Judgment of 15 December 2021, Case No 25 Cdo 1361/2021 –⁠⁠⁠⁠⁠⁠ Compensation for loss of amenity in case of personal injury

Judgment of the Supreme Court of 15 December 2021, Case No 25 Cdo 1361/2021
(Personal injury; compensation for loss of amenity; interpretation of Section 2958 Civil Code; expert report; judicial discretion; Methodology on Compensation for Pain and Loss of Amenity; individualized assessment)

The Supreme Court of the Czech Republic addressed the legal interpretation and application of Section 2958 of Act No 89/2012 Coll., the Civil Code, in a case concerning compensation for non-material harm resulting from serious personal injury sustained in a traffic accident. The plaintiff, a motorcycle enthusiast, volunteer firefighter, and amateur ice hockey player, suffered multiple injuries when the second defendant failed to yield the right of way, resulting in a collision. The sustained injuries severally limited him in multiple areas of life.

The first instance court partially upheld the plaintiff’s claim, awarding him CZK 464,937 (EUR 19,173) for the sustained pain and CZK 840,021 (EUR 34,640) for loss of amenity, based on an expert report and the Methodology on Compensation for Pain and Loss of Amenity (Rc 63/2014) and dismissed the claim for the payment of further CZK 7,451,499 (EUR 307,278). The court concluded that the plaintiff, despite significant physical limitations, remained socially and professionally active and therefore did not merit increased compensation. The appellate court upheld this decision.

The plaintiff filed an extraordinary appeal, arguing that the lower courts failed to sufficiently individualize the compensation and incorrectly assessed his pre-accident lifestyle and the impact of his injuries. He emphasized that his exclusion from all sporting activity at age 30, combined with chronic pain and reduced work capacity, constituted exceptional circumstances warranting increased compensation.

The Supreme Court found the extraordinary appeal admissible under Section 237 of Act No 99/1963 Coll., the Code of Civil Procedure, as it raised a question of substantive law not yet resolved in its decision-making practice. It clarified that compensation under Section 2958 of the Civil Code must reflect the extent to which the injured person is excluded from normal life activities, and that expert reports serve as a foundation but do not replace the court’s duty to assess the full impact of injuries on the individual’s life.

The Supreme Court emphasized that the determination of compensation is left entirely to judicial discretion. However, it cannot be unfounded and arbitrary but must be reasoned in such a way as to make it clear on what basis the court proceeded and what criteria it applied. For this purpose, a non-binding aid, also referred to as the Methodology on Compensation for Pain and Loss of Amenity, the basic principles of which were published under Rc 63/2014 (also referred to as “Methodology”), has been used in court practice as one of the possibilities for interpreting Section 2958 of the Civil Code since 2014. The courts are not obliged to use the Methodology depending on the nature of the case. However, if they do, they should respect its recommended rules or justify their deviation from these rules. The Methodology is based on the WHO’s International Classification of Functioning, Disability and Health (also referred to as “ICF”). The ICF system allows for a nuanced assessment of impairment across nine domains of social participation, expressed as a percentage of limitation. It implies the necessity to draw up an expert report of a medical expert in the field of determination of non-material harm to health (or assessment of the degree of pain and functional capacity in personal injuries as of 1 January 2021) on the basis of which a decision can be made. However, the expert’s role is limited to providing an objective medical basis; the final legal assessment and determination of compensation lies solely with the court.

The Supreme Court criticized the lower courts for relying too heavily on the expert’s monetary calculation without exercising independent judicial discretion. It found that the courts failed to properly distinguish between objective medical findings and the legal assessment of the plaintiff’s individual circumstances, including his above-average involvement in sport and civic life prior to the accident. According to the Supreme Court, the medical evaluation makes up only a first stage of the assessment and falls within the competence of the expert, whose task is to create a sufficiently detailed, structured and comprehensible factual basis for the court, containing an expert medical conclusion on the extent of the injured person’s disablement from life activities defined in the Methodology, so that the court can make a legal conclusion on the amount of compensation for non-material harm. This conclusion is of an objectifying nature, as it assesses the specific disability of the injured person in question, but in the general sense of all the activities under consideration, without taking into account the subjective feelings and individual specifics of the injured person. It is then a task for the court to modify the objective classification of the patient in the percentage scale of exclusion from social life precisely in the light of the specific circumstances of the case and with due regard for the injured person’s own perception of the harm and determine and set the amount of compensation for the loss of amenity. In other words, the court should modify the amount of basic valuation determined by objective means by certain other non-medical circumstances such as the age of the injured person, the intensity of their previous involvement (loss of a genuinely exceptional better future) and the reasons listed illustratively in Section 2957 of the Civil Code. However, the lower courts basically used the expert opinion without referencing their own discretion, specifically when they worked directly with the amount of damages determined by the expert instead of the percentage of the injured person’s disability. The Supreme Court also noted inconsistencies and omissions in the expert report and their evaluations by the courts, particularly regarding fine motor skills, mobility, and psychological difficulties.

The Supreme Court reaffirmed that exceptional prior involvement in physical and social activities may justify an increase in compensation, even if the injured person remains socially active in a limited capacity. It rejected the lower courts’ reasoning that the plaintiff’s continued participation in municipal and social events negated the need for increased compensation, emphasizing that the loss of meaningful engagement in activities previously engaged in by the plaintiff must be considered.

Accordingly, the Supreme Court annulled the judgment of the appellate court and the relevant part of the judgment of the first instance court and referred the case back to the first instance court for further proceedings.