Royal Decree 463/2020, of March 14, declaring a STATE OF ALARM. A YEAR LATER, IS THE STATE PAYING FOR THE DAMAGES?

March 14, 2021, marked one year since the Government of Spain approved Royal Decree 463/2020, of March 14, declaring a state of alarm for the management of the health crisis caused by COVID-19.

For the second time in the history of our recent democracy, a state of alarm was declared, this time with the purpose of tackling coronavirus infections, which increased exponentially in the first half of March, after the World Health Organization declared a pandemic health alert on March 11.

In its preamble, the Government justified this state of alarm in the need to deal with the serious and exceptional situation caused by the pandemic, for which it was necessary to adopt a set of essential, proportionate, extraordinary measures, including, among others, the limitation of wandering on public roads and the suspension of the opening to the public of stores and retail stores, with the exception of the activity declared essential.

This set of measures, which at their best entailed the confinement of the population, was effective until midnight on June 21, 2020, the date on which the sixth extension of this state of alarm ended.

We all know the serious economic consequences that the lockdown had for our companies and businesses, and which in macroeconomic terms led to a 21.6% drop in Gross Domestic Product during the second quarter of 2020.

Many measures have been taken to try to alleviate the consequences: ERTES due to force majeure, ICOs credits, direct or concurrent grants from City Councils and Autonomous Communities, tax deferrals; on March 13, Royal Decree Royal Decree-Law 5/2021, of March 12, was approved on extraordinary measures to support business solvency in response to the COVID-19 pandemic, which designs a new aid program for the affected sectors; even so, this set of grants does not reach fully cover the damage caused.

This causes, a year later, to question whether the decisions taken by the Government were adequate or not, and whether, as a result, the set of losses suffered can be required of the State, especially considering that article 3.2 of Organic Law 4/1981, of June 1, on states of alarm, exception and siege, which develops article 116 of our Constitution, requires that those who have suffered damages directly, or to their property or rights, for acts that are not attributable to them, as a result of the application of the acts and provisions adopted during the term of the latter, in accordance with the provisions of the laws, and which in our law, can take two forms, expropriation or the path of financial liability.

In general terms, by property liability of the administration we can understand the obligation to compensate for damages suffered by citizens in the normal or abnormal functioning of the services provided by public administrations.

Its principles, derived from the Constitution's recognition of this obligation in article 106, and set out in article 32.1 of Law 40/ 2015, of October 1, on the Legal Regime of the Public Sector, are as follows:

• Existence of an event attributable to the Administration, specified in the normal or abnormal functioning of a public service.
• Injury suffered by individuals to their property or rights; unlike injury, injury implies not only that there is property damage, but that it is unlawful, that there is no legal obligation to bear it, and must also be effective, economically evaluable and individualized.
• A causal relationship between the fact and the injury caused, or in other words, that there are objective factors whose absence in hypothesis would have prevented that.
• Absence of force majeure, understood as an extraordinary and inevitable assumption, beyond all expectations. This requirement is reinforced by the provisions of article 34.1 of Law 40/2015, LRJAP, according to which “Damages resulting from events or circumstances that could not have been foreseen or avoided according to the state of knowledge of science or technology existing at the time of their production shall not be compensable, all without prejudice to the assistance or economic benefits that the laws may establish in such cases.”

Once these requirements have been met, responsibility is promoted directly by the interested party, accompanied by the evidence supporting them, giving rise to an administrative procedure/file that must be resolved within six months. Since responsibility for the administration has been expressly denied or because of negative administrative silence, if this period elapses without a response, the path of review by the Courts and Tribunals of administrative litigation is opened, who will ultimately decide.

The deadline for filing the file is one year from the date of the occurrence of the event or act that motivates the compensation, although, in the case of continuing damages, this period begins once the harmful result can be definitively evaluated, which has led the jurisprudence to point out that the statute of limitations for the action for financial liability in this type of case does not begin to be counted until the harmful effects of the causative act cease.

In view of the foregoing, any property claim file whose purpose is compensation for damages suffered by Royal Decree 463/2020, must be intended to prove the assumptions of financial liability.

However, we are not in the presence of an ordinary administrative activity; the causative fact is not purely a public service that has been provided abnormally, or an administrative act, but rather the injury suffered derives directly from a rule, Royal Decree 463/2020, which declares a state of alarm, whose nature is not that of a regulation, despite emanating from the Government, but from a law, a regulatory range that was already recognized by the Constitutional Court in STC 83/2016 (and earlier in ATC 7/2012), in relation to the state of Alarm issued in 2010 due to the air traffic control crisis.

