Compensation for Non-Contractual Damages under Vietnamese Civil Law: Legal Principles, Recent Developments, and Practical Difficulties

Abstract

Compensation for non-contractual damages is an important legal mechanism for protecting individuals and organizations whose lawful rights and interests have been infringed. In Vietnam, this matter is primarily governed by the 2015 Civil Code and guided by Resolution No. 02/2022/NQ-HĐTP of the Council of Judges of the Supreme People’s Court. These legal instruments have established a more comprehensive framework for determining liability, compensable damage, and compensation levels. Nevertheless, several difficulties remain in judicial practice, particularly in proving damage, determining causation, valuing mental suffering, and identifying the liable parties. This article examines the theoretical foundations, important legal developments, and practical challenges concerning compensation for non-contractual damages under Vietnamese law.

Keywords: non-contractual damages, civil liability, compensation, actual damage, mental suffering, 2015 Civil Code.

1. Introduction

Non-contractual damage occurs when a person causes harm to another person without the existence of a contractual obligation between them. Common examples include traffic accidents, damage caused by dangerous sources, infringement of health or life, damage to property, and violations of an individual’s honor, dignity, or reputation.

The main purpose of compensation is to restore, as far as possible, the situation that existed before the damage occurred. Unlike criminal punishment, civil compensation does not primarily aim to punish the wrongdoer. Instead, it seeks to protect the injured party and distribute the financial consequences of harmful conduct fairly.

The 2015 Civil Code provides the general legal foundation for non-contractual compensation in Vietnam. However, applying its provisions requires courts to consider many factual and legal questions, including whether actual damage occurred, whether a causal relationship exists, and how the amount of compensation should be calculated.

2. Theoretical Foundations of Non-Contractual Liability

Under Article 584 of the 2015 Civil Code, a person who infringes another person’s life, health, honor, dignity, reputation, property, or other lawful rights and interests, thereby causing damage, must provide compensation. This rule establishes the general basis of non-contractual liability.

Traditionally, civil liability is established through several elements. First, there must be unlawful conduct that infringes another person’s protected rights or interests. Second, actual damage must occur. Third, there must be a causal relationship between the unlawful conduct and the damage. In many cases, the fault of the person causing the damage is also considered.

Nevertheless, fault is not always a mandatory condition. The law recognizes strict liability in certain circumstances, such as damage caused by sources of extreme danger. In these cases, an owner or lawful possessor may be liable even when they did not intentionally or negligently cause the damage. This approach reflects the principle that a person who creates or controls an unusual risk should bear the consequences arising from that risk.

The 2015 Civil Code also recognizes circumstances in which liability may be excluded. A person causing damage may not be required to compensate if the damage results entirely from a force majeure event or entirely from the injured party’s fault, unless otherwise agreed or provided by law.

3. Principles for Determining Compensation

Article 585 of the 2015 Civil Code provides several essential principles. The first is that actual damage must be compensated fully and promptly. The parties may agree on the amount, form, and method of compensation. Compensation may be paid in money or in kind and may be made once or periodically.

The second principle permits the compensation level to be reduced when the person causing the damage was not at fault, or was only unintentionally at fault, and the damage is excessively large compared with that person’s financial capacity. This rule demonstrates the humanitarian and equitable nature of Vietnamese civil law.

Third, the injured party is not entitled to compensation for the portion of damage resulting from their own fault. Furthermore, an injured party who fails to take reasonable measures to prevent or limit the damage cannot demand compensation for losses that could have been avoided.

Compensable damage depends on the interest infringed. Damage to property may include lost, destroyed, or damaged property; reduced benefits associated with its use; and reasonable expenses incurred to prevent or remedy the damage. Damage to health may include medical expenses, lost income, the income lost by caregivers, and compensation for mental suffering.

When a person’s life is infringed, compensation may cover medical expenses incurred before death, funeral costs, financial support for dependants, and mental suffering suffered by close relatives. Infringement of honor, dignity, or reputation may lead to compensation for expenses incurred to mitigate the damage, lost income, and mental suffering.

4. New Guidance under Resolution No. 02/2022/NQ-HĐTP

Resolution No. 02/2022/NQ-HĐTP provides important guidance on the application of the Civil Code’s provisions concerning non-contractual liability. It assists courts in identifying the conditions giving rise to liability and determining compensable damage in particular cases.

One significant contribution of the Resolution is its clarification of “actual damage.” Damage may already have occurred or may certainly occur in the future. However, hypothetical or purely speculative losses generally cannot serve as a basis for compensation.

The Resolution also explains the determination of lost or reduced income. Where the injured person had stable income, compensation may be calculated using their income immediately before the damage occurred. If the income was unstable, courts may consider the average income during an appropriate period. Where income cannot be precisely determined, the average income of similar workers in the locality may be used.

Another important development concerns compensation for mental suffering. Since emotional damage cannot be measured directly in monetary terms, the parties are encouraged to reach an agreement. If they cannot agree, the court must determine an appropriate amount within the statutory limits. The Resolution provides more specific guidance on identifying the persons entitled to receive such compensation, especially where life, health, honor, dignity, or reputation has been infringed.

5. Practical Challenges

Despite these developments, proving actual damage remains difficult. Injured persons may fail to retain medical bills, repair invoices, employment records, or other documents. Informal workers may find it especially difficult to prove their lost income because they often have no employment contracts or salary records.

Causation is another complex issue. In cases involving medical treatment, environmental pollution, defective products, or multiple wrongdoers, it may be difficult to establish that a particular act directly caused the alleged damage. Courts may need expert opinions, technical evidence, or professional assessments, which can increase both the cost and duration of proceedings.

Compensation for mental suffering also remains inconsistent. Because mental harm is personal and cannot be evaluated objectively, similar cases may result in different compensation amounts. Statutory limits contribute to predictability, but they may not always reflect the actual degree of suffering experienced by victims and their families.

Finally, even when compensation is awarded, enforcement can be challenging. The liable person may have insufficient assets or may attempt to conceal property. Consequently, a favorable judgment does not always ensure that the injured party will receive full and timely compensation.

6. Conclusion

The 2015 Civil Code and Resolution No. 02/2022/NQ-HĐTP have created a relatively comprehensive framework for compensation for non-contractual damages in Vietnam. The law emphasizes full and prompt compensation while also considering fault, financial capacity, and the injured party’s responsibility to limit damage. However, practical difficulties remain in proving losses, establishing causation, valuing mental suffering, and enforcing judgments. Further judicial guidance and greater consistency in adjudication are therefore necessary to ensure that injured parties receive fair and effective protection.