The provisions of the Administrative Procedure Code amended on 11 August 2021 regarding the time limits for invalidating administrative decisions or finding that they were issued unlawfully will come into force on 16 September 2021. What are the real consequences of this amendment? They seem inconsistent with the pronouncements of Poland’s highest state authorities.
A great deal was said and written about this amendment and its context long before it was adopted (we wrote about it in Rzeczpospolita in connection with the judgment of the Constitutional Tribunal of 2015), in the course of legislative work (as part of which our law firm prepared an expert opinion for the Senate), and in the Sejm’s final consideration of the Senate’s amendments (Stefan Jacyno wrote about this on Prawo.pl in light of the history of reprivatisation claims). Despite widespread opposition from a group of experts and institutions, the Sejm passed the bill without the key amendments proposed by the Senate.
In the end, the act of 11 August 2021 has caused a lot of controversy not only in Poland but also in the international community. The main reason is the drastic limitations on pursuing reprivatisation claims introduced by the amendment, excluding both the return of property in kind and the possibility of obtaining compensation in civil proceedings.
This last consequence has been denied in numerous statements by the highest representatives of the executive branch (the President, the Prime Minister, and the Minister of Justice), although that position finds no support in legislation, case law or legal literature. Therefore, leaving aside the history and validity of the amendment, it is necessary to clarify what is known about the effects of the amended provisions of the Administrative Procedure Code.
The amendment legalises communist lawlessness
The changes introduced in the Administrative Procedure Code refer to the regulations providing for a procedure for verifying compliance of administrative decisions with the law in terms of the most significant potential breaches, both substantive and procedural. The amended provisions exclude the possibility of reviewing the legality of decisions more than 30 years after their delivery or announcement.
The code regulations in question are general and apply to all administrative decisions issued in various proceedings. But in practice, in the context of reprivatisation and taking into account the current timeframe, the amendment is tantamount to legalisation of all cases of breach of the law (then in force) when issuing administrative decisions in communist times. Thus, the amendment leads to legalisation of communist lawlessness across the board in the administrative-law sphere due to the exclusion from 16 September 2021 onward of any form of legal review in this regard.
The amendment does not implement the judgment of the Constitutional Tribunal of 2015 and distorts its meaning
In response to every manifestation of criticism, the proponents of the changes pointed out that the amendment implements the obligation to amend the Administrative Procedure Code imposed on the parliament in the judgment of the Constitutional Tribunal of 12 May 2015 (case no. P 46/13). Indeed, in that judgment, the Constitutional Tribunal indicated the broad unconstitutionality of one of the questioned provisions of the Administrative Procedure Code and ordered a relevant amendment to be implemented. However, in many respects the amendment goes beyond the framework outlined in the 2015 judgment and distorts the conclusions and meaning of that judgment.
The tribunal’s decision was based on a reprivatisation case in which, after more than 60 years, the authorities sought to invalidate a decision (objectively unlawful) from the 1940s restoring the former owners’ right to the return of their Warsaw property. In 2015, in line with the principles of permanence of administrative decisions and protection of vested rights, the Constitutional Tribunal held that the absence of any time limitation to request the annulment of final decisions granting a party a right or expectancy is unconstitutional. In other words, to protect the reprivatisation claims of heirs of former owners of a Warsaw property, the tribunal held that the legal system should provide for a time limit for invalidating an objectively unlawful decision, provided that such a decision is the basis for granting a party a right or entitlement.
In the operative part of its ruling, the tribunal indicated the categories of decisions for which the parliament should introduce time limits: decisions granting parties a right or expectancy. Therefore, the tribunal was not concerned with a general ban on invalidating any and all decisions after a certain period, but only with protecting the permanence of a specific category of administrative decisions. Significantly, the administrative decisions constituting the basis for taking of property during the communist era were a completely opposite category of decisions, as they deprived citizens of rights or expectancies (or refused to grant them). Thus, in line with the holding of the Constitutional Tribunal, the Administrative Procedure Code should allow for invalidation of such decisions without any time limit, while temporarily protecting only those that are the basis for acquisition of rights or expectancies.
