About proportional civil liability.

Belgian joke or new paradigm?

As part of the major reform of its Civil Code, Belgium is planning to implement proportional civil liability.

The philosophy behind this new liability regime is to enable (better) compensation for cases involving causal uncertainties:

  • (i) In cases where damage could occur even in the absence of fault, the victim could receive compensation proportional to the probability that the fault actually caused the harm.
  • (ii) In cases where several events could be the cause of the damage, each potential liable party will be held responsible, in proportion to the probability that their action caused the harm.

Compared to civil law standards (such as those in France), this represents a significant extension of a tort liability regime based on strict causality.

Beyond the specific Belgian case, the concept of proportional civil liability (based on causality, but also on the extent of fault committed by the perpetrator) opens up interesting perspectives.

Covering the blind spots of tort liability

Currently, tort liability allows the victim to obtain full compensation for personal damage caused by a wrongdoer.

To quote the classic terms of the Court of Cassation, “the essence of civil liability is to restore as accurately as possible the balance destroyed by the damage and to place the victim, at the expense of the liable party, in the position they would have been in if the harmful act had not occurred.”

This citation, often understood as a whole, actually contains two distinct injunctions that do not completely overlap:

  1. Civil liability aims to restore the balance destroyed by the damage as accurately as possible;
  2. it aims to place the victim, at the expense of the liable party, in the position they would have been in if the harmful act had not occurred.

In the first case, it concerns the destroyed balance. In the second—logically retained in the current law—it concerns the victim’s situation.

In doing so, it ignores imbalances created to the extent that they do not directly affect the victim’s situation.

The typical example is that of counterfeiting luxury products: the audiences targeted by sales of originals and counterfeits are so distinct that the impact of counterfeiting on the sales of originals is either nil or at least minimal.

Even in the absence of harm to the victim, it remains true that a pre-existing balance has been destroyed due to the wrongful enrichment of the counterfeiter.

To remedy such situations, French law is increasingly introducing possibilities for quantification through lucrative fault (for infringements of intellectual property, trade secrets, parasitism, and breaches of equality in competition); which falls under liability proportional to the fault committed.

This logic could also be extended not only to the fault but also to the identity of its author.

Implicitly, this is already the case: many restrictive competition practices are specific to certain distributors or actors in the digital sector (a trend that should further strengthen with the transposition of the DMA), in economic balance logics.

 

A more flexible assessment of causality

Using causality (between the wrongful act and the damage) as a criterion of proportionality could fit into the same logic of seeking balance.

Indeed, it allows for the consideration of more potential damages (a loss of chance whose cause cannot be established with certainty) in favor of the victim, while limiting reparations to the actual liability of the wrongdoer (in their favor).

In spirit, this new approach would allow for more flexibility in the granting of reparations. But isn’t this a pipe dream? Such logic indeed presupposes the extensive use of statistical and/or econometric instruments to measure each of the causal probabilities.

 

Proportional civil liability, loss of chance

In the explanatory memorandum relating to the Belgian draft bill, the drafters argue for replacing the logic of loss of chance with the broader logic of proportional civil liability (based on the probability that the defendant caused the final damage).

In our view, these should be two distinct elements: loss of chance is the certain and direct loss of a favorable eventuality, and it is quantified based on the probability of this favorable event.

Like any other type of damage, loss of chance is therefore based on certain causality and should therefore be extended based on proportional civil liability to causality (in cases where the loss is uncertain).

Similarly, two damages falling under proportional civil liability cannot be quantified in the same way depending on whether it is a proven missed gain or a loss of chance (with an equivalent probability of causing the damage).

While it is obviously possible to extend the notion of proportional liability sufficiently to fully cover the notion of loss of chance, this seems undesirable to us.

The structuring of compensable damages into large easily identifiable categories (suffered losses, missed gains, loss of chance, lucrative fault, compensatory interests) helps to delimit and facilitate quantification.

Abandoning these categories in favor of a more holistic approach would inevitably lead to an increase in quantification errors in the absence of dedicated expertise (typically the lack of consideration of the possibility of the favorable event in the case of a loss of chance).

In a nutshell:

Proportional civil liability is already followed sporadically in French law.

It embodies a restorative and more collective vision of the notion of liability, based on restoring balance between the parties involved, without solely seeking to place the victim back in the position they would have been in had no damage occurred.

For example, in cases of unfair competition, the wrongful gains of a wrongdoer are returned to competitors/victims who should not have benefited from them strictly within the framework of full compensation.

In law, it thus allows for addressing certain shortcomings of classical civil liability and adapting it to the realities of the modern economy. However, in practice, it involves a certain complexity in legal matters, which may not be desirable in a context of court congestion.

Nevertheless, the Belgian example will undoubtedly provide valuable insights in the years to come.

For any further clarification on the subject, feel free to contact arnaud.cluzel@outmatch.fr.

 

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