State Compensation Claims in Vietnam: Grounds and Procedures

A land recovery decision revoked because the issuing body lacked authority, a business subjected to coercive enforcement built on expired figures, or a suspect detained and then released when the investigation is discontinued for absence of a crime: the thread running through these stories is damage caused by the exercise of public duty itself. The Law on State Compensation Liability 10/2017/QH14, effective 1 July 2018, is the framework under which injured individuals and organisations claim compensation from the State budget instead of chasing each individual official. This article organises the grounds of liability, the limitation clock, the negotiation procedure at the liable agency and the heads under which damage is quantified.

Three cumulative grounds: unlawful act, actual damage, causal link

Article 7 of Law 10/2017/QH14 fixes three cumulative elements. The first is an unlawful act by a person performing official duties, and that element must be established by a competent written instrument, for instance an effective judgment or decision declaring the act unlawful, a decision annulling an erroneous administrative document, or a decision discontinuing a case because the accused did not commit the offence. The second is actual damage suffered by the claimant, measurable across the property, income, health and mental heads the statute lists. The third is a direct causal relationship between the unlawful act and that damage. Remove any one element and the claim loses its foundation, however plain the sense of unfair treatment may feel.

The statute also draws the perimeter of fields in which the State accepts liability: administrative management, covering administrative decisions and acts, coercive enforcement and the grant or revocation of licences; criminal procedure, covering wrongful cases such as unlawful custody, detention and wrongful judgment enforcement; civil and administrative procedure in listed situations such as wrongful interim emergency measures; and civil and criminal judgment enforcement. Damage caused by the claimant own fault, or by force majeure and urgent necessity that the duty performer could not foresee, falls into the exclusion group. Before drafting anything, a claimant should locate the case in the right cell of that perimeter table, because the competent agency and the procedural route differ by cell.

The three-year limitation period and where the clock starts

Article 33 of Law 10/2017/QH14 sets the limitation period for a compensation claim at three years. The start point depends on the situation: from the day the injured person receives or learns of the instrument establishing the duty performer unlawful act; where no separate instrument exists, from the day the judgment or decision resolving the underlying case takes effect; and for a person still in custody, serving a prison sentence or under an administrative handling measure, from the day of release or of termination of that measure. Periods in which force majeure or an objective obstacle prevented a timely claim are excluded from the count, but the claimant must prove the obstacle. The most common mistake is waiting for a second-level complaint to finish before even starting the compensation file, while the three-year clock has been running since the instrument establishing unlawfulness appeared.

Procedure at the liable agency: acceptance, verification, negotiation, decision

The injured person sends a written claim, with evidence of damage, to the agency directly managing the official who performed the unlawful act; in most administrative and enforcement cases that agency is the compensation-liable body. Within the statutory period after receiving a valid claim, the agency must accept it and notify the claimant in writing, then appoint a handler to verify the damage, gather the related administrative or case files and record a verification minute that grounds the next step. Negotiation is compulsory and is the heart of the procedure: the parties meet to settle whether compensation is payable, the amount under each head of damage, and the form and timing of payment, with the outcome minuted and signed by both sides. On that basis the agency head issues the compensation decision, and funding is disbursed from the State budget under a dedicated allocation mechanism, separate from the agency ordinary operating budget.

If negotiation fails or the agency misses its deadline, the claimant may bring an administrative lawsuit seeking compensation at the competent people court, and the compensation decision itself can likewise be challenged in court. One strategic point deserves emphasis: the evidentiary value of damage proof is at its highest during verification and negotiation, because the court phase still rests on the same financial records, invoices, contracts and medical files filed at the start. Claimants may authorise a lawyer or representative to negotiate on their behalf, and in practice claims drafted with counsel from the request stage settle noticeably closer to provable damage, since each head of loss arrives with documents attached instead of narrative assertions.

Compensable heads of damage and how they are quantified

Articles 26 to 32 of Law 10/2017/QH14 enumerate the heads: damage from infringement of property, computed from the lost or damaged value and restoration costs; actual income lost or reduced during the period the claimant was affected by the unlawful act; health damage, covering medical examination and treatment, rehabilitation, income lost during treatment and carer costs; mental damage, computed at statutory rates by reference to days of custody, detention or wrongful sentence service, or to the degree of harm in administrative cases; damage from death, including funeral expenses and support for persons the deceased was obliged to maintain; and other reasonable costs such as lawyer fees and travel for pursuing the claim within statutory limits.

The quantification discipline throughout is that undocumented damage is rarely accepted in full. Lost income of an employee is proven by the labour contract and payroll; income of a business household must rest on books, tax filings and same-period revenue; medical costs need invoices from the treating facility. For real estate or machinery, an independent valuation report or appraisal conclusion carries far more weight than a self-prepared schedule. After payment, the liable agency must also organise a public apology and correction for wrongfully prosecuted persons in the criminal sphere, and an official at intentional fault, or convicted for the act, must reimburse part or all of the budget outlay under the internal recourse mechanism.

Frequently Asked Questions

When does State compensation liability arise in Vietnam?

Under Article 7 of Law 10/2017/QH14, liability arises when three elements coincide: an unlawful act by a person performing official duties, established by a competent instrument (an effective judgment or decision, or a decision annulling the wrongful administrative document); actual damage suffered by the claimant; and a direct causal link between the two. The scope covers administrative management, criminal procedure, civil and administrative procedure and judgment enforcement in the cases the law lists.

What are the steps to claim State compensation?

The main steps: the injured person files a written claim with damage evidence to the agency directly managing the duty performer; the agency accepts the claim and notifies in writing; an appointed handler verifies the damage on the file; the parties negotiate the amount and method of compensation and minute the outcome; the agency head issues the compensation decision and payment is made from the budget. If negotiation fails or the deadline passes without a decision, the claimant may sue in court.

What is the time limit for a State compensation claim?

The limitation period is three years under Article 33 of Law 10/2017/QH14, running from the day the claimant receives or learns of the instrument establishing the unlawful act; where no separate instrument exists, from the day the judgment or decision resolving the case takes effect; and for a person in custody, serving a sentence or under an administrative measure, from release or termination of the measure. Periods of force majeure or objective obstacle are excluded from the count.

What heads of damage are compensable in a State compensation claim?

Under Articles 26 to 32 of Law 10/2017/QH14, the heads are: damage from infringement of property; actual income lost or reduced; health damage (treatment and rehabilitation costs, income lost during treatment, carer costs); mental damage at statutory rates; damage from death (funeral expenses and dependant support); and other reasonable costs such as lawyer fees and travel within statutory limits. Every head must be supported by documentary evidence.

Reviewed by the Legal Practice Group – FLAT LAW FIRM

This legal analysis has been verified against current Vietnamese regulations and cross-border FDI transaction practices by the attorneys at FLAT LAW FIRM.

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