Russian liability law gets icy reception

Small pay outs and a lack of legal infrastructure make the Russian courts a weak tool in the fight to get personal injury compensation. Alice Lagnado reports. Alice Lagnado is a reporter at the St Petersburg Times.

On a Sunday afternoon last March, 12-year-old Ksenya Yuzipchuk was killed just metres from her front door when an icicle fell from a balcony above. Ksenya was the latest victim of a pattern of negligence that causes thousands of unnecessary deaths and serious injuries every year across the former Soviet Union.

Criminal cases are usually instituted as a matter of course by the local prosecutor's office and, in Ksenya's case, a special committee headed by city vice-governor German Gref was formed to investigate the incident.

Alongside the criminal case, people sometimes institute a case of civil liability. Criminal and departmental cases usually focus on the workers directly responsible.

A suggestion that workers be better trained for next winter to clear up ice and snow and to safeguard danger spots has also been put forward by the special committee. But the crux of the matter is that the lack of an effective civil liability code and an effective insurance system means that neither government nor private entities have a serious financial incentive to ensure their buildings and utilities are safe.

While lawyers say that liability cases in the newly formed Commonwealth of Independent States (CIS) are on the increase, and that punitive damages are beginning to be awarded by the courts, the pay outs are a matter of lip service rather than real compensation. It is still cheaper to pay those damages than to prevent such incidents by clearing icy roofs. For example, a Moscow district court earlier this year awarded Elizaveta Rolshchikova US$5,000 in damages after her mother, Lyudmila, was killed by a falling icicle in 1996.

Rolshchikova intends to take the case to the Moscow City Court to try to win a larger sum. Indeed, the US$5,000 pay out pales into insignificance when compared with the notorious McDonald's coffee-spill case, where a US woman won US$2.9m damages over third-degree burns she received after spilling a cup of take-away coffee on herself.

Nevertheless, the lawyer who fought the case, Tatyana Dmitriyeva, greeted Rolshchikova's victory as a major first step: “This case created a precedent, a model.”

Dmitriyeva says the case has inspired her to fight for compensation for a six-year-old girl from Moscow who suffered serious spinal injuries when an icicle fell on her in February 1997. “Now I think I can do it. Two years ago I would have had my doubts,” she says.

Ivan Pavlov, a St Petersburg lawyer, is more sanguine. He knows of many cases where citizens have sued the state for what often seem pointless reasons. One man sued the city tram operator for US$5,000 because a tram roared past his stop, leaving the appellant behind. The man – who lost his case – claimed that the tram company had failed to supply an adequate level of service.

“I would not call [the Rolshchikova case] a precedent,” he says. “I do not see a problem in instituting such cases.”

Liability is not a new concept in Russian law. But under communism, citizens rarely sued the state because the damages that could be won were small, and because they were living under a totalitarian regime.

Timothy Stubbs, resident partner at the St Petersburg office of Salans Hertzfeld & Heilbronn, says that the US notion of punitive damages, which are paid out on top of other damages in cases of gross negligence, has only recently been put into practice in the cis.

This concept does not exist in UK, where the maximum sum won for a personal injury claim was around US$1.67m (£1m), but the legal and insurance system which allows citizens to be adequately recompensed is in place.

According to Stubbs, Russians are winning punitive damages, or “moralny usherb”, in the courts – for example when workers sue for wrongful dismissal.

Pavlov agrees: “It is a new phenomenon [to claim for punitive damages] but it will soon get stronger. It is coming into practice,” he says.

Anya Daichman, a Moscow lawyer, says that since the law on consumer rights was passed in 1992, many consumers have sued companies for shoddy goods, late planes or bad food. She says these cases were not hard to win and that this can have a direct effect on services.

But winning heavier cases is made that much more difficult in the cis because the entire infrastructure that enshrines the notion of civil liability does not exist yet. Obtaining legal representation is far from easy. While some lawyers represent those with little money for free, the principle of legal aid is not formally established. And the pitifully low level of damages awarded means no lawyer will work on the basis of a percentage of the award – a widespread practice in the US and other Western countries.

The sums that can be awarded by district judges have not risen dramatically since Soviet days. According to Stubbs, the courts have been told to take the state of the budget into consideration when ordering the state to pay damages to individuals.

The feeble state of the insurance industry is another part of the problem. Just as most Russians do not fasten their seat belts, very few take out car insurance. It is mandatory in most western countries for registered car owners to take out third-party personal accident insurance at the very least.

Companies and government departments are also wary of taking out similar types of insurance. Again, this is partially due to the lack of any perceived financial risk because of the nominal level of damages awarded.

But it is only when such a system is in place that people will be properly compensated for serious accidents and that money and expertise will be spent on preventing them.

Stubbs says he regards the development of this infrastructure as “very important”. “In any normal society, a company has to be able to cover these risks [of accidents], and fairly adequately,” he says.

“From the economic standpoint it is very important that the insurance industry be ready to answer whatever demand there is, so that it will assuage the concerns of companies in the marketplace,” he adds.

Early last month, underground pipes on St Petersburg's Sennaya Ploshchad burst, filling the square with several centimetres of boiling water. A St Petersburg Times photographer who witnessed the scene reported that people simply walked around or through the water, showing no signs of panic or indignation.

This was despite the widespread publicity generated by two separate fatalities in Moscow just weeks earlier. A 45-year-old woman died in March when, while she was out walking her dogs, the ground gave way under her feet, pitching her into a pit of boiling water created by a burst hot water pipe. And in February, a nine-year-old boy died soon after falling into a pool of water resulting from a burst pipe.

Russians do not share the infamously litigious mentality of the average American. Lawyers say that when an accident happens, people do not necessarily think of obtaining legal advice. “The Russian mentality is that you only go to a lawyer as a last resort,”says Pavlov. “[People] do not know their rights. Sometimes they do not even know they can go to a lawyer.”

On top of that, there are very few lawyers in Russia compared to the West. According to Pavlov, there are 10 times more lawyers in Germany than in Russia alone. Russia, with a population of some 147 million, has 26,500 lawyers, whereas the US, with a population of 268 million, has 946,000 lawyers. Along with Russians' renowned fatalistic streak, people here are also not as aware of their rights as most citizens in the West.

“The level of awareness of law and order in this country is low,” says Pavlov.

Fear also plays a part, according to Dmitriyeva. “People are simply afraid,” she says, explaining that people in their thirties or forties are still in the grip of the terrible Soviet fear of the state.