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Case:
BGHZ 18, 149 Great Civil Senate (GSZ 1/55)
Date:
06 July 1955
Translated by:
K. Lipstein
Copyright:
Professor B.S. Markesinis

The Great Civil Senate has answered as follows the question referred to it by the Sixth Civil Senate as to whether in assessing the amount of reasonable compensation in money in accordance with § 847 BGB all the circumstances must be taken into account, including the financial circumstances and the degree of blameworthiness of the person liable to pay damages:

In assessing equitable compensation in money in accordance with § 847 BGB all circumstances of the case can be taken into account, among them the degree of blameworthiness of the person who is liable and the financial circumstances of both parties. In this connection account must also be taken of the extent to which the person who is liable is indemnified by a liability insurance or a claim for redress.

Reasons

According to § 847 BGB ‘equitable compensation’ in money may be claimed in case of injury to the body or to health even in respect of damage which is not pecuniary. The older view, held in particular by the Reichsgericht, was that compensation under § 847 BGB must be ‘equitable’ in respect of all the circumstances which characterize the damaging event in issue; it therefore took into account not only the extent and the duration of the pain, disfigurement, suffering, and intrusion, which were always matters of primary concern, but also particularly the economic situation of the injured party and of the tortfeasor, the degree of blameworthiness, and the circumstances which led to the damage (e.g. gratuitous transportation). According to a more recent view the compensation must only be ‘equitable’ with reference to the purpose, which is to compensate non-pecuniary damage; it therefore only takes into account the extent and the duration of the pain, disfigurement, suffering, and intrusion as well as the means necessary to compensate for non-pecuniary damage; thus it takes into account only the general circumstances of the injured party. This more recent view was adopted by the Third Civil Senate in its decision of 29 September 1952 [reference] to the extent that in assessing the amount of damages for pain and suffering it did not take into account the economic circumstances of the tortfeasor, while leaving open the question as to whether the degree of this blameworthiness should also not be considered.

I. 1. The modern practice bases its view on the ground that claims for damages for pain and suffering, too, are true claims for damages; it therefore regards as decisive the non-pecuniary damage which the injured party suffered as a result of the tort; as in all cases of claims for damages it seeks to take into account only those consequences which the act giving rise to damages has had for the injured party.

This view assumes correctly that as a result of the treatment of the Civil Code of claims in respect of torts—including those based on non-pecuniary damage—it is impossible to attribute to them a direct penal function. This applies equally to claims for non-pecuniary damage. However, by denying the penal character of claims for non-pecuniary damage no final answer has been given to the question for decision in the present case which is in respect of what circumstances damages to be awarded under § 847 BGB must be ‘equitable’.

2. First of all the provision of § 847 BGB must be considered as part of the system of the Civil Code as a whole, which in the most diverse places determines the extent of a performance in accordance with ‘equitable discretion’ or allows ‘equitable compensation’. In these cases the Code intends normally that account should be taken of all the circumstances of a case which are relevant according to equitable considerations, and more particularly the situation of all the parties involved.

(a) If a performance is to be fixed in accordance with ‘equitable discretion’, as §§ 315, 317 BGB require, or an act must be carried out in accordance with ‘equitable discretion’, as §§ 1246, 2048, 2156 BGB demand, it means undoubtedly in these cases that not only the economic circumstances of the creditor, but also those of the debtor must be taken into account.

(b) In connection with claims for damages, too, the Civil Code refers not only in § 847 but also in §§ 829, 1300 to equitable compensation or to damages in accordance with the requirements of equity.

When § 829 BGB speaks of equitable considerations, the Code refers expressly to ‘the circumstances of the parties involved’, and thus the economic circumstances of the parties must also be taken into account. It is true that normally § 847 BGB presupposes that the tortfeasor is to be blamed, while § 829 establishes strict liability. Moreover, according to § 829 both the ground for holding a person liable as well as the extent of his liability are determined according to the principles of equity, while according to § 847 only the extent of liability is so to be fixed. Nevertheless, it is the express intention of § 829, also in so far as it determines the extent of the claim for damages in accordance with equity, that the circumstances of those involved should be taken into account, albeit on the basis of detailed particulars. It is not possible either to refer to § 829 in order to further the argument in support of a restrictive interpretation of § 847, as adopted by the more recent practice, if only for the reason that the Civil Code by requiring that something is to be performed in accordance with the principles of equity intends not only in that case, but regularly, that all circumstances are to be taken into account which may be relevant.

