Examining the Mexican Supreme Court’s Application of Punitive and Moral Damages.
March 28, 2023
Recently, the Supreme Court determined that punitive damages do not always apply when ordering the payment of compensation for moral damage in cases of extra-contractual civil liability. It all comes down to the violated right and the degree of responsibility of the one who caused the damage. Punitive damages will only be added when the gravity of the conduct deserves a high degree of social reproach that justifies such a sanction.
The case studied consisted of a claim for moral damages that a person filed against a Notary Public and a notarial association for publishing a note that criticized his work in a Notary. Before the claim reached the Supreme Court, a Federal Court had only ordered the defendants to pay moral damages and determined that a sentence for punitive damages was not appropriate.
This determination was what motivated the plaintiff to file an appeal, where the Supreme Court determined that punitive damages do not proceed unfailingly and unrestrictedly in any tort liability case in which moral damages are claimed.
The Court established that punitive damages are an element of the right to just remuneration, which constitute an exemplary sanction with preventive purposes that aims to dissuade similar harmful behaviors in the future, for which they will be added when the behavior is extremely grave and deserves to increase the sentence.
Additionally, although it is true that punitive damages increase the amount of compensation in favor of the victim, its essential and primary purpose is not to compensate the victim, but to prevent future violations of rights, which makes it imperative that the valuation of punitive damages be fully justified in the gravity of the conduct and the particular elements of the case.
The Civil Litigation Team at OLIVARES will continue to monitor the criteria and judgments in terms of damages that the Courts have issued and will provide further guidance, as changes arise.
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Armando Arenas joined OLIVARES in 2000 and became a partner in January 2017. He has experience working on a range of IP matters, including consulting and litigation on trademark, patent, unfair competition, trade dress protection, and misleading advertising cases before the Mexican Institute of Industrial Property (IMPI), Federal Court of Tax and Administrative Affairs (FCTA), Federal Circuit Courts (FCC) and the Supreme Court of Justice (SCJ) Regulatory Affairs and Public Acquisitions.
Alejandro Luna joined OLIVARES in 1996 and being made partner in 2005, he has been instrumental to the firm’s IP Litigation, Regulatory, and Administrative Litigation practices. He co-chairs the Life Sciences & Pharmaceutical Law industry group and coordinates the Litigation Department.
Abraham Díaz is a partner and co-chairs OLIVARES’ Privacy and IT Industry groups and has a wealth of knowledge across all areas of intellectual property (IP), with a focus on copyright, trademarks, unfair competition, litigation, licensing and prosecution matters.