The experience acquired through ordinary human interactions or with economic connotations, has historically contributed to perfecting the legal guidelines to safeguard the assets of people and different commercial agents, in particular it has allowed to chisel out the content and scope of the legal duty to not cause harm to another “alterum non laedere” that is incorporated into Nicaraguan legislation.
In the economic life of a person or in the dynamics of the commercial relations of companies, it is usual that lawyers are asked questions, such as:
What can I do when a contract is breached?
What to do when someone has caused a damage in my assets?
What to do when, because of someone’s fault, I have stopped receiving a profit that was legitimate to receive?
In this context, the innate and categorical response of lawyers is usually: We can sue for damages! Said first response may be correct, but this does not imply that the expected result will be obtained, for some reasons that we will see in this short article.
Moving forward on the subject, we can express that claims for compensation for damages can be prosecuted in two major legal cases: a) Claims derived from contractual liability (Article 1860 of the Civil Code), which in simple words refers to the non-observance of contractual obligations that in general give rise to the possibility of claiming compensation for impairment of assets and b) Claims for compensation based on extra-contractual civil liability (article 2509 of the Civil Code), which is nothing more than a violation of the general duty of not to cause harm to another (even if there is no contract).
The purpose of being able to formulate these claims is that there is a legal tool that allows to restore the damage to the victim’s patrimony and put it in the same patrimonial situation in which it would be, if the event that requires compensation had not occurred.
In our experience, the main cause that leads to the lack of success of claims for compensation for damages, is largely based on the failure to present to the competent authority all the factual or probative elements that are required to demonstrate the concurrence of the necessary legal premises to declare well founded the request for compensation, the absence of only one of these legal premises, has the immediate consequence of rejecting the claim made, which is why it is important to know the legal premises that must be alleged and proven to not create false expectations to clients.
In our legislation the legal duty of not to cause harm to another is incorporated, whereby it is intended to establish a system of clear rules that allows people to claim compensation for the damage caused to their current or expectant assets.
Regarding the legal premises that must be met to properly submit a claim for damages arising from extra-contractual liability, in Nicaragua there are more than 100 years of jurisprudential precedents that coincide in establishing that the following aspects must be alleged and proven:
i) The facts that describe the event generating the damages (background facts of the damage caused);
ii) The direct author of the damage, who may be a person responsible for his own act or for those carried out by those who are subordinate to them or under his care;
iii) The fault, fraud or negligence of the person responsible;
iv) The causality between the action and omission and the alleged damages;
v) The amount of damages caused.
Unless there is an early participation of legal advisors, in our experience, when designing and executing a case of this nature, all these elements are extraordinarily difficult to prove, since there are not the adequate elements to support the concurrence of each one of these legal premises. This weakness can be overcome with the early intervention of legal advisers during the execution of the project and before the start of the controversy, in order to support each of the situations that will have significance in the claim that could eventually be presented.
Regarding contractual civil liability, the following additional elements must be alleged and proven:
i) The existence of a contract or contractual relationship;
ii) That the promoter of the petition has complied with the obligations that the contractual relationship imposes;
iii) That the defendant has breached the obligations that were his responsibility;
iv) The delay in the fulfillment of the obligations;
v) That the damages are a direct consequence of the total or partial breach of the contractually agreed obligations.
We can express that in Nicaragua and in general in the different jurisdictions, preparing a lawsuit that aims to claim compensation for damages represents one of the most complex legal tasks to design and execute, which can be especially complex due to:
i) Lack of clarity of the background facts that caused the damage, which usually occurs because there are different actors that handle different levels of communication with the counterparts;
ii) Impossibility of describing the events generating the damages caused, due to the lack of mechanisms for verifying non-compliance;
iii) Lack of evidence to support the client’s positions and;
iv) Lack of legal skills to design and execute a claim for damages that would prevent obtaining a favorable resolution.
In relation to the previously outlined aspects, these can be modulated to strengthen the position of our clients, with the implementation of some practical elements that can serve to simplify solutions to controversies of this nature, such as:
i) Establish as a practice to involve legal advisors before the start of the controversy. The purpose of this is to provide immediate advice during the execution of the projects regarding how to support the background facts, the terms in which the communications on non-compliance should be written and in general the preparation of the different evidentiary elements that will serve as a basis in the context of a judicial or arbitration claim for damages;
ii) Appoint a contract administrator whose main function is to ensure compliance with the contractual obligations of its own company and of the counterpart and who in general serves as a historical memory of the project’s background;
iii) Centralize communications to facilitate the handling of information and thus prevent contradictory messages from leaking or weakening the client’s position;
iv) Ensure coordinated work between the business and legal areas in order to strengthen the client’s position in the face of any controversy. In our experience, this is a very valuable element that has contributed in an extraordinary way to the formula for success in solving our clients’ controversies;
v) Hire the services of specialists with proven experience in the quantification of damages;
vi) Establish criminal clauses that quantify the damages in the event of non-compliance.
This type of controversy has several variables that could modify the legal recommendations to be implemented and that cannot be fully addressed in this article.
Finally, for the reasons previously expressed, it has become clear that the advice of these conflicts is extraordinarily complex and requires certain legal skills; despite this, in the Litigation & Arbitration department of Consortium Legal Nicaragua, we believe that the art of adequate legal advice for this type of case rests on the beauty of articulating simple legal solutions to respond to situations of complex crises.
The above can only be achieved with legal advisors who intervene early for the proper handling of the controversy, whereby we are at your disposal to work in structuring an adequate and satisfactory solution that can respond to the different controversies, that you may face in your daily routine of your economic life, to increase the chances of success of obtaining a resolution favorable to the interests of you as our clients.