Judicial Determination Of Compensation Liability For Damage Caused By Application For Property Preservation

Article 7 of the Provisions of the Supreme People’s Court on Several Issues concerning the Handling of Property Preservation Cases by the People’s Courts stipulates that an insurer providing guarantee for property preservation in the form of signing a liability insurance contract with the applicant shall issue a guarantee letter to the people’s court.Since then,as a security guarantee,the Property Preservation Liability Insurance has been widely recognized in the trial of civil and commercial cases,providing great convenience for the applicant of property preservation.Therefore,the property preservation system plays a greater role in the improvement of difficulties in enforcement.The property preservation refers to the restrictive measures that the court takes by rendering a ruling to the property of one party according to the application of the opposing party or,when necessary.With the increasing complexity of the basic legal relationship in property preservation cases,the difficulty of hearing the damage compensation disputes and subsequent insurance contract disputes arising from an erroneous application for property preservation increases accordingly.The general opinion is that an erroneous preservation is a tort act.However,on the issue of judicial determination of the resulting compensation liability,the judicial opinions differ greatly,and unified standards have not yet been formed.The introduction of insurance mechanism in the property preservation system makes the insurer become the party to the damage compensation disputes and has defendant’s right of defense,which further increases the difficulty of case trial.Under the background that the property preservation system functions effectively and the litigation property preservation liability insurance is widely used,the judicial determination of compensation liability for damage caused by application for property preservation is a key and difficult issue.According to article 108 of the Civil Procedure Law of the People’s Republic of China stipulates,where an application is erroneous,the applicant shall compensate the respondent for any loss incurred from preservation.As to the doctrine of liability fixation,there is a debate between fault liability theory and no-fault liability theory.As the laws and regulations do not make it clear that filing an erroneous application is one of the no-fault liability,so the former is the mainstream view.There are two views on the constitutive elements of compensation liability: three elements theory and four elements theory.The three elements include the loss of the respondent,the causal relationship between the loss and the application and the fault of the applicant,while the four elements also includes the illegality of the application for property preservation.An erroneous application for property preservation itself is not illegal,but it indicates that the applicant has intentional or at least negligence.In terms of the applicant’s fault,there are subjective fault theory and objective fault theory and the former is the main point of view,which argues that the applicant should have intentional or gross negligence.As for the degree of the duty of care that the applicant should fulfill,there is a debate between the standard of ordinary person and the standard of rational person.In judicial practice,the unified identification standards of determination of liability for damage have not yet been formed,and the inconsistency mainly focus on the identification of the applicant’s fault.When determining the fault of the applicant,the court mainly considers the following factors: the factual and legal basis of the application for property preservation;the correctness and appropriateness of the object,method and amount of property preservation;the timeliness and initiative of the applicant in applying the removal of preservation,etc.However,in the actual process of trial,some courts did not examine the elements one by one when determining the compensation liability,and the scale of judgment in the cases was not uniform.The second instance of disputes over the compensation liability arising from erroneous application for property preservation had a high rate of revision and appeal.In order to give full play to the system function of property preservation and solve the disputes caused by property preservation and the subsequent insurance disputes,it is particularly important to correctly determine the compensation liability for damage caused by application for property preservation.Where the preservation measures infringe upon the civil rights and interests of the parties,a relationship of compensation rights and obligations arises between the applicant and the respondent.Therefore,the judicial determination should follow the logical path of the determination of tort liability.Firstly,the court should judge whether the damage exists,and then consider the limitation of the damage and the ruling of damages compensation.In order to solve the problem of inconsistencies in the identification standard of elements,the courts should make use of the case review standard established by the Supreme Court to comprehensively judge whether the applicant has subjective fault,and shall exercise full reason in the judgment document.In addition,when the applicant takes out litigation property preservation liability insurance,the tort legal relationship and insurance legal relationship exist simultaneously but are independent of each other,so the courts should clarify the legal relationship and make a fair and accurate judgment on the scope of liability and the subject of liability for damages.