Civil and Commercial Code: Risk-Benefit Theory

The new Civil and Commercial Code passed by Law No. 26,994 provides several amendments regarding civil liability.
 
Among other modifications, the Code incorporates the ‘risk-benefit theory’ construed by the Courts in recent few decades.
 
Although strict liability remains for damages caused by risky or defective goods, new Section 1758 classifies a keeper as the person who profits because of them.
 
Said Section defines ‘keeper’ as the one who uses, decides, controls or profits through or because of the goods, by him or her or by representation. The same consideration applies to the one who benefits from a risky activity. The risky activity concept is also a case law creation included in the new Code.
 
The Code still allows the owner or keeper to repeal the claim as long as he or she succeeds in proving the use of the goods against his or her will.
 
This is not the first time that strict liability of the profit maker appears under Argentine law. In fact, Section 40 of the Consumer Protection Act (amended by Law No. 24,999) provides for strict, joint and several liabilities of all the members of the chain of distribution when a defective product has been placed in the market.
 
However, the risk-benefit theory’s judicial construction implies some serious hazard that must be pointed out.
 
Since the multiple scholarly interpretations given to Section 1113 of the current Civil Code, the Courts have held that strict liability relies upon the damage created by such risk (risk-creation theory).
 
After years of practical experience, the Courts realized the dangers of applying such a broad theory. We must note that any harmless thing might represent a potential risk, depending on the location and destination assigned in a particular case.
 
That was the reason for the creation of risk-benefit theory, currently ruled by the new Code.
 
In order to complete the prior legal construction, the theory states that the creator of the harming risk is liable for damages because of the profits made by the risk creation.
 
Economic backgrounds and some kind of “punishment for profit” may be easily assumed from the theory.
 
Although the premise aims to prevent the excesses incurred by the prior theory, the “benefit” liability faces the risk of providing unfair legal solutions.
 
A car crash or online defamation are both examples of the problem: indiscriminate application of the risk-benefit theory might lead us to place liability on the car’s gasoline supplier or the retailer of the computer used to post a dishonorable expression. According to the scope granted to the theory, gasoline and computer retail company’s employees should both be accountable for damages. 
 
As soon as some Courts took note of the difficulties inherent to the theory, they established some level of factual control, intellectual or legal title on the goods or activity as a requirement, in order to place liability upon the beneficiary, despite the profit obtained.
 
Legal scholars have also pointed out problems of identifying the benefit-making party in every single situation. We must bear in mind that “benefit” does not necessarily represent an equivalent income. A tenant -for instance- benefits from the lease-holding of real estate, without earning any money.
 
If we take into account every stakeholder that might benefit from a good or activity, civil liability seems to become endless, and may lead to quite unjust decisions.
 
In this context, we will have to wait until the new Civil and Commercial Code comes into effect in 2016 and then observe the interpretation of future precedents.