Full damage compensation in car accidents

In the past, the Constitutional Court had already ruled that, when calculating the actual amount of damage to a car involved in an accident, it could not be simply stated that if a car had been repaired using new spare parts, the amount of the compensation could be reduced to reflect the technical improvement to the car. According to the Constitutional Court, such an approach to determining the total amount of actual damage was not sufficient. Already in that ruling, the court stated that it is always necessary to consider whether a car involved in a crash would sell for a lower price than a comparably equipped car that had not been in an accident. The Constitutional Court held that courts always have to examine nuances in market value, taking also into account the nature of the parts replaced. Thus, reducing the claimed damage compensation by 50%, for instance, arguing that the use of new spare parts in fact increased the value of the car, is inacceptable.

In its previous ruling, the Constitutional Court also stated that the injured party did not arrive at the situation through their own fault – on the contrary, the car repair was in a way forced onto them. Thus, if the repair effectively aims to eliminate the consequences of the event inflicting the damage, it would be unjust for the injured party to have to pay anything for getting the car back into working order.

Notably, the mentioned rulings related to the regulation under the previously valid Civil Code. The new Civil Code now explicitly stipulates that the amount of the damage is to be determined taking into account everything which the injured party had to efficiently incur to restore or replace the function of a thing.

In recent ruling TZ 39/2017, the Constitutional Court proceeded along the lines of its previous opinions when dealing with a complaint of a corporation that, apart from the cost of repair of a damaged car, sought also compensation of damage equalling the difference between its market value before the crash and after the repair. The Constitutional Court stated that the common courts’ approach to pay only the cost of repair and not to reflect the difference in the market value of a thing was contrary to the right to damage compensation and ownerships protection. According to the Constitutional Court, statutory provisions regulating damage compensation should be construed extensively to cover all expenses that the injured party had to face as a result of the wrongdoing. Thus, unless the injured party acts excessively in repairing the crashed car, they are entitled to full damage compensation, including the difference between the market value of the repaired car and the car not involved in an accident.