Comment On Offsetting Benefits

Victims suffering damages and gaining benefits from it occurs frequently,offsetting benefits requires to deduct benefits from the compensation.This thesis is to research the application of offsetting benefits.There are few detailed provisions about offsetting benefits in China's current law,only the Supreme People's Court has issued scattered provisions in its reply,guiding opinions and judicial interpretations.However,the reply is only an explanation of medical compensation and employee's unit's subsidy in specific case,and there has not developed a unified document,so it can't be applied universally.Therefore,the legislation on offsetting benefits in tort law is blank.And although it is clear in the guiding opinions and judicial interpretations that offsetting benefits is applicable to calculate the loss of possible gains and compensation for breach of contract,these provisions are still relatively broad.There are many cases about offsetting benefits in judicial practice,but due to the lack of clear guidance of law,it inevitably leads to the confusion of the application of law and the inconsistency of judgments.Offsetting benefits originates from that the victim is forbidden to obtain benefits from damages,thus there is dispute between “balance” and “prohibition of benefits”.In fact,the two theories don't have any difference in essence,except that the former focuses on the change of the victim's overall property,while the latter emphasizes the victim can't obtain compensation beyond damages.Both theories can provide justification for the application of the rule.The lack of legislation,theoretical disputes and the inconsistency of judgments all highlight the significance of research on offsetting benefits.Firstly,about the constitutive elements,it includes the establishment of claim for compensation,the victim's benefits,adequate causation between benefits and damages,and the application of offsetting benefits conforms to the purpose of norms.Among these,the key criterion is the causation between benefit and damage.On the judgment of causation,there are “homology” and “adequate causation”.The former emphasizes damages and benefits must be caused by the same incident,which is too strict and narrow.The latter holds that benefits can be deducted as long as there is adequate causation.Adequate causation is based on the promotion of the possibility of the outcome of the behavior,which can be in line with the general concept of society.But it also has flaws,there exist many benefits which have adequate causation but aren't suitable to be deducted.Hence the purpose of norms came into being.The core is whether the purpose of obtaining benefits and compensating are the same,only when the intention of the norm or the contract is to let the injurer enjoy benefits,can offsetting benefits be applied.Adequate causation and the purpose of norms can coexist to decide whether offsetting benefits is applicable.Typological research is actually important,according to the sources of benefits,cases can be distinguished as:Firstly,benefits arising from third party's payments,including bestowal and insurance.For the purpose of payments,offsetting benefits isn't applicable in bestowal.Claim for insurance and compensation are caused by the same fact,that is,the victim suffers damages and claims for insurance because of tort.Offsetting benefits isn't applicable in social security,because it has the nature of salvage.However,there exist big controversies about basic medical insurance and work injury insurance.Based on the purpose of norms,offsetting benefits isn't applicable in both.About commercial insurance,the insurer of property insurance enjoys subrogation,the reason for deducting insurance is subrogation rather than offsetting benefits.But in life insurance,the insurer doesn't have subrogation and offsetting benefits isn't applicable.As one kind of property insurance,liability insurance takes the liability of the insured,the compensation the victim obtained is part of the liability of the insured to the victim,rather than newly generated,so offsetting benefits isn't applicable.Secondly,benefits arising from the victim's behavior,including from derogatory behavior and beyond derogatory obligation.Since the latter has no causation with damages,it should be acquired by the victim,so offsetting benefits isn't applicable.As for the former,as there is no adequate causation,and the purpose of derogation is avoiding the waste of social resources,offsetting benefits isn't applicable.Thirdly,benefits arising from neither third party's payments nor the victim's behavior.As benefits are generated from damages itself,so it is no doubt to apply offsetting benefits.What is disputed is whether residual value and balance between old and new and income tax can be deducted.Since the value of new object is greater than the old,people are more willing to accept the new in general,thus offsetting benefits is applicable.As residual value is only a continuation of original object,it doesn't belong to newly generated benefits,offsetting benefits isn't applicable.However,the court takes net loss in determining damages,so residual value should be deducted.But the realization of the residual is risky,so the victim can choose to keep the residual and claim the balance of compensation or hand over it and claim a new object.And income tax can be deducted.Lastly,benefits arising from objective circumstances.Neither from the causation nor the purpose of norms,offsetting benefits isn't applicable.