Basham, Ringe y Correa, S.C.
  March 18, 2005 - Mexico

Federal Civil Liability Law

The Federal Civil Liability Law was published in the Federal Official Gazette on December 31, 2004 and entered into full force and effect in January 1, 2005. This law has as its objective that of determining the bases and proceedings for recognizing the right to claim indemnification by those suffering loss or damage as a consequence of improper actions of the executive, legislative, and judicial branches of the federal government and its agencies. The Law defines improper action as activity that does not have a legal or judicial justification or basis and which causes damage to an individual or company. Acts of God or force majeure are excluded as are unforeseen or inevitable loss or damage. The limitation period is one year from the date of the damage caused or the date when the action objected to stopped, or two years, in the case of physical or psychological injury. To be recoverable, the loss or damage must be real, capable of being reduced to an amount of money, directly suffered by one or more people, and not borne by the population at large. The amount of the indemnity is calculated in accordance with the guidelines established in the federal Expropriation Law, the Federal Tax Code, the National Properties Law, the Federal Labor Law and any other applicable law. It should be borne in mind that in Mexico, indirect, consequential, or punitive damages may not be recovered but rather only those damages which are the immediate and direct result of the offending conduct. The Tax and Administrative Justice Court, a federal administrative tribunal, has jurisdiction to hear claims made under this Law. Amounts payable by way of indemnity are charged to the budget of the federal entity that caused the damage and if the amount budgeted is not sufficient, must be paid from the budget for the subsequent year. An injured party may enter into a settlement agreement with the federal entity responsible for causing the loss or damage. Finally, the federal government may seek recovery of any amount paid from the civil servant responsible for causing the loss or damage.