On the possibility of compensation for moral damage in case of violation of property rights: traditional views and innovations of practice

Kardava Aleksei Romanovich Student, Department of Civil Procedure, St. Petersburg State University 199106, Russia, Saint Petersburg, Vasilyevsky Island, line 22, 7 lit.A st089550@student.spbu.ru

1. Problem statement

Compensation for moral damage, as a legal institution, has a long history of evolution. In the process, questions have repeatedly been raised in legal science about the possibility of compensation for moral damage and about the limits of such compensation, which were solved differently in various historical periods. So, at the end of the XIX – beginning of the XX century, there were two opposite approaches in the doctrine. On the one hand, it was argued that the possibility of monetary compensation for moral damage is impossible and is a "concession to entrenched prejudices" ^[18], since it can lead to an increase in the number of offenses, since it will be possible to "buy off" legal liability. This approach is expressed in a quote by P. N. Gusakovsky: "If the law allows the victim to satisfy moral harm by monetary compensation, then this provision does not speak about taking into account the importance of harm <...> but about taking into account the solvency of the victim" ^[1]. And the inability to reliably and objectively prove the existence of moral harm can lead to judicial arbitrariness ^[2],[3]. On the other hand, legal scholars, in particular S. A. Belyatkin, believed that the state could not exist if the personality and personal rights of citizens were not subject to any protection, since ignoring moral harm would lead "to an increase in the feelings of the humiliated and offended, which would shake the foundations of society in personal welfare and personal law" ^[4].

In the Soviet period of Russian history, the possibility of monetary compensation for moral harm was denied at the level of doctrine ^[5]. This institution received full–fledged consolidation in its modern form only after the collapse of the USSR, with the introduction of the Civil Code (hereinafter referred to as the "Civil Code of the Russian Federation") and the adoption of Resolution No. 10 of the Plenum of the Supreme Court of December 20, 1994 (hereinafter referred to as "Resolution of the Plenum of the Supreme Court No. 10"), which established a certain procedure and limits for compensation for moral damage ^[17].

With the adoption of Resolution No. 33 of the Plenum of the Supreme Court of the Russian Federation dated November 15, 2022 "On the practice of application by courts of norms on compensation for moral damage" (hereinafter referred to as "Resolution of the Plenum of the Supreme Court No. 33"), which made a small revolution in the approach on the procedure and rules for the application of the institution in question, which will be justified further, a scientific discussion the limits of compensation for moral damage have received a new round of development.

Thus, the provision presented in paragraph 4 of the Resolution of the Plenum of the Supreme Court No. 33 changed the approach to the possibility of compensation for moral damage in case of violation of property rights, which was previously established by the norms specified in Articles 151 and 1099 of the Civil Code of the Russian Federation. This circumstance led to uncertainty in the practice of applying the institution in question, and it became necessary to study a new approach from the point of view of doctrinal grounds and the possibility of practical application.

A. V. Vorobyov ^[21], A. Cheshin ^[22], B. I. Sosna ^[23], S. V. Kiselyov ^[24], P. V. Kirsanov ^[25], A. Erdelevsky ^[26] and other legal scholars studied the possibility of compensation for moral damage in case of violation of property rights. Despite the fact that the works of these scientists were created before the adoption of the Resolution of the Plenum of the Supreme Court No. 33, their study, nevertheless, allows us to form the necessary opinion on the approaches to the application of the legal institution in question in modern times. Thus, in these works, the very possibility of compensation for moral damage in case of violation of property rights is not disputed, however, these approaches differ in terms of the limits and grounds for compensation. The degree of permissibility of the application of the studied institute in various works can be both absolutely permissible in all cases, and permissible only in strictly defined cases, which indicates the absence of a unified doctrinal approach to the problem under study. These approaches are discussed in more detail in the next section of this article, since their full-fledged analysis requires referring to the historical stages of the development of the institution of compensation for moral damage in case of violation of property rights and relevant regulatory legal acts.

