Dr. Riyadh Abu Saida
Faculty of Law – University of Kufa
There is no doubt that the development of the banking along with the emergence of e-banking system and its widespread use has been accompanied by a number of legal problems arising from dealing with this type of banks. Since these banks are based on mechanisms that are substantially different from those of traditional ones, it was natural that some kind of incompatibility between the existing legal texts and the banks would appear as they evolved. This kind of problem refers to the difficulty of determining liability for the damage that may arise between these banks and their customers.
What draws attention to the problem of the bank regarding nodal fault is whether the damage suffered by the costumer was arisen without direct intervention from the bank, such as defect happening in the software (design) or by someone else (Hackers), who hack the customer’s bank account through the Global Information Network (Internet) and manipulates the costumer’s account or invades it through virus which hinders banking transactions and inflicts serious damage on the customer.
Throughout the major part of the 19th century, jurisprudence and judiciary were of the view that the last phrase in the article (1384) does not mean anything special, rather it is a prelude to the two articles (1385) and (1386), that stipulate the responsibility for animals and for building, and that the phrase was explained by these two articles. The result was that the damage to the human being, which was not caused by the animal or the building, but by something else, would be governed by general rules of tort liability that calls for the error, damage and causation to be proved.
The idea of the error, according to which the evolution of tort liability took place, gradually weakened; even in some cases it almost disappeared. Sometimes on the pretext of the fault that is presumably capable to prove the contrary and at other times on the pretext of the fault that is presumably not capable to prove the same, but even it disappeared completely and gave way to the theory of liability (risk).
It seems that jurisprudence is the pioneer of this development. It took lead in the matter and got ahead of judiciary in this field. The judiciary followed the jurisprudence with hesitant steps, and did not want to go to the end of the way, and therefore it stood at the presumed fault, and did not exceed it to the issue of liability that is not primarily based on an error, but on the mere assumption of liability.
The jurisprudence was influenced, in its first response to this development, based on what the Italian positive school says about the substantive theory in the criminal law and the need to rely on the substantive aspect, not on the self, even in the case of criminal himself, he may be punished not because what he deserves for himself, but because the protection of society requires that. And thus the civil law was deemed to be a fertile ground for this theory. Moreover, the jurisprudence noted that the risks of work have increased greatly, which would make it very difficult for the worker to prove the fault on the part of the employer so that he could refer to him with compensation.
If the personal liability is valid in an economic system based on agriculture, only substantive liability is valid in an economic system based on industry and information progress that has taken great strides forward. Therefore, in view of this trend, the liability based on a fault though a presumed one should be considered as the liability free from any fault.
Soon the jurisprudence went through a shift from the substantive theory and stopped moving forward, because of the position of both the legislation and the judiciary in France and returned to the theory of presumed fault. They also did not abide by the theory in its broad and comprehensive meaning, except for a few jurists including Jusran, Demog and Sava Tiye who did that.
French legislation, having defined a narrow scope of substantive theory, remained far from being considered as a general rule and was confined to taking into account the certain aspects of the activity and liabilities arising from them.
The tendency to fix liability without fault is what the jurists and the Muslims said. Islamic jurisprudence does not take the idea of fault in actual acts.
By reviewing the examples and definitions of direct and indirect causation, the study finds that the idea of liability for fault is not mentioned, and instead, it carries the guarantee on those who have inflicted the damage. There is no indication that the Islamic law seeks to judge the guarantee by holding the offender accountable for his act; rather it wants to oblige him to reparation, because his action was a cause of damage.
The sanctity of man and money are sufficient things in view of the Islamic law to hold the person involved in direct and indirect causation without any condition, as Professor Al-Siraj affirms that: And that is not to impose the condition of infringement by the one involved into direct and indirect causation for reparation of the damage; because Islamic jurisprudence does not consider the act being forbidden to itself to implicate the doer, rather it considers the cause for damage, and if it was so it is direct causation, and if the act led to the cause of the damage then it is indirect causation. The element of causation should be there between him and the judgment because the judgment is bound to have a cause affecting its subject and the cause leads to the judgment. And its path has no subject and no influence in it. The act is assigned to the person involved into indirect causation because of the meaning of cause present in it. It can be said that the guarantee of direct and indirect causation is not based on the idea of the causal relationship between the act and the damage. Rather, it is based on the reparations (compensations), which are legitimate to bring about the lost interests, while the reprimand is legitimate to ward off evil.
Article (282) of the Civil Transactions Act states the basis of liability for the harmful act by saying: ((Any damage to third parties obligates its doer even if it is not known to the liability of the damage)). This article states that the general rule is that every act that harms others demands compensation. This rule is based on what is prescribed in the Islamic law, which is expressed by the Code of Judicial Judgments, as it states the rule in the article 19: ((There should be neither harm not reciprocated harm.))
Thus, the study finds that the Civil transactions Act takes the idea of guarantee to the level of the reparation of damages resulting from the harmful act, which is in accordance with the provisions of Islamic law, where the damage occurs in two ways; direct and indirect causation.
