Conditions and procedures for claiming compensation

Conditions and procedures for claiming compensation

Claiming and proving compensation in the Saudi system is carefully regulated and is essentially subject to the provisions of the Civil Transactions Law. In order for compensation to be properly claimed, certain procedures must be followed and specific elements proven before the competent court.

Disclaimer

This is a legal article that provides general information that does not replace consulting a competent lawyer to help you and for more accurate information.

Below is a breakdown of how to claim and prove compensation:

First: Conditions and procedures for claiming compensation

• Advance excuse: The basic principle is that compensation is not due (especially in contractual obligations) except after the debtor is excused (notified and demanded for implementation), unless there is an agreement or statutory text to the contrary.
• Filing a lawsuit within the regular period (limitation period): A lawsuit for compensation arising from the harmful act must be filed before the expiry of (three years) from the date on which the injured party became aware of the occurrence of the damage and who was responsible for it. In all cases, the lawsuit is dropped after (ten years) from the date of the damage. If the claim arises from a crime, it cannot be heard as long as the criminal case is ongoing.
• Submitting a claim form: A claim is filed before the competent court (general, commercial, or labor, depending on the nature of the dispute), including the facts of the damage, the value of the compensation claimed, and the legal evidence.

Conditions and procedures for claiming compensation

Second: How to prove the damage that leads to compensation

The burden of proof falls on the plaintiff (the injured party), and he must prove the availability of the three pillars of liability: (error, damage, and causality). The damage for which compensation is made is determined based on the following:

• Material damage: The actual loss suffered by the injured party and the gain missed must be proven. This damage must be a “natural and direct result” of the harmful act, and the injured party could not have avoided it by making reasonable efforts.
• Moral harm: includes sensory or psychological harm resulting from harm to the body, freedom, honor, reputation, or social status.
• Methods of proof before the court: Damage and error can be proven by all methods of proof established by law, such as:
• Technical and accounting reports: to prove the extent of financial losses.
• Medical reports: to prove physical and psychological damage.
• Hiring experts: The court often appoints an expert to estimate and review the value of the actual damage.
• Documents and invoices: To prove the costs incurred by the injured party to repair the damage.

Third: The mechanism for estimating and ruling on compensation

• The general rule: Compensation shall be in a way that completely compensates for the damage, with the aim of returning the injured party to the situation in which he was or could have been had the damage not occurred.
• The court’s authority to estimate: If the compensation is not estimated in advance, the court shall estimate it. Compensation is usually estimated in cash, but the court may, upon the request of the injured party, order compensation in kind, or by restoring the situation to what it was.
• Initial assessment: If the court is unable to finally assess the compensation, it may decide on an initial assessment while preserving the injured party’s right to demand a review of the assessment within a period specified by the court.
• Agreement compensation (penalty clause): Contractors may specify the amount of compensation in advance in the contract (unless the obligation is a cash amount). However, this compensation is not due if the debtor proves that no damage occurred, and the court has the authority to reduce it if it is exaggerated, or increase it if the damage results from fraud or serious error.

Conclusion: To claim compensation, you must document the damage (whether material or moral) with all available evidence (invoices, expert reports, medical reports), then excuse the party responsible, and file a lawsuit three years before you became aware of the damage and who was responsible for it, clarifying the direct causal relationship between the defendant’s action and the damage you suffered.

Conditions and procedures for claiming compensation

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