RESOLUTION

GUIDING THE APPLICATION OF A NUMBER OF PROVISIONS OF THE CIVIL CODE REGARDING COMPENSATION FOR DAMAGE OUTSIDE CONTRACT

THE JUDGES' COUNCIL OF THE SUPREME PEOPLE'S COURT

Pursuant to the Law on Organization of People's Courts;
In order to correctly and uniformly apply the provisions of the Civil Code to settling disputes over non-contractual damage compensation;
After reaching agreement with the chairman of the Supreme People's Procuracy and the Minister of Justice,

RESOLVES:

I. ON GENERAL PROVISIONS

1. Damage compensation liability

Under the provisions of Article 609 of the Civil Code, according to the general principle the liability for non-contractual damage compensation shall arise only when all of following factors are involved:

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Damage includes material damage and damage caused by mental sufferings.

a/ Material damage includes damage caused by infringements upon property prescribed in Article 612 of the Civil Code; damaged caused by infringements upon health prescribed in Clauses 1

b/ Damage caused by mental sufferings to individuals is understood as that due to infringements upon their health, honor, dignity and/or reputation, the damaged persons, or due to infringements upon life, the closest relatives of the victims, suffer from grief, sorrow, emotional loss, have their reputation diminished or lost, are stunned away or misunderstood by their friends' and must be compensated a sum of money for the sufferings inflicted on them.

Damage caused by mental sufferings to legal persons and other subjects other than legal persons (called collectively organizations) is understood as due to infringements upon their honor and/or reputation, such organizations have their credibility, trust' diminished or lost due to misunderstanding and must be compensated a sum of money for the sufferings inflicted on them.

1.2. There must be illegal acts

Illegal acts are specific behaviors of human beings, expressed through action or non-action in contravention of law provisions.

1.3. There must be between the inflicted damage and the illegal act(s). The inflicted damage must be an inevitable effect of the illegal acts(s) and, vice versa, the illegal act(s) is the cause of the damage.

1.4. There must be an intentional or unintentional fault on the damage inflictor's part

a/ Intentionally causing damage is the case where a person is clearly aware that his/her act will cause damage to another person but still commits such act and wishes that such damage will occur or does not so wish but consciously let such damage occur.

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It should be noted that for cases where it is prescribed by law that damage must be compensated even when nobody is at fault, the compensation liability of the damage inflictors in these cases shall comply with the provisions of the relevant legal documents.

2. Principles for damage compensation

2.1. When settling disputes over non-contractual damage compensation, the principle for damage compensation prescribed in Article 610 of the Civil Code must be strictly adhered to. The agreements between the involved parties on the compensation amounts, forms and modes should be respected provided that such agreements are not against law and social ethics.

2.2. Where the involved parties are unable to reach any agreement, when settling disputes over non-contractual damage compensation the following are worth of note:

a/ Damage must be wholly compensated, meaning that where there are claims for compensation for damage caused by infringements upon property, health, life, honor, dignity and/or reputation, the relevant articles of the Civil Code must be referred so as to determine in such specific cases what the damage consists of, how much the damage is and the extent of fault of each involved party so as to force the damage inflictor to adequately compensate for such damage.

- Causing damage due to unintentional fault;

- The inflicted damage is too big as compared with the immediate as well long-term economic capability of the damage inflictors, meaning that given their immediate as well as long-term economic situation, the damage inflictors are unable to compensate for the whole or most of the inflicted damage for which they are liable to compensate.

d/ The damage compensation amounts are no longer realistic, meaning that the compensation amounts currently in effect are no longer suitable due to changes in the economic, social situation or price fluctuations, due to changes in the disability or working capacity of the damaged persons, or due to changes in the economic capability of the damage inflictors'

3. Capacity for damage compensation liability

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- In the case prescribed in Clause 1, Article 611 of the Civil Code, the damage inflictor is the civil defendant, except when he/she has lost his/her civil act capacity;

- In the case prescribed in paragraph 1, Clause 2, Article 611 of the Civil Code, the parent of the damage inflictor is the civil defendant;

- In the case prescribed in paragraph 2, Clause 2, Article 611 of the Civil Code, the damage inflictor is the civil defendant and his/her parent is the person with related interests and obligations.

- In the case prescribed in Clause 3, Article 611 of the Civil Code, the guardian individual or organization is the civil defendant.

3.2. The decision on compensation (seizing property for compensation) must be specific and comply with the provisions of Article 611 of the Civil Code.