(c) A closer connection than that between § 847 and § 829 BGB exists between the claims arising under § 847 and the claim for defloration under § 1300 BGB, in respect of which the law provides also that ‘equitable compensation’ in money is to be granted. It must be admitted that the liability under § 1300 arises from the breach of an agreement which forms part of Family Law while that under § 847 is based on a tort. However, in both cases the extent of liability is to be determined in accordance with equity.

This history of § 1300 BGB shows that the legislature intended the considerations which had led it to allow ‘equitable compensation under § 1300’ to apply equally to ‘equitable compensation in § 847’. Thus the proposal to replace the expression ‘equitable compensation’ in what is now § 1300 by the term ‘adequate compensation’ was rejected together with the further proposal to grant, instead of ‘equitable compensation’, ‘compensation which takes into account the financial circumstances of either party to the engagement to marry as well as the reduced expectation of another marriage’. One of the reasons was that § 831 of the Bill, now § 847, which was followed by § 1283 of the Bill, now § 1300, also referred to equitable compensation and that in the case of a claim for damages under what is now § 1300, which follows closely the claim for damages under what is now § 847, no danger existed that the previous practice (opposed by the second proposal) in the case of claims for defloration would be continued.

The substantive considerations expressed in respect of § 1300 and applicable also to § 847, as appeared above, emerge from the reasons which accompany the rejection of the proposals referred to above. The first of these proposals was rejected on the ground that ‘the term “equitable” had a clear established technical meaning’. The second proposal was met by the argument that ‘it was not just in assessing the damages to take no notice at all of the financial circumstances and the situation in life of the girl, as might be feared, if the proposal were accepted; the best means of ensuring the development of a realistic practice of the Court was not in any way to restrict the judges in assessing damages’. Another proposal to fix the damages under § 1300 at a minimum of fifty times the normal local daily wage was ‘countered by the argument that individual provisions concerning the assessment of damages were not advisable . . .’.

Therefore the preparatory materials for the Civil Code permit the conclusion in respect of § 847 as well that it was the intention of the legislature not to constrain the courts to disregard certain circumstances in assessing damages for non-pecuniary losses. This means that in fixing equitable compensation the courts may, as a matter of principle, take into consideration all the circumstances which may arise.

3. Contrary to the modern view the same conclusion follows from the legal purpose of damages for pain and suffering. In law damages for pain and suffering have a dual function. They are meant to provide the injured party with adequate compensation for that kind of damage, for those handicaps which are not of a pecuniary nature. At the same time they are meant to indicate that the tortfeasor owes the victim satisfaction for what he has done to him.

Of these two functions that of compensation or redress is prominent. The purpose of the claim is redress for the loss suffered. The latter cannot, however, be assessed arithmetically. The underlying idea may perhaps be formulated as follows: the tortfeasor, who has not only inflicted pecuniary damage upon the injured party but also gravely affected his life, is to help the latter by his payments to alleviate his burden as far as possible. Having regard to this purpose of damages for pain and suffering it must be admitted that considerations of the seriousness, acuteness, and duration of the pain, suffering, and the disfigurement constitute the main basis for assessing equitable damages. The sum required to provide this redress, therefore, depends primarily upon the extent of this damage. It is the merit of the decision of the Third Division of this court [reference] to have shown this, with the result that damages for pain and suffering were treated more seriously than hitherto not only as to their legal significance, but also as to their factual evaluation. Since, however, the Code requires equitable compensation in the meaning set out above (I.2), the purpose of making good cannot determine alone the amount of damages, particularly since this purpose is insufficient alone to fix the amount with something approximating certainty.

