On 29 January 2013, the Dutch Senate adopted the Act for the Compensation of Loss and Damages for Unlawful Decisions. The Act provides for a supplement to the provisions of the General Administrative Law Act (“Awb”).

In my article “Statutory scheme for compensation of loss under discussion in the Lower House of Parliament” (in Dutch), I described the key aspects of the compensation of loss resulting from administrative decisions scheme (“compensation of loss scheme”) as it was formulated in the original bill. In this article, I will discuss an important amendment compared to the original bill, and describe the basic idea of the scheme for unlawful government acts. Besides, I will briefly touch on the entry into force and the amending legislation required.

Amendment Compared to the Original Bill

The discussion in the Lower House of Parliament has led to an important change regarding the compensation of loss: in order to be able to contest a decision about compensation of loss before the administrative courts, it is no longer required that the cause of the loss itself – the loss-causing decision or the government act – can be appealed against. Thus, the requirement of connexity developed in case law is abandoned. Decisions about loss arising from acts without an intended legal effect, policy rules and generally binding regulations can now also be presented to the administrative court.

Proceedings Commenced by an Application For Unlawful Government Act

A new Title 8.4 will be incorporated in the General Administrative Law Act, concerning damages arising from a an unlawful act. Claims based on unlawful act can be presented to the administrative court through proceedings commenced by an application. It is important to note that such an application cannot relate to all actions of the government; the loss has to be caused by: (1) an unlawful decision; (2) an unlawful act in preparation of a decision; (3) taking a decision late; or (4) an act vis-à-vis – in brief – a civil servant. These acts are all connected to a decision. If it is not possible to appeal against this decision, the administrative court will not be competent to consider the application (Section 8:88 of the Awb).

It is furthermore important that the competence of the administrative court is limited to damages not exceeding €25,000 (Section 8:89 (2) of the Awb). Up to this threshold amount, it is possible to start proceedings with an application before the administrative court, or in the case of a claim based on unlawful act, before the civil court. If the amounts claimed are higher, the claimant will have to go directly to the civil court. However, there is no such freedom of choice if the loss was caused by decisions adjudicated by the civil servants court, the social security court or the tax court. In those cases, irrespective of the loss amount, the competent authority is always the Central Appeals Tribunal or the tax division of the Supreme Court, and the road to the civil court is blocked from now on.

Entry into Force and Amending Legislation

The Act is expected to enter into force on 1 January 2014 at the earliest. Amending legislation is being elaborated at the moment. Provisions about the compensation of loss in special laws, such as the well-known compensation scheme for loss resulting from government planning decisions in the Spatial Planning Act, will be reconciled with the new scheme in the Awb. Other public authorities, such as municipalities, will also have to compare their local compensation of loss schemes to the Awb. A great number of local provisions can probably lapse as a result of the new statutory scheme.