In May 2025, a weekly magazine published a report alleging that a fight over management control had arisen at the parent company of a well-known English learning center and questioning whether the learning center had transferred the personal data of parents and students to mainland China. The learning center promptly issued a statement clarifying that it was unrelated to the private dispute between the shareholders of its parent company. It further reaffirmed its strict compliance with the Personal Data Protection Act, stating that the report was false, had damaged its business reputation, and that legal action had been taken.[1]
Damage to a company’s reputation arising from various incidents is not uncommon. Where such damage results in a reduction in business turnover, it is undisputed that the company can claim pecuniary damages. What remains controversial, however, is whether a company can claim compensation for invisible, intangible non-pecuniary damage where there is no immediate, concrete monetary loss, but only an impact on its abstract reputation, credit, or brand image.
In the past, the majority of judicial opinions adopted the “negative view.” Under this view, non-pecuniary damage under Taiwan’s Civil Code is deemed to refer to the “mental suffering” experienced by a natural person arising from harm to their reputation, liberty, body, or health. Since a juristic person cannot experience “mental suffering,” it is not entitled to claim compensation for such damage.[2] Nevertheless, a minority of judicial opinions adopted the “affirmative view.”[3]
In response to this long-standing divergence in judicial opinions, the Supreme Court rendered Supreme Court Civil Grand Chamber Ruling No. 112-Tai-Shang-Da-544 (the “Grand Chamber Ruling”) in June 2025, with a view to resolving the controversy. This article will first outline the content of the Grand Chamber Ruling and then provide an overview of how subsequent judicial practice has applied the ruling in individual cases.
I. Supreme Court Civil Grand Chamber Ruling No. 112-Tai-Shang-Da-544
(1) Underlying Facts
The Grand Chamber Ruling consolidated two underlying cases for adjudication. The first case concerned infringement of a juristic person’s reputation arising from non-performance of an obligation. In that case, upstream supplier Company A supplied light bulbs that failed to meet national standards to downstream distributor Company B, causing Company B to recall the defective bulbs from third parties. After the matter was reported by the media, Company B’s business reputation was damaged and it asserted that it was entitled to claim non-pecuniary damages against Company A.[4]
The second case concerned infringement of a juristic person’s reputation through a tort. In that case, taking advantage of Company Y’s status as a Taipei Exchange-listed company, X sent a warning letter without complying with the procedures prescribed in the Fair Trade Commission Disposal Directions (Guidelines) on the Reviewing of Cases Involving Enterprises Issuing Warning Letters for Infringement on Copyright, Trademark, and Patent Rights, and also filed a lawsuit based on an expired patent. As a result, Company Y was required to make a material information disclosure, creating a negative market impression and damaging Company Y’s business reputation. Company Y then filed a lawsuit against X, requesting removal and prevention of the infringement, together with a claim for non-pecuniary damages.[5]
(2) Content of the Ruling
With respect to the legal issue presented in the two cases above—namely, whether a juristic person whose reputation or credit is infringed by a tort or non-performance of an obligation may, under Article 195, forepart of paragraph 1 of the Civil Code, or pursuant to Article 227-1 of the Civil Code applying Article 195 mutatis mutandis, claim a commensurate amount of compensation for non-pecuniary damage suffered (i.e., claim non-pecuniary damages)—the key points of the Grand Chamber Ruling are as follows:
- While the majority of judicial opinions in the past adopted the “negative view,” with reference to the legislative intent and German comparative law, on the ground that juristic persons lack mental suffering, such a view was appropriate in the social context at the time. However, contemporary society has changed significantly in various aspects since the enactment of the relevant provisions. Juristic persons have become increasingly internationalized and diversified in operations, with ever-expanding organizational scale. Damage arising from infringement of their reputation or credit is often far more serious and long-lasting than in the past and could even impact the achievement of their purpose of establishment.
- Swiss law and judgments from France, Japan, and Poland, as well as judgments of the European Court of Human Rights, have largely adopted an affirmative view on this issue, which has increasingly become a global trend.
- Referring to Article 514-8 of the Civil Code (which allows travelers to claim compensation for wasted time),[6] the ruling observed that Taiwan, in line with the development of a civilized society, recognizes “wasted time” as a form of non-pecuniary damage; therefore, “non-pecuniary damage” no longer needs to be closely tied to “mental suffering,” and its scope has expanded alongside societal development.
- Although non-pecuniary damages are limited to those expressly provided by law, the “damages” referred to in Article 18, paragraph 2 of the Civil Code are not expressly limited to pecuniary damage and can be interpreted to include forms of non-pecuniary damages other than solatium, including restoration of the status quo ante and monetary compensation.
- The “reputation” and “credit” referred to in Article 195, forepart of paragraph 1 of the Civil Code are not exclusive to natural persons; juristic persons may also enjoy them.
In order to balance the protection of personality rights with the prevention of frivolous or abusive claims, where a juristic person’s reputation or credit is infringed, it may claim a commensurate amount of compensation under Article 195, paragraph 1 of the Civil Code, subject to the limitation requiring that it has “suffered damage that has a significant impact on the achievement of its purpose of establishment and cannot be quantified in monetary terms.”