The purpose of this article is to substantiate the thesis stated above about the revolutionary approach presented in the Resolution of the Plenum of the Supreme Court No. 33 and to analyze this approach from the point of view of doctrine and law enforcement practice.

The structure of the article is determined by this goal – to confirm the innovative nature of the concept enshrined in the Resolution of the Plenum of the Supreme Court No. 33, the author uses a universal dialectical method (analysis of the interaction of categories of property and non-property harm within the general category of moral harm), a formal legal method (study of doctrinal approaches to compensation for moral harm and the essence of this institution outside the relationship with practical application), logical and historical-legal research methods (establishing a causal relationship between doctrinal views, law enforcement practice and normative legal acts amending the existing rules of application of the institution in question in a hysterical perspective), as well as analyzes and compares approaches used before the adoption of the Resolution of the Plenum of the Supreme Court No. 33 and after adoption, in conjunction with the judicial practice presented in the work.

2. The Institute for the Application of compensation for moral damage for violation of Property rights before the Resolution of the Plenum of the Supreme Court dated November 15, 2022 No. 33 "On the practice of applying the norms on compensation for moral damage by courts"

Initially, the approach on the possibility and limits of compensation for moral damage in case of violation of property rights in the legal system of the Russian Federation was presented in paragraph 1, paragraph 2 of the Resolution of the Plenum of the Supreme Court No. 10. The Supreme Court, interpreting the provisions of Article 131 of the Fundamentals of Civil Legislation of the USSR and the Republics in force at that time (approved by the Supreme Soviet of the USSR on May 31, 1991 No. 2211-1) and analyzing judicial practice, established that "moral harm is understood as moral or physical suffering caused by actions (inaction) encroaching on the property of a citizen <...> intangible benefits <...> or violating his personal non-property rights <...> or violating the property rights of a citizen." Since Article 131 of the Fundamentals of Civil Legislation of the USSR and the Republics did not establish any framework or restrictions regarding the application of the institution of compensation for moral damage in case of violation of property rights, and the Supreme Court did not indicate their presence in the said Resolution of the Plenum of the Supreme Court, it can be concluded that the existing at that time in In the Russian Federation, the approach to the application of the institution in question assumed the possibility of monetary compensation for moral damage in case of violation of property rights in all cases when such damage was caused. However, in Part two of the Civil Code, adopted in January 1996, Article 1099 explicitly provided that compensation for moral damage for violation of property rights is possible only in cases specifically provided for by law. So, in 2 years, the approach to the possibility of compensation for moral damage in case of violation of property rights has changed from the permitted in all cases in the presence of such harm, to a closed list of cases established by law.

To explain the changes made in legal regulation, it is necessary to analyze the category of "moral damage" and common approaches to the limits of its compensation. In the current law, moral harm is understood as moral and physical suffering that a person experiences as a result of violation of his non-property rights and intangible benefits (Article 151 of the Civil Code of the Russian Federation). The doctrine clarifies this concept. Thus, physical suffering is understood as physiological changes in the human body that worsen its work and cause physical pain; moral suffering is formed only in the human mind and can be caused by a violation of the order of his life, fear, resentment and other emotions that cause unpleasant mental unrest ^[6]. If physical suffering can be assessed objectively enough (for example, with the help of a medical examination), then the assessment of moral suffering is more subjective. Therefore, in the doctrine, opinions on the limits of compensation for moral damage are divided.

So, on the one hand, opinions are expressed that causing property damage to a person can cause moral suffering, since the human right to mental (mental) well-being is violated, and therefore compensation for moral harm should be awarded in all such cases ^[7],[8].

On the other hand, opinions are expressed that since the category of moral suffering does not have clear criteria for definition, moral harm will be compensated in any disputes, which, in turn, may lead to the "emasculation" of this institution as a way to protect violated non-property rights and intangible benefits ^[9],[16].