Furthermore, even if claims in tort for damages, including damages for non-pecuniary losses, no longer bear any penal character directly, nevertheless something inherent in the purpose of making good is a reminder of its former function as a fine or, to use the apposite term of the corresponding Swiss institution, as satisfaction. Legal history shows that damages for pain and suffering have their origin in criminal law and that in the laws of the German States in modern times different types were fashioned according to the respective stages of development, which still reflect in some respects their antecedents in criminal law. The following is significant: wherever damages for pain and suffering were not excluded altogether, as for instance in § 112 I 6 of the Prussian Allgemeines Landrecht of 1792 in respect of the persons other than ‘peasants or common citizens’ or in Art. 14 of the Württemberg Act concerning the effects in private law of crimes and penalties of 5 September 1839 [reference], the laws provided expressly that in assessing the amount of damages also certain circumstances were to be taken into account which cannot be reconciled with a limited notion of damages restricted to making good. Such are the degrees of blameworthiness mentioned in §§ 168, 125 I 6 of the Prussian Allgemeines Landrecht, or the degree of blameworthiness and ‘the financial circumstances of the tortfeasor’ as stated in § 15 of the Baden Act concerning the effects in private law of crimes of 6 March 1845 [reference] or if, according to the Saxon decree of 1 August 1856 [reference] damages were to be fixed ‘in the discretion of the judge, having regard to the pain inflicted on the victim’, which latter provision was interpreted to mean that the status and the financial circumstances of the claimant were to be taken into account [reference]. Similar considerations influenced the unanimous view of the practice of the courts and writers up to the thirties of this century in dealing with § 847 BGB to the effect that in assessing damages for pain and suffering all circumstances must be taken into account which colour the individual case.

It is true that the legislature has given the claim for pain and suffering the form of a claim for damages according to private law. However, in substance it does not bear the character of a usual claim of this kind, which is for compensation in respect of pecuniary damage. Its purpose to effect restitution cannot be achieved through restitution in kind, as is the case where the damage is pecuniary. To that extent restitution is impossible. Certainly an attempt is to be made to make good, but it cannot be done arithmetically. It is impossible to concentrate on the notion of making good, because non-pecuniary damage can never be expressed in terms of money and since the possibility itself of making good by means of money payments is very limited. Contrary to a view to be encountered occasionally, non-pecuniary losses concern ‘assets not to be valued in money terms’. The amount of money necessary to make good cannot be determined by ‘so to say balancing pain with those pleasures which are intended to wipe out the victim’s memory of his sufferings’. Even where it is to a certain extent possible to compensate physical and mental suffering by amenities and comforts, widely differing possibilities almost always exist as to how redress is to be effected and the purpose alone of the damages to make good does not provide a sufficient measuring-rod. The purpose of making good alone only provides a very rough standard for assessing damages the greater the non-pecuniary loss. This appears particularly if the non-pecuniary loss is so extensive that it is difficult to conceive of making it good, as for instance when restitution can hardly be achieved because the body of the victim has been extensively destroyed. This becomes particularly clear where the type of non-pecuniary damage cannot be made good at all, as for instance frequently in the case of psychological effects. It is generally recognized that damages for non-pecuniary losses must also be awarded if an assault, false imprisonment, or interference with physical integrity resulted in psychological and not in physical injuries. Especially in the case of psychological disturbances it will frequently be impossible to compensate the feelings of unhappiness since the injured party himself is not conscious of his damage. Nevertheless, damages for pain and suffering have been rightly awarded even in this case. The award of damages under § 847 BGB, it must be admitted, serves to make good non-pecuniary loss; it is not, however, a condition for awarding damages for non-pecuniary loss that this purpose can be achieved. The same would be the case if the injured party is so situated financially that no amount of money could raise a sense of happiness which would make good his non-pecuniary damage.

Precisely in these situations of non-pecuniary damage, the function of making good, which is intimately connected with the legal regulation of damages for non-pecuniary loss, acquires its special significance. The function of making good underlines that the injurious act has created a certain personal relationship between the tortfeasor and the victim—which, by its nature demands that in assessing how much the tortfeasor must pay the victim all the circumstances of the case must be taken into account. This appears also from the special provision that this claim dies with the claimant and cannot be assigned.

II. In accordance with the foregoing observations, the severity and the extent of the reduction in the enjoyment of life must be considered in the first place for the purpose of assessing damages for pain and suffering. This is the preponderant aspect. In addition, other circumstances may, however, be taken into account as well which are salient features of the injurious act.

