Lecture

Note
Law of Obligations
IV. Damages/ Losses

Generally in civil remedy, it is almost certain that such remedy is related to monetary
compensation to someone who suffered of damages because of the conduct of
another who violates civil obligation. Monetizing the damages is the most
characteristic of the civil remedy.

Art. 1365 and Art. 1366 CC do not define the meaning of damages or losses, then it
becomes an issue whether damages or losses in terms of the unlawful act may have
a similar meaning as those in Art. 1243 CC for damages caused by a breach of
contract. Legal scholars opined that to some extent Art. 1243 CC may be applied
analogical when deciding damages caused by an unlawful act, however, some
provisions related to compensation when a breach of contract occurred cannot be
applied, such as Art. 1247 and Art. 1250 CC.

Damages in breach of contract Damages in unlawful act
(Art. 1243 CC) (Art. 1365 CC)
1. Cost, all expenses have been paid for 1. Pecuniary damages, all damages that
the performance of contract; are discernible or can be quantifiable
2. Damage, any depreciation of in monetary amount, e.g.
economic value or proces of an asset - damage of personal belongings
caused by breach of contract; - repairing costs
3. Interests, any economic profits that - medical bill
should be obtained if the debtor - depreciation of property’s value
performed his contractual obligations. - loss of income
2. Non-pecuniary damages, all damages
that are not discernible and
quantifiable, e.g.
- pain and suffering
- feeling humiliated
- emotional distress
- loss of enjoyment
- damage of reputation

Damages in the unlawful act can be categorized into two types, namely: 1) pecuniary
damages (kerugian materiil); and 2) non-pecuniary damages (kerugian immateriil).
Pecuniary damages are visible and can be calculated into a certain amount of
money; however, non-pecuniary damages are not visible and are mostly related to
the feeling of loss, pain, and grievance, thus it is incalculable into the amount of
money. Even though in principle non-pecuniary damages cannot be quantifiable into
a certain amount of money, the law allows the victims to request for remedy in a
civil lawsuit against the perpetrator to claim compensation on non-pecuniary
damages into a certain amount of money which they consider reasonable. In
practice, almost all non-pecuniary claims before the court are adjusted by the judges
considering that the amount demanded is unreasonable or too excessive.

Lecture Note
Law of Obligations
Then, what are the factors or standards that should be considered in awarding
compensation? Other than pecuniary damages that are discernible or can be
calculated into a certain amount of money, some factors must be considered when
awarding compensation to the victim.

1. The Social and economic status of the victim and the perpetrator
Art. 1371 par. 2 CC provides that all compensation must consider the social and
economic status of the parties. A similar provision also can be found in Art. 1372 par.
2 CC. Those provisions allow the victim to demand non-pecuniary damages against
the perpetrator. When there is non-pecuniary damages asked for compensation, the
judge must take into account the social and economic status of the victim and the
perpetrator when deciding the amount of money for compensation. The
perpetrator’s ability to pay must be considered when the economic status of the
perpetrator is lower than the victim, in such a condition the judge may reduce the
compensation into a certain amount that is reasonable and just for the parties.

2. The victim-self contribution to the damage (the victim fault)
Look into the case illustration below:

When exiting the parking lot, A was not careful and ignored directions from the
parking attendant to reduce speed, while from the other direction, B also did not
reduce the speed of his car, so that B’s car hit the rear part of A’s car.
B has spent IDR 15 million to repair the damage, while A spent IDR 8 million.

In that condition, it can be said that both parties are negligent leading to the collision
which result in damage for both. The judge may consider that both parties equally
contribute to the damage, then in that case the judge may award the compensation
to B as suffered more severe damage after distributing the part equally, thus B may
receive IDR3,5 million as compensation from A.

Look into the following case illustration:

A was driving his car recklessly, so it hit B's food stall on the side of the road. B
demands IDR 10 million for repairing the stall, IDR 5 million for damage to goods and
foodstuffs, and loss of income of IDR 500 thousand per day multiplied by 30 days.
During the examination, it was found that B did not immediately repair his food stall,
so he did not work for 30 days.

In this case, the judge may partially refuse to award B’s loss of income as he
demands. The judge may consider that B’s passive action, not immediately repairing
his stall, contribute to the increase in his losses. Such action can be considered as his
own fault. The judge may adjust the amount of compensation in loss of income by
adjusting the multiplier. It is reasonable that seven days are sufficient for B to repair
his stall, thus he can not work during the repairment and can be calculated as a loss
of income. Therefore instead of IDR 15 million, the judge may grant IDR 3.5 million
(IDR 500 million/day x 7 days).

Lecture Note
Law of Obligations

3. Join and several liability
Where there are two or more perpetrators who have committed unlawful acts that
result in damage to the victim, those perpetrators are joint and several liable for the
compensation towards the victim. The portion of compensation borne by each
perpetrator can be equal or different depending on the contribution of each
perpetrator for the loss to the victim.

Take a look to the following case illustration:

A and B beat C, causing serious injuries to C. From the court examination, A has
caused broke on C's right leg, while B made sprain on C's left wrist. It is known that C
is right-handed. The judge has rendered its judgment, that A must pay compensation
of IDR 30 million and B IDR 15 million.

Joint and several liability will result that if B has paid his portion in full (in this case
IDR 15 million), while A is unable to pay his portion, then B cannot be released from
his liability. If B decides to pay all the compensation to C (in this case IDR 45 million),
both A and B can be released from the liability, subsequently B has a right to
recourse against A for IDR 30 million.

In general, compensation awarded to the victim has an objective to restore the
victim's condition as optimal as possible (restitutio in integrum) in the state if there is
no occurrence of unlawful act.

Types of Claim under Art. 1365 CC
Related to damages or losses caused by the unlawful act under Art. 1365 CC, the
victim may lodge some types of claim.

1. Pecuniary and non-pecuniary damages which are calculated into a certain
amount of money;
2. A declaration that the perpetrator has committed an unlawful act
3. Prohibiting the perpetrator to do something which is unlawful;
4. Reverse something that is resulted from an unlawful;
5. Announcement of court decision or announcement as a remedy.

Types of claim no. 3, 4, and 5 require the victim to perform something as per court’s
order, if he refuses to perform, the victim may do the performance at the expense of
the perpetrator. The perpetrator shall pay the expense, if he still refuses, the court
may order to confiscate some of his properties as the guarantee of the expense that
has been paid by the victim.
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