4. Reasonable expenses

Reasonable expenses prescribed in Clause 1 and Clause 3, Article 613, Clause 2 and Clause 3, Article 614 and Clause 1, Article 615 of the Civil Code are necessary actual expenses which are suitable to the nature and extent of damage and to the average prices in each locality at the time of incurring.

5. The involved parties' obligation to prove

a/ The damaged persons claiming for damages must clearly state each damage item actually inflicted, the requested damages amounts and have valid vouchers on, or receipts of, their reasonable expenses or incomes.

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1. Damage caused by infringements upon health

Damage caused by infringements upon health covers:

1.1. Reasonable expenses for the treatment, recovery of health and rehabilitation of lost or decreased functions of the damaged persons, including rents for vehicles to carry the damaged persons to medical establishments for emergency treatment; costs of medicines, medical equipment, costs of X-ray, scanning images, ultrasonic diagnosis, tests, surgical operations, blood transfusion, physiotherapy.. . according to physicians' prescriptions; hospital charges; costs of tonics, solution transfusion, expenses for health recovery according to physicians' prescriptions; other necessary, actual expenses for the damaged persons (if any) and expenses for the fitting of artificial limbs, eyes, purchase of wheelchairs, clutches and plastic surgery' in support or replacement of part of the lost or declined body functions of the damaged persons (if any).

1.2. The damaged persons' actually lost or reduced incomes. If before their health is infringed upon, the damaged persons have actual incomes which are lost or reduced after their health is infringed upon as they must go for treatment, they shall be compensated the actually lost or reduced incomes.

- If before their health is infringed upon, the damaged persons have stable incomes from salaries on official payrolls, wages from labor contracts, their actual incomes shall be determined to be the salary or wage of the month preceding the time their health is infringed upon multiplied by the treatment duration.

- If before their health is infringed upon, the damaged persons have jobs and monthly actual incomes which vary from month to month, their actual incomes shall be determined to be the average income of the six consecutive months (or all of the months if the working time is less than six months) preceding the time their health is infringed upon multiplied by the treatment duration.

- If before their health is infringed upon, the damaged persons have actual incomes which are, however, unstable and undeterminable, their actual incomes shall be determined to be the average income of labor of the same type multiplied by the treatment duration.

- If before their health is infringed upon, the damaged persons have actual incomes, they shall not be compensated according to the provisions of Clause 2, Article 613 of the Civil Code.

Step 1: To determine whether the damaged persons have actual incomes or not during their treatment duration. If any, how much is total income.

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Example 1: A is a self-employed motorbike repairer. A's actual income before his health is infringed upon is stable, with a monthly average of VND one million. As his health is infringed upon, A must receive treatment and thus earn no income. In this case, A's actual income is lost.

Example 2: B is working at a limited liability company. Her actual income before her health is infringed upon is stable, with VND 600,000 on a monthly average. Because her health is infringed upon, B must have treatment and in the treatment duration she is paid by the company 50% of her wage, with VND 300,000. In this case, B's monthly actual income is reduced by VND 300,000.

Example 3: C is a State employee having a stable monthly income of VND 500,000. After her health is infringed upon, C must undergo treatment and in the treatment duration, her agency pays fully incomes to C. In this case, C's actual income is not lost.

1.3. Reasonable expenses and lost actual incomes of caretakers of the damaged persons in the treatment duration.

a/ Reasonable expenses for the caretakers of the damaged persons in the treatment duration include: travel costs, accommodation rents according to the average prices in the locality where they are paid (if any) for one of the caretakers of the damaged persons in the treatment duration as necessary or upon requests of the medical establishments.

- If the caretakers of the damaged persons have stable actual incomes being salaries on official payroll or wages under labor contracts, their lost actual incomes shall be determined to be their salary or wage of the month preceding the time they have to take care of the damaged persons multiplied by the care-taking duration.

- If the caretakers of the damaged persons have jobs and monthly stable incomes which vary from time to time, their lost actual incomes shall be determined to be the average income of the six consecutive months (or all of the months if the working time is less than six months) preceding the time they have to take care of the damaged persons multiplied by the care-taking duration.

- If the caretakers of the damaged persons have no job or have an irregular job and, as a result, unstable incomes, they shall enjoy a care-taking sum equal to the average sum payable to a caretaker of the disabled in the locality where the damaged persons reside.

- If in the time of taking care of the damaged persons, the caretakers are still paid salaries or wages by their agencies or employers as prescribed by labor and social insurance legislation, it means that they do not lose actual incomes and, therefore, will not be compensated.