1. One of these is the degree of blameworthiness on the part of the tortfeasor. The degree of blameworthiness is not only relevant, as the more recent interpreters of § 847 BGB would have it, with regard to its effect upon the injured party: the fact that the injury was caused by the reckless or even intentional behaviour of the defendant, may naturally have left the injured party embittered, while he may be more inclined to accept as his fate an injured caused by slight negligence. Leaving aside the reaction of the injured party, it may accord with equity and the notion of satisfaction in assessing compensation under § 847 BGB if, in the individual case, intention and recklessness count against the tortfeasor, while especially slight negligence counts in his favour. It would be incomprehensible if the trial judge could not award higher damages for pain and suffering in the case of a crime than where the external consequences are the same, but occurred as result of an error in normal human intercourse which might be committed by anybody. For this reason many foreign legal systems, too, have taken, and still take, into account the degree of blameworthiness of the tortfeasor in assessing the amount of damages payable by him. The fact that German law does not offer this opportunity where the damage is pecuniary does not preclude its use where the Code offers it in arriving at the equitable compensation for non-pecuniary loss. On the contrary, this possibility is a great merit of the regulation of damages for non-pecuniary losses.

Apart from the degree of blameworthiness, the cause of injury or of the injurious act may be relevant in certain circumstances. Even if the degree of blameworthiness is the same, different acts may bear very different characteristics (injury in the course of the enjoyment of some pleasure on the one hand, or in connection with the exercise of a profession, the administration of help, or any other necessary activity on the other hand). This is particularly valid in those cases in which the tort was committed on the occasion of an activity which the tortfeasor carried out in order to oblige the injured party and which the latter welcomed—perhaps even gratefully—as, for instance, where the victim suffers an injury on the occasion of a journey as a gratuitous passenger in the car of the tortfeasor as a result of the latter’s negligence who sought to do him a favour. In such a case it may even be inequitable if the victim claims damages for pain and suffering to an amount equal to that which a pedestrian could have claimed who had been run down by the tortfeasor.

2. Possibly the economic circumstances of the injured party may also influence the assessment of damages on grounds of equity.
The economic circumstances of the victim may, for instance, affect the notion of making good inasmuch as the function of making good is less significant if, for example, the injured party is so favourably circumstanced economically that sums of money paid by the tortfeasor can hardly make good the non-pecuniary damage suffered to him. In such cases the function of damages as satisfaction assumes primary importance. On the other hand, it is not impossible that in individual cases the higher standard of living to which the victim is accustomed may also lead to increased damages for pain and suffering.

3. Finally, the economic circumstances of the tortfeasor may also be taken into account in assessing the damages under § 847 BGB.

(a) Viewed from the angle of equity, i.e. by taking into account the circumstances of both parties, the idea of making good should not normally result in the tortfeasor’s serious and lasting penury. It is true that here, too, the need to offer satisfaction and to make good the damage is preponderant. The fact that the tortfeasor is not well off must be of greater or lesser importance having regard to the cause of the damaging event, and especially to the degree of blameworthiness. Any behaviour of the tortfeasor which is especially reprehensible, such as inconsiderate recklessness or, even more so, acting intentionally, may consign into the background any concern to preserve him from economic distress. On the other hand, if the tortfeasor’s economic situation is particularly favourable it may appear equitable in the exercise of the court’s discretion to award higher damages. Moreover, the smaller the amount of damages required to make good non-pecuniary losses, the more it will be possible to disregard the economic circumstances, in particular those of the tortfeasor. Equally the economic circumstances of the victim may be relevant in this connection. If the victim is comfortably off, it may appear equitable in assessing the damages to exercise in favour of the tortfeasor the power of discretion inherent in the consideration of the economic circumstances. On the other hand, if the victim is in straitened circumstances it may seem equitable to exercise this discretion in favour of the tortfeasor to a lesser extent than if the victim is well situated financially. However, even if the tortfeasor is penniless considerations of his financial position can never release him from the duty to pay damages for pain and suffering, for the financial position of the tortfeasor constitutes only one aspect among many, and not even the most important, which must be taken into account.

