Chapters of the article
History and motivation for the development of the methodology
The Methodology for the Compensation of Non-Pecuniary Injury was developed by the Supreme Court of the Czech Republic in response to long-standing legal uncertainty and divergent case law in the area of valuation of non-pecuniary injury. It was developed in cooperation with the Society of Medical Law, representatives of insurers and other legal and medical professions. The main objective was to develop a coherent and systematic approach that would enable courts and other legal entities to assess and compensate for non-pecuniary damage in a consistent and fair manner.
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Legislative changes and the need for standardisation
Prior to the development of this methodology, the courts could rely on the Decree on Compensation for Pain and Hardship until January 2014. A turning point was the adoption of the new Civil Code in 2014. The new Civil Code reformed many aspects of private law, including the rules on damages and pain and suffering. In this context, the aforementioned decree was repealed. While the new legislation included a framework for compensation for non-pecuniary damage, practice has shown that there is still a need for further interpretation and methodological guidance from the courts. There were extremely divergent court decisions in similar cases, resulting in legal uncertainty.
Development of methodology
The work of the Supreme Court judges, lawyers and academics has resulted in a document that offers concrete guidance on the valuation of non-pecuniary damage, including formulas and examples of how to proceed in different situations.
The methodology was thus developed in response to the practical needs of the Czech judiciary and is a fundamental step towards ensuring transparency, predictability and fairness in the field of compensation.
Reasons for the obligation to pay damages
Generally, in practice, we encounter various reasons why damages are payable. These can be summarised under one of the sub-categories listed:
- § Section 2909 of the Civil Code – breach of good morals
- § 2910 of the Civil Code – violation of the law
- § 2913 of the Civil Code – breach of contract
- § 2895 et seq. of the Civil Code – The wrongdoer is obliged to compensate for the damage regardless of his fault in cases specifically provided for by law. Section 2958 provides that “In the case of personal injury, the injurer shall compensate the injured party for the injury by monetary compensation, fully compensating for the pain and other non-pecuniary damage suffered; if the injury to health has caused an obstacle to a better future for the injured party, the injurer shall also compensate the injured party for the impairment of his or her social life. If the amount of compensation cannot be so determined, it shall be determined in accordance with the principles of decency.”
The Methodology was drawn up in connection with the latter provision of the Civil Code.
Bindingness of the Methodology: Legal status and implications
The Methodology on compensation for non-pecuniary damage cannot, by its very nature, have the character of a legal regulation. This fact affects its binding effect on the courts. However, the Supreme Court recommends that courts use it when deciding disputes on compensation for pain and suffering and social disadvantage under Section 2958 of the Civil Code and that they justify their decisions in accordance with the rules set out therein.
Thus, despite its factual non-binding nature, the Methodology has a rather significant influence on judicial practice. It constitutes a recognised guideline which the courts often use as a reference point for determining the amount of compensation. It thus helps to ensure greater uniformity and predictability in Czech law.
Tip: Have you been a victim of a crime and suffered damages? What are the defence options under Czech law and when can you claimdamages in criminal proceedings? We have looked at this in more detail in our separate article.
Applying the methodology in practice: when and how it is used
Model examples from practice show how the methodology is used to provide an award for non-pecuniary damage.
Examples of the use of the methodology
- Bodily harm and pain: In cases where victims suffer physical injuries, for example as a result of an accident or assault, the courts use the methodology to assess the adequacy of compensation for pain and suffering. For example, in the case of a victim of a car accident with permanent injuries, the intensity and duration of pain, among other factors, will be taken into account.
- Mental anguish: Where a person experiences mental anguish as a result of an accident, loss of a loved one or other traumatic experience, the methodology provides a framework for assessing these non-pecuniary damages.
- Loss of social participation: If a situation arises where a person loses the ability to participate in social, professional or personal activities that were previously part of their normal life, the methodology provides criteria for financial compensation. For example, an athlete who is unable to continue his or her career due to an injury could receive compensation under these rules.
Key principles and content of the methodology: what you should know
The Non-Pecuniary Injury Compensation Methodology sets out clear principles and criteria for the award of non-pecuniary damage, which includes pain, suffering and reduced standard of living. As we have already mentioned, it aims to provide courts and legal professionals with a framework that will help guarantee fair and consistent results in different cases. The following points summarise the basic principles set out in the methodology:
- Health Assessment: The injured person’s state of health following an injury, illness or other impairment, or aggravation thereof, can only be considered settled after the completion of continuous treatment for the expected development of the effects of the impairment.
- Determination of domains – The methodology identifies so-called domains (e.g., communication or mobility), which are assessed in detail by an expert according to the items in the table to determine the exact percentage or degree of impairment in a given domain.
- Valuation of pain and suffering: the methodology provides formulas and tables for calculating pain compensation depending on the duration and intensity of the pain suffered.
- Compensation for loss of standard of living: Where the injury has a long-term effect on the victim’s standard of living, the methodology suggests ways to quantify these losses, including loss of ability to carry out normal activities or occupations.
- Taking into account individual circumstances: The methodology emphasises the need to take into account the individual aspects of each case, which includes the age of the victim, his/her state of health before the injury and other relevant factors that may affect the amount of compensation. The amount determined by applying the methodology should always be individualised in the light of the specific circumstances.
- Determination of the amount of compensation according to gross wages – The Methodology recommends basing the determination of the amount of compensation on a statistical figure, which is the gross monthly nominal wage per converted number of employees in the national economy for the calendar year preceding the year in which the claim arose
By applying these principles, the methodology seeks to ensure that the award of non-pecuniary damage is as objective, fair and predictable as possible.
Criticism and public debate
The Methodology has provoked various reactions among legal professionals and in the public debate. While on the one hand it is recognised for its contribution to objectifying and standardising the calculation of compensation, there has also been criticism pointing to possible shortcomings and limitations.
On the one hand, it is appreciated that it provides uniform and understandable guidelines that help to increase the consistency of judicial decisions. It also increases the transparency of the decision-making process by providing clear formulas and criteria for assessing harm, which reduces the scope for subjective assessment.
However, some critics argue that the methodology can lead to too much rigidity, where courts may lose the ability to respond flexibly to the unique aspects of each case. Nor may the emphasis on quantification and mathematical models adequately reflect the depth and complexity of human suffering. There are views that pain and suffering are too personal and individual to be fairly expressed in numerical terms alone.
There has also been confusion for some time about the answer to the question of whether an expert’s report on non-pecuniary damage under the Methodology must be drawn up by an expert who is an expert both in the field of non-pecuniary damage to health (which has developed precisely in the context of the Methodology) and in the field in which the personal injury under assessment most closely falls. The prevailing view is that this is not necessary.
In conclusion, the methodology of the Supreme Court is an important tool for unifying and improving the decision-making on non-pecuniary damage. Although it is not binding, its importance lies in providing a framework to help judges assess pain, suffering and loss of amenity more fairly and transparently. Nevertheless, it should be borne in mind that it will not limit the individual assessment of each case. Overall, this is a positive step towards a more consistent and predictable justice system.