Compensation in civil law: type, legal basis, and case example

Experience losses due to action or negligence of other parties? In the realm of civil law, there is a compensation mechanism that aims to restore the loss. However, what exactly is compensation in civil law? What are the types? What is the legal basis and how to demand it? This article will thoroughly explore compensation in civil law, ranging from understanding to examples of real cases, as well as fundamental differences between compensation due to default and acts against the law. Check out the full review!

Also read: Acts against the Law: Understanding, Elements, Legal Basis, and Case Examples

Understanding of compensation in civil law

In general, compensation in civil law is a form of compensation or compensation suffered by one party due to the action or negligence of another party that violates the law (acts against the law (PMH)) or agreement (default). The main objective of compensation is to restore the condition of the disadvantaged party to its original position before the loss, even in practice, complete recovery is often difficult to achieve.

Also Read: What Is Default in Civil Law? Let’s understand together!

Legal basis for compensation in civil law

The main legal basis governing compensation in civil law is spread in various articles in the Civil Code (Kuhperdata), including:

1. Article 1243 of the Civil Code, which regulates compensation due to default (not fulfilling obligations in the agreement).
2. Article 1365 of the Civil Code, which regulates compensation due to PMH.
3. Article 1366-1380 Civil Code, namely articles that specifically regulate the responsibility of losses caused by other people, animals, or certain items in the context of PMH.

In addition to the public, other special laws and regulations can also regulate compensation in a particular context, such as in the Consumer Protection Act (Law Number 8 of 1999 concerning Consumer Protection) or the Environment Act (Law Number 32 of 2009 concerning Environmental Protection and Management).

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Types of compensation in civil law

In civil law, there are several types of compensation that can be prosecuted, including:

1. Cost

Costs are all real expenses issued by the disadvantaged party, for example advertising print costs, building rental, or chair rent if there is a cancellation due to default.

2. Lost

Loss is a loss experienced by related parties for the actions of the default of the perpetrator, which is divided into two namely material and immaterial.

• Material compensation, which is a compensation that is real and can be calculated economically. Examples include medical costs, the cost of repairing damaged goods, loss of expected profits, and loss of other property.
• Immaterial compensation, which is a compensation of non-economic losses or cannot be measured directly with money. Examples include pain, psychological suffering, loss of honor or good reputation, and discomfort. Determination of the amount of immaterial compensation is usually handed over to the judge’s consideration.

3. Flower

Interest is a loss in the form of loss of profits that have been estimated by creditors, for example the benefits that should be obtained if the contract is met. In the case of default which involves payment of a sum of money, the entitled party can demand interest payments for the late payment in accordance with applicable regulations.

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Terms and procedures demand compensation

To be able to demand compensation in civil law, the disadvantaged party must meet several conditions, including:

1. Loss. There must be a real loss suffered by the Plaintiff.
2. There is a legal basis. There must be a clear legal basis that requires the Defendant to provide compensation (both due to default and PMH).
3. The relationship between causality (cause and effect). There must be a clear cause and effect between the defendant’s actions or negligence with the loss suffered by the Plaintiff.
4. An error (in the case of PMH). In the case of acts against the law, it is generally needed an element of error from the perpetrator.

The procedure for demanding compensation is usually carried out through filing a civil suit to the District Court. The process includes the submission of a lawsuit, the Defendant’s Answer, Replic and Duplicate (if any), proof, conclusions, and court decisions. Before filing a lawsuit, mediation efforts are often recommended to achieve a peaceful settlement.

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Examples of cases of compensation in civil law

Here are some examples of cases of compensation in civil law:

1. Case of default: a property developer failed to complete the construction of a house in accordance with the promised time in the sale and purchase agreement, resulting in buyers suffering material losses (loss of potential rent) and immaterial (disappointment and discomfort). Buyers can demand developers to pay compensation.
2. PMH Case: A factory removes dangerous waste into a river that pollutes the environment and damages agricultural land owned by local residents. The disadvantaged residents can sue the factory to pay material compensation (harvest loss) and immaterial (health problems and discomfort).
3. Cases of Traffic Accidents: A driver of a car is negligent and crashes into a motorcyclist to suffer injuries and damage to the vehicle. Motorcyclists can demand car drivers to pay material compensation (medical expenses and motor repair) and immaterial (pain and trauma).
4. Cases of defamation: someone spread slander about the reputation of other people’s business through social media, resulting in a decrease in turnover and loss of good name. The slandered parties can sue the perpetrators to pay material compensation (decrease in income) and immaterial (reputation loss).

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The difference in compensation due to default vs pmh

Although both aim to compensate for losses, there is a fundamental difference between compensation due to default and acts against the law:

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(This article has been edited by the perqara editorial team)

Legal basis

1. Civil Code Book;
2. Law Number 8 of 1999 concerning Consumer Protection;
3. Law Number 32 of 2009 concerning Environmental Protection and Management;
4. Law Number 22 Year 2009 concerning Road Traffic and Transportation;
5. Law Number 11 of 2008 concerning Information and Electronic Transactions (ITE) as amended by Law Number 19 of 2016;
6. Civil Procedure Law (HIR/RBG).

Reference

1. Subekti. (2003). Agreement law. PT INTERMASA.
2. Prodjodikoro, Wirjono. (2015). Civil law regarding engagement. Bandung well.
3. Mariam Darus Badrulzaman. (2014). Compilation of engagement law. Citra Aditya Bakti.
4. Yahya Harahap. (2016). Civil Procedure Law: Theory, Practice, and Problems. Graphic rays.