(b) Any such consideration of the economic circumstances of the parties involved is not contrary to the intention of positive law—express or implied. It is, however, true that in the case of a debt consisting of fungibles the debtor is always liable, even if he cannot supply them and that therefore in the case of a debt of fungibles, he cannot plead his adverse economic circumstances. The significance of any considerations of the economic circumstances of the tortfeasor, is, however, completely misunderstood by those who argue that, as a result of his adverse economic circumstances damages for non-pecuniary loss which are appropriate ‘as such’ are reduced and that therefore the victim is receiving less than is due to him ‘as such’. This view assumes that in fixing equitable damages only the extent of the losses is to be taken into account. In reality the amount of damages for pain and suffering is ascertained only when all the circumstances of the individual case have been considered. Taking into account all the financial circumstances of the tortfeasor does not reduce in any way the damages which are appropriate ‘as such’; instead ‘equitable damages’ are being assessed for the first time in accordance with § 847 BGB by taking into account all circumstances which can be evaluated, including the economic circumstances of the parties involved; without considering all the circumstances, and thus also where appropriate the economic circumstances, no assessment would be possible. For this reason it cannot be contended that such an interpretation amounts to ‘breaching the principle which governs the entire area of law in the matter, which is that the extent of an obligation is always independent of the ability of the debtor to perform’. This principle applies to pecuniary damages. On the other hand, the Code intends the extent of the damages for non-pecuniary losses envisaged by § 847 BGB to be assessed having regard to all the circumstances of the case. For the same reason it follows that an injured party whose economic circumstances are taken into account in his favour cannot be awarded more than his damage. The decision DR 1941, 280 does not permit the conclusion that the Reichsgericht abandoned its current practice and assumed that there is something like damages for pain and suffering ‘which are appropriate as such’. If such a complete change of practice had taken place, it would certainly have been accompanied by more detailed arguments; where the Reichsgericht employed the term ‘damages for pain and suffering which are appropriate as such’, it clearly used an imprecise formulation.

If it is acknowledged that the economic circumstances of the parties involved may be taken into account as one of the possible bases for assessing the amount of pecuniary damages for non-pecuniary losses, this constitutes a facet of the facts before the court, as are also the extent of the non-pecuniary damages and the possibility of providing an opportunity for making good. It is therefore wrong to say that it is contrary to the principle of equality to take the economic circumstances of the parties into account; for if the same victim suffers non-pecuniary damage inflicted by two tortfeasors whose economic circumstances differ from each other, the two situations are not identical. It is not clear why, as is said occasionally, the consideration of the economic conditions of the parties involved should be regarded as unsocial. Surely the fundamental principles of a social state based on law are not violated if in assessing damages the economic circumstances of the parties involved are balanced against each other.

(c) Considerations of the economic circumstances of the parties do not lead to insoluble difficulties either.

The view that considerations of the economic conditions of a penniless tortfeasor must—in strict logic—lead to a complete denial of damages under § 847 BGB has already been refuted above.

The view is also incorrect that the principle of taking into account the economic conditions is breached in those cases where the Fiscus is the tortfeasor. It must be conceded that in these cases, and also where the tortfeasor is a ‘charitable institution’ of public law, the practice of the courts, especially that of the Reichsgericht, does not take notice of the financial situation of the tortfeasor. The reason is that the assets of the Fiscus serve public purposes and are tied to this extent. The conclusion is drawn therefrom that these assets do not reflect a financial situation in the nature of private enterprise; they cannot therefore be related to the assets of the victim, representing private enterprise, so as to balance them against each other. In the light of this view of the assets of the Fiscus, the financial situation of the Fiscus and that of the injured party are so different as to preclude a comparison. In these cases the tortfeasor (i.e. the Fiscus) lacks a characteristic (i.e. the economic circumstances) which, if existing, would have to be taken into account where engaging in considerations of equity. In the case of the Fiscus ‘economic’ circumstances defy evaluation. They mitigate neither in favour of nor against the Fiscus as a debtor. The Fiscus can never plead straitened economic circumstances, just as the victim cannot point to the particularly favourable circumstances of the Fiscus which is liable to pay damages for pain and suffering.

