Civil Liability of the State

Civil Liability of the State

In Iran, as in many other jurisdictions, the concept of state liability is relatively recent. Historically, a prevailing view was that the state enjoyed immunity and could not be pursued for acts it performed.

This approach was aligned with the principle of state sovereignty. Over time, however, increased respect for individual rights and the spread of liberal thought brought that perspective to an end.

Although the notion of state responsibility for harm caused to individuals by its employees and workers was not entirely unfamiliar to Iranian statutory law, its practical application remained limited for many years.

The underlying idea of holding one person responsible for the fault or act of another had already been contemplated in Article 332 of the Iranian Civil Code. In judicial practice, however, interpretation tended to be narrow, and in non-contractual relationships between individuals and the state, courts were less inclined to issue judgments finding the state liable. This was regarded as a significant shortcoming in the legal framework until the enactment of the Civil Liability Act on 27 April 1960, which expressly and, in an unprecedented manner, affirmed the state’s civil liability.

Under this Act, the liability recognized for the state and its public servants is primarily based on the fault principle. This means that an administrative body is liable for errors or faults in the performance of its functions. In exceptional cases, state liability is based on the risk theory, which is why it is sometimes described as liability arising from risk or strict liability. Under this theory, fault is not a condition for liability. Rather, once it is established that the damage is the direct and logical result of a harmful act, meaning that a causal relationship exists between the damage on one side and the act of the direct actor on the other, the direct actor must compensate for the loss.

The sections below address the principal forms of liability attributed to the state.

Jurisprudential and Legal Foundations of the State’s Civil Liability

State Liability Based on Administrative Fault

Definition of Administrative Fault

Article 11 of the Civil Liability Act provides that state civil liability is established when the damage is attributable to the administration itself, not to the personal act of an employee, and related to a deficiency in administrative resources or facilities.

The term “deficiency in administrative resources or facilities” refers to a situation in which the administration lacks appropriate tools, measures, and sound management methods to perform its duties properly. Such deficiencies may result in organizational disorder, malfunctions in administrative processes, and, ultimately, damage. In other words, the administration fails to equip itself with the proper operational structure and disciplined management required for the orderly conduct of public affairs.

Strictly speaking, attributing fault to the administration is not a precise expression, because the administration is not a natural person and lacks an independent will. It is not logically possible for an abstract administrative entity to commit fault in the same manner as an individual.

The fault attributed to the administration is, in reality, ultimately borne by public employees and agents. In the interest of justice and, at times, as a form of accommodation, certain employee faults with a personal dimension are nonetheless attributed to the administrative apparatus, thereby rendering it accountable.

In assessing administrative fault, an important standard should be applied:

If a reasonable, prudent, and foresighted person were placed in the employee’s position and, under the same circumstances, the damage would still have occurred, the administration should be responsible for compensation. This reflects the fact that employees and the administrative apparatus operate as an integrated unit, and that their actions are not readily separable from the administration’s functioning. Consequently, ordinary and customary errors logically fall upon the administrative entity.

Institutions Subject to Civil Liability

Institutions that may bear civil liability include all state and local bodies, namely the state, municipalities, and entities affiliated with them, whether or not such entities possess independent legal personality.

This general rule is derived from Article 11 of the Civil Liability Act.

Scope and Limits of the State’s Civil Liability

State liability arising from administrative fault is not absolute. It applies to losses arising from acts commonly referred to as administrative or proprietary acts. Different rules are contemplated for acts of sovereignty.

The distinction between proprietary and sovereign acts is a traditional doctrine of administrative law, originally developed by French administrative law scholars. Although it once had widespread support, it is now largely outdated even in France. In Iranian law, this distinction was first referenced in the legislation of 4 November 1930.

According to administrative law doctrine, the state performs two categories of acts:

• Acts of sovereignty.
• Proprietary or administrative acts.

Acts of sovereignty are those in which the state acts as a governing authority with supreme power, issuing commands and exercising coercive authority over the public.

These acts are not comparable to acts commonly performed by private persons, and it is not realistic to assume that an individual could perform an equivalent act.

Proprietary or administrative acts are those in which the state does not exercise political power, but rather acts under conditions similar to those applicable to private parties. Such acts are therefore comparable to the conduct of ordinary individuals. Examples include purchase and sale, leasing, mortgage, lending, and similar transactions, which the state performs in its capacity as a legal person responsible for the administration and protection of public assets, interests, and property.

Frequently Asked Questions About the Civil Liability of the State