Compensation for the violation of the company’s reputation is no longer in doubt

Individuals as well as legal entities have personal rights, which are protected by law under the provisions of the Civil Code. While the possibility of harming an individual has never been legally questionable, against the possibility of harming a legal entity and consequently awarding it compensation for harm, the case law has not been consistent.

A significant part of the doctrine and jurisprudence so far has indicated that a legal person as a legal construct does not have the ability to feel sorrow, grief, anger or pain, and therefore it is not legitimate to consider that a legal person can be harmed. Therefore, if it is not possible to cause harm to a legal person, it is therefore also not permissible to award compensation to that legal person. In this approach, a company whose personal rights have been violated could only seek compensation.

Due to the discrepancies in the jurisprudence in this regard, the Supreme Court on October 3, 2023, adopted a resolution (ref. III CZP 22/23), stating that „Article 448 of the Civil Code (now Article 448 § 1 of the Civil Code) shall apply respectively to legal entities (Article 43 of the Civil Code).” By virtue of the aforementioned resolution, the Supreme Court agreed with the opinion that in the case of a violation of the personal rights of a company, it is permissible to award compensation for non-material damage to the legal entity.

As a result of the aforementioned resolution, legal entities can more extensively assert the defense of their rights, particularly with regard to the infringement of an entity’s reputation through opinions published on the Internet. The brand and reputation of an entity, which has been developed over years of activity in the market, can be significantly damaged by negative opinions posted on the Internet by dissatisfied customers, contractors or employees. A legal entity’s action for protection of personal rights is intended to resist hurtful information, the publication of which negatively affects the perception of this entity on the market and in the minds of customers and contractors. In many cases, this is the only way for a company to defend its rights and demonstrate that negative reviews do not reflect the actual activities of the entity.

Then why doesn’t the Supreme Court’s resolution of October 3, 2023, ref. III CZP 22/23 mean that any legal entity will receive compensation for violation of its personal rights? Unfortunately, media reports quite often miss the fact that the above resolution does not modify the general rules related to the burden of proof in personal rights infringement lawsuits. This means, therefore, that while the courts should have no further doubts as to whether compensation can be awarded to a legal entity, it is still the legal entity’s burden of proof to show that a specific personal right of the entity has been violated.