Compensation for Damage in the Saudi Civil Transactions Law

Introduction

Compensation for damage is a fundamental legal principle aimed at redressing harm caused to individuals or institutions as a result of unlawful actions. This principle forms a cornerstone of the Saudi Civil Transactions Law, which seeks to ensure fairness among parties and protect rights.

Definition of Compensation in the Civil Transactions Law

Compensation refers to restoring the injured party to their original state prior to the damage, whether material or moral. It includes all losses suffered by the harmed party and is granted based on a harmful act that caused direct or indirect loss.

Compensation for Material Damage

This involves financial compensation for actual losses, including lost profits. The damage must be a natural and direct result of the harmful act and aims to restore the individual to the position they would have been in had the damage not occurred.

Compensation for Moral Damage

Moral damage includes psychological or social harm, such as harm to freedom, reputation, or social status. The court considers the nature of the harm, the person affected, and the circumstances when determining compensation.

How Compensation Is Estimated

Compensation is usually awarded in monetary form, but the court may rule for restitution or in-kind compensation if appropriate. If a final estimate is not possible, the court may issue a preliminary judgment while preserving the right to reconsider.

Compensation for Damage to Property

In cases of significant damage that renders the property unusable, the injured party may retain it or leave it to the wrongdoer, and in both cases, they are entitled to compensation.

Compensation for Personal Injury

This type of compensation is determined according to Islamic law provisions regarding bodily injury and follows predefined amounts of blood money or indemnity (diya or arsh).

Statute of Limitations for Compensation Lawsuits

A claim for compensation is not heard after three years from the date the injured party becomes aware of the damage and the liable person, with an absolute limit of ten years from the date of the incident. If the damage results from a crime, the lawsuit remains valid as long as the criminal case can be heard.

Conclusion

The Saudi Civil Transactions Law provides a comprehensive framework to ensure fair and equitable compensation for harmed parties. Individuals and businesses should understand their rights and obligations under these provisions to protect their interests when damage occurs.