19 May 2021
I. Does Article 184 of the Civil Code apply to a tortious act of a juristic person?
Under Articles 26 and 28 of the Civil Code, juristic persons are the subject of rights and may enjoy rights, have disposing capacity and are capable of assuming liability necessary to conduct the target business. Under Article 28 of the Civil Code, a juristic person is jointly liable with the wrongdoers for the injury caused by its directors or other persons who are entitled to represent the juristic person in the performance of their duties. Under Article 188, Paragraph 1 of the Civil Code, the employer shall be jointly liable to make compensation for any injury which the employee has wrongfully caused to the rights of another in the performance of his duties. This shows that it is specifically provided that a juristic person shall assume joint and several liabilities with its relevant personnel for their tortious acts. However, whether a juristic person can be held liable for its own civil liability for tort under the provision on general tortious acts under Article 184 of the Civil Code is an issue worthy of discussions. Different opinions can also be found in prior court decisions (Reference: 108-Tai-Shang-2035 Civil Decision of the Supreme Court) [1].
II. The opinion of the Civil Grand Chamber of the Supreme Court (the 108-Tai-Shang-2035 Civil Decision of the Supreme Court) affirmed that the general provisions on tortious acts under Article 184 apply to juristic persons.
The Civil Grand Chamber of the Supreme Court affirmed that the provisions on general tortious acts under Article 184 of the Civil Code also apply to juristic persons for the following reasons: (1) nothing in the literal meaning of the legal provisions on general tortious acts under Article 184 of the Civil Code and in their legislative explanation limits their application to natural persons; (2) a juristic person can consolidate the intent and activities of its members to reflect its own organizational intent and engage in its own acts; (3) from the angle of victim protection, the intricate division of labor in modern society, juristic persons and businesses has contributed to the fact that many torts are caused by the interplay of many acts, machinery and equipment, not by any single act of a specific natural person. However, there is no comprehensive protection of the victims since the criteria for the joint and several liabilities of a juristic person for a tortious act under Article 28 or Article 188 of the Civil Code cannot be satisfied without the tortious act of its representative organization or employee. Based on the foregoing reasons, the Grand Chamber held that since a juristic person may pursue and obtain benefits through its own organizational activities, it is capable of diversifying risks and a juristic person should also assume the damages liability arising from its organizational activities. Therefore, Article 184 of the Civil Code also applies to juristic persons, who shall be liable for their own tortious acts. (Reference: 108-Tai-Shang-2035 Civil Decision of the Supreme Court)
III. Relevant Discussions:
1. The circumstances where a juristic person’s other damages liabilities are concurrently established are not excluded:
It is affirmed that the general liability for tort under Article 184 of the Civil Code applies to juristic persons, and that other circumstances where juristic persons shall be held liable both under Articles 28 and 188 of the Civil are not excluded, even though the criteria relied on for the claims and the compensatory effect are different, depending on how the claimants in individual cases assert the claims.
2. Determination standard for a juristic person’s own willfulness and negligence:
With respect to the determination of a juristic person’s own willfulness and negligence, some scholars hold that “a juristic person’s negligence refers to its organizational negligence or the so-called ‘organizational defect’ arising from violation of its organizational duties, which include, inter alia, the deployment of personnel, the setup, maintenance and update of things, the establishment of the safety management mechanisms required to prevent the occurrence of incidents, etc.” [3]. Some scholars believe that the intent of a juristic person should be examined by the standard of a reasonable person to determine if there is willfulness and negligence. A juristic person’s erroneous decision, facility defect, improper personnel management or organizational defect may cause the juristic person itself to assume the liability for tort. [4]
3. A juristic person’s right of claim:
If Article 184 of the Civil Code applies to a juristic person for its tortious act, it is not necessarily true that compensation claims may be asserted against the employee or legal representative of the juristic person. This is different from the requirements under Article 28 or Article 188 of the Civil Code.[5] [5]
IV. Conclusions
The release of such legal issue by the Supreme Court should facilitate the assertion of claims in future cases where the wrongdoers are unknown but the juristic persons themselves are negligent and may be liable. Under such circumstances, it is not necessary to produce evidence to substantiate the willfulness or negligence of any specific employee or legal representative in accordance with Article 28 or Article 188 of the Civil Code. Instead, it may be asserted that the juristic person itself constitutes a tortious act and should be liable for damages in accordance with Article 184 of the Civil Code. However, with respect to claims asserted against a juristic person in accordance with Article 184 of the Civil Code, it is still necessary to prove that the juristic person itself has engaged in a willful or negligent tortious act. However, how the court will make its determination still requires continued observation of the way a specific determination is made in practical cases and the determination standard.
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[1]There are indirect affirmative views such as the 93-Tai-Shang-1154 Civil Decision of the Supreme Court, and also negative views such as the 95-Tai-Shang-2250 Civil Decision of the Supreme Court. For the analysis and explanation of the decisions, please see: Tsung-fu Chen, Juristic Person’s Liability for Tort, National Taiwan University Law Journal, Volume 40, Issue 4, Pages 2090-2094, December 2021.
[2] Tsung-fu Chen, Juristic Person’s Liability for Tort, National Taiwan University Law Journal, Volume 40, Issue 4, Page 2021, December 2021.
[3] Tse-chien Wang, Development of Juristic Person’s Liability for Tort – Creation of Juristic Person’s Own Liability for Tort under Article 184 of the Civil Code, Court Case Times, Issue 100, Page 13, October 2020.
[4] Tsung-fu Chen, Juristic Person’s Liability for Tort, National Taiwan University Law Journal, Volume 40, Issue 4, Page 2119, December 2021.
[5] Tsung-fu Chen, Juristic Person’s Liability for Tort, National Taiwan University Law Journal, Volume 40, Issue 4, Pages 2120-2121, December 2021. 。
