Why Civil Damages Thailand Courts Award Exclude Punitive Claims
Civil damages Thailand courts award are generally limited to actual monetary loss — punitive and emotional distress claims are barred, except under the 2009 Product Liability Act.As a general rule, civil courts in Thailand limit recovery for contractual breaches and wrongful conduct to the actual monetary damage caused, once a case reaches the appeal stage covered in Part 5 or is resolved at trial. The aim is to put the harmed party in the same financial position they would have been in had the wrongful act not occurred. There is no provision for the recovery of “general” or “additional” damages in Thailand, such as emotional distress or punitive damages. However, there is a recent exception with regard to the latter under the 2009 Product Liability Act, which does permit the court to award limited punitive damages based on, and in addition to, the actual damages.
Contractual parties may provide an exception to this general rule of “actual damages only” by including a liquidated damages provision in their contract. It should be noted, however, that Thai courts have discretion to reduce such liquidated damages if they believe the amount is too high compared to the actual damages caused. Courts may also refuse to enforce such a provision if they believe it is contrary to public policy and/or contravenes other relevant applicable laws, such as the Unfair Contract Terms Act.
Because Thailand is a “free contract” jurisdiction — where parties can agree to any lawful contractual terms — they may also limit their respective liabilities. However, such limitations of liability will almost certainly receive a greater degree of scrutiny by the courts as to their enforceability. For example, contractual terms pre-exonerating a party from fraud or gross negligence are highly unlikely to be enforceable under the Unfair Contract Terms Act.
Understanding these limits on civil damages Thailand courts will award is essential when drafting contracts here — particularly when negotiating liquidated damages clauses or liability caps, since courts retain broad discretion to revise or reject terms they consider excessive or contrary to public policy.