Perhaps, after the introduction by the Resolution of the Plenum of the Supreme Court No. 10 of a fairly open approach to the application of the institution in question, which practically did not set limits or any criteria for compensation for moral damage in violation of property rights, except for the very fact of moral harm, the legislator considered that this could lead to the incorrect application of this institution, and therefore he limited the possibility of using only the most indisputable and obvious cases where moral harm may be caused to a person in violation of property rights, for example, in the case of dissemination of information that is untrue and discrediting the honor of a citizen in the media or in the case of violation by a tour operator of the terms of an agreement on the sale of a tourist product.

The approach presented in Article 1099 of the Civil Code of the Russian Federation was clear enough to understand and apply to civil law disputes about the possibility of compensation for moral damage. It remained relevant until the adoption of a new Resolution by the Plenum of the Supreme Court. Thus, with reference to Article 1099 of the Civil Code of the Russian Federation, the courts refused the possibility of compensation for moral damage for damage to property of persons (for example, a car) (Decision of the Chita District Court of the Trans-Baikal Territory dated November 16, 2021 No. 2-1981/2021), or in case of deprivation of the right to use the property of persons, even if constant care of this property is necessary (Decision of the Chusovsky City Court of Gornozavodsk dated July 21, 2021 No. 2 – 327/2021). The rationale for such decisions was the absence of a special rule of law that would provide for compensation for moral damage in such categories of cases. At the same time, the courts did not even analyze the existence of moral harm to the "victim" in the situations under consideration. From the point of view of the formal approach, such a decision is correct and legitimate, but it seems that it does not meet the spirit and meaning of compensation for moral damage as a legal institution. Since causing property damage to a person (intentionally or accidentally) can cause emotional shocks and other moral suffering no less significant than violations of non-property rights ^[19].

In confirmation of the fact that the refusal to compensate for moral damage only on the basis of the fact of the property nature of the violation is unlawful from the point of view of the spirit and meaning of compensation for moral damage as a legal institution, we can cite the Resolution of the Constitutional Court of the Russian Federation dated October 26, 2021 No. 45-P (hereinafter – "Resolution of the Constitutional Court No. 45"). The reason for the appeal to the Constitutional Court was the refusal of a citizen to compensate for moral damage due to the commission of a crime (fraud in the field of funeral services), with reference to Articles 151 and 1099 of the Civil Code of the Russian Federation. The court, having considered the case, put forward the following theses: 1) compensation cannot be refused only on the basis of the fact of violation of property rights; 2) simultaneously with the violation of property rights, a non-property right or an intangible benefit must be violated; 3) a person must experience moral or physical suffering. Thus, the law enforcement officer should not be limited only to the cases provided for in the law.

The fact of the possibility of compensation for moral damage in violation of property rights, established by the Constitutional Court, marked the beginning of the development of a new approach in this area of law enforcement. However, due to the fact that such an approach contradicted the literal interpretation of the law, it was necessary to further develop and establish limits on compensation for moral damage.

3. The approach presented in paragraph 4 of the Resolution of the Plenum of the Supreme Court of November 15, 2022 No. 33 "On the practice of applying the rules on compensation for moral damage by courts"

In paragraph 4 of the Resolution of the Plenum of the Supreme Court No. 33, the Supreme Court "reveals" a closed list of cases in which compensation for moral damage was previously possible. At the same time, while preserving the main theses of the Constitutional Court's Decision No. 45, the Supreme Court indicates that the court cannot refuse compensation for moral damage only on the basis of a violation of property law, and also that non-property must be violated simultaneously with property law. However, the possibility of monetary compensation is no longer limited to cases expressly provided for in the law and crimes. The Supreme Court develops the approach laid down in the Decision of the Constitutional Court No. 45 and establishes the criterion that courts should apply when making decisions on the applicability of norms on compensation for moral damage in case of violation of property rights.

