An Interesting Choice

Interest on personal injury damages has been a hot topic of debate for many years in Poland. Even the Supreme Court’s standpoint on the matter has seen several revisions by now. More importantly, it is far from just an academic discussion, as personal injury trials tend to last for at least a few years, which makes the interest resolution significant – for both parties.

As far as provisions are concerned, article 481 § 1 of the Polish Civil Code stipulates that if the debtor delays with performance, the creditor may claim interest for delay, even if he has not suffered any damage, and even if the delay resulted from circumstances which the debtor bears no liability for.

Said provision regulates interest in the most general sense, and finds application in many different cases and in regard to several different claims – including personal injury damages. This is not disputed in any way, but what causes great controversy is the exact moment from which interest should run. Since the obligation arises from tort, usually there is no legal relationship between the parties prior to the tort being committed. As a result, the time of providing performance is not strictly determined, and it also does not follow from the properties of the obligation.

Such situations have been taken into account and are regulated by article 455 of the Civil Code, which stipulates that if these aforementioned conditions are met, the performance should be provided immediately after the debtor has been given a notice to perform the obligation. As such, it would seem clear that the if the debtor fails to comply with the latter, he is deemed to fall into arrears, which entails the duty to pay interest.

However, despite the abovementioned provisions, two important tendencies in the way of awarding interest on personal injury damages have developed in the Polish doctrine and judicature. The first is to award interest on such damages from the date of judgment, while the second entails the award of such interest from the day following the expiry of the deadline for its payment, depending on the circumstances of the case (almost always the day after the debtor has been informed about the debt and called to cover it, as provided by article 455 – but there are some exceptions).

What justifies the latter standpoint are primarily the particular characteristics of the claim at issue, because it arises when its statutory premises have been fulfilled, and since that moment the injured party may call the debtor to make the payment. As soon as that call is made, the debtor is obliged to provide the performance. Such standpoint has seen a lot of support from the Supreme Court, according to which if the debtor does not provide punctual payment of personal injury damages, the creditor is not able to take advantage of the monetary performance due to him. Accordingly, detriment suffered by the creditor for that reason should be remedied by awarding him interest for the delay, and apart from some exceptions, mentioned above, article 455 of the Civil Code should be applied in such cases to determine the initial date.

However, the other tendency, i.e. to award interest from the date of judgment, does still have several supporters, and the dispute can hardly be considered resolved. What is more, a new approach has been gaining ground recently, in accordance to which each case should be analyzed individually, and it should be determined whether there were any objective obstacles preventing the debtor from covering personal injury damages prior to the date of judgment, which should then influence the interest resolution accordingly. It is noteworthy that believing the claims are not justified is not considered such an obstacle.

In the end, both the aggrieved and the tortfeasors have to endure a fair share of uncertainty when it comes to the matter of interest, and there does not seem to be any resolution in sight.