Sergei Bakeshin has commented for Legal Information Agency on the specifics of compensation for moral damages in cases of administrative offences

The Supreme Court of the Russian Federation has confirmed the right of bona fide citizens and businesses to recover legal expenses and compensation for moral damages from complainants. A precedent-setting decision was made in the bankruptcy case of  Ob”yedinennaya Stroitel’naya Kompaniya Moscow based construction company. Several corporate creditors, dissatisfied with the activities of insolvency administrator Mariya Bulatova, appealed to the supervisory authority. The administrative investigation conducted did not reveal the misconduct mentioned in the appeal, after which the trustee in insolvency filed a lawsuit against the authors of the complaint to recover the costs of legal assistance and compensation for moral damages. According to the assessment of the Supreme Court of the Russian Federation, the recovery of costs associated with the resolution of a legal dispute did not require the establishment of either unlawfulness of actions on the part of the persons who initiated the dispute or their guilt, at the same time, the defendants caused Mariya Bulatova moral suffering caused by her worries due to unfounded accusations on their part in the commission of an administrative offence.

Sergei Bakeshin, Counsel, Head of Dispute Resolution & Insolvency Practice at Maxima Legal, has commented on the dispute for Legal Information Agency:

“The party of “prosecution” in cases of administrative offence is the state in the person of the official authorised to draw up a protocol. Therefore, in practice, in the case of termination of such a case on the so-called rehabilitative grounds (in connection with the absence of the event or corpus delicti of the offence) the costs of payment for the services of a representative and compensation for moral harm are recovered at the expense of the treasury.

The norms on compensation for moral damages do not apply to legal entities. Individual entrepreneurs are entitled to claim such compensation only if their personal non-property rights unrelated to business have been infringed.

The case against Mariya Bulatova, an insolvency administrator, was dismissed for lack of corpus delicti. It can be assumed that the appellants did not distort the facts, but only gave them a different legal assessment. Especially considering that they did not have professional knowledge and experience”.

To read the full article (in Russian) please see Legal Information Agency website>>>