State compensation obligations for Covid-19 control measures

During times of a viral out-break, as we are living today with coronavirus, the government takes measures to protect the public and to minimise the economic and sanitary consequences. When doing so, said measures can lead to damages to property or rights of individuals. 

The patrimonial responsibility of the Administration is based on the fact that the individuals have the right to be compensated by the State for the damages or injuries they suffer in their goods and rights as a consequence of the normal or abnormal functioning of the public services of the Public Administration; except in the cases of force majeure or damages that the individual has the legal duty to bear in accordance with the Law.

In any case, the alleged damage must be effective, economically quantifiable and individualised in relation to a person or group of persons.To be able to claim the mentioned compensation, requirements must be met

Requirements for the Public Administration’s liability to arise state compensation:

  • Evidence of a damaging result.

  • The illegality of the damage or injury, given the qualification of this concept as the conduct of the author being contrary to law, as well as, the person who suffers it not having the legal duty to bear it, a matter that needs to be specified in each specific case.

  • Liability of the Administration for the harmful activity due to the integration of the agent in the administrative organisation to which they belong..

  • The direct and exclusive causal link between the administrative activity and the harmful result. The damage must be the exclusive consequence of the normal or abnormal functioning of a public service or administrative activity. The agent must have acted within their duties.

 

Having learned about the liability of the State, we must ask ourselves whether, in light of the Covid 19 crisis, citizens who are affected in any way by the measures implemented or by any other circumstance can claim such liability. 

The law regulating the liability of public administrations has been proclaiming for years that “no compensation shall be payable for damage arising from facts or circumstances that could not have been foreseen or avoided according to the state of knowledge of the science or technology existing at the time of their occurrence”, regardless of the welfare or economic benefits that may be contemplated for these cases.

That provision of law, could be applicable to the sudden spread of the Covid 19 that we are experiencing in Spain, although some adjustments could be made in this scenario.

The first is that, despite the lack of public responsibility for a matter of this nature, since our authorities cannot put an end to international transmissions of this magnitude, nor prevent their transmission entirely in these initial phases, subsequent failures to prevent them could be potentially reprehensible.

In any case, this negligence should also be presented as serious, notorious and causing a high degree of continuity of the epidemic, circumstances that should still be subjected to the rigorous test of force majeure that usually operates in these areas.

Thus, once COVID-19 infects patients in a public health centre for reasons other than this virus, the issue may have a different legal prognosis.

In these cases, liability may be recognised if the health administration does not prove the adoption of prophylactic or preventive measures to avoid the infection in those patients hospitalized for other pathologies, accrediting compliance with the standard of operation of the health service in each patient.

On the other hand, due to the approval last Saturday of the state of alarm, a number of measures were taken that have been based on different Health Laws. 

The financial effect that these state compensation measures may have on companies

In the coming months countless lawsuits will be filed to determine whether the authorities should respond through the instrument of the liability of the administration to compensate for damages arising from these measures.

Firstly, with regard to the measure concerning the closure of companies, it is doubtful whether it fits in the above-mentioned force majeure scenario. The Administration has exercised its power of health control as a result of a situation that can potentially be described as force majeure, but this does not mean that the damage produced is the result of force majeure.  The coronavirus has not closed any company -it is not a storm or fire that the Administration has not prevented-; they have been closed by direct order of the Administration.

On the other hand, there is the question of the legal duty to bear damages in accordance with the law. The Royal Decree of declaration of the state of alarm has not made any mention of this, nor has it recognised any right to compensation, but, evidently, the legal validity of the right is not conditioned by its recognition in the rule of declaration of the state of alarm.

Another key article is that “The costs of taking precautionary measures […] shall be borne by the person or company liable”, which does not mean that any damage should not be compensated but simply that any costs of, for example, closure are not compensable. Nothing, however, is said about the damage caused to the affected person by the measure, which brings us back to the general rule already mentioned.

How Lexidy can help?

If you think you have suffered damage from the Public Administration given this special situation and you think it is claimable in Lexidy Law Boutique we can help you. Contact us and we will see if your situation is sueable and if you can obtain compensation for the damage suffered.