However, the main purpose of the amendment (particularly stressed by the proponents) is to protect decisions unlawfully depriving owners of their property. For this reason alone, the amendment distorts the meaning of the judgment of the Constitutional Tribunal of 2015, as the amended provisions refer to all types of administrative decisions and do not take into account the unambiguous indication of the protected category of decisions in the tribunal’s holding. In this paradoxical way, the judgment of the Constitutional Tribunal which in 2015 ensured the protection of vested reprivatisation rights was used by the parliament to create a regulation to eliminate those rights.
Moreover, when the 30-year period expires, the parliament excluded the possibility of confirming the issuance of an administrative decision in breach of law, if for various reasons it was not subject to invalidation. Such findings will be referred to later in this article, but importantly, the Constitutional Tribunal did not in any way refer to this type of controlling decision in the judgment of 2015, and to this extent the amendment clearly oversteps the bounds of the tribunal’s ruling.
No more return of real property if it was taken based on an administrative decision from more than 10 years ago
The amended provisions of the Administrative Procedure Code (Art. 156 and 158) constitute the legal basis for the mechanism of property restitution in Poland in all cases where property was taken by the state after the Second World War based on an administrative decision. Declaring an administrative decision invalid results in its elimination from legal circulation, together with all its legal effects, with retroactive effect, as if it had never been issued. In other words, in legal terms, invalidation of an administrative decision returns to the time before that decision was issued. By the same token, the invalidation of an administrative decision (i.e. eliminating the decision from legal circulation with retroactive effect) opens the way to recover the seized property in kind, or if at a later stage of the case it proves impossible to return the property for various reasons, it allows compensation to be sought in civil proceedings.
The amendment excluded the possibility to declare a decision invalid if 10 years has passed since its delivery or announcement. Thus, as of 16 September 2021, it will not be possible to recover property in kind if the basis for its seizure was an administrative decision delivered or announced more than 10 years ago, which naturally excludes the return of property taken during the communist era, but also property taken in the course of enfranchisement of the post-communist nomenklatura of the 1990s, de facto legalising this widely criticised practice.
Lack of grounds for obtaining compensation for property taken on the basis of an administrative decision more than 30 years ago
Declaring an administrative decision invalid is not always a justified solution, and therefore, the amended Art. 156 §2 of the Administrative Procedure Code excludes a ruling invalidating an administrative decision:
- If it has produced irreversible legal effects (this refers to legal effects that cannot be nullified through administrative proceedings, e.g. acquisition of real property in good faith, which can only be raised through proceedings before a civil court), or
- If 10 years has passed since the defective administrative decision was delivered or announced.
In such cases, in proceedings to pronounce a decision invalid, it can only be established that the defective administrative decision was issued in breach of the law.
A declaration that a defective decision was issued in breach of law does not lead to elimination of the defective decision from legal circulation with retroactive effect, and preserves all legal effects produced by the defective administrative decision. At the same time, ascertaining that an administrative decision was issued in breach of law (i.e. formal confirmation of the unlawfulness of a defective administrative decision, with the administrative decision remaining in legal circulation and preserving all the legal effects it has produced) makes it possible to seek damages in civil proceedings.
Obtaining compensation from the state in a civil court for property seized after the war by virtue of an administrative decision is possible under the first sentence of Civil Code Art. 4171 §2. Pursuant to this provision, if an injury was caused by issuance of a final and binding judgment or an unappealable decision, redress may be demanded after its unlawfulness is established in appropriate proceedings, unless separate provisions stipulate otherwise.
Thus, this provision requires a qualified form as the source of injury, which must be a final and binding court judgment or a final and binding administrative decision whose unlawfulness has been established in appropriate proceedings. In other words, Civil Code Art. 4171 §2 imposes an obligation on injured parties to obtain a predicate ruling (prejudykat) confirming the unlawfulness of the ruling or decision causing the injury, before applying to the court for redress.
