Liability and Torts

1. Liability and Torts Prof. Bruno Tassone Docentedi Principles of Civil Law LUISS Guido Carli References: Chapters 11 and 19 of Language and Rules of Italian Private Law

2. Liability • There are three types of liability: • Contractual Liability, stemming from non-performance of an obligation; • Extra-contractual Liability or Civil Liability or Torts, stemming from the violation of the general duty not to cause damage to others while carrying out one’s own activities; • Pre-contractual Liability, stemming from the violation of the duty to behave according to good faith and fair dealing during contractual negotiations(which is regarded as a specific hypothesis of tort [or contractual liability according to the minority of scholars]rather than a type of liability itself).

3. Contractual liability Contractual Liability (more extensively dealt by the L&R Book) arises from non-performance of an obligation (see Arts. 1218 ff. c.c.), whether created by a contract or not (see Art. 1173 c.c. for the “sources” of the obligation). Therefore, contractual liability covers a variety of situations, even beyond non performance of contracts. Performance can be totally missing, partial or late: It may amount to a different level of frustration of the creditor’s interest(s), so giving rise to compensation of damages to a different extent.

4. Contractual Liability (II) The claim of compensation is usually about the economic consequences of non-performance: Pursuant to Art. 1223 c.c. the creditor can ask both the “dannoemergente” (decrease in his assets value) and the “lucrocessante” (loss of profits). Both elements are assessed according to the “positive interest” of the creditor, that is the one in the fulfillment of the contract (i.e. to the benefits arising out, and to the losses to be avoided because of, performance). Art. 1225 c.c. states that, in case of negligence, only the damages foreseeable when the non-fulfilled obligation arose are recoverable.

5. Pre-contractual liability The violation of the duty of good faith and fair dealing during negotiations obliges the infringing party to pay damages (the typical case is the outright interruption of negotiations without a good reason). The ensuing liability is limited to the “negative interest”, that is the interest in avoiding unsuccessful and pointless negotiations (i.e. to the benefits arising out, and the losses to be avoided because of, non-commitment in such kind of negotiations).

6. Differences Between Contractual and Extra-contractual Liability Differences between contractual and extra-contractual liability are: The statute of limitation, respectively 10 years (unless differently provided for single contracts or relationships) and 5 years (unless a crime is committed: see Arts. 2946 and 2947 c.c.); The already mentioned limitation of Art. 1225, only applicable to contractual liability; The burden of proof, as the creditor must only prove (i) the existence of the obligation (allegedly non-performed) and (ii) the damages suffered because of non-performance together with (iii) causation (even though this still discussed), while the victim of a tort must in principle demonstrate all its (numerous) elements.

7. Scopes of Tort Law Torts is a set of rules aimed disciplining situations in which there is not a previous relationship between the parties. Shifting or not (or only to a limited extent) the burden of the damages on the tortfeasor, Tort Law tries to achieve a new (and better) balance in the conflicting interests of citizens. The main scope of compensation is to indemnify the victim for the losses suffered or, in economic terms, to put her on the same “indifference curve” on which she was before the accident (and the same purpose is achieved by the criterion of the positive interest above in contractual liability).

8. Scopes of Tort Law (II) Together with a scope of indemnification there is a scope of deterrence, that is to prevent unlawful conducts thanks to the “threat” of compensation itself. The last scope is a punitive one, as becomes clear thinking about the “implicit sanction” enshrined in the award of high damages in case of a crime (which can be properly assessed only to a limited extent: how much is worth the life of a murdered son?).

9. Art. 2043 c.c. The general rule of Tort Law is embodied in Art. 2043 c.c., while other special rules are set by the provisions following the said article, in other parts of the Civil Code or in special laws. Art. 2043 model-situation requires four elements: A positive or negative conduct (act or omission); Negligence or wilfulness of the tortfeasor; Causation between the conduct and the damage; Unfairness of the damage. A further element is the capacity to direct the mind and understand the consequences of the action, according to Art. 2046 c.c. (incapacity).

10. Conduct & Fault Omissions (or negative conducts) are relevant only when there is a previous obligation to act established by the legal system (e.g., a mother can kill a baby stopping to feed him). Therefore, most of tort cases occur because of a positive conduct of the tortfeasor. The torfeasor must also be at fault, as his conduct must be willful or negligent. In the first instance he intentionally harms the victim, while in the second one the damages occur without any intention and rather because of the violation of a standard of care.

11. Negligence Negligence can be “specific” or “general”: in the first case the relevant standard is fixed by a specific rule of conduct whose violation gives rise to liability (e.g., driving above the speed-limit). General negligence, on the contrary, is the violation of a broader rule of conduct, stemming from the general criteria of “diligence, prudence and ability”. Under Italian Law negligence is also regarded as “objective” rather than “subjective”: the personal conditions of the tortfeasor are in principle irrelevant to establish liability.