The new approach is a combination of doctrinally established views. So, there are 2 different approaches in the doctrine: one of them is that the mental well-being of a person is his integral material good within the meaning of Article 150 of the Civil Code of the Russian Federation. Accordingly, if there was a violation of the property right of a person and this led to a violation of the mental well-being of the person, this can be regarded as causing non-material harm to the person, and therefore the basis for compensation for moral harm ^[7].

A different approach defines moral suffering and deterioration of a person's mental well-being as the consequences of a property violation, and not as independent violations of simultaneously violated non-property rights and benefits. At the same time, moral suffering, as a concept, does not have a clear definition framework, and therefore the possibility of compensation should be provided for in specially defined cases, and as a general rule, only objectively calculated property damage is compensated ^[10].

The new approach preserves the possibility of compensation for moral damage in all cases where it is necessary, and not only in specially permitted ones, but at the same time establishes the criterion under which the dispute should fall in order for the court to decide on the application of norms on compensation for moral damage in case of violation of property rights. The essence of this approach is precisely contained in paragraph 4 of the Resolution of the Plenum of the Supreme Court No. 33. In this paragraph, it is established that compensation for moral damage for violation of property rights is possible in the case when non-property rights are simultaneously violated, causing physical or moral suffering to a person.

To define the concept of "simultaneity" and the ratio of property and non-property damage, it is necessary to refer to the norms of the Civil Code. Article 1099 of the Civil Code of the Russian Federation establishes a rule according to which monetary compensation for moral damage is possible only in cases specifically provided for by law. An analysis of such situations established in the law allows us to conclude that in all cases it is the non-material harm that is the main one, and property damage acts only as collateral ^[11]. Thus, compensation for moral damage for violation of property rights is allowed by the legislator in cases where the encroachment is carried out specifically on non–property rights to a greater extent and on property rights to a lesser extent.

Next, it is necessary to refer to those cases cited by the Supreme Court in paragraph 4 of the Resolution of the Plenum of the Supreme Court No. 33 as an example of circumstances allowing compensation for moral damage in case of violation of property rights: "intentional damage by one person to the property of another person of special non-material value to the latter (the only copy of a family photo album, an inherited household item and etc.)".  A family album, first of all, is a source of emotions and feelings evoked by its owner, and its loss or destruction will certainly cause moral suffering. The examples given have certain similarities with the cases provided for by law: non-property damage is the main one, and property damage acts as a concomitant one.

In confirmation of the presented criterion, it is necessary to refer to other paragraphs of the Resolution of the Plenum of the Supreme Court No. 33.

Paragraph 54 establishes that the exclusive right to the result of intellectual activity is a property right, and therefore is not subject to protection by collecting moral damage. Exclusive rights by their nature have no material basis, but they regulate property relations, and therefore it is extremely difficult to intuitively classify them into the category of property or non-property rights, and as a result, correctly apply the rules on compensation for moral damage.

In Article 1229 of the Civil Code of the Russian Federation, the legislator does not establish a legal definition of the concept of "exclusive right", but only indicates that its owner can dispose of this right. However, doctrinal approaches to the definition of an exclusive right designate it as "an absolute property subjective civil right to protected results of intellectual activity and equated means of individualization that perform the functions of legal identification of the goods mediated by it in civil circulation." Based on the definition presented, an exclusive right is a quasi–absolute property right that secures the right to own, use and dispose of a certain intangible object to a specific person ^{[12],[13],[14],[15]}. The Supreme Court found that the violation of an exclusive right in itself cannot be a basis for compensation for moral damage. Compensation is possible only if the related copyright, the right to a name and other non-property rights expressly provided for in Part Four of the Civil Code of the Russian Federation are violated. The criterion remains: non–property damage is the main one, property damage is concomitant or absent.