Under that section of the Civil Code, a predicate ruling with regard to administrative decisions may be:
- A declaration that the decision is invalid
- A declaration that the decision was issued in breach of law
- Resumption of the administrative procedure concluded by the defective decision
- A ruling of the administrative court finding the administrative decision defective.
For formal reasons (i.e. grounds and time limits for resumption of administrative proceedings or filing a complaint with an administrative court), declaring an administrative decision which was the basis for the state to seize property after the war to be in breach of law is currently feasible only under the provisions of the Administrative Procedure Code regarding invalidity proceedings. Thus, for purposes of this provision of the Civil Code, in cases for compensation for property taken after the war by virtue of an administrative decision, the predicate ruling will be a declaration that the decision is invalid or that it was issued in breach of law.
Applying to the civil court for compensation for property taken after the war on the basis of an administrative decision without first obtaining a declaration of its invalidity or a declaration that it was issued in breach of law will result in dismissal of the legal action at a very early stage, and, as a result, forfeiture of the court fee. Therefore, the lack of an appropriate predicate ruling in the form of a declaration of the invalidity of an administrative decision or that it was issued in breach of law in practice precludes obtaining compensation.
In the context of decisions issued in the communist era, the changes to the Administrative Procedure Code make it impossible to obtain a declaration of the invalidity of an administrative decision or that the administrative decision was issued in breach of law if 30 years has passed since the decision was delivered or announced. By the same token, the amendment precludes obtaining the predicate ruling required under Art. 4171 § 2 of the Civil Code to seek compensation for injury caused by defective administrative decisions when more than 30 years has passed since their delivery or announcement. It will also be impossible to obtain such a predicate ruling in pending administrative proceedings if they were initiated more than 30 years after delivery or announcement of the defective administrative decision, as those proceedings will be discontinued by operation of law.
The amendment does not directly change the rules regarding the ability to file civil actions for damages. However, due to the impossibility of obtaining a predicate ruling for the purposes of Civil Code Art. 4171 §2, any legal action seeking compensation for the seizure of property by the state during the communist era in Poland by virtue of an administrative decision will run a high risk of being dismissed at a very early stage of the proceeding, which will also result in loss of the court fee.
Thus, although the amendment does not directly block the filing of civil suits for compensation in such cases, it renders such suits completely ineffective, which is in direct conflict with Art. 77 of the Polish Constitution, which guarantees everyone the right to compensation for injury caused to them by unlawful action of a public authority and introduces a ban on statutory foreclosure of the judicial path to pursue redress for infringement of rights or freedoms.
Contrary to groundless declarations of the highest representatives of the executive branch, the amendment to the Administrative Procedure Code deprives entitled persons of the possibility to claim restitution or compensation for property illegally taken during the communist era. The changes eliminate the previously functioning mechanism of pursuing reprivatisation claims in Poland for property seized after the war on the basis of administrative decisions, which, in the opinion of the European Court of Human Rights, was an available and feasible legal path for victims.
Since it applies to pending cases, such a sudden and drastic removal of this mechanism may give rise to numerous complaints against Poland before the European Court of Human Rights. Moreover, doubts as to the legitimacy of the amendment to the Administrative Procedure Code were also expressed by the Ombudsman, who is considering initiating a proceeding for review of the constitutionality of the amendment.
Thus, the legal successors of former owners of the property illegally taken during the communist era are again left to wait for the legal situation to develop. In the meantime, as lawyers representing the legal successors of former owners, we will be looking for new possibilities, not explored so far in the case law, to pursue compensation claims in the lower courts and in the Supreme Court, to make good on the claims by the highest officials of the executive branch that obtaining compensation in civil courts will still be possible.
Krzysztof Wiktor, attorney-at-law, Dr Radosław Wiśniewski, adwokat, Reprivatisation practice, Private Client practice, Wardyński & Partners