The issue of damage compensation is primarily governed by the Law on Contracts and Torts (“Official Gazette of the SFRY”, No. 29/78, 39/85, 45/89 – decision of the CCY and 57/89, “Official Gazette of the FRY”, No. 31/93, “Official Gazette of Serbia and Montenegro”, No. 1/2003 – Constitutional Charter and “Official Gazette of the Republic of Serbia”, No. 18/2020), however, considering the scope of the matter, it is also regulated by other laws and bylaws on case by case basis.

Indemnity for material damage

Indemnity for material damage can be claimed within 3 years form the day when the injured party became aware of the damage and the tortfeasor (subjective timeline). The injured party’s right to claim indemnity expires in any case within 5 years from the occurrence of the damage (objective timeline). Material damage can occur in the form of general damage or loss of profit. For example, if there is a traffic accident where there is material damage to the vehicle, it will be categorized as general damage. However, if that vehicle is used by the injured party to perform some business activity (taxi, food delivery, etc.), there will be lost profit, since the injured party cannot earn the income that he/she would have otherwise earned if the vehicle had not been damaged. Although the most common form of indemnity is monetary compensation, in certain cases there may also be restitution in kind, which involves repairing the destroyed item or replacing the destroyed item with a new one.

Indemnity of non-material damage

The amount of indemnity for non-material damage is a complex issue that is determined in each specific case, where many criteria for determining the amount of damage are evaluated: age, gender, education, occupation, remaining service until retirement, living conditions, sports and hobbies that the injured person will no longer be able to exercise, intensity of mental disorder, etc.

Indemnity of non-material damage aims to satisfy the injured person, that is, it is an attempt to compensate the injured party with monetary compensation for the suffered pain, fear, reduced life activity and the like. Indemnity for non-material damage can be requested within 3 years from the day when the injured party became aware of the damage and the perpetrator, and in any case within 5 years from the occurrence of the damage. However, in contract to material damage, knowledge of the damage here is not related to the moment when the damage occurred, but to the circumstances related to the duration and termination of physical pain or fear, i.e. to the completion of treatment and the knowledge that there has been permanent damage to health and life activities. Therefore, the statute of limitations runs separately for each form of non-material damage. So, for example, the three-year term for compensation for the fear suffered begins shortly after the harmful event, the moment the fear ceases. However, the claim for damages due to a reduction in general life activity or due to impairment will start much later, when the treatment is completed, i.e. when the reduction in life activity or impairment takes its final form.

Indemnity for non-material damages can be requested for suffered physical pain, suffered fear, mental anguish due to the death of a close person, mental anguish due to reduced life activity, mental anguish due to disfigurement and mental anguish due to particularly severe disability.

It is also important to note that if the health conditions of the injured party significantly deteriorates, it should be considered a new type of damage, regardless of whether it occurs as a consequence of a previously suffered injury, and the term for compensation for that damage begins to run from the day of learning about it.

Periodical payment (annuity)

In addition to the above, damages can also be decided through a periodical payment (annuity, money rent). Money annuity means a form of compensation paid in cases of death, disability , bodily injury or damage to the health of the injured person. This is about future damage, so in the event of death, the annuity will be paid to indirectly injured persons who lost support due to the death of the provider of support. In cases where disability, bodily injury or health damage occurs, money annuity will be paid directly to the injured person due to lost earnings, future medical expenses and third-party help and care allowance.

The court decides on the amount of money annuity and the period of time for which it is paid, and the awarded amounts are paid to the injured party in advance for each month (unless the court decides otherwise). It should be noted here that the amount of the monetary annuity can be changed if there is a significant deterioration in the condition of the injured person, which enables a re-alignment between the severity of the damage and the amount of the annuity.

Other limitation periods and liability for damages

When the damage was caused by a criminal act, and the criminal prosecution has a longer statute of limitations, the claim for damages against the responsible person expires when the statute of limitations for the criminal prosecution expires.

The claim for indemnity for damage caused by the breach of contractual obligation becomes time-barred for the time specified for the limitation of that obligation.

The injured party submits a request for indemnity to the person responsible for the damage, namely the person causing the damage or the person who is obliged to compensate the damage instead of him/her. Thus, parents will be responsible for damage caused by their minor child, the employer will be responsible for the damage caused by an employee to a third party at work or in connection with work, and the guardian will be responsible for damage caused by an incompetent person. Indemnity for damage due to the bite of a stray dog must be compensated by the local self-government, i.e. the city or municipality on whose territory the harmful event occurred. The Republic of Serbia is responsible for damage suffered by third parties, caused by the work of its services in the performance of their functions or in connection with them, as well as for damage that is a consequence of terrorist acts.

Finally, a person can be released from responsibility for damage if he/she proves that there is no causal connection between the damage and the cause that led to the damage, as well as when he/she proves that the damage occurred as a result of force majeure, the sole responsibility of the injured party or a third party.