No objections can be raised against the admissibility of considerations concerning the economic circumstances of the parties on the possible ground that the assessment of damages for non-pecuniary losses, which is difficult in any event, will be ‘rendered unpredictable and complicated’ if the economic circumstances of the parties are taken into account. Apart from the fact—stressed more than once before—that the amount of damages depends primarily on the extent of the damage, the possibility of making good, and the amount of the means necessary to achieve this, none of these conceivable difficulties rules out the admissibility of considering economic circumstances, now that the legislature has abolished the more or less fixed rates for assessing damages to be awarded for non-pecuniary losses. The view that ‘non-pecuniary damage can be assessed and also that certain maximum and minimum amounts can be laid down as to how objectively ascertainable non-pecuniary losses can be compensated’ results of necessity in the readoption of the fixed tariffs which were established by the law of some German States (e.g. §§ 113, 118 I. 6 of the Prussian Allgemeines Landrecht; § 1497 of the Saxon Civil Code) which were abolished by the Civil Code. Not only does the variety of possible non-pecuniary losses preclude the adoption of such ‘maximum and minimum tariffs’ altogether or the latter would not do justice to the individual character of non-pecuniary damage, but it restricts the opportunity created by the code of reaching a decision based on the discretion of the court.

Moreover, the fact that the adverse economic circumstances of the tortfeasor are taken into account does not make it difficult or inequitable if later on, in the course of execution (by way of a judicial adjustment, a composition with creditors, or of bankruptcy), the tortfeasor seeks to obtain a reduction of his debts and thus also of his liability to pay damages under § 847 BGB which had already been fixed as appropriate in view of his unfavourable economic situation. The conclusion derived therefrom that in these cases the adverse financial position of the tortfeasor leads twice to a reduction of the claims under § 847 BGB is influenced by the incorrect assumption that damages which are appropriate ‘as such’ are being reduced if the economic circumstances of the tortfeasor are taken into account. Here, too, the damages awarded under § 847 BGB are ‘reduced’ only once, i.e. in the course of execution. Moreover, regarded from the economic point of view, the same result is reached not only in § 847 BGB but wherever the amount of the performance owed depends upon the economic circumstances of the debtor, as for instance where the extent of a performance or act is to be determined ‘in accordance with equitable discretion under §§ 315, 317, 1246, 2048, 2156 BGB, where a contractual penalty is to be reduced in accordance with § 343 BGB, or where damages for breach of promise under § 1300 are in issue’.

(d) Once it is realized that where the claim is for non-pecuniary losses, damages which are appropriate ‘as such’ do not exist and cannot therefore be increased or reduced in view of the economic circumstances of the parties, the case where several tortfeasors acting together have committed a tort resulting in non-pecuniary damage—which is that before this court—can be solved without difficulty. Here, too—if necessary—damages under § 847 BGB must be assessed independently in respect of each tortfeasor. The same task is incumbent upon the courts if, as regards pecuniary damage, one tortfeasor is only liable under § 7a of the Haftpflichtgesetz (Strict Liability Act), § 12 of the Strassenverkehrsgesetz (Road Traffic Act), or § 23 of the Luftverkehrsgesetz (Air Traffic Act) while the other has incurred more extensive liability under § 843. The two tortfeasors are only liable as debtors in common to the extent that the amount of their liability is the same; as regards the excess, that tortfeasor is only liable who must pay higher damages.

In taking into account the economic circumstances, the question may arise as to whether in so doing the possibility of compensation between the tortfeasors should be considered. Since the fact that the economic circumstances are taken into account means that economic potential counts and since, on the other hand, economic potential is increased if enforceable claims for redress exist against the co-tortfeasor, it follows naturally that such enforceable claims for redress must be taken into account in determining economic potential. It must be admitted that if several tortfeasors who are liable in common have claims for redress against one another, each is liable in the end to pay only a portion of the total damages. The reason is that even in the presence of several tortfeasors the victim can only demand to be compensated once. This principle is not violated if the damages for non-pecuniary loss are fixed at a higher level because the value of the claims for redress against other tortfeasors is taken into account in determining the economic potential of one of the tortfeasors. In this case, too, the injured party can only recover once the sum of money which was awarded to him in respect of non-pecuniary losses. Therefore, no principle of positive law is being violated in this respect either.

(e) It was much disputed—especially in recent times—whether in considering the economic circumstances of the tortfeasor it is relevant that he is insured against liability.

