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Coronadvice 13 – What we think about the state compensation

28/03/2020

Due to the coronavirus pandemic and the emergency measures taken, it is possible to claim damages from the state. Given the information currently appearing in the media, many clients ask us if it makes any sense at all. In our opinion, the state has a strict liability for damages caused by the emergency measures taken by the Ministry of Health this week.


The procedure can be summarized to following steps:
a) the documentation of damage and its extent, supported by accounting or other documents
b) an explanation of the context in which the damage has occurred, and why it would not have occurred without these measures
c) consulting with lawyers, and finalizing the grounds
d) claiming damages from the competent authority
e) if the application is not granted or is not answered, it is possible to bring an action against the State


What exactly is included under the “documentation of damage and its extent, supported by accounting or other documents”?


- Create an statement of income projections, i.e. income that was expected (contracted) but subsequently cancelled. Each planned income item needs to be supported by a contract or communication that implies there was an agreement between the parties, and a communication showing that it was not performed and why it was not performed. If a deposit has been made, or a prepayment received, record how much has been refunded to the other party and how much is the expected loss of income.

- Create an overview of the operating or closure expenditures incurred as a result of the coronavirus measures. These can be costs related to employees, rent, supplier or material expenses.


- The expenses are required to be supported by contracts or invoices. Since the legal restrictions continue to evolve over the past few weeks, it is also important to list when the damage occurred:
a) before the announcement of the emergency state on 12 March 2020 (14:00),
b) from 12. 3. 2020 (14:00) to 24. 3. 2020 (6:00),
c) from 24. 3. 2020 (06.00) to 27. 3. 2020 (06.00),
d) after 27 March 2020 (6:00).


Think about how to prove what income you usually have and what income you would expect in a pandemic situation if the government did not take emergency measures. It is likely that the number of clients would still be lower than if there was no pandemic.


This situation is highly uncertain, and legal opinions on damages differ widely. Therefore, nothing can be considered certain. In our opinion, one who does not try anything will certainly get nothing. There is no need to wait until the end of the state of emergency to file a claim.