The Supreme Court of Cassation (SCC) and the Supreme Administrative Court (SAC will provide an interpretative decision on the question of whether it is possible to award compensation for non-pecuniary damages in favor of legal entities.
In their first joint interpretative case of the year, SCC and SAC will address the questions of whether it is possible to award compensation for non-pecuniary damages to legal entities, whether such possibility arises from the EU laws, and what criteria shall be used to determine such compensation.
The exact wording of the questions under the interpretative case is as follows:
- Does our substantive material law allow for the award of compensation for non-pecuniary damages in favor of legal entities?
- Does the law of the European Union, which has direct effect and prevails over national law (Article 4, paragraph 3 of the Constitution of the Republic of Bulgaria), or international treaties ratified in accordance with the constitutional procedure, promulgated and in force, which take precedence over contradictory provisions of domestic legislation (Article 5, paragraph 4 of the Constitution), provide a possibility for the national court to award compensation for non-pecuniary damages to a legal entity for a violation of a subjective right recognized by the law of the Union or international treaties, and what criteria shall be used to determine such compensation?
The reason for initiating the interpretative case is a case examined by SCC at the beginning of 2023, where the fundamental question was raised whether legal entities can suffer non-pecuniary damages. Subsequently, another panel of the court identified that there are discrepancies in the court practice regarding the possibility of compensating non-pecuniary damages suffered by legal entities as a result of a violation of their rights recognized by EU law.
Different views on the possibility of awarding non-pecuniary damages to legal entities also exist within the judicial panels of SAC when considering cases under the State and Municipal Liability for Damage. Some believe that claims for compensation of non-pecuniary damages suffered by legal entities are procedurally admissible but must be proven, while others take the position that a legal entity cannot suffer non-pecuniary damages and therefore should not be compensated for them.
Supporters of the latter view believe that compensation for non-pecuniary damages shall be awarded for specific physical and mental pain, suffering, and inconvenience that are a direct and immediate consequence of unlawful actions or omissions of administrative authorities, and therefore are inherent only to natural persons, not legal entities. Regarding damage to reputation and authority, these proponents contend that the damage from this is "commensurate with a decrease in financial status, which renders them of a pecuniary nature."