The view was expressed in particular by the Reichsgericht at an early stage, that the claims of the tortfeasor arising out of liability insurance could not be taken into account since the purpose of liability insurance was to indemnify the insured in respect of payments which the latter was obliged to make because he was liable, and that this must be established first. However, this view concentrates exclusively on the relationship between the tortfeasor and the insurer of his liability; in reality the question must be as to whether and how the fact that the tortfeasor is insured against liability can affect the extent of his liability towards the injured party. For this purpose the following consideration applies quite generally to damages according to § 847 BGB: a tortfeasor who is entitled to be reimbursed by the insurer against liability to the extent of the amount insured is in a more favourable financial position than a tortfeasor who carries himself alone the burden of paying damages. The claim acquired by the payment of premiums to protection by the insurer is a financial asset in so far as any payment of compensation for damage caused is concerned.

Since in taking this financial approach it is only relevant whether the tortfeasor must bear the cost of the damages himself or will be reimbursed—at least in part—on the strength of his liability insurance, it can make no difference whether the insurance against liability is voluntary or compulsory.

Finally, it cannot be concluded that liability insurance must be disregarded because the assets of the insurer against liability constitute a special fund which is dedicated to a special purpose, similar to the assets of the Fiscus, which must be disregarded. This view overlooks that the assets of the Fiscus are not assets in the meaning of private law for the reason that they are not only dedicated to a special purpose, but because the special purpose is a public one. Therefore they cannot be related to the assets of the injured party, which are within the private sector, so as to balance them. The assets of a liability insurer, however, contrary to those of the Fiscus fall within the private sector. For this reason alone the reference to the treatment of Fiscal property is inappropriate. Moreover, in taking into account the existence of liability insurance no ‘purpose linked special fund’ of the insurer is being considered, but the claims of the tortfeasor to be indemnified by the liability insurer.

Consequently it is admissible in assessing damages under § 847 BGB to take into account also that the tortfeasor can demand an indemnity from the insurer—up to the amount of the sum insured.

(f) In taking into account the economic circumstances of the tortfeasor it may be relevant that the damages for pain and suffering are not being awarded in the form of a lump sum but of periodic payments. Thereby the result can be achieved in some cases that the victim receives damages for pain and suffering which are largely in keeping with their purpose, namely to make good, even if the tortfeasor’s financial circumstances are unfavourable, seeing that such periodic payments do not burden him that heavily for the time being. If damages for pain and suffering are assessed in the form of a right to periodic payments the question arises, however, as to whether a subsequent change in the financial circumstances of the tortfeasor must be taken into account under § 323 of the Code of Civil Procedure [ZPO]. The answer must be in the affirmative. It is true that when the amount of damages for pain and suffering is fixed by a judgment or a compromise, the claim for damages in respect of non-pecuniary loss loses its character as a claim for damages in money; thus the amount of the claim under § 847 BGB is henceforth fixed for the future, at least in principle. However, just as any consequences of the injurious act which occurred or manifested themselves subsequently, and therefore had not been taken into account in assessing damages under § 847 BGB, may give rise to a supplementary claim under § 847 BGB, so no objections exist in principle against reviewing the periodic payments if the conditions laid down by § 323 ZPO are fulfilled, especially if a fundamental change in economic circumstances has occurred, in particular on the part of the tortfeasor.

4. As stated above on several occasions, among the circumstances to be taken into account on grounds of equity, the extent, the severity, and the duration of pain and suffering must always contribute the determining criteria; the non-pecuniary damage inflicted, the adverse effect on life always occupies the first place among the circumstances to be taken into account. For the rest, it is impossible to establish a general order of priorities among the circumstances to be considered, for their extent and importance in assessing equitable compensation emerges only when they coincide in the individual case, as was shown above, especially in II. 3 (a). It is therefore necessary to consider the individual case. The extent to which the circumstances enumerated previously, or any other which may be relevant, affect the assessment of damages for pain and suffering must be determined in accordance with equity. Such an examination may also lead to the conclusion that certain circumstances, as for instance the financial situation, should be disregarded in fixing damages for pain and suffering.

In the light of the foregoing, the question had to be answered in the general terms in which it had been formulated by the Sixth Senate of the court, for only thus the substance of the question could be treated exhaustively. Nevertheless, it seemed appropriate to stress already by the manner in which the answer is formulated that not all the circumstances which have been mentioned must be taken into account in each individual case, but only that they may be considered, having regard to the facts. In order to eliminate doubts it also appeared appropriate to include at this stage the treatment of possible claims of the tortfeasor for an indemnity under a policy of liability insurance or for redress against other tortfeasors.

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