Civil Liability Regime in the Bill to Reform the Argentine Civil and Commercial Codes

Not only will the Bill unify the civil and commercial aspects of the current civil liability regime, but it will also amalgamate the liability derived from a contractual breach and that derived from the violation of the law into one system.

The Bill also proposes the legislative incorporation of a number of general principles, which will imply a significant modification of the current regime.

Indeed, the emphasis on the good faith principle, further regulations on the abusive exercise of rights, the supremacy of the general interest over the individual interest, and the establishment of the principle of damage prevention (its avoidance and mitigation) over an ex-post compensation, will have a very significant effect on the different legal relationships.

As mentioned, the aim is to unify the regulation of contractual and non-contractual liability, establishing identical requirements for both, while unifying numerous solutions (limitation period, extent of compensation, etc.), although some differences are to be maintained.

As for the traditional bases of civil liability, the Bill incorporates principles established in case law that hold that illegality exists whenever the generic obligation not to damage has been breached.

According to the Bill, in absence of an express rule, the attribution factor must be subjective: negligence. However, in general, the Bill proposes the expansion of the number of situations that will be expressly subject to strict liability rules (liability for risky activities, for breach of an obligation of result, for damage caused in group, etc.).

In addition, leaving aside the classification of the type of liability (objective/strict vs. subjective), the powers recognized to judges regarding the distribution of the burden of proof will also be very important.

The traditional classification of damages, divided in patrimonial loss and compensation for pain and suffering, will be maintained, albeit with certain express incorporations such as loss of chance.

The Bill also gathers the notion of full reparation (immediate and mediate consequences are to be repaired, with exceptions), expands the list of those with standing to claim compensation for pain and suffering, provides that there is no need to prove damage in certain cases (damage that can be presumed or that notoriously derives from the facts), and proposes objective formulae for the quantification of damages in case of disability.

Regarding the last of the requirements of civil liability, the Bill proposes to definitely incorporate the theory of adequate cause. In such cases, the burden of proof of causation falls on the person that claims its existence (unless a legal inference or attribution exists).

As anticipated, a single three-year limitation period is provided for the filing of judicial proceedings for the compensation of damages derived from civil liability, without differentiating liability resulting from the breach of a legal obligation from that resulting from the breach of a contractual obligation.

The limitation period starts running on the day when the obligation is due, i.e., when the lawsuit can be validly filed. It may be suspended for six months as a consequence of a formal out-of-court demand (currently, a one-year term), and may be interrupted by any petition filed in court that demonstrates the intention to maintain the cause of action alive (as opposed to the current requirement that a formal complaint be filed).

A “monetary dissuasive sanction” and judicial actions to avoid the production of damages are among the preventive or dissuasive measures of the new civil liability regime.

The application of the former is intended exclusively to those cases where collective rights are affected. In addition, unlike other similar situations, it is clearly indicated in the Bill that damages must have been caused with malice, no maximum has been set for the sanction, and judges will be authorized to allocate its produce as they deem appropriate.

Regarding the judicial action to avoid the production of damages, the only requirement needed for a judge to grant a restraining order is that the production of the damages must be foreseeable.

Lastly, the regulation of certain contractual situations and of some consumer rights by the Bill will also have an impact on the civil liability regime.