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The king can do wrong

It used to be accepted that the sovereign is infallible, and questioning the correctness of the sovereign’s decisions was bound to end badly. Today, fortunately for the people, there are instruments for holding the authorities liable for their wrongful acts and omissions.

Poland’s Civil Code of 1964, which recently marked 50 years in force, contained from the very beginning Art. 417, governing the liability of entities of public authority. This article has undergone numerous changes, however, and it no longer must be proved who exactly committed a violation of law. What does this mean for the injured party?

Under current law, the injured party does not have to indicate a specific person who is to blame for a violation that has caused negative consequences for the claimant. The construction of this provision indicates that the State Treasury, territorial governmental unit or legal person exercising public authority pursuant to law is responsible for such actions as for its own actions.

This rule is advantageous for the injured party, as it indicates that the liability of public authorities is not fault-based, and they cannot escape liability by proving they were not at fault. It is sufficient to show that the infringement was contrary to applicable law.

What are entities of public authority?

The catalogue of entities falling within the scope of public authority is quite extensive. Polish constitutional scholars take the view that it includes all entities of a state or local governmental nature equipped with the attribute of power, that is, the right to apply means of compulsion against citizens.

But the case law expands this category to include all entities performing public tasks. As the Supreme Court of Poland held in its judgment of 6 June 2014 (Case III CSK 211/13), “If performance of tasks in the area of public authority is assigned by agreement to a territorial governmental unit or other legal person, the performer of the tasks and the unit of territorial governmental assigning them or the State Treasury bears joint and several liability for injury.”

The range of entities performing functions within the sphere of public authority has also been established in the case law of the Court of Justice of the European Union. The concept of entities acting as an “emanation of the state” was explained by the Court of Justice in Foster (C-188/89), defining it as “A body, whatever its legal form, which has been made responsible, pursuant to a measure adopted by the state, for providing a public service under the control of the state and has for that purpose special powers beyond that which result from the normal rules applicable in relations between individuals.”

Grounds for liability

There are three main conditions for liability of entities of public authority, which must all be met in order to rely on Civil Code Art. 417. They are injury, an unlawful act or omission in exercise of public authority, and a causal connection between the act or omission and the injury.

In describing the first of these conditions—injury—it should be pointed out that this term is not defined in the context of Civil Code Art. 417. Thus the broad notion of injury used in Civil Code Art. 361 §2 should be adopted, comprising two constituent elements: damnum emergens, i.e. the actual loss determined by the reduced value of assets or increased value of liabilities of the injured party, and lucrum cessans, i.e. lost benefit, the inability to achieve potential gains in the future. It should be pointed out, however, that this interpretation applies to injury caused after entry into force of the current Constitution (of 1997). This interpretation was established by the judgment of the Constitutional Tribunal of 23 September 2003 (Case K 20/02). There the tribunal held that certain limitations on the liability of public authorities for existing or potential injury are unconstitutional—thus depriving the public authorities of the possibility of limiting the scope of their liability in damages.

The second condition for liability of entities of public authority is an unlawful act or omission. Unlawfulness arises in terms of public law, not in the sphere of civil relations. The act or omission must occur in connection with the exercise of public authority, or else it cannot be said that there is liability arising in the sphere of public power. “Unlawful” here is not regarded as identical to the notion of “contrary to law,” but is a broader concept. Unlike with the stricter notion of being contrary to law, the injured party need not demonstrate that the act or omission is contrary to positive law, i.e. reduced to the form of various acts of law, but may also show that the act or omission is inconsistent with principles of social coexistence. These principles are much more flexible and give the injured party greater latitude in pursuing claims. Moreover, civil law commentators locate the source of this interpretation in the Constitution itself, which provides in Art. 2 that the Republic of Poland shall implement “principles of social justice.”

The last condition for liability is a causal connection between the other two conditions.

First the court will examine whether there was actually an act (or omission) causing a detriment to the plaintiff. The next step is to determine whether an injury actually occurred. Only after that is the causal connection examined in legal terms. The tort nature of the liability of entities of public authority is apparent in that there is an obligation on the part of the plaintiff, as the person with a legal interest in resolving the case, e.g. by obtaining damages, to prove that all of the conditions for liability are fulfilled. There is an exception for cases involving protection of personal interests (e.g. defamation), where there is a presumption under the code that a violation of personal interests was made unlawfully.

In the context of the conditions for liability of public authorities, it is essential to mention the prerequisite of a preliminary finding (prejudykat), that is, a determination in an appropriate proceeding of the unlawfulness of the action of the public authority. Obtaining a preliminary finding is not required when pursuing redress of injury under Civil Code Art. 417, but it is required when Art. 4171 §§ 1, 2 and 3 are applicable. Thus this applies to a situation where the injury arose as a result of issuance of a normative act, a legally final judicial ruling, or a final administrative decision, or failure to issue a ruling or decision which is required by law to be issued. The condition of obtaining a preliminary finding was introduced into the Civil Code in 2004 when Art. 160 of the Administrative Procedure Code was repealed.

Consequently, liability in damages of the State Treasury and territorial governmental units is regulated quite broadly in the Civil Code. This, in combination with European legislation, provides injured parties the possibility of effectively seeking redress of injury. However, demonstrating this liability and proving the conditions requires the injured party to take the initiative of coming forward with evidence to support the claim.

Mikołaj Kubik, Agata Górska, Reprivatisation Practice, Wardyński & Partners