The basis for the establishment of annuity claims

Definition and characteristics of annuity

In obligation law the annuity is understood as a form of compensation for damages whose total amount is not known at the time of making the request and it shall be paid periodically in predetermined amounts. Typically material damage that will be realized in the future is compensated by annuity.

The basis for the establishment of annuity claims is contained in the realization of the objective circumstances of unexpected adverse event.

The annuity has the following main features:

  • It’s about the future damage
  • The final total amount of the annuity is not known at the time of the judgment and
  • The annuity is paid periodically (successively) in certain installments.

Indemnity in the form of an annuity according to provisions of the law on obligations

Indemnity in the form of an annuity is regulated by the provisions of Articles from 188 to 197 of the Law on Obligations. General rules on the indemnity of any damage to property are regulated by the provisions of Articles from 185 to 192 of the Law on Obligations , and by the provisions of Articles from 193 to 197 of the Law on Obligations are listed specific cases of the indemnity of damage to property (due to death, bodily injury or harm to health), which is awarded in the form of an annuity.

Exceptionally an annuity can be awarded for suffered non-pecuniary damage on the basis of Article 203 of the Law on Obligations.At the request by a person sustaining loss the court shall also award damages for future general loss if, according to regular course of events, it became certain that it will continue.

In case of death, bodily injury or damage to health, indemnity shall, as a rule, be determined in the form of an annuity, either for the life of the injured person or for a definite period.

An awarded annuity as a form of damages shall be paid in advance in monthly installments, unless the court provide otherwise. The judgment-creditor shall be entitled to demand necessary guarantees for payment of annuities, unless according to circumstances of the case, this would be not justified.

The judgement-creditor shall be entitled to demand payment of a lump sum (capitalized annuity) instead of annuities, of an amount established according to the amount of annuities and probable duration of the judgment-creditor’s life, after deducting corresponding interest in the following cases:

  • Should the judgment-debtor fail to supply guarantee ordered by the court and
  • In other justified causes.

An annuity as a form of indemnity for damage to property in case of death, bodily injury and harm to health

According to the Law on Obligations pecuniary damages in the form of annuity in case of death, bodily injury and harm to health is determined for:

  • Lost support or assistance as a consequence of the death of the provider – Article 184 of the Law on Obligations
  • Salary lost – Article 185 of the Law on Obligations
  • Permanent increasing needs of the injured person (necessary external help) – Article 195 Paragraph 2 of the Law on Obligations
  • Destruction or reduction of possibilities for further development and advancement, as a result of full or partial inability to work – Article 195, Paragraph 2 of the Law on Obligations.

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