Newsletter
The Supreme Court Civil Grand Chambers recognizes that non-pecuniary damages should be included when calculating punitive damages pursuant to the Consumer Protection Act
The Supreme Court Civil Grand Chambers ruled that non-pecuniary damages should be included when calculating punitive damages pursuant to the Consumer Protection Act ("CPA"), which ends the long-disputed issue regarding whether the punitive damages under the CPA should also cover the non-pecuniary damages. While the opinion rendered by the Grand Chamber would be helpful for the trader to clarify its risk and to avoid an unpredictable result during the lawsuit, it is expected that the claimed amount for a consumer dispute in the future will rise substantially accordingly and due to the enhanced consumer awareness and higher standard to the quality of various merchandise. Companies as traders should cautiously respond to such trend.
Article 51 of the CPA provides that consumers may claim a punitive damages up to 5 times/3 times/1 times the amount of actual damages as a result of injuries caused by willful misconduct/gross negligence/negligence of a trader. The Grand Chambers' opinion focused on whether, in addition to pecuniary damages, non-pecuniary damages should be included when calculating such punitive damage under Article 51 of the CPA. The Grand Chamber ruled that non-pecuniary damages should be included for the following reasons, among others, Paragraph 2, Article 7 and Paragraph 3, Article 50 of the CPA clearly indicate that consumers' life, body and health are under the protection of the CPA and the legislators had no intention to rule out the non-pecuniary damages and treat it differently from pecuniary damages. Therefore, the non-pecuniary damages under Paragraph 1, Article 195 of the Civil Code is also part of the compensatory damages suffered by consumers and should be included when calculating the punitive damages under Article 51 of the CPA.