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Reasonable expenses for the regular caretakers of the damaged persons are calculated to be equal to the average wage payable to a caretaker of the disabled in the locality where the damaged persons reside. On principle, this damage compensation amount is paid for only one caretaker of each damaged person who lost his/her working capacity.

b.1/ Support money shall only be considered for those towards whom the damaged persons have the supporting obligation if before their health is infringed upon the damaged persons were performing their supporting obligation. Those who are currently supported by the damaged persons shall be compensated exactly such sums of support money. For those towards whom the damaged persons were performing the rearing obligation before their health is infringed upon, such persons shall be compensated a reasonable sum of support money suitable to the actual incomes and capability of the persons obliged to compensate and the essential needs of the compensated persons.

b.2/ Subjects to be compensated sums of support money:

- The spouse who has no working capacity and no property to live on and towards whom his/her partner being the damaged person is performing the supporting obligation;

- Minor children or adult children who have no working capacity and no property to live on and towards whom their parent being the damaged person is performing the supporting obligation;

- Parents who have no working capacity and no property to live on and towards whom their child being the damaged person is performing the supporting obligation;

- The divorced spouse towards whom the other party (ex-husband or ex-wife) being the damaged person is performing the supporting obligation.

- Minor children or adult children who have no working capacity and no property to live on and towards whom their parent being the damaged person, who is not personally rearing them, is performing the supporting obligation;

- Minor younger siblings who have no property to live on or adult younger siblings who have no working capacity and no property to live on in cases where both parents are deceased or have no working capacity and no property to support their children towards whom their adult older siblings being the damaged persons, who do not live together with their younger siblings, are performing the supporting obligation;

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- Minor grandchildren or adult grandchildren who have no working capacity and no property to live on and have no other supporting persons and towards whom their paternal or maternal grandparents being the damaged persons, who do not live together with their grandchildren, are performing the supporting obligation;

- Paternal or maternal grandparents who have no working capacity and no property to live on and have no other supporting persons and towards whom their adult grandchildren being the damaged persons, who do not live together with their paternal or maternal grandparents, are performing the supporting obligation.

1.5. Sums of money to indemnify for mental sufferings due to infringed health

The determination of the extent of mental suffering shall be based on the effects on occupation, appearance, social relations,

2. Damage due to infringements upon life

2.1. Reasonable expenses for the treatment, fostering and care of the damaged persons before their death include expenses guided at Sub-Items 1.1, 1

2.2. Reasonable expenses for burial include expenses for purchase of a coffin, necessary objects for the shrouding cloth, mourning turbans, incenses, candles, wreaths, rent of hearses, and other expenses for the burial or incineration of the dead persons according to traditional practices. Claims of compensation for worshiping offers, rituals, parties, tomb construction, exhumation for re-burial' expenses shall not be accepted.

2.3. Support money for those towards whom the damaged persons have the supporting obligation before their death shall comply with the guidance at Point b, Sub-Item 1.4, Item 1 of this Part II.

2.4. Sums of money to indemnify for mental sufferings to the closest relatives of the dead persons.

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The determination of the extent of mental suffering shall be based on the positions of the dead persons in their families, daily-life relations between the dead persons and their closest relatives'

3. Damage caused by infringements upon honor, dignity and/or reputation

Damage caused by infringements upon honor, dignity and/or reputation includes damage caused by infringements upon individuals' honor, dignity and/or reputation and damage caused by infringements upon organizations' honor, dignity and/or reputation.

3.1. Reasonable expenses for limiting and remedying damage cover necessary expenses for the retrieval of publications with contents hurting the honor, dignity and/or reputation of the damaged person; expenses for the collection of documents and proofs to prove that one's honor, dignity and/or reputation is infringed upon; travel costs, accommodation rents (if any) according to the average prices in the localities where expenses are incurred in order to request functional bodies to verify the facts and publish corrections on the mass media; expenses for organization of public apologies, corrections at the residence or working places of the damaged persons, and other necessary, actual expenses (if any) for limiting and remedying damage.

3.2. Lost or reduced actual incomes

a/ If the infringed persons have actual incomes before their honor, dignity and/or reputation is infringed upon but these actual incomes are lost or reduced because they have to perform some work to limit or remedy damage due to infringements upon their honor, dignity and/or reputation, they shall be compensated such lost or reduced actual incomes.

