Under the Maltese Civil Code, damages may be awarded for tortious liability, with the aim of reinstating the individual in the same exact position before the damage occurred (to the status quo ante), and contractual liability, with the aim to enforce a contract or to liquidate damages for failure to perform an obligation arising from said contract.
Traditionally, when it came to tortious liability, courts awarded ‘damnum emergens’ equivalent to actual losses suffered and ‘lucrum cessans’ equivalent to loss of future earnings. However, apart from financial losses and future earnings, the courts also occasionally awarded victims compensation for moral damages. Prior to Act XIII of 2018, moral damages only existed in other areas of law such as in the case of breaches of constitutional rights and consumer claims. However, with the inclusion of moral damages provisions under our Civil Code to specific instances as contemplated in the Maltese Criminal Code, now the courts have clear guidelines on when to award compensation for moral damages. However, and perhaps ironically the impact of such legislation limited to very specific offences means that courts are now less able, than ever before, to grant compensation in situations which do not specifically fall under the proviso of article 1045 of the Civil Code.
The above was considered thoroughly by the Court of Appeal Application number 88/21/2, in its decision given on the 30th of July 2024 whereby the Court of Appeal considered that the argument against or in favour of moral damages culminated with the introduction of Act XIII of 2018 which as highlighted further above considered the entitlement to non-pecuniary damages for victims of specific criminal offences.
The above-cited case revolved around damages ex delicto (damages arising from tortious actions as opposed to ex contractu which arise from breach of a contract) following an accident between two vehicles.
In its decision, the First Court considered that the multiplier to be used when calculating the damages owed to the applicant, who was fifty-eight years old at the time of the accident, was that of 12 years. The First Court considered the victim’s background as a healthy businessman who, prior to the accident, was expected to continue working well beyond the retirement age. On appeal, the Court of Appeal agreed with the appellant’s arguments and dismissed the First Court’s considerations in relation to the 12-year multiplier. Whilst acknowledging the current trend of working beyond the retirement age, the Court of Appeal considered that everyone’s future is uncertain and as the Maltese proverb goes “Il-bniedem jiproponi u Alla jiddisponi!’. On that note, the Court of Appeal continued that therefore when it comes to determining the multiplier, the statutory retirement age under our law should be considered as the norm rather than it being decided upon arbitrarily by our courts.
The second point of contention put forward by the appellant centered around the First Court’s decision to award €7,000 to the victim for extra pecuniary damages given that the victim’s integrity was going to be compromised following the accident. On this point, the appellants argued that the First Court’s decision was effectively compensation for ‘moral damages’ albeit not labelled as such.
As mentioned further above, with the introduction of Act XIII of 2018, the law contemplates only specific instances when moral damages are awarded, and which are found under the proviso of article 1045 of the Civil Code and which instances where not applicable in this case.
The Court of Appeal accepted the arguments brought forward by the appellants and reduced the liquidated damages from €92,033.75 to €41,328.00.
On the basis of this recent decision by the Court of Appeal, the courts are still seemingly applying a strict approach when it comes to damages ex delicto, since the law explicitly mentions when compensation for moral damages should be awarded and that therefore, the rule is and remains that moral damages are not awarded under article 1045 of the Civil Code save for the exceptions in the above-mentioned.
In conclusion, as the legislation currently stands, the likelihood for our courts to unreservedly award moral damages by way of just compensation continues to fall short of the victim’s legitimate expectations and this author contends that it is high time that the Maltese Civil Code is amended to allow more flexibility and discretion to the courts when it comes to awarding moral damages.