The issue of unlawful acts and omissions generates some of the greatest controversy in the case law surrounding claims for damages against public authorities. It requires proof from which the court can conclude that a specific act or failure by public bodies was contrary to law.
The regulations in Poland provide for various grounds for claims in damages against public authorities, but they generally share the same prerequisites for the liability of public entities: injury, an unlawful act or omission by the public authority, and a causal connection between the act or omission and the injury.
What is unlawfulness?
In the narrow sense, unlawfulness simply means that the action of a public authority conflicts with universally binding provisions of law (the Constitution, a statute, a ratified treaty, an executive regulation or an act of local law). Conflict with legal norms covers violations of both substantive and procedural law. The conflict with law must be obvious, not requiring a deep legal analysis, and must not be open to varying interpretations.
More broadly, conflict with law is identified with unlawfulness in a civil-law sense, meaning conflict with legal norms as well as principles of social coexistence and fair practice.
Both of these approaches to the premise of inconsistency with the law are found in the case law of the courts and in the legal literature. Proponents of a broad understanding of this notion argue that public officials may exploit their authority in compliance with the regulations but at the same time violate principles of social coexistence. In their view, this can lead to abuse of authority, which in turn would be inconsistent with a sense of social justice. Opponents of this view rely on the literal wording of Art. 417 of the Civil Code and Art. 77 of the Polish Constitution, which is limited to actions “contrary to law.”
In cases seeking damages, the state courts are quite strict when it comes to finding that the actions of public authorities are unlawful. Failure to prove the unlawfulness of an act or omission is the most common grounds for denial of relief in such cases.
The courts often simplify their understanding of this requirement, assuming that an action taken by public authorities on the basis of applicable regulations of law and within the competencies vested in them by the law cannot result in an action contrary to law within the meaning of Civil Code Art. 417 §1. Under this understanding, if for example the prosecutorial authorities are entitled to conduct investigative proceedings and seize items, or for example construction supervision authorities are entitled to issue an order halting construction work, such actions could never result in liability of these public authorities for the resulting injury. This means consequently that citizens must always recognise the authoritative actions of public bodies, accepting and factoring in the risk associated with such actions as values protected by the state.
But this position cannot be entirely accepted. A distinction should be made between actions taken by public authorities within the bounds of their statutory competence and actions taken in violation of the regulations governing their competence.
While the mere exercise of statutory competence is not contrary to law, acts and omissions conflicting with statutory obligations, commands and prohibitions do constitute unlawful actions for purposes of regulations providing for civil liability of public authorities for tortious acts.
Thus it is not the mere exercise of public authority that is unlawful, but exercise of such authority contrary to regulations of law.
Who determines unlawfulness?
The existence of the condition of unlawfulness is confirmed by state authorities, namely the state courts in cases seeking damages, but also by administrative authorities or administrative courts issuing a “predicate” ruling (prejudykat). In simple terms, this means that in some sense the state is the judge of its own actions, as one public authority evaluates the legality of another public authority.
It sometimes happens that the public authority whose act or omission is the subject of the claim for damages is the specific state court itself. That court will also usually be the court with jurisdiction to hear the case for damages and will rule on the correctness of the claim for damages, thus assessing the lawfulness of its own behaviour. This procedure was allowed by the Supreme Court of Poland in its resolution of 11 September 2014 (Case III CZP 66/14), holding that judicial independence and the possibility of recusing the particular judge under Art. 48 ff. of the Civil Procedure Code offer a sufficient safeguard of the rights of the citizen.
Currently it is being debated whether the courts can take into account the financial consequences for the state budget if certain actions of public authorities are found to be unlawful. There is a concern that injured parties may flood the courts with claims against public authorities, limiting the state’s ability to cover those claims. One cause for these concerns is findings by law enforcement authorities and investigative committees suggesting irregularities by public authorities who did not do enough to combat pyramid investment schemes by quasi-banks.
From a theoretical point of view, it seems that when assessing the unlawfulness of the actions of public authorities, the state courts should not regard aspects such as the financial possibilities of the state to be relevant. The court should point out to the public authorities the defectiveness of their actions so they can make corrections and comply with applicable legal standards. In the long term this would also raise citizens’ trust in the state and respect for the law.
But it cannot be ruled out, as indicated already in the legal literature, that a practice taking into account the financial impact on the state will come to predominate in judicial practice. This would be a negative condition for the liability of public authorities, not articulated anywhere in the law but having a major impact on how court decisions are reached. But this would lead to issuance of judicial rulings that are hard for the injured parties to accept and in the longer term would undermine the authority of the state.
Adding insult to injury
A private party asserting claims for damages against the public authorities is often doubly injured: the first time when the act or omission of a state body causes it to suffer a loss, and the second time when its rightful demands are not upheld in the case seeking damages.
This state of affairs results from an overly protective attitude of the legal system in assessing the condition of unlawfulness, but also unfortunately from the fact that in a significant portion of the cases involving claims against public authorities, the courts make factual findings that seem aimed at excluding the possibility of holding the state liable.
Leszek Zatyka, Real Estate, Reprivatisation and Private Client practices, Wardyński & Partners