© Springer International Publishing Switzerland 2015Ewoud Hondius and André Janssen (eds.)Disgorgement of ProfitsIus Comparatum – Global Studies in Comparative Law810.1007/978-3-319-18759-4_9
9. Legal Mechanisms Enabling Disgorgement of Profits in Romania
University of Bucharest, Bucharest, Romania
The legal instruments affected to the recovery of losses in the Romanian legal system are based on tort and performance restitution (applicable in unjust enrichment, annulment or rescission of contracts, impossibility to perform a contractual obligation and others). Criminal, respectively administrative, liability may be cumulated with tort, and the procedural rules applicable enable the victims to recover the damages incurred within the criminal action frame or by means of separate action. The principles applicable to disgorgement ensued by tort are: the reparation of direct damnum emergens or lucrum cessans entirely. A hypothesis of performance restitution can be completed with a request of paying damages, if the restitution in itself does not cover the entire damage suffered by the claimant, and the defendant meets all the conditions provided by the civil tort.
KeywordsTortUnjust enrichmentPerformance restitutionRecovery of lossesLiability
Faculty of Law, University of Bucharest, is an Associate Professor of Private Law, Property Law, Civil Obligations, Dynamics of Obligations, Secured Transaction, Contract Negotiation and Competition Law.
Faculty of Law, University of Bucharest, is a Lecturer of Private Law, Property Law, Civil Obligations.
The legal instruments affected to the recovery of losses are numerus clausus in the Romanian legal system and they are based on tort (I), as well as performance restitution (II), applicable in unjust enrichment, annulment or rescission of contracts and others. The restitution may result from the recovery of losses, as well as profits, not all of the instruments entailing disgorgement being grounded on misconduct from the defendant. Presently, all the sources entailing disgorgement of profits/damages are provided in the Civil Code of 20091 (the Civil Code); however the recovery mechanisms are limited to actio de in rem verso, action for damages and action for restitution, depending on the obligation legal source.
The previous Romanian Civil Code of 1864 merely provided six ineffective articles (articles 998 through 1003) for the entire tort system; most of the rules applicable to tort resulted from the doctrine and jurisprudence. Compensation further to tort is governed by several principles that have been developed in case law and obfuscator prior to the entry into force of the Civil Code and that are nowadays regulated per se. The principles applicable to disgorgement ensued by tort are2: the reparation of direct damnum emergens or lucrum cessans entirely, predictable and unpredictable at the moment it is done, joint liability of the perpetrators. In order to compensate the victim of an animal attack for the encountered damage, the entire damage must be certain in order to restore the status quo prior to the damaging act or deed.3 In addition, the restitution is based on the specific economic situation of the wrongdoer and the amount that has been rendered may be subject to modification if circumstances alter.
Special rules apply for the “loss of chance” that is covered proportionally with the probability obtaining a profit or avoiding a loss and for moral damages4 in which the law courts may render nominal reparation (especially in media case law), or render damages valuated according to the specific case circumstances. The act of publishing a creation by a publishing house established by a university through the authorisation of the publisher’s company that is part of the university’s foundation, without the authors’ consent, represents a breach of the author right entailing the liability of the university as well as the obligation for the latter to pay compensation for moral damages.5 The moral damage is a variety of general damage and also a relatively independent factor in order to trigger a tort action; these specific damages regard the individual moral values of a person.6 Even though the moral damages cannot be pecuniary determined, damages inflicted have particular forms and the court has the possibility to assess the damage intensity and gravity and in order to rule in favour of compensating the moral damage.7 Due to the fact that the victim (an underage girl) was hospitalized in several medical unities it was necessary to determine the moment when the victim was infected with HIV in order to trigger the action in damages against the culpable hospital.8
Criminal, respectively administrative, liability may be cumulated with tort, and the procedural rules applicable enable the victims to recover within the criminal action frame or by means of separate action the damages incurred.
