Punitive Damages: Here to Stay?

On May 27, 2009 Tribunal II of the Civil and Commercial Court of Appeals of the City of Mar del Plata confirmed the lower court decision in the “Machinandiarena Hernández Nicolás vs. Telefónica de Argentina re. Claim against private acts” case. The lower court condemned the defendant to pay AR$ 30,000 (approx. US$ 11,000 at the current exchange rate) for moral material damages and AR$ 30,000 for punitive damages.

The claim was filed by a disabled person who needed a wheelchair to move. The plaintiff argued and was able to prove that he had tried to file several claims before the offices of a mobile telephone company, of which he was a client, but he had not received the proper attention because the company’s building did not have a wheelchair ramp.

The Court of Appeals analyzed in depth all the applicable and current regulations, both international and national, from the principle of non-discrimination and its constitutional status, the supplier-consumer relationship of goods or services to urbanization regulations for access to buildings for handicapped people.

Likewise, the Court of Appeals stated in its decision that section 8 bis of the Consumer Protection Law (Law No 24,240) (“CPL”) sets forth that suppliers of goods and services shall guarantee a decent treatment to the consumers and users at all stages of the commercial relationship.

Nevertheless, the innovation of this judicial decision is the confirmation of the award of punitive damages according to section 52 bis of the CPL, introduced by Law No 26,361.

This civil fine had been previously imposed only in the “Cañadas Pérez María Dolores vs. Bank Boston NA re. Damages” case.  In said precedent punitive damages were awarded to sanction the publication by a bank of a client’s erroneous credit history. However, the courts of appeals had not issued a decision regarding this matter until the current case.

The Court of Appeals stated in “Machinandirena” that the defendant abused its powerful position acting with grave disrespect to the individual rights of the plaintiff as it did not give him decent treatment.

Thus, in this landmark ruling, for the first time in Argentina the Court of Appeals analyzed and uphheld a punitive damages award according to the provisions of the CPL. Only time will tell if this is an isolated precedent or a new trend to protect the rights of consumers and users.