Conditions for Filing a Compensation Claim under Saudi Law
The Civil Transactions Law has been issued to serve as the legal reference for civil dealings in Saudi Arabia. The Law sets out the rules governing liability and compensation for harm. Article (136) of the Civil Transactions Law provides that compensation shall fully redress the damage by restoring the injured party to the position they were in—or could have been in—had the harm not occurred.
Therefore, it is clear from this article that an injured party may file a compensation claim for the damage suffered. In this article, Al-Salama Law Firm will outline the legal requirements for filing a compensation claim under Saudi law.
What Are the Rules of Compensation in Saudi Arabia?
The Civil Transactions Law constitutes the legal foundation for compensating the injured party. It contains all general statutory provisions governing compensation claims. Article (137) states:
“The damage for which the liable party must compensate is determined by the loss suffered by the injured party and the lost profits, provided such damage is the natural result of the harmful act. The same applies if the injured party could not have avoided the damage by exercising the reasonable effort that the circumstances require from an ordinary person.”
This article therefore establishes general conditions for filing a compensation claim.
Conditions for Filing a Compensation Claim
Three essential conditions must be met to file a compensation claim:
First Condition: The Occurrence of a Fault
Fault is a positive or negative deviation in the conduct of the obligor that renders him liable. This deviation refers to straying from the behavior of the ordinary person, who would exercise sufficient caution to fulfill their obligation without causing harm.
The “ordinary person” is neither exceptionally intelligent nor negligent; the standard is determined by the court, which may consult an expert to assess whether the defendant acted as a reasonable person would.
Example:
A doctor performs a surgery that results in medical error. To determine whether the doctor exercised due care or whether the error resulted from unavoidable external circumstances, the court appoints a medical expert to provide an opinion.
Second Condition: The Occurrence of Damage
Damage is defined as any harm inflicted on a person’s rights or lawful interests, whether relating to bodily integrity, property, reputation, honor, or any other material or moral rights.
Damage is divided into two types:
1. Material Damage
Damage that can be evaluated in monetary terms, commonly arising in contractual liability. It affects the person’s financial interests, such as damage caused by a tenant to leased property, leading to financial loss for the landlord.
2. Moral Damage
Damage that does not affect financial interests but harms a person’s dignity, reputation, honor, or social standing. This typically arises in tort cases.
Examples:
- A newspaper publishes defamatory content harming a person’s reputation.
- An individual insults another on social media, harming their reputation and dignity.
Third Condition: Causal Link Between Fault and Damage
Fault and damage alone are insufficient to establish liability; the causal relationship between them must be proven. The plaintiff bears the burden of proving this causal link using all permissible means of evidence.
Types of Compensation Claims under Saudi Law
Compensation claims are broad and may be filed for almost any harm caused by another party’s act or negligence. Examples include:
- Compensation for bodily injuries, vehicle damage, and losses resulting from accidents.
- Compensation for occupational injuries or diseases occurring during employment.
- Compensation for harm caused by defective or dangerous products, such as cosmetics or medical products.
- Compensation for losses due to breach of contract.
- Compensation for providing misleading information or concealing essential facts during contract formation.
- Compensation for goods or services not meeting agreed specifications or warranties.
- Compensation for copyright infringement, including unauthorized use or copying of protected works.
- Compensation for patent infringement through unauthorized use or manufacturing of protected inventions.
- Compensation for trademark infringement through unauthorized use of a registered mark.
- Compensation for unauthorized entry into or damage to private property.
- Compensation for pollution or environmental harm affecting individuals or property.
- Compensation for unfair commercial practices harmful to competitors.
- Compensation for reputational harm resulting from false statements.
- Compensation in certain cases for noncompliance with alimony or custody rulings.
- Compensation for losses resulting from fraud or financial deception.
- Compensation for practices that mislead consumers.
Thus, the scope of compensation claims is very broad and covers nearly any situation where damage is caused to a person or entity by another’s act or negligence.
Reasons for Dismissing Compensation Claims
Compensation claims are commonly dismissed for two primary reasons:
1. Failure to Prove the Causal Link Between Fault and Damage
This is why consulting a specialized compensation lawyer is essential, as they possess the expertise to help prove fault, damage, and causation.
2. Filing the Lawsuit Before the Wrong Court
Many plaintiffs file compensation claims before the wrong jurisdiction, while such claims may fall under:
- General Courts
- Commercial Courts
- Administrative Courts under the Board of Grievances
Filing before the wrong court results in dismissal and wastes time, effort, and money. Therefore, it is crucial to consult Al-Salama Law Firm, as we have extensive experience determining the proper court—both in subject-matter and territorial jurisdiction.
Amount of Compensation for Bodily Harm
Article (139) of the Civil Transactions Law states:
“Compensation shall be assessed in monetary terms; however, the court may, depending on the circumstances and at the request of the injured party, award compensation in kind, restore the situation to its prior state, or order a specific act related to the harmful act.
Compensation may be awarded in installments or as a periodic payment, and in both cases, the court may require the obligor to provide adequate security.”
Accordingly, compensation for harm may take the following forms:
- Monetary compensation
- Compensation in kind
- Restoring the situation to its prior state, where possible
- Issuing a specific judicial order related to the harmful act
The court has broad discretion in determining both the method and the amount of compensation, which varies depending on the circumstances of each case.
FAQs
What are the conditions for compensation under Saudi law?
Fault, damage, and a causal link between them.
Can moral damage be compensated under Saudi law?
Yes. Article (138) of the Civil Transactions Law provides for compensation for moral harm.
What is the time limit for filing a compensation claim?
Ten years from the date the damage occurred.
However, a tort-based compensation claim is not heard after three years from the date the injured party becomes aware of the damage and the responsible party.
If the compensation claim arises from a crime, it remains valid as long as the criminal case is still actionable.
When does the right to claim compensation expire?
After ten years from the date of knowledge of the harm.
Conclusion
Compensation claims require specialized legal expertise. Do not take any step before consulting us.
Book a confidential and specialized consultation now with Al-Salama Law Firm.