Particular cases where tort is applicable include recovering damages incurred form the breach of competition law rules (antitrust law), as well as unfair business conduct (unfair competition), administrative and intellectual property infringements. The usage by an ex-employee of a label that has been registered with OSIM (the national trademarks registrar), knowing that the patentee has been producing under that specific label for a long period of time, is an act of unfair competition and ensues disgorgement of profits.9 A simple material contact is neither sufficient nor able of causing damages to the author of the intellectual property creation, unless it is of a considerable consistency and gravity in order to affect the author’s reputation and honour.10 When determining the damages encountered by the patentee, the unjust profit obtained by the wrongdoer as well as the revenue that the patentee has been deprived of, due to act of infringement of a patent, are relevant criteria.11 Until it has been proven that the derived creation is not the translator’s fruit of creation, the performed translation is protected as an author’s right and ensues disgorgement of profits.12 The use of a commercial name that is similar or identical with a trademark registered by another can create confusion regarding the background of the products or services of both the entrepreneurs and this could result in a conflict between the two intellectual property rights; in this case, the victim could file an action with the court in order to recover damages.13
However, in comparison with the intellectual property infringements practice that has reached an efficient level of applicability, the competition law disgorgement of profits is scarce to none in Romanian judicial practice. Despite the fact that the special law affords the possibility to obtain disgorgement, the practical difficulties in fulfilling the conditions for tort, especially the damage valuation and the direct causality of the damages, have strong dissuasive effect on victims of antitrust conduct. More specifically, the calculation of losses and profit is important and has to be precisely determined in order for damages to be awarded. In addition, the causality between the deed and the damage has to be direct, which triggers a difficulty in principle. The recent entering into force of the vast amendment of the Law on unfair trading practices no. 11/199114 reforms the administrative and criminal liability by de-incriminating some of the misconducts. This policy has immediate consequences on tort, as well; the condition that the unjust profit would result from an unjust practice being more difficult to be proven if the illicit behaviour is not provided in a legal norm. Consequently, the successful claims related to unfair practices may even more diminish in the future.
Tort may be applied for personal wrongdoing or for another person falling into a certain category (parents are liable for the deeds of their children, employers for their employees, teachers for pupils). In the latter, subrogation is availed to the person liable for another, the perpetrator bearing the entire liability. Even though the victims decided to claim damages from the employer of the actual perpetrator, eventually the personal liability prevails, and the wrongdoers must be held personally liable for their actions; the employer has the right to recourse with an actions against the employees (wrongdoers) in order to recover the paid amounts of money.15
The recovery of losses and profit is in most of the cases solved by individual claims. Class actions are possible in principle, according to the Code of Civil Procedure of 2013; however in practice the applicability of the Code of Civil Procedure is subject to corroboration with special provisions that have not been enacted in any material. The practice record encompasses odd solutions, seldom made use of and with little success.
In case the liability is sourced from contract but may also be qualified as tort, the representative Romanian doctrine considers that both forms of civil liability – contractual and tort liability – “are forms of civil liability, being dominated by the fundamental idea of remedying the monetary damage caused by an unlawful and guilty deed”, with the specification that “the tort civil liability forms the common law of the civil liability, as long as the contractual liability is a liability with special derogatory feature” but “there is no difference of essence between the two forms.”16
As a practical matter, cumulating the tort civil liability with the contractual liability means the following situations:
the victim is not entitled, in case of the same unlawful and harmful deed, to obtain two remedies, one based on contractual ground and the other on tort ground, by exceeding the full value of the incurred damage
the victim is not entitled to initiate a hybrid, mixed legal action, by claiming simultaneously both the rules related to the contractual liability and to the tort liability, in order to benefit by a more favourable regime, since the tort liability is more severe in comparison with the contractual liability, and, finally
the use of the tort legal action is not admissible after having used the contractual legal action, based on which the remedies have been obtained.17
Nonetheless, the overlap between contract and tort is not possible.18 The differences between the two liability forms for which the cumulus is forbidden refer to the following issues: the capacity of the perpetrator of the unlawful deed; the delay notification sent to the debtor of the indemnification obligation; the value of the remedy; the joint and several feature of the tort liability. The simple act of inserting the possibility of supplementing the circulation of a publication in the initial contract cannot represent sufficient basis in order to consider that the act of not publishing a new circulation is a predictable damage at the time of the execution of contract.19 However, unpredictable damage is to be disgorged in case of tort.
Following the model of the Quebec Civil Code, the new Romanian Code sets a distinct chapter/title named Performance Restitution, at the end of the Book V (Obligations). Under this title (art. 1635–1649), the Romanian Code establishes the general rules governing the performance restitution, regardless the cause generating the restitution. These provisions in the Civil Code represent the main legislation (ius commune), applicable whenever no special law concerning restitution is in place, or in addition of an insufficient special law provision. As a rule, the right of restitution belongs to the person that performed the disbursement – subject to restitution, or to another person entitled by the law (pursuant to article 1636 Civil Code) which is, by force of law, the creditor of the restitution from the very moment generating the restitution. When a debt has been paid further to the issuance of a court order and afterwards a different court order invalidates the act that represented the grounds for the enforcement order, the payer is entitled to disgorgement due to the fact that the nullity has retroactive effect and the payment has become undue.20