In the second paragraph of paragraph 55 of the Resolution of the Plenum of the Supreme Court No. 33, the position was formulated that compensation for moral damage can be demanded not only for violations of consumer rights, but also if other non-property or non-material rights of citizens were violated at the same time. That is, despite the fact that the first paragraph of this paragraph and Article 15 of the Law of the Russian Federation dated February 07, 1992 No. 2300-1 "On Consumer Rights Protection" explicitly provide for the possibility of compensation for moral damage for violation of property law in the field of consumer relations, the Supreme Court also considered it important to note the possibility of additional compensation for harm if violation of non-property rights according to the criterion: basic non-property law (for example, rough treatment) and related property consumer law.

An analysis of the listed provisions of the Resolution of the Plenum of the Supreme Court No. 33 showed that the Supreme Court established a new procedure for compensation for moral damage for violation of property rights. The approach presented in paragraph 4 of the Resolution of the Plenum of the Supreme Court No. 33, in conjunction with other paragraphs, establishes the possibility of compensation for moral damage in violation of property rights in all cases when the criterion is met, namely, the violation of non-property rights or intangible benefits is so significant and significant that it is considered as the main one, and the violation of property rights in comparison with it, it is less significant and is considered as additional.

Further, in order to analyze trends in the development and strengthening of a new approach in the legal system of the Russian Federation, it is necessary to consider court decisions adopted after the entry into force of the Resolution of the Plenum of the Supreme Court No. 33, namely, how the legal position considered in this work influenced law enforcement practice.

Let's turn to the category of cases related to damage to property in road accidents. The courts, referring to paragraph 4 of the Resolution of the Plenum of the Supreme Court No. 33, in these cases refused to compensate for moral harm due to the absence of moral or physical suffering in a particular dispute, which are an integral part of moral harm. As confirmation, arguments were given that the persons had not received any physical injuries or injuries, and therefore there was no physical suffering. The courts also did not see the presence of moral suffering, since the person was not in the car at the time of the incident (Appeal ruling of the Sakhalin Regional Court dated March 02, 2023 in case No. 33-542/2023) or since the fact of damage to the car itself cannot be considered moral suffering (Appeal ruling of the Samara Regional Court dated January 17, 2023 in case No. 33-477/2023). However, still, sometimes the courts in cases related to road accidents made decisions on compensation for moral damage on the grounds that a person suffered moral suffering from the very fact of damage to an expensive thing.

Thus, the Oktyabrsky District Court, literally interpreting the provisions of paragraph 4 of the Resolution of the Plenum of the Supreme Court No. 33, finds at the same time the presence of property and non-property damage and on this basis decides on the possibility of compensation for moral damage (Decision of the Oktyabrsky District Court of Kirov dated November 23, 2022 in case No. 2-2829/2022).

Such decisions seem wrong from the point of view of a new approach to compensation for moral damage. Some courts do not consider the presence of moral suffering, but damage to expensive property can in fact cause mental distress of a person, which in paragraph 14 of the Resolution of the Plenum of the Supreme Court No. 33 is considered as moral suffering. And if a person has any diseases in which a car is a necessary means of transportation for a full life, then other intangible benefits may be violated (Decision of the Leninsky District Court of Novosibirsk dated March 02, 2023 in case No. 2-1825/2023).

Some courts, having discovered the presence of non-material harm, limit themselves to this and do not analyze the ratio of property and non-property harm in a particular case. However, the correct approach seems to be when the courts initially have to establish the existence of all intangible benefits and non-property rights violated simultaneously with property rights, and then correlate the significance of property and non-property damage, and already on the basis of this analysis make a decision on the possibility or impossibility of compensation for moral harm.

In the categories of cases of deprivation of the right to use a person's property, the courts make more uniform decisions and more often see this as a violation of an intangible right and the presence of moral suffering. For example, if a person for one reason or another cannot get to his land plot (Decision of the Yelizovsky District Court of November 17, 2022 in case No. 2-2095/2022) or to the garage (Decision of the Oktyabrsky District Court of Saransk of December 13, 2022 in case No. 2-1884/2022). The courts argue for the presence of moral suffering here by the fact that such objects need care, without which the property loses its properties and deteriorates. However, in the reviewed decisions, the courts also did not analyze the ratio of property and non-property damage.