II. Dissenting Opinions and Academic Commentary
The Grand Chamber Ruling has not been without dissent. While some commentators generally agree that a juristic person’s business reputation deserves protection, they point out certain deficiencies in the ruling’s rationale and the prerequisite elements it establishes:[7]
- The original legislative intent should not be disregarded. Protection of a juristic person’s business reputation should be achieved through legislative amendment rather than judicial interpretation; otherwise, the principle of separation of powers would be violated.
- The damage arising from “wasted time” under Article 514-8 of the Civil Code does not refer to the objective passage of time, but to damage in terms of “mental distress arising from a traveler’s subjective feeling that their time was fruitlessly spent.”
- When a natural person claims solatium, the degree of mental suffering is merely a factor to be considered in the discretionary determination of damages. It is therefore questionable why a juristic person must have suffered a “significant” impact to be eligible to claim.
- The requirement for “damage that cannot be quantified in monetary terms” is only necessary primarily for a non-profit juristic person. Infringement of the business reputation of a for-profit juristic person can generally be translated into pecuniary damage; as such, this threshold may preclude for-profit companies from satisfying the prerequisite element in specific cases.
III. Subsequent Court Decisions After the Grand Chamber Ruling
To help better understand the specific meaning of “suffered damage that has a significant impact on the achievement of its purpose of establishment and cannot be quantified in monetary terms,” this article provides an overview of several subsequent court decisions rendered after the Grand Chamber Ruling, with a view to outlining how the requirement has been applied in judicial practice.
(1) Claim Allowed: Taiwan High Court Kaohsiung Branch Court Civil Judgment No. 113-Shang-Yi-322
The plaintiff and the defendant signed a cultivation contract under which the plaintiff supplied seedlings for the defendant to cultivate to the agreed specifications. Following a contractual dispute, the defendant posted statements on Facebook groups accusing the plaintiff of “specifically exploiting hard-working farmers like us.” The court held that such statements amounted to a serious allegation against the plaintiff, clearly had a significant impact in relation to its purpose of establishment, and had caused damage that could not be quantified in monetary terms. Accordingly, the court allowed the plaintiff’s claim for non-pecuniary damage, after a discretionary reduction in the amount of damages awarded.
(2) Claim Allowed: Taiwan High Court Civil Judgment No. 114-Shang-Yi-348
The plaintiff operated a well-known clothing brand. The defendant posted on the plaintiff’s Facebook page alleging that the clothing sold by the plaintiff was not designed by the plaintiff, but was instead sold under its own label after rebranding ready-made garments. The court held that such statements undermined public perception of the brand’s clothing and had a significant impact in relation to the brand, trademark, and the plaintiff’s business purpose, and the damage was difficult to quantify in monetary terms. Accordingly, the court allowed the plaintiff’s claim for non-pecuniary damage in full.
(3) Claim Dismissed: Taiwan High Court Judgment No. 113-Shang-Yi-488 and Supreme Court Civil Ruling No. 114-Tai-Shang-2054
The defendant’s reporting damaged the plaintiff’s reputation. A prior court judgment had ordered the defendant to take appropriate measures to restore the plaintiff’s reputation. The plaintiff filed this subsequent lawsuit to pursue a claim for damages. With respect to non-pecuniary damage, the Supreme Court held that the plaintiff was a for-profit juristic person engaged in intermediary services; where its reputation was unlawfully infringed, the resulting damage could not be regarded as damage incapable of monetary quantification. Furthermore, given that the prior judgment had already ordered appropriate measures for the restoration of reputation, it was doubtful whether the plaintiff had “suffered damage that has a significant impact on the achievement of its purpose of establishment and cannot be quantified in monetary terms.” Accordingly, the court dismissed the plaintiff’s claim for non-pecuniary damage.
(4) Claim Dismissed: Taiwan High Court Civil Judgment No. 113-Zhong-Shang-272
The defendants published online articles and videos containing negative news about the plaintiff. With respect to non-pecuniary damage, the court held that, under the definition of non-pecuniary damage to juristic persons established by the Grand Chamber Ruling, most cases arising in foreign jurisdictions would fail to satisfy the applicable standard for such claims, because the damage involved in these cases generally remained capable of monetary quantification, even if difficult to quantify or prove. Although the plaintiff, a for-profit juristic person, argued that its purpose of establishment also included promoting order in real estate transactions and safeguarding transaction security, the evidence submitted showed, at most, that online reports concerning the plaintiff’s negative reputation were likely to impede growth in sales figures. Even assuming that the plaintiff thereby lost opportunities to enter into contracts with potential consumers, such loss still constituted pecuniary damage capable of monetary quantification. Accordingly, the court dismissed the plaintiff’s claim for non-pecuniary damage.
