Compensation for Losses in Russian and Foreign Law

Abstract

In Russia is still in the process of the civil law reforms. One of the most notable developments in this process has been the active application of foreign experience, which come out as the introduction of many foreign institutions into the Civil Code of the Russian Federation. In regard to the novelties to Art. 406.1 of the RF Civil Code it has repeatedly been expressed that it is intended to introduce the concept of indemnity into the Russian Law. However, the category of indemnity is a kind of an "umbrella" category, which covers a wide range of relationships, as the indemnity is a method by which the law allocates different losses. For example, the insurance contract in Anglo-Saxon literature has traditionally been seen as a contract, the essence of which is to provide "indemnity". The considered novelty deals with the so-called contractual indemnity, aimed at the adoption of the debtor on the risk of property loss, not related to the breach of their obligations. The range of this Article is not only limited to "guarantees" for the actions of third parties, indicating the influence of Anglo-Saxon law. However, the drafters of Art. 406.1 of the Civil Code has deprived an agreement for loss reimbursement of the compensation feature since courts can not reduce the size of the losses, unless it is proved that the party deliberately contributed to their increase. The legal position of the Supreme Court of the Russian Federation gets the agreement on compensation for losses in the framework of the "concept of accurate protection" (exact protection) which corresponds to the compensatory function of civil rights. The Supreme Court also demonstrated "hidden" application of the rule contra proferentem in regard of the interpretation of the agreements on compensation for losses. The article substantiates the conclusion that in interpreting and assessing reservations for losses it is necessary to be guided by the standards of good faith and reasonable conduct of contractors, to verify these contractual terms for compliance with criteria of fairness, taking into account the actual ratio of negotiating capacities. As a result of the research, it can be argued that the indemnity is the method of distribution of property losses, compensation and distribution functions of civil law. As a separate legal institution, it is possible to consider only the question of agreements for reimbursement of property losses.