve as the basis for its derogation.” Art.23(1) reads in part: “Every person shall have the right to [...] the protection of his (her) honor and good name.”