Next, it is necessary to turn to the category of cases where non-material harm can indeed be distinguished as more significant ^[20], namely disputes about the failure to provide or improperly provide social benefits to those who are entitled to them by law. The courts, as a rule, consider that in such a case, in violation of the property right to receive a certain benefit, a person, as needy and having certain life difficulties, experiences special moral suffering, since such a benefit is introduced specifically to support vulnerable segments of the population. Such a decision seems to be correct, since it is the position of these citizens, as those in need of social protection, that highlights non-material harm in such cases as more significant than property damage (Ruling of the Sixth Court of Cassation of General Jurisdiction dated March 07, 2023 No. 88-5920/2023; Appellate Ruling of the Belgorod Regional Court dated December 15, 2022 No. 33-5891/2022). The possibility of compensation for moral damage in this case corresponds to the criterion from paragraph 4 of the Resolution of the Plenum of the Supreme Court No. 33. However, there is also no indication of the court's analysis of the ratio of property and non-property damage in the reasoning part of the decision, as in the previously reviewed decisions.

Thus, based on the considered practice, it can be seen that the adoption of a new Resolution of the Plenum of the Supreme Court on the issue of compensation for moral damage has really changed the approach of courts in the field of compensation for moral damage in case of violation of property rights. However, the courts do not always correctly apply the new approach established in paragraph 4 of the Resolution of the Plenum of the Supreme Court No. 33.

Thus, some courts interpret the provisions of paragraph 4 of the Resolution of the Plenum of the Supreme Court No. 33 literally, that is, they do not see a violation of intangible benefits or non-property rights where it is necessary to analyze their presence for the correct resolution of the dispute, and some courts correctly make a decision from the point of view of a new approach, but do not apply a new criterion for determining the possibility of compensation for moral damage. Also, there was no reasoning in any decision that non-property damage should be more significant than property damage, and only in this case it can be the basis for compensation for moral damage, which is the main criterion for determining the possibility of compensation for moral damage in case of violation of property rights. Accordingly, it can be concluded that judicial practice does not fully accept and use the approach established in paragraph 4 of the Resolution of the Plenum of the Supreme Court No. 33 in the aggregate interpretation with the examples and other paragraphs of this Resolution of the Plenum of the Supreme Court.

4. Conclusions

An analysis of the provision of paragraph 4 of the Resolution of the Plenum of the Supreme Court No. 33 showed that the new approach to compensation for moral damage in case of violation of property rights is really revolutionary and changes the rules of application of this institution used before the adoption of the Resolution of the Plenum of the Supreme Court No. 33. Thus, in contrast to the provisions established in Article 1099 of the Civil Code of the Russian Federation, the list of cases where monetary compensation for moral damage is possible in case of violation of property rights becomes open. Further, a certain criterion is established when this provision should be applied. Despite the fact that, literally, paragraph 4 of the Resolution of the Plenum of the Supreme Court No. 33 establishes that the violation of non-property rights or intangible benefits must occur simultaneously with the violation of property law, the interpretation of this provision in connection with the established examples, as well as other paragraphs of this Resolution of the Plenum of the Supreme Court, allows us to conclude that the basis for compensation for moral damage is not only the simultaneous violation of property and non-property rights, but a more significant component of non-property damage, compared with property.

The progressiveness of the new approach also lies in a more thorough and balanced definition of the harm caused to a person, since the line between material and non-material damage is difficult to define in certain cases.

However, the courts still do not correctly interpret and apply the new approach in the form in which it was established by the Supreme Court of the Russian Federation, as evidenced by the judicial practice analyzed in this article. The literal interpretation of the provision in question of the Resolution of the Plenum of the Supreme Court and its interpretation in relation to other provisions differs, and courts often apply the provision precisely in its literal interpretation, rather than analyzing the dispute on the applicability of the developed criterion, which is an important part of the established approach.