(5) Claim Dismissed: Taiwan Taichung District Court Civil Judgment No. 114-Su-2267
The defendant drove a vehicle into a fitness center operated by the plaintiff. Following the incident, users on an online forum left comments such as “This looks like a strong warning message” and “Better to stay away for a while and just tell the coach I’m taking a break.” With respect to non-pecuniary damage, the court held that the comments, based on their plain meaning, merely reflected suggestions by online users to temporarily avoid visiting the fitness center. None of the comments indicated any intention to request refunds or cancel memberships, nor did any users state that they had intended to join the fitness center but changed their minds because of the incident. Therefore, it was difficult to infer that the trustworthiness of the plaintiff’s fitness center had been impaired in its economic activities. Accordingly, the court dismissed the plaintiff’s claim for non-pecuniary damage.
(6) Claim Dismissed: Taiwan Keelung District Court Civil Judgment No. 112-Su-472
The defendant signed a contract for water-meter reading services with the plaintiff. Because of the defendant’s employee failing to accurately perform meter readings, the plaintiff failed to collect the fees correctly. With respect to non-pecuniary damage, the court held that the plaintiff’s purpose of establishment was to effectively provide adequate and sanitary water supplies to various regions; however, the news reports and customer complaints submitted by the plaintiff did not concern this core purpose and therefore failed to establish that the defendant’s conduct had caused a significant impact in relation to the plaintiff’s purpose of establishment. Accordingly, the court dismissed the plaintiff’s claim for non-pecuniary damage.
(7) Claim Dismissed: Changhua Summary Court Civil Judgment No. 113-Zhang-Jian-338
The plaintiff and the defendant signed a hire-of-work contract, but the defendant failed to produce the semi-finished products according to the agreed quality, resulting in a downstream vendor claiming compensation from the plaintiff. With respect to non-pecuniary damage, the court held that the plaintiff failed to provide evidence of damage beyond the compensation claim itself, such as extensive media coverage, reduced willingness of downstream or partner companies to conduct business with the plaintiff, or a significant decline in business turnover. Nor did it provide evidence of a sufficient causal connection between any damage suffered and the defendant’s conduct. Therefore, the court found it difficult to determine that there was a significant impact in relation to the plaintiff’s purpose of establishment, and accordingly dismissed the plaintiff’s claim for non-pecuniary damage.
IV. Conclusion
While the Grand Chamber Ruling adopted the “affirmative view” in the long-standing debate over whether a juristic person may claim non-pecuniary damage, it imposed a limitation requiring that the juristic person must have suffered damage that has a significant impact on the achievement of its purpose of establishment and cannot be quantified in monetary terms. An overview of the interpretation and application of this ruling in subsequent court decisions shows that, in multiple cases, courts have dismissed claims for non-pecuniary damage brought by for-profit juristic persons on the ground that their damage was capable of monetary quantification. Conversely, in a minority of cases, courts have allowed non-pecuniary claims brought by juristic-person plaintiffs on the grounds that, among other things, the defendants’ conduct amounted to serious allegations or undermined brand perception, thereby having a significant impact in relation to the plaintiffs’ purpose of establishment. Whether judicial practice will adopt a more lenient or stricter threshold for determining juristic persons’ claims for non-pecuniary damage remains to be seen and will require further observation.
This article was co-authored by Gary Kuo, Partner; Natalie Lee, Attorney; and Hung-Yi Yang (Researcher).
If you would like to learn more about laws and regulations and other matters related to this article, please feel free to contact us at gkuo@winklerpartners.com and nlee@winklerpartners.com.
Written on 15 September 2026 by Gary Kuo and Natalie Lee.
[1] TVBS News Network (2025), “False Reporting Severely Damages the Brand—Sesame Village Education Sues Weekly Magazine for Aggravated Defamation! Chairman: No Leniency.” (https://news.tvbs.com.tw/local/2867965).
[2] See, e.g., Supreme Court Civil Precedent No. 62-Tai-Shang-2806, Supreme Court Civil Judgment No. 104-Tai-Shang-599, and Supreme Court Civil Judgment No. 103-Tai-Shang-2434.
[3] See, e.g., Supreme Court Civil Judgment No. 90-Tai-Shang-2026, Supreme Court Civil Judgment No. 90-Tai-Shang-2109, and Supreme Court Civil Judgment No. 99-Tai-Shang-210.
[4] Supreme Court Civil Submission Ruling No. 112-Tai-Shang-544.
[5] Supreme Court Civil Ruling No. 110-Tai-Shang-580.
[6] Article 514-8 of the Civil Code: “If, owing to circumstances for which the tour operator is responsible, the tour does not proceed according to the agreed itinerary, the traveler may, in respect of their wasted time, claim a commensurate amount of compensation calculated on a daily basis. However, the daily amount of such compensation shall not exceed the average daily amount of the total tour fees received by the tour operator.”
[7] See Ta-Liang Wei’s Dissenting Opinion on Supreme Court Civil Grand Chamber Ruling No. 112-Tai-Shang-Da-544; Bao-Tang Li and Chun-Hui Zheng’s Partially Dissenting Opinion on Supreme Court Civil Grand Chamber Ruling No. 112-Tai-Shang-Da-544; Yun-Chi Chang (2025), “Damages for Infringement of Business Reputation—Also Discussing Compensation for ‘Fūhyōhigai’ (Reputational Harm Caused by Rumors),” The Taiwan Law Review, Issue 364, p. 44.