One of the requirements for the assessment of the State’s financial liability is the effectiveness of the damage; however, in civil law it has also been recognised that in order to recognise the existence of liability, the damage caused by action or omission must be effective.
As lawyers specialising in Insurance Law, throughout our extensive experience, we have observed different cases in which, although the existence of an action or omission was evident, the finding of the existence of actual (and not potential) damage did not allow a verifiable causal link to be established.
In this sense, as numerous doctrines have been insisting for a long time (among others, Judgment of the Supreme Court of 29 October 2008, rec no. 942/2003), tort liability requires the existence of i) an action or omission generating imprudent or negligent conduct attributable to the person or entity against which this action is directed, ii) the reality of the damage and injury and iii) a causal relationship between the damage and the fault:
‘Furthermore, the STS of 13 July 1999 has said: ‘Due to the reiterated jurisprudential doctrine, which is not necessary to cite, in order for non-contractual liability, regulated in article 1902 of the Civil Code, to be admitted, the following requirements must be met: one, subjective, consisting of the existence of an action or omission generating imprudent or negligent conduct attributable to the person or entity against whom the action is directed; another, objective, relating to the reality of damage or injury; and, finally, the causal relationship between the damage and the fault; likewise, the jurisprudential doctrine is inclined towards the thesis that regulatory diligence is not sufficient if the factual reality shows that the guarantees adopted to avoid foreseeable damage have proved ineffective’;
Thus, it is true that, in practice, what poses most problems is the ascertainment and proof of existence, both of action or omission, as well as of causal link, but, in reality, sometimes the determination of the damage is complicated.
In this sense, the principle of effectiveness has been demanding that the damage be effective in order to assess the existence of liability.
The principle of effectiveness is an essential prerequisite for assessing liability, insofar as assessing liability without the damage being effective would imply recognition for hypothetical events that might never occur after the ‘potentially’ damaged party has received the compensation.
In this sense, the Judgment of the Audiencia Provincial de Alicante, Secc. 5ª, nº 148/2024 of 8 April makes it clear that one of the requirements for the assessment of liability in tort is the verification of the reality of the damage and that the amount of the damage is that of the loss suffered due to non-performance, which must be proven by the party claiming it:
the compensation actually paid, derived from the liability for non-contractual or non-contractual negligence of Article 1.902 CC , and one of its requirements being the existence of the damage, the reality and extent of which must be clearly demonstrated by the plaintiff, in accordance with the general principle on the burden of proof established in Article 217 of the LEC, a reiterated jurisprudence has been indicating that the damage compensable under said liability must be real and effective, and its accreditation precise and categorical. In this respect, it can be said that in cases such as the present case, of compensable damage in accordance with Article 1902 CC , the estimable damage is that of the loss actually suffered as referred to in Article 1106 CC .
If this value or damage must be fully proven by the claimant, it cannot correspond to the new market value of the goods lost at the time of the loss, which would lead, as the appellant maintains, to an unjust enrichment of the injured party, but to the real value of the goods at the time of the loss. Furthermore, it should not be forgotten that these damages are compensated so that the injured party can restore his assets to the state they were in at the time of the loss.
3. The Supreme Court has established this clearly by stating that ‘the purpose of compensation is to return the affected assets to the state they would have been in had the non-performance not occurred’ (SSTS of 19 December 2005, citing SS of 26 November 1994, 13 April 1987, 28 April 1992 and 2 April 1997).
In a more explicit sense, the Judgment of the Commercial Court nº 15 of Madrid, nº 48/2023 of 25 September, points out the need for the damage to be effective and not potential, and the indemnified party must be compensated to the extent equivalent to the effective damage in order to avoid unjust enrichment:
The damage must have been generated in an actual manner, that is to say, it must have materialised in an unfavourable practical consequence, and not merely potential, in order for it to be the basis of the claim for liability. The requirement that the damage must be real and effective is compatible with the idea that the compensation to be obtained must be aimed at restoring the damaged assets to the same situation in which they would have been had they not suffered it.
The compensation may include both the consequential damage (loss suffered by the injured party’s assets, which must be proved to the full extent) and the loss of profit (profit lost, which will require a prospective judgement, but based on objective data, from the handling of accounting information, the help of an expert opinion, etc.) that has been generated by the harmful conduct. In any event, the injured party must only be compensated to the extent equivalent to the actual damage he has suffered, so that the value of any advantage that the harmful event may have brought him (the perception of benefits obtained from a transaction, etc.) must be subtracted, otherwise an unjust enrichment could be generated.
However, as an exception to this general principle, the doctrine of the so-called ‘loss of opportunity’ arises, opportunity being understood as ‘disappearance of a probability of a favourable event’ and whose purpose has been to overcome the pitfalls and rigidity offered by the principle of certainty and effectiveness of the damage, as stated in the Judgement of the Provincial Court of Madrid, Sect. 11, no. 420/2017 of 27 November
45. The doctrine of loss of opportunity is a particular case of infringement of an interest worthy of legal protection. Opportunity must be understood as the ‘disappearance of the probability of a favourable event’ (STS 1ª 662/2012, 12.11), of an economic nature or not. The loss of the chance of an uncertain benefit is per se compensable, which makes it possible to escape from the rigid principle of ‘all or nothing’.
46. The High Court has developed a body of doctrine on loss of chance (lost chance, perte d’une chance, perdita di chance). The notion of loss of chance – which had already been discussed by the Second Scholasticism, although some place its origin in the English or French jurisprudence of medical liability – has been accepted here in order to overcome the notable pitfalls of, on the one hand, the principle of certainty and effectiveness of the damage and, on the other, the jurisprudential restrictions on the compensation of loss of profit.
The loss of opportunity implies the need for a reasonable certainty of its positive materialisation, which must be proven by the plaintiff, as the doctrine has been insisting with regard to the loss of procedural opportunity in the eventual assessment of the existence of professional liability of the lawyer, as stated in the Judgement of the Provincial Court of Madrid, 8th Section, no. 105/2024 of 27 February.
The burden of proof is on the plaintiff to demonstrate the seriousness of the frustrated opportunity and its degree of probability. The damage due to loss of opportunity is hypothetical and therefore financial compensation is not applicable when there is no reasonable certainty that the frustrated action would have been judicially accepted. It is therefore necessary to demonstrate that the injured party was in a factual or legal situation that was suitable for carrying them out (STS 801/2006, of 27 July).
In conclusion, it seems clear that the assessment of liability has, as one of its prerequisites, the ascertainment and proof of the effectiveness of the damage, bearing in mind that, in order to overcome the rigidity of this need, case law has been configuring the assessment of damage based on the loss of opportunity of an uncertain benefit.
In this sense, unless a certain degree of certainty can be proved, hypothetical and potential damage could not pass the test of the principle of effectiveness required for the existence of liability to be assessed.
From the Insurance Law Department of Belzuz Abogados, we are at your disposal to analyse your liability and insurance problem in the most professional, efficient and solvent manner.
Abogado Senior
Departamento de Derecho del Seguro
Belzuz Abogados – Madrid
