Game Changer in Tort–Like Liability in Mexico? MXP$30 Million Judgment vs. Hotel for Wrongful Death

27 02 2014

 

 

The First Chamber of the Suprema Corte de Justicia de la Nación (SCJN) issued a $30 million pesos judgment (approx. $226,000 USD) against Acapulco’s Mayan Palace hotel for the moral damage caused to the parents of a guest that died by electrocution. The SCJN issued a press release detailing the decision.

Mexico does not have a tort system per se, as understood in common–law countries like the United States. Instead, civil codes in Mexico generally provide for a twofold remedy for prevailing parties claiming damages caused by illicit conducts not derived from contracts—extra–contractual responsibility: an award for material damages, and an independent award for moral damages. Recovery, however, has been historically low (between $20,000-$200,00 USD), and this is the main reason as to why there has not been a specialized bar for this type of cases. But the instant case can be a catalyst for change.

Material damages under Mexican law can compare to actual damages under the U.S. tort law system. In wrongful death cases, the civil codes of Mexico sets a cap in recovery, taking as base the Federal Labor Law, ranging, depending in the specific jurisdiction, between $20,000 and $300,000 USD (thanks to an amendment to the Federal Labor Law in late 2012 that in some cases increased almost sevenfold the recovery for material damages

Moral damage (daño moral) is a prejudice suffered in the moral patrimony of the victim, such as affection for others, right to privacy, honor, esteem for certain goods, decorum, prestige, reputation and physical integrity, among others. Moral damages are “awarded to compensate the victim for intangible losses suffered due to the defendant’s wrongful misconduct.” Zamora et al., Mexican Law 528 (Oxford University Press 2004).

Some local jurisdictions in Mexico limit the amount of recovery for moral damages (sometimes at 20%), but the Federal Civil Code and most of the states do not impose  a cap or limit. In the jurisdictions with the latter rule, theoretically one could get a judgment of $1 for material damages, and $1,000,000 for moral damage.

But even in jurisdictions where the civil code did not impose a cap in the recovery for moral damages, courts in Mexico rarely awarded serious amounts in wrongful death cases. Until yesterday’s ruling by the First Chamber of the SCJN.

From the SCJN press release, we know that the $30 million pesos were awarded to the surviving parents of the decedent for what it considered negligent conducts of the hotel company.

Per the court’s press release, the decedent fell into an artificial lake in the premises of the hotel, electrified due to a short-circuit in a water pump.

Mayan Palace in Acapulco, MX

 

The SCJN found that the hotel lacked qualified personnel to respond to the emergency, did not offer an adequate medical attention, and did not provide with a dignified treatment to the relatives of the victim. All this translated into a violation of the law, and a breach of their general duties of care vis–a–vis their guests.

The ruling incorporated the concept of “social retribution”—a reflection of societal disapproval towards the actions of the defendant, and a dissuasive element for future similar conducts. This aspect of the ruling is relevant because Mexico does not contemplate punitive damages, and some of the elements of “social retribution” advanced in the sentence reminiscence of components of U.S.–style punitive damages.

The judgment, coming from the SCJN itself, is final and not subject to appeal.

Lawyers and law firms in Mexico should start to look at tort–like cases, aim not only for an award for material damages for their clients, but for an award–on–steroids for moral damage.