In Polish civil law, the protection of personal rights of natural persons is well established. But do the same legal remedies apply to legal entities? Can a company claim compensation for the violation of its good reputation? These questions were answered by the Supreme Court in a groundbreaking resolution of October 3, 2023 (case no. III CZP 22/23).
The case that sparked the discussion
The limited liability company “N.” sued an individual who had published a negative online review of its business activities related to the sale of heat pumps. The company argued that the post violated its personal rights, particularly its reputation and good name. In the lawsuit, it sought, among other things, the removal of the review, an apology, and compensation in the amount of PLN 22,000. The court of first instance partially granted the claims but reduced the compensation to PLN 5,000.
The court of second instance, while examining the appeal, referred a legal question to the Supreme Court: can a legal entity effectively claim compensation for the infringement of personal rights under Article 448 § 1 of the Civil Code in connection with Article 43 of the Civil Code
What does the Civil Code say?
According to Article 43 of the Civil Code, the provisions on the protection of personal rights of natural persons apply accordingly to legal entities. This means that legal entities may invoke the protection provided in Articles 23 and 24 of the Civil Code, which includes, among other things, demanding that violations cease, requiring the removal of their consequences, and seeking compensation.
The issue arises with Article 448 of the Civil Code, which provides for the possibility of awarding monetary compensation for harm suffered. Critics of applying this provision to legal entities argue that such entities do not experience psychological suffering, and therefore the concept of “harm” cannot be understood in the classical sense.
Supreme Court resolution: compensation also for legal entities
The Supreme Court unequivocally ruled that a legal entity can claim monetary compensation for the infringement of personal rights. In its reasoning, it emphasized that “harm” in the case of a legal entity does not mean emotional suffering, but rather a non-material loss that hinders or prevents the proper conduct of its business activities.
The Supreme Court emphasized that the personal rights of legal entities are non-material values that enable them to operate in accordance with their business objectives. These may include, among others, the company name, trade name, reputation, the right to conduct business without interference, or the ability to communicate with their environment. The violation of these rights can lead to loss of trust, damage to reputation, or undermining of credibility.
It is worth noting that the Supreme Court’s resolution was issued after the amendment to the Civil Code on July 28, 2023 (Journal of Laws 2023, item 1615), which modified the content of Article 448 of the Civil Code. The provision was divided into three paragraphs, clarifying the conditions for awarding compensation. Despite these changes, the Supreme Court held that the new wording does not exclude the application of Article 448 to legal entities.
What does this mean for practice?
The Supreme Court’s resolution is highly significant for business practice. Entrepreneurs, foundations, associations, and other legal entities can effectively claim compensation for the infringement of their personal rights—for example, in cases of defamatory publications, false online reviews, or the unlawful use of their name.
The Supreme Court emphasized, however, that awarding compensation should be preceded by a thorough analysis of the case circumstances. Important factors include the type of infringed right, the extent of the violation, the nature of the legal entity’s activities, and the impact of the infringement on its operations.
Changes in enforcement proceedings
The Supreme Court emphasized that, when resolving the legal issue, it also took into account the effects that the amendment to Article 1050 of the Civil Code, effective from April 15, 2023, had on the protection of personal rights. This article regulates the enforcement of actions that the debtor cannot delegate. The application of Article 1050 § 4 of the Civil Procedure Code may significantly limit the effective protection of personal rights through non-material remedies indicated in Article 24 § 1 of the Civil Code. The way a court-mandated statement is published in the appropriate form may be modified during the enforcement proceedings. In specific cases, this could result in the consequences of the violation of personal rights not being fully reversed, or only being reversed to a limited extent, despite judicial protection. According to the Supreme Court, effective protection of the personal rights of legal entities—especially those not conducting business activities—when carried out solely through non-material remedies and the monetary remedies provided in Article 24 § 2 of the Civil Code, could sometimes be merely illusory.
Summary
The Supreme Court resolution of October 3, 2023, confirms that legal entities can utilize the full range of remedies for the protection of personal rights, including monetary compensation. This is an important step toward ensuring a balance between protecting the reputation of business entities and freedom of expression. In the internet era, where a single review can damage a company’s image, the ability to claim compensation becomes a practical tool for defense. Awarding monetary compensation to a legal entity is not intended to provide satisfaction or to compensate for physical or psychological suffering, but rather to protect the objectively understood interests related to its personal rights.
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