12. Causation Coming to causation, the traditional view is based on the “condicio sine qua non” theory (in Common Law countries known as “but for test”). According to this theory any “condition” without which the event would not have occurred is a “cause” and it implies a “mental subtraction” process to ascertain with and without which single cause the injury would have taken place. The consequences of this theory are often too harsh, as even poorly relevant circumstances may lead to establish liability.

13. Causation (II) On the other hand, when liability can be established only on stochastic grounds (e.g., where a proper surgery would have healed the victim only with a certain degree of likelihood), the condicio sine qua non theoryis obviously unworkable. Therefore, Courts often use the “adequate causality” and the “id quod plerumqueaccid”theory: only non-extraordinary or non-atypical consequences are deemed to be linked to the conduct. In short, with an “ex ante”evaluation it is ascertained if the kind of conduct at stake is generally suitable to bring about that kind of event.

14. Causation (III) More recently, the“adequate causality” and the “id quod plerumqueaccid”theories led Courts to admit causation on the basis of simple probabilities, if they are “more likely than not” or at least (when a rigid threshold is deemed inappropriate) “substantial”. The criteria used within the said theories are not valid in the criminal setting (where liability must be established “beyond any reasonable doubt”). Therefore, the same case can be assessed with two opposite outcomes (as to the issue of causation) before Criminal and Civil Courts.

15. Damages Damages arising out from a tort can be economic and non-economic. Economic damages are always awarded using the criteria of “dannoemergente” and “lucrocessante” already discussed above. As for Art. 2059 c.c. non-economic damages are compensated only in the cases set by the law (the most important is the commission of a crime, which can give rise both to a criminal and civil liability). From the year 2003 (decisions nos. 8827 and 8828/2003) the Court of Cassation established that compensation of non-economic damages is awarded also when a violation of a fundamental right set forth by the Constitution occurs.

16. Damages (II) Until very recent times, non-economic damages were distinguished among: Biological Damage, the decrease of the psycho-physical integrity (ascertained by a doctor); Moral Damage, the “pain and suffering” (as labelled in Common Law) stemming from the tort; “Existential Damage”, the “change in the life conditions” brought about by the tort. A tort can give rise only to economic (destruction of a car) or non-economic damages (defamation) and, in the second case, to all the said types of damages or only to one or few of them.

17. Damages (III) In the year 2008 (decision no. 26972/2008) the Joint Sessions of the Court of Cassation offered a restatement of the issue, which (formally) bars Courts to distinguish among the said three types of non-economic damages. Then, non-economic damages are seen as a “unitary category” with different “components”, whose “translation into money” depends on the specific right violated, ascertained on a case-by-case basis. Nevertheless, the real impact of the new framework on the issue is not clear yet and many Courts still decide the case applying the old types of non-economic damages using the new terminology.

18. Non-economic Damages and Contractual Liability As to contractual liability (the wording of) Arts. 1218 ff. c.c. could lead to conclude that non-economic damages cannot be recovered in case of non-fulfilment of an obligation. Nevertheless, Courts used to award such damages considering the “content” of the breached obligation and the impingement of non-performance on fundamental rights (such as property rights and physical integrity). With the already quoted decision of 2008 the Supreme Court stated that when the breach of an obligation affects the fundamental rights granted by the Constitution (coupling the above interpretation of Art. 2059 given in the year 2003), the claim of non-economic damages can be sustained (even though a “parallel” or “concurring” action in tort has not been brought by the victim).

19. Unfairness Eventually, Art. 2043 c.c. requires the damage to be “unfair”, which implies a selection of the consequences to be compensated and the ones to be left where they fall. The traditional case-law was based on the “qualification” of the right violated and, in early stages, damages were awarded only when an “absolute right” was infringed. After a long evolution, with the decision no. 500/1999 the Joint Session of the Court of Cassation established that the violation of “any legally relevant interest” (a “benedella vita”) gives rise to compensation, so enlarging the scope of civil liability and providing Courts with more discretionary powers.

20. General and Special Tort Rules So far we have dealt with the element of art. 2043, while tort law provides many special rules which entail a variation of the framework. The main differences can be summarized as follows: Liability can be established under negligence or can be “strict”: in the second case the way the tortfeasor behaved does not matter, as is sufficient to ascertain causation between the conduct and the damages (see Arts. 2050, 2051 and 2054, Para. 1, c.c.); Liability can be direct or indirect: in the second instance the one obliged to bear the consequences of the tort is not (only) the tortfeasor, but (also) the one entertaining with him the relationship described by the law (typically the employer: see Arts. 2048, 2049 and 2054, Para. 3).