3.3. Sums of money to indemnify for mental sufferings caused by infringements upon honor, dignity and/or reputation

The determination of the extent of mental suffering shall be based on the forms of infringement (words or press or television articles'), acts of infringement, the extent of spreading of hurting information'

4. Duration for enjoyment of compensation for damage caused by infringements upon life or health (Article 616 of the Civil Code)

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III. COMPENSATION FOR DAMAGE CAUSED BY SOURCES OF EXTREME DANGER (ARTICLE 627 OF THE CIVIL CODE)

1. Determination of sources of extreme danger

a/ When means of transport, works, objects, substances or beasts cause damage as grounds for application of Clauses 2, 3 and 4, Article 627 of the Civil Code to determining damage compensation liabilities, it must be determined whether or not the damage-causing sources are sources of extreme danger.

2. Determination of liability to compensate for damage caused by sources of extreme danger

b/ Persons who are lawfully assigned by owners of sources of extreme danger to possess, use such sources of extreme danger strictly according to law provisions must compensate for damage caused by such sources, except otherwise agreed upon by the owners and such persons not in contravention of laws and social ethics or not for the purpose of shirking the compensation.

Example: The following agreements are not against laws and social ethics or not for the purpose of shirking the compensation:

- Agreements on bearing joint liability for damage compensation;

- Agreements that the owner shall compensate for damage first, then the person assigned to possess or use the source of extreme danger shall redeem the owner the compensated sum of money;

- Who have better economic conditions shall compensate for damage first.

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Example: The owner of a car knows that a person has no driving license but still assigns the right to possess, use the car to such person, thereby causing damage, the owner must compensate for damage.

c/ On principle, the owners, the persons assigned by the owners to lawfully possess, use sources of extreme danger must compensate for damage caused by such sources even when they are not at fault, except for the following cases:

- Damage inflicted totally due to the intentional faults of the damaged persons;

Example: A car is running strictly according to law provisions, when suddenly a person throws himself/herself into the car for suicide and consequently this person is seriously injured or dead. In this case, the owner, the person assigned to lawfully possess, use the car shall not have to compensate for damage caused by the source of extreme danger (the car).

- Damage inflicted in force majeure events or emergency circumstances, except otherwise provided for by law. It should be noted that in cases where it is otherwise provided for by law regarding the liability to compensate for damage caused by sources of extreme danger in force majeure events or emergency circumstances, the liability to compensate for damage shall comply with the provisions of such legal documents.

d/ The persons who unlawfully possess or use the sources of extreme danger must compensate for damage caused by such sources; if the owners, the persons assigned by the owners to lawfully possess, use such sources of extreme danger are not at fault for the unlawful possession, use thereof (having strictly observed the regulations on preservation, watch, transport, use of the sources of extreme danger as prescribed by law).

If the owners, the persons assigned by the owners to lawfully possess or use the sources of extreme danger are at fault for the unlawful possession, use thereof (having failed to strictly observe the regulations on preservation, watch, transport, use thereof as prescribed by law), they must bear joint liability with the unlawful possessors or users to compensate for damage caused by their sources of extreme danger.

e/ If the owners of sources of extreme danger have assigned the sources of extreme danger to other persons, thereby causing damage, it must be determined in this specific case whether or not the persons assigned the sources of extreme danger are the possessors or users of such sources of extreme danger in order to identify who shall bear the damage compensation liability.

Example: A owns a car and has assigned it to B, who causes an accident and damage while driving the car. It should be distinguished that:

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- If B is assigned the car by B under a property renting contract, then A no longer possesses, uses this car and B is the lawful possessor, user of the car; therefore, B must compensate for damage. If, in this case, with A's agreement, B then assigns the car to C under a property re-renting contract, then C is the lawful possessor, user of this car; therefore, C must compensate for damage.

IV. IMPLEMENTATION EFFECT OF THE RESOLUTION

1. This Resolution was passed by the Judges' Council of the Supreme People's Court on April 28, 2004 and takes effect fifteen days after its publication in the Official Gazette.

The Supreme People's Court's guidances, which were promulgated before the effective date of this Resolution and deal with the matters guided in this Resolution, are all hereby annulled.

2. For the cases of compensation for damage outside contract under specific legal documents on compensation, the settlement shall comply with the provisions of such legal documents.

3. For the lawsuit cases involving the settlement of compensation for damage outside contract already guided this Resolution, which the courts have received nut not yet conducted first-instance, appellate, cassation or review trials, this Resolution shall be applied to the settlement thereof.

4. For the courts' judgments or decisions which have taken legal effect before the effective date of this Resolution and contain decisions on compensation for damage outside contract as guided in this Resolution, this Resolution shall not be applied to protest according to cassation or review procedures, except for cases where such protests are lodged on other grounds.

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