5.6. ANÁLISIS ECONÓMICO Y FINANCIERO BÁSICO
5.6.3. ANÁLISIS ECONÓMICO
While principles relating to state liability have now been discussed and developed over a long period, there are no common legal standards, principles or policies to be seen in national legal systems. Vietnam, because of its own history and circumstances, is still at a relatively early stage in their development and application. There also has been no previous independent research which has systematically studied state liability in Vietnam including the enforcement processes. The purpose of this thesis is to undertake such a study. It focuses on the following five research questions.
Research question 1: What are the justifications and nature of state liability for compensation?
Understanding the theories of state liability for compensation is the first important step to establishing the nature as well as the origin of state liability. In this context, law is distinctive in that it is not only the object of study, but also provides the framework and tools through which it studied. According to Hoecke “The legal system itself provides the concepts required in order to study a certain legal or social development. That means that the law is not only the object of research, but also the theoretical perspective from which that object is studied.”141
141 Mark Van Hoecke (ed), Methodologies of legal research: Which Kind of Method for, What
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While these theories may relate to wider categories of civil wrongs and criminal actions, they are used here in the narrower context of the SCL and the remedies provided under it relating to wrongful decisions or actions by the executive and judicial branches of government and for specific wrongful enforcement activities. As indicated above, the ideas of justice and the rule of law have been important in developing the concept that there is a relationship based on some form of accountability between the state and citizens. Ideas of justice also play an important role when determining the level of responsibility or liability that there should be between people and people and the state. They bear on the issue of whether the state can be treated as a special subject different from individuals and other legal persons. Or whether the state should be treated equally like other individuals. Considering these question will help to clarify common and distinctive features of state liability in the Vietnamese and other legal systems.
Furthermore, national legal systems and international law, as noted, have developed principles which ensure that the losses resulting from wrongful official acts are compensated by the competent authority.142 Nevertheless, because of the differences between political and economic backgrounds and in legal traditions, such principles vary and may appear in different fields within national legal systems. State liability may be treated as civil wrongs as in the civil law systems of France and German. It may be considered as breaches of professional standards of care as in Chinese and Japanese law.143 The law on state liability may be found in private law as in German, Japanese, and Korean. It may be found in public law as a form of administrative liability as in France or China.144 It may be described as ‘interaction’ or ‘interface’ or ‘inlimbo’ between tort law and administrative law in the common law system.145 It can be total or partial liability.146 This raises issues of how it is treated in Vietnamese law. This question is considered in section 3.5.1.
142 Peschorn, above n 21, 3.
143 The State Compensation Liability Law 1994 (China); The Law State Compensation 1947
(Japan).
144The State Compensation Liability Law 1994 (China); Martina, above n 51, 187.
145 A W Bradley, Administrative Law and the Law of Torts- un Unresolved Boundary Dispute (the Law teacher, 1989); Peter H Schuck, Suing Goverment: Citizen Remedies for Official
Wrongs, (Yale University Press 1984); Carol Harlow, ‘Public and Private law: Definition
without distinction’ (2011) Modern Law Review 241.
146 In many countries state liability can be treated as totally but in Japanese Law of criminal wrongful actions, the state only pay apart (grace).
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As indicated in section 1.2.1, in common law jurisdictions, the state (crown) has had immunity and there is no separate law on state liability for compensation for wrongs caused by state officials. This raises issues of whether a separate law on state liability for compensation is significant for Vietnamese society. These will be further investigated as part of the research in section 3.5.2.
Research question 2: What is the Vietnamese law on the liability of the state for compensation?
The SCL 2009 states the current law regarding the liability of the state to pay compensation for wrongful actions by state officials. This law, as noted, represents a significant development in the legal reform process aimed at building a state based on the rule of law and better protecting human rights. When evaluating this Law, it is important to recognise the changes that it has made.
The limitation of state liability: The Law provides, in Article 1, that the state is liable to pay compensation to individuals and legal persons who have suffered damage caused by officials in administrative actions, judicial proceedings and in the enforcement of judgments. The law extends the scope of liability to almost all state sectors including administration, legal proceedings and enforcement of judgments. Under the previous law, the majority of proceedings were for wrongful convictions. It was not possible to bring actions for wrongful judgments in civil proceedings or for the wrongful enforcement of judgments. However, the Law limits liability for the last two by listing the specific wrongful actions falling within their scope. This may restrict any liability for compensation.
In addition, there is no liability in the Law for losses caused by legislation. If a law does not comply with the limitations of the Constitution and harms the individual, it will be suspended or cancelled by the NA but will not give rise to liability for compensation.147 The justification is that the NA, constituted by the citizens’ elected representatives, makes legislation. This is seen in earlier reasoning of how the state as sovereign which made the law could not be held accountable under it.148Also there is a constitutional justification in that legislation should have general application and not specifically name individuals or organisations. Consequently, it should not directly affect a particular individual or organization without a decision or judgment by officials
147Law on the Promulgation of Legislation 2008 (Vietnam); Ministry of Justice, above n 15.
