The State of Emergency and the Liability of the State for Damages under the State Liability Act

The Act on the Liability of the State and the Municipalities for Damages (State Liability Act) regulates the liability of the State for damages incurred by citizens and legal persons, as well as the liability of municipalities. The liability for damages covers injury incurred from administrative activity, from actions of law enforcement bodies, from actions of the judiciary in breach of the right to have one’s case heard and decided within reasonable time, and from violations of European Union law.

The state of emergency in Bulgaria was declared with a decision of the National Assembly from 13 March 2020 for a period of one month until 13 April 2020. The factual basis of the decision was the growing COVID-19 pandemic, and the legal basis – Art. 84, pt. 12 from the Constitution of the Republic of Bulgaria, which establishes the exclusive competence of the legislature in this regard. With its decision from 13 March 2020 the National Assembly assigned the Council of Ministers to take all necessary measures to manage the emergency situation, while taking into consideration Art. 57, para. 3 from the Constitution. This provision is the legal ground for temporarily curtailing certain rights of citizens during a state of emergency with a law, including: the right to life, the prohibition of torture, cruel, inhuman or degrading treatment, and the forcible use of medical and other experimentations, the presumption of innocence, the inviolability of privacy and family life, the prohibition on encroachment on honor, dignity and good name, and freedom of conscience, freedom of thought, and choice of religion.

On the day the state of emergency was declared, the Minister of Health issued an order for instituting anti-epidemic measures on the territory of the whole country until 29 March 2020, which mainly consist of a ban on visiting public places predisposed to large gatherings of people.

On 24 March 2020 the Measures and Actions during the State of Emergency Declared with a Decision of the National Assembly from 13 March 2020 Act (State of Emergency Act) was promulgated. The effect of the State of Emergency Act is limited in time – until the state of emergency is lifted. By way of legislative delegation under Art. 2, the Minister of Health may impose other temporary measures and restrictions set by law, in addition to those under the Health Act.

The State of Emergency Act amends the Health Act and creates new provisions regulating measures such as ordering mandatory isolation of patients, infectious agents, contact persons and persons who have entered the territory of the country from other countries. The types of anti-epidemic measures that the Minister of Health can introduce throughout the country or for a particular region in the event of an emergency epidemic have been expanded. The newly introduced measures are temporary restriction of movement on the territory of the country, temporary suspension or limitation of the operation or mode of operation of public buildings and / or other venues or services provided to citizens, in cases of declared state of emergency.

Persons that have been in contact with patients with infectious diseases are banned from refusing to be tested in order to establish whether they carry an infectious disease.

The order of the Minister of Health from 13 March 2020, which regulates the epidemiological measures imposed due to the state of emergency and aimed at limiting the spread of the COVID-19 infectious disease, has been amended and supplemented multiple times by the introduction of additional measures or by the repeal of some of the measures previously imposed, and by extending the effect of the restrictions for the duration of the state of emergency.

It is precisely those measures that affect in varying degrees the legal sphere of the natural and legal persons that they are addressed to, and the question now arises whether and to what extent there exists the legal possibility for claiming damages as a result from the imposed epidemiological measures. The measures concern the performance of administrative activity, and their implementation by the police authorities, as well as the measures taken by the judiciary to avoid the crowding of many people in court buildings, create grounds to analyze the possibility of holding the State liable under the State Liability Act. The acts, actions and inactions of executive and judiciary bodies during the state of emergency, which are connected to establishing and implementing measures and restrictions, do not fall outside the scope of the State Liability Act.

The anti-epidemic measures are implemented by the Minister of Health and the administrative competence exercised by him would be at the base of the claims for damages under the State Liability Act. Invoking this liability relies on the cumulative existence of the following constitutive elements:

– an unlawful administrative act, action or inaction of a State or municipal authority, carried out during or in connection with the performance of an administrative activity;

– real injury incurred from this act, action or inaction;

– the incurred injury must have a direct and immediate causal link with the unlawful administrative act, action or inaction.

The absence of any one of those constitutive elements of the liability for damages from administrative activity would cause the claim to be considered unfounded.

The specifics of the declared state of emergency and the powers of the Minister of Health under the Health Act at the date of issuance of the order of 13 March 2020, raise the question of the Minister’s competence to impose epidemiological measures not provided for by law at the date of the order