Compensation from the state for the closure of shops, restaurants and service establishments during the pandemic
The government banned retail sales and the sale of services in establishments by its resolution issued under the crisis law with effect from 14/03/2020 to 24/03/2020. This resolution also lists exceptions to which these prohibitions do not apply. As of March 16, 2020, the government issued a resolution allowing further exceptions to the ban on retail sales and sales of services.
However, with effect from 24/03/2020, the situation changed when bans on retail sales and sales of services in establishments were effectively extended by an extraordinary measure of the Ministry of Health pursuant to the Act on the Protection of Public Health (the government then only took note of this extraordinary measure). The Ministry of Health further extended bans on retail sales and sales of services in establishments through its extraordinary measure until 11 April 2020.
As can be seen from the above description, the situation regarding the closure of shops and establishments is quite complicated. At the same time, the Minister of Finance has a rather negative attitude towards compensation for damages, in such a way that at least the lost profit will not be compensated. It is also speculated that the reason why the closure of shops and establishments from 24/03/2020 is stipulated by an extraordinary measure of the Ministry of Health is an effort to avoid disputes over compensation for damages. The Act on the Protection of Public Health does not contain a provision for compensation for damage caused by an extraordinary measure of the Ministry of Health.
On the contrary, according to the so-called crisis law, the state is obliged to compensate damage to legal entities and natural persons in causal connection with crisis measures according to the crisis law. The state can be released from this responsibility only if it is proven that the victim caused the damage himself. The extent of damage according to the crisis law is not limited so that only actual damage (for example, spoiled goods) has to be paid for. The term ``damage'' generally means actual damage as well as lost profit.
How is it actually with compensation?
The definitive answer to this question would currently be ``council over gold'', however, it may not be so clear-cut that entrepreneurs could not receive damages from the state (possibly including lost profit). It is also possible to argue that even the absence of provisions on compensation for damages in the Act on the Protection of Public Health could be bridged by the fact that these measures of the Ministry of Health were also issued within the framework of a state of emergency and that they were in fact crisis measures.
The courts will make a final decision on the asserted claims. It can be expected that in the coming months these claims will start to be applied by entrepreneurs.
What else should I watch out for if I want to make a claim for damages?
Of course, it is appropriate for the affected entrepreneur to prepare as much evidence as possible to prove his claims and claims. It should also be remembered that the Crisis Act sets time limits for the application of claims - the claim must therefore be made within six months from the moment the injured party became aware of it, but within five years at the latest, otherwise the claim expires. Both of these periods must be running at the time the claim is made.
If possible, it would be advisable to apply this claim within six months of the declaration of the state of emergency, in order to eliminate the risk of possible late application.
Although the crisis management authority may, in cases deserving of special consideration, award compensation even after the deadline for submitting an application or even without submitting an application, but no later than 5 years from the occurrence of the damage, however, such leniency is probably not likely to be counted on. Therefore, it is not advisable to delay too much with the eventual application of the claim.