After the opinion solicitation procedure, Taiwan Supreme Court reached a unanimous opinion regarding Article 184 of the Civil Code that was amended on May 5, 2000, and the provision applies to juridical persons as well.  

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Article 184 of the Civil Code provides, “A person who, intentionally or negligently, has wrongfully damaged the rights of another is bound to compensate him for any injury arising therefrom. The same rule shall be applied when the injury is done intentionally in a manner against the rules of morals. A person, who violates a statutory provision enacted for the protection of others and therefore prejudice to others, is bound to compensate for the injury.” This is a general provision of liability for torts.

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In the case of Taiwan Supreme Court's judgment 108-Tai-Shang-Zi No. 2035 (hereinafter the “Judgment”), the Appellant, Mr. Kuo, pursuant to Article 184 of the Civil Code, claimed damage compensation against the Appellee, a bank. After the Civil Division Second Court of the Taiwan Supreme Court heard the case, they found that the earlier Taiwan Supreme Court judgments diverged in opinions and is necessary to provide a unanimous opinion regarding the legal issue of “Is Article 184 of the Civil Code amended on May 5, 2000, applicable to torts committed by a juridical person?” which is the basis of the judgment. Hence, on May 28, 2020, it solicited opinions from other civil courts. After the opinion solicitation procedure was completed, all civil courts adopted a positive answer to the aforesaid issue that Article 184 of the Civil Code is also applicable to a juridical person. Since the aforesaid legal issue already has a concurring answer through opinion solicitation, it is no longer necessary to propose such a issue to the Constitutional Court for interpretation. The adjudication shall then be the final judgment of the case according to the aforesaid opinion.        

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The following is a summarized version of the rationale used by the Judgment to decide that Article 184 of the Civil Code may be directly applied to juridical persons for liabilities from torts:

1. Articles 26 to 28 of the Civil Code provide that juridical persons are objects of rights and duties, and are capable of enjoying rights and assuming duties.

2. Article 184 of the Civil Code is a general provision regarding torts. According to the text and the legislative description of the article, it does not restrict its application only to natural persons.

3. If juridical persons are excluded from the application of Article 184 of the Civil Code, it will not only make representative or the employee of the juridical person assume too many external responsibilities; it will also make the victim bear too much burden of proof and result in unfairness.

4. A juridical person pursues and gains profits through its organization and activities, is also capable of diversifying its risks. To meet the principle of fairness, the juridical person shall assume any damage compensation liability derived from its organization and activities.

This article is based on the news releases from the Judicial Yuan.  https://www.judicial.gov.tw/tw/cp-1888-269402-dfe87-1.html

(Author: Sharon Chou, Senior Associate)

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