The study also finds that the Jordanian Transactions Law has hit the nail on the head, as did the UAE law, and codified the direct causation, as Muslim jurists wanted to make the person involved into direct causation guarantor unconditionally as stipulated in article 257, it came out of the jurisprudence debate on requirement or non-requirement of infringement in the direct causation, and made the person involved into direct causation guarantor whether because of his positive or negative act, and whether he is a literate or illiterate person, whether he recalls things, forget them, or act in his own or any other’s possession, and whether he is small or distinguished, wise or insane, just because he has committed a harmful act that makes it a reason to hold him liable for that. The Jordanian Court of Cassation ruled in more than one case: appropriation of springs’ water by Water Authority which irrigate farmers’ land and its distribution to citizens as drinking water, is infringement as long as it causes the damage and the Water Authority is obliged to compensate those whose land has been damaged. It is clear from this ruling: The water Authority caused the plants to dry because it prevented water from irrigating it which resulted in the damage to the land. Although the Water Authority has used a legitimate right to supply drinking water to citizens, the Court of Cassation has ruled that it should pay for collateral in view of its act that the Court of Cassation considered as an infringement. The same court ruled that any damage to third parties obligates the person involved into the act of damage whether he is involved into direct or indirect causation, to compensate for the damage. It is based on the fact that the person causing the damage is responsible for compensating the damage, whether his act was intentional or unintentional.
It is clear from this provision that non-cassation is a guarantor, whether he is involved directly or indirectly. It goes without saying that as long as the court ruled with a guarantee of non-cassation, it did not refer to the person, but rather considered the act. It can also be drawn from this ruling that intent and fault both are equal in making the person involved in direct causation for compensation, meaning that the guarantee shall be by intentional infringement and unintentional infringement.
The Jordanian Court of Cassation also ruled against the right holder if his right was used in a manner that caused harm to others, even if the person who used his right was authorized to use it. And one of these provisions is (if the distinct body started implementing and operating its mechanisms in a way that caused dust damaging the trees of the plaintiffs, then the damage arising from such act requires the guarantee of the distinct body).
It can also be drawn from these rulings that the court of cassation considers the use of the right; even if it is legitimate, to be an infringement if it is harmful to others or their property, because the infringement can also occurs through the use of the right.
By reviewing the previous rulings, the Court of Cassation seems to focus on the substantive criterion in investigating the same act, whether it fulfills the condition of infringement or not. We have not found any of its rulings that have investigated the perpetrator or his psychological conditions when he committed the harmful act. In this sense, the Court of Cassation investigates the act and stipulates the infringement in the act, not in the perpetrator.
The Court also ruled that intension is not a condition in the act of the person involved into indirect causation and said that the cause might be intentional or wrongful.
The position of the Jordanian and Emirati legislators was sound when they recognized the liability for the person involved into direct, even if his act did not arise intentionally or wrongfully, but merely caused damage. Without that, how can we ask the one who refused to hand over the knife to the owner of the ewe to slaughter her, which resulted in its death. In this context, does not his action cause the damage? Thus, the bank also guarantees any damage to the use of the electronic system because its commitment to the customer is in the sense of cause, so the damage to the customer is a cause like a well digger, who is liable for the damage to the person who fell in the well or like a person, who was thrown by the wind into the well. This is evident in the third condition mentioned by the Jordanian legislator in the article (257/2) and the UAE legislator in the article 283, which is: (The act causes the damage).
As long as the bank is committed towards the customer to preserve his money and secrets, and therefore this obligation requires the meaning of cause and the bank is obliged to guarantee, if it causes damage to the customer as a result of using the electronic system. In addition to that, the application of this concept, the indirect causation of the guarantee to the compensation for customer damage in the bank against the use of the electronic system, reduces the cases of the external cause to which the bank can resort to shirk the liability such as the failure of the electronic system due to a defect in the software or the entry of hackers through the Internet.
The research comes out with a number of conclusions and recommendations, the most important being are:
- Recognizing that there is no difference between civil liability for a fault presumed and material liability cannot help; because the official in the first case is the guard and the official in the second case is the beneficiary and the guard may be useless and vice versa.
- The bank bears the liability of damage to a client as a result of what he does for their banking services without the need to prove his fault as liability is the risk of his profession.
- The bank’s liability would not be discharged in the case of error in the fulfillment of checks for non-beneficiaries due to the use of fake papers, but the bank has the liability of this fulfillment –no matter what should be the degree of mastery of forgery.
- And this is considered a risk of the profession exercised by the bank no matter whatever should be its degree.
- It is necessary that the legislator intervene to introduce a legal framework to ensure adequate protection for parties of electronic banking contracts.
- The research has found that theory of direct and indirect causation is a successful method of positive law (especially the Jordanian Civil Law and UAE Civil Law) at least for guaranteeing the rights of customers in the bank because since its establishment, it was not based on the idea of error or accountability of the perpetrator, but mostly focusing on reparation and safeguarding the rights of individuals. Any harm or damage which is inflicted on the individual is borne by the doer if his act causes the damage or it has the sense of this. And in this way, we can make the bank liable to any damage inflicted on its customers as a result of the use of electronic system in banking transaction. The victim is not required to bear the burden of proving the liability of the bank, and the latter cannot be free of liability on the grounds that it has taken the necessary care to prevent the occurrence of the external cause because he has no control over it. Therefore, keeping in view all of the above, the research recommends the legislator and the judiciary to adopt the theory of direct and indirect causation derived from Islamic jurisprudence both in form and substance. The study recommends the jurisprudence and the interpreters of the civil and statutory law in general to consider the damage as the basis to hold the doer accountable and not the fault, and to work on reparation to any harm or damage, since any harm or damage which is inflicted on the individual is borne by the doer if his act causes the damage or it has the sense of causes.