This introduces another element in the requirements to be taken into account in determining the attribution of responsibility to the State, that is, whether a law can give rise to the birth of responsibility, which leads us to consider the so-called patrimonial responsibility of the legislator state.

Although, traditionally, the recognition of property liability for economic injuries caused by law has been denied, since it is a manifestation of the principle of sovereignty, this statement has subsequently been nuanced by the most recent doctrine, and found its legislative expression in article 32.3 and 4 of Law 40/2015, LRJAP, where the following attributions of responsibility can be distinguished:

• Patrimonial liability for legislative acts of a nature that does not expropriate rights that citizens do not have the legal duty to bear, provided that such acts expressly contemplate the possibility of compensation.
• Patrimonial liability for legislative acts declared contrary to the Spanish Constitution. In this case, the deadline to be able to demand it would start from the date of publication of the judgment declaring unconstitutionality.

Finally, to these categories, we should add the rules with the rank of law with materially expropriatory content, against which, if the procedure for compensating the rights is not determined, the administrator may demand liability as an alternative to the request for justification.

Once we have stated the regime that would be applicable to the damages of our case, we cannot deny that the issue is complex enough to affirm that the State must compensate in all cases for the damages caused during the State of Alarm.

As we can see, the viability of this type of file would depend either on the declaration of unconstitutionality of Royal Decree 463/2020, or on the grounds that it is a materially expropriatory rule on the understanding that the decreed closures actually constituted an expropriation of rights, otherwise, since a specific regime had not been established to compensate for injuries caused to property by the state of alarm, the possibility of claiming compensation would be closed.

With regard to unconstitutional procedures, we must not forget that interested parties have their way directly closed, since only the President of the Government, the Ombudsman, fifty Deputies, or fifty Senators are entitled to file an appeal of unconstitutionality, which has not been done in relation to Royal Decree 463/2020.

An alternative would be for the interested party, within the procedure, faced with a hypothetical resolution contrary to recognizing the State's property responsibility, under review before the contentious-administrative jurisdiction, to promote a question of unconstitutionality, the Court accepts it, asks the question to the Constitutional Court and the latter declares the unconstitutionality of the rule. Even so, the approach would have to go through two types of judgments, that of the appropriateness of the matter by the Court responsible for hearing the case, and that of unconstitutionality by the Constitutional Court.

And even so, after all this procedural mess regarding the constitutionality or not of Royal Decree 463/2020, it may happen that the Court understands that the administrator was obliged to bear the damage, or that we are in the presence of an event of force majeure, excluding financial liability, with the included risk that a possible conviction of costs could exist in court for the dismissal of the appeal.

On this last aspect, we cannot lose sight of the Judgment of the Administrative Litigation Chamber of the National High Court, of April 15, 2013, which, in the controllers' strike from December 3 to 5, 2010, confirmed the exclusion of responsibility of the Ministry of Public Works and AENA, considering that force majeure existed since “(...) an absolutely exceptional, serious, unpredictable and inevitable situation, generated in a premeditated and voluntary manner by air traffic controllers with the purpose of collapsing space aerial (...)”.

If this was the pronouncement on an event in which there was a component of voluntariness on the part of a body of officials attached to the administration of the State, in my opinion, it will be much easier for the courts now to wear much of what happened in those days of March and April 2020, because after all, the measures taken to curb a virus that was barely known at the time, were similar in other countries, and confinement became the most immediate way to contain its spread.

As we can see, the degree of complexity in this matter is very high; we cannot conclude that there is a generic attribution of property liability to the State; we must locate the fact causing the damage, verify on a case-by-case basis which administration or power of the State would be responsible, and depending on this, claim through the appropriate channel; on the contrary, it is easy to lend itself to legal debates, which do not benefit the potential victims and from which no categorical conclusion can be drawn.

For this reason, it is essential that the interested party who initiates this type of procedure be advised, and knows their complexity and real viability to bring the claim raised to a successful conclusion, on pain of investing time and money in a procedure, motivated by the need to recover what was lost with the state of alarm a year ago, and of which there is no certainty as to the result.

Hortensio Santos (T&L Attorney)