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or judges to apply it. Furthermore, it is also argued that Vietnam’s present economic capacity means it is inappropriate to establish such liability. This again may ensure that the Law can be more effectively enforced.149 This question involves assessing whether this limitation is reasonable.
This liability, and the limitations imposed on it, is examined in the light of the principles of justice, restitution and principles of tort law and obligation referred to in section 1.2.1 above and below in Chapter 3, to determine whether or not they are reasonable in the context of Vietnam in section 4.3.1.
The grounds for state liability: General liability for compensation under the Civil Code 2005 requires (1) actual damage; (2) the act causing the damage to be an unlawful action; (3) a causal relationship between the unlawful act and the actual damage; and, (4) that the defendant committed the act intentionally or negligently, or, in some special cases, that strict liability applies. The SCL provides different grounds for liability. There are two main grounds:
firstly, there will be liability for executive actions, for civil and administrative proceedings, and in enforcement of judgments if two conditions are met: (1) there is a valid document issued by an authorized office affirming that the officer’s act is unlawful and falls within the scope of liability for compensation; and, (2) actual damage occurred.
secondly, there will be liability in respect of wrongful convictions in criminal proceedings if two conditions are met: (1) there is a valid judgment or decision by a relevant officer affirming that a person falls within the scope of the criminal proceedings provisions; and, (2) actual damage occurred.
Under this second provision relating to criminal proceedings, the person suffering the damage does not need to show that there was an unlawful action. So it appears that this is a provision intended to give more extensive protection to the rights of citizens. This reflects the purpose of the legislation to better protect human rights, specifically, rights to liberty and freedom of movement and association. There is a question of whether the restrictions on the grounds of non-criminal liability are reasonable. The
149 Báo cáo 236/BC-UBTVQH12 của Ủy ban Thường vụ Quốc hội giải trình tiếp thu, chỉnh lý dự thảo Luật Trách nhiệm Bồi thường của Nhà nước ngày 13/6/2009 [Report 236/BC- UBTVQH12 on Justification and Modification of the Draft of the Law on State Liability for Compensation of the National Assembly’s Standing Committee on 13/6/2009].
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government may still be able to control its liability by choosing to provide or not provide the documents required. Whether this presents a significant problem in the enforcement of the Law is considered in section 4.3.2.
The damages to be compensated and how they are calculated: Under the law, two kinds of damages can be claimed: physical and mental loss. Physical loss includes both direct and indirect damage. Where property is damaged, the remedy is the loss in value of the property. Where there is physical injury, damages include loss of income. Where there is mental loss or suffering, damages are not to exceed 30 months minimum wages in injury cases and 30 years (360 months) in cases of death.
The means used to calculate the amount of the damage is both important and controversial. Damage is a precondition to determining the liability for compensation. It is noted that the Law in Article 46 provides a formula for calculating loss of income, one kind of damage. However, this provision appears not to be appropriate as it uses the salary of the victim before they suffered the injury rather than what it may have been in the future. Moreover, there is a challenge in most cases in determining the amount of damage concerning compensation for officials’ wrongful acts as state compensation often includes mental and indirect damage. Thus, there is a question of whether or not the provision on the method for calculating damages is appropriate. This is further investigated in section 4.3.3.
The reimbursement responsibility of state officials: One goal of the law is to increase the accountability of state officials. This is why the law provides for the reimbursement by state officials of the state budget funds paid as compensation for their wrongful actions. This is in addition to administrative discipline including dismissal or demotion.150 Decree 16 specifies the responsibility of the state by fixing the amount of the repayments. Accordingly, an officer who has intentionally committed a wrongful action may be required to reimburse the state up to a maximum of 36 months wages. Those who have only neglected their duty have their liability limited to compensation not exceeding three months’ wages. There is a question of whether these provisions are reasonable or effective in preventing wrongful actions by state officials and strengthening the state’s operational effectiveness. This question is dealt with in section 4.3.4.
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Research question 3: Are the procedures and mechanism effective to deal with state liability in Vietnam?
Theories of justice in the context of law are divided into substantive legal justice and procedural legal justice. Substantive legal justice is primarily concerned with the conduct of individuals, but also places obligations on judges and other officials responsible for the enforcement of the law. Procedural justice refers to fairness in the processes that resolve disputes and allocate resources. Procedural justice reinforces substantive justice which depends to a large extent on procedural justice.151
According to Rawls, there are three aspects to procedural justice:152
1. Perfect procedural justice has two characteristics: an independent criterion for what constitutes a fair or just outcome from the procedure, and a procedure that guarantees that the fair outcome will be achieved.
2. Imperfect procedural justice shares the first characteristic of perfect procedural justice, in that there is an independent criterion for a fair outcome, but no method that guarantees that the fair outcome will be achieved.
3. Pure procedural justice describes situations for which there is no criterion for what constitutes a just outcome other than the procedure itself.
As mentioned above in the aims of the project, this study also seeks to evaluate the procedures for resolving state liability for compensation in Vietnam. Concepts of procedural justice provide a guide to appropriate and fair processes to resolve disputes over state liability.
The previous Vietnamese law had an uncertain process. Decree 47 provided for a process of negotiation. Claimants were to negotiate with the relevant government agency to reach agreement. No case was resolved through this procedure.153 Resolution
151 Suri Ratnapala, Jurisprudence (Cambridge University Press, 2009) 331.
152 John Rawls, A Theory of Justice (Harvard University Press, 1971) Chapter II, Section 14.
153Tờ trình Quốc hội số 161/TTr-CP của Chính Phủ về Dự án Luật Bồi thường Nhà nước ngày
13/10/2008, Trung tâm thông tin thư viện và nghiên cứu khoa học, Văn phòng Quốc hội
[Justification 161/ TTr- CP of the Government reporting the National Assembly on the draft of
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388, later adopted, appears to have improved this process of negotiation but it was still inadequate.154
Negotiation remains a fundamental principle under the SCL. If the relevant agency does not issue a resolution decision or the claimant does not agree with its contents, the case may be taken to the relevant District People’s Court.155 This is a significant development which strengthens the rights of citizens under the Constitution, and the Civil and Civil Procedure Codes.
However, there are still problems with the procedures. One is when a court committed the wrongful act or is the relevant agency responsible for paying compensation. Where the claim cannot be settled, the court will be the defendant as well as the judge. This creates an unfair conflict of interest.156 This also affects the negotiation process as the court knows that it may make the final decision in ruling on the dispute. Furthermore, as mentioned in the context of research question 2, all claimants, except in wrongful conviction cases, must have a valid document issued by the relevant authorized office affirming that the officer’s act is wrongful.157 This may be a barrier which restricts the rights of potential claimants as relevant officers may refuse to issue such a document. As the Law also exposes officials to possible action by the state against them to recover amounts paid in compensation, this creates another conflict of interest which may also lead officials to refuse to issue the relevant document. Those procedures and mechanisms need be independently investigated in Chapter 5 to establish whether there are more effective procedures to resolve state compensation cases in Vietnam.
Research question 4: How is the law on state liability for compensation enforced in Vietnam?
There are many factors which may affect the enforcement of any law. These include legal issues as well as the legal political and social cultures. In the case of Vietnam, as
154 Hạ Long, ‘Bồi thường oan sai còn nhiều tranh cãi’ [Compensation for Wrongful Conviction Remains Subject to Argument] An ninh Thu do, 21/12/2007
<http://www.anninhthudo.vn/Tianyon/Index.aspx?ArticleID=15302&ChannelID=3>
155The SCL 2009 (Vietnam) Art 22.
156 Toa tinh mo phien xu kien … chinh minh [The Provincial Court judged itself] Nasco, 21/9/2010 <http://www.nasco.com.vn/?u=nws&su=d&cid=392&id=1967>
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indicated above, the turn to constitutionalism and the rule of law is relatively recent compared with other states.
Firstly, Vietnam is a transitional socialist state governed by a single party. The VCP dominates the state. The Constitution itself recognises the VCP’s leading position in the state and society.158 Therefore, state officials’ actions may be restricted by its influence. Furthermore, Vietnam has a socialist civil law tradition. It reflects ‘the unity of powers’ doctrine, which unlike the separation of powers doctrine, concentrates all powers in the NA.159 There is no constitutional court to rule on the validity of legislation. Courts also do not have the function of interpreting legislation which is vested in the NA, with some limited exceptions vested in the SPC. The judiciary, through a system of relatively short-term appointments, lacks significant independence.160 This creates a weak regime for the enforcement of the law including the SCL.
Vietnam’s unique legal culture also affects legal enforcement processes. ‘Legal culture’ refers to the attitudes, values and mentality as well as the modes of behaviour of people or actors in government, society and the economy that may be relevant to the operation of law and legal systems.161 Vietnam’s history of Confucian morality, colonialism, a long war of independence and unification and regionalism all impact on the Soviet model of dispute resolution which it adopted.162 This legal culture has a significant impact on the legal system as the four following examples show. Firstly, the law in the books will only be translated into law in action by a legal culture that supports the implementation of the law. In Vietnam, in practice there is considerable conflict between legal norms, particularly between superior legislation and subordinate rules. Lower-level administrative and judicial institutions and officials involved in local rule-making have not yet developed a culture of respect for, or compliance with, higher legal norms.163 Secondly, provincial and local authorities in Vietnam may not implement laws enacted by the national legislature, so laws may have been enacted but
158 Sidel, above n 127; The Constitution 1992 (Vietnam) Art 4. 159 Gillespie and Chen, above n 6, 17.
160 Adam Day, Legal Reform and Economic Development in Vietnam and China (Master thesis, Fletcher School, Tufts University, 2004) <http://fletcher.tufts.edu>.
161 Gillespie and Chen, above n 6, 19.
162 Lindsey (ed), Law reform in Developing and Transitional States (Routledge, 2007) 153. 163 Gillespie and Chen, above n 6, 19.
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the supporting local legal culture to support them does not exist.164 Thirdly, citizens in Vietnam do not have sufficient belief in the legal system to turn to the law and legal institutions to resolve conflicts. People do not expect to settle their disputes in court as a traditional proverb illustrates: vo phuc dao tung dinh [try not to go to court].165 A number of writers claim that there is a low level of trust in laws, lawyers and courts.166