2021-03-22

Grand Justices Rule that the "Amount of Actual Damages" of Punitive Damages in the Consumer Protection Act Includes Non-Pecuniary Losses

Taiwan's Grand Justices of the Judicial Yuan ("Grand Justices", 司法院大法庭) ruled on 26 February 2021 that the "amount of actual damages" (損害額) of punitive damages (懲罰性賠償金) stipulated at article 51 of the Consumer Protection Act (消費者保護法) includes the compensation amount for “non-pecuniary losses” (非財產上損害).  This judgement puts an end to a long-debated controversy.
 
According to article 51 of the Consumer Protection Act, in litigation brought in accordance with the Consumer Protection Act, consumers may claim punitive damages up to five times the amount of actual damages suffered as a result of injuries caused by the willful misconduct of traders.  However, whether the “amount of actual damages” included the compensation amount for non-pecuniary losses, which usually refers to consolation payments (精神慰撫金), has long been a controversial issue.
 
Some Supreme Court judgements have indicated that due to the ambiguous definition of “amount of actual damages” in the Consumer Protection Act, the make-up of the “amount of actual damages” should be determined by reference to the Civil Code and include the compensation amount of both pecuniary and non-pecuniary losses.  In contrast, other judgments have stated that the “amount of actual damages” excludes the compensation amount for non-pecuniary losses, but did not clearly explain the reasons for this decision.
 
By this ruling of Grand Justices, the Supreme Court has now a unified legal decision, which acknowledges that the "amount of actual damages" referred to as punitive damages at article 51 of the Consumer Protection Act includes the compensation amount for non-pecuniary losses.
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