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Compensation for non-economic damages, the debate over its justification, and the adequacy of compensation awarded for harm to non-economic goods have been contentious issues among domestic legal theorists for decades. The provisions of the 1978 Law on Obligations resolved this debate by introducing the right to monetary compensation for non-economic damages in explicitly enumerated cases. The aim of the authors is to use appropriate scientific methods to demonstrate how failures by state authorities, specifically the police and judicial bodies, can cause non-economic damage to individuals through miscarriages of justice and false imprisonment. Freedom is a fundamental human right, guaranteed by the Constitution, laws, and ratified international documents. This raises the question of how, and to what extent, a wrongful conviction or unlawful deprivation of liberty violates this fundamental right, and what legal remedies are available to the victim. The focus of the paper will be on the legislation of the Republic of Serbia, as well as the views and interpretations in legal theory and in practice regarding the victim’s claim for monetary compensation for harm to non-economic goods, such as reputation and honor.