Law of obligations

The Senate's Civil Cases Department partly annulled a regional court ruling in a dispute where a hospital sought double repayment of a resident doctor's stipend plus late-payment interest after the doctor left early. The case on stipend repayment and interest was sent back to the regional court because the lower courts had misapplied the rules on the duration of a training agreement. The ruling touches on how contractual penalties and default interest apply to training/stipend agreements.

Also reported by: lvportals.lv

On 21 October, the Saeima's Economics Committee gave final-reading approval to a new law on liability for damage caused by defective goods or services. The bill modernises the existing framework for compensating such harm, setting out a clearer procedure for consumers to claim compensation for losses caused by defective products or services.

On 15 October the Saeima adopted in final reading amendments to the Civil Law establishing that animals are living, sentient beings rather than things, while keeping their status as objects of civil law. Property-law rules will apply to animals only insofar as compatible with their nature and animal-protection law, and rules on damage caused by animals are also clarified; the article does not give specific article numbers or an effective date.

LV portāls explains that under Civil Law Article 945, a person who finds someone else's property whose owner is unknown must report the find to the police within a week. The article covers what to do when unclaimed property has been sitting on someone's premises for a long time, how to return property if the owner has died, and the role a sworn bailiff can play in resolving such cases. It also explains how to track inheritance-case notices published in Latvijas Vēstnesis.

On 7 October the official gazette published amendments to the Land Register Law that simplify the streamlined transfer of mortgage loans — registering a pledge will no longer need notarial or guardianship-court certification where the request is signed with a secure electronic signature. The amendments also allow deleting a pledge where the creditor, a legal entity, has been struck from the Enterprise Register for over a year with no successor; the law takes effect 8 January 2027.

The article examines the undefined concept of "changed circumstances" in Section 2108 of the Civil Law as applied to supply contracts, a term the law does not define and which causes interpretive problems in practice.

Amendments adopted by the Saeima in final reading provide that a client may claim the remaining balance of an account closed by a credit or financial institution within five years — after that period the right to claim lapses and the funds pass to the state.

Saeima adopted amendments setting out what happens to money left in bank accounts after a credit institution has ended a client relationship over high risk and closed the account. If the client does not claim the funds within a set period, the claim right lapses and the money becomes state property; the new rules exclude Latvian resident individuals and funds already frozen or seized in criminal or civil proceedings. Industry data put roughly €26.8 million in such accounts; accounts closed before the new rules take effect get a six-month transition period.

The article examines liability for damage caused by a tree that fell during a storm, after a municipality tried to invoke force majeure. Attorney Andris Tauriņš notes the municipality, as a prudent property manager, may be liable if an independent arborist finds the tree was dangerous. The situation could be aggravated if residents had previously complained about the tree and the complaint was ignored.

Citadele Bank announced that for clients declared missing in the Nepal disaster, collection of credit-obligation payments will be suspended and no late fees, contractual penalties or debt-recovery action will be applied until relatives arrange guardianship. To access account information, relatives must first establish temporary guardianship over the missing person's estate.

Swedbank announced that for clients missing in the Nepal disaster, collection of mortgage principal and interest payments will be suspended for 12 months, and credit-card interest and daily fees waived. To access detailed account information and act on the client's behalf, relatives must obtain temporary guardianship through a court, which processes such applications within days.

BB.LV reports that the Latvian Stevedoring Companies Association (LSA) warns that banning transit of Russian and Belarusian grain through Latvia could expose local firms, including state companies, to claims worth hundreds of millions of euros for breach of already-signed contracts. The association calls for assessing the economic and legal consequences before any decision, noting Latvia's infrastructure also carries grain belonging to major international traders, including US companies.

The Riga Regional Court dismissed a claim by former “Mamas D” co-owner Aleksandrs Daderko for more than €711,000, while granting a counterclaim by the now-insolvent company and voiding the underlying agreement; the court found the company owed him nothing over rights to the “Latgales alus D” trademark and ordered him to cover legal costs.

The consultation restates the general rule of Civil Law Article 1779 — everyone must compensate loss caused by their act or omission. It explains that loss includes diminished property, lost profit and other pecuniary consequences of a rights infringement, and such a claim can be brought years later, subject to limitation periods.

Answering a question on recovering burial costs from a medical institution, the consultation explains that only actual and reasonable expenses are recoverable, and the right to choose burial arrangements must be exercised proportionately and in good faith. Courts assess the justification and proportionality of costs case by case.

The article explains that Latvian statutory law does not directly regulate fiduciary transactions, but legal literature and case law recognize fiduciary (trust) ownership. Under it, the settlor transfers rights — property or a claim — to a fiduciary, agreeing that they will be used for the settlor's benefit for a specific purpose, even though formally held in the fiduciary's name.

If a credit or financial institution has terminated its relationship with a client and closed the client's account, the client has five years to exercise their right to the remaining funds — otherwise the claim against the institution lapses and the funds pass to the state.

The piece explains that core terms of risk insurance (property, motor) and life insurance contracts can only be changed by mutual agreement of both parties. Contracts can be ended by written agreement taking effect 15 days after notice, or when the insurable interest lapses or ownership changes. On termination, insurers refund the unused premium minus a 15% administrative deduction.

The subscriber-only article analyses the Supreme Court's 27 May 2026 judgment in case No. SKC-32/2026, which recognised a pledgor's right to claim reimbursement from the principal debtor, on a subrogation basis, after selling the pledged property.

The article explains that before issuing a policy, insurers must identify the client's needs and prepare a proposal detailing covered risks, exclusions, premium and deductible, plus provide the contract terms and a comparable product information document. From 1 July 2026 policies must clearly mark both covered and excluded risks, while a plain-language requirement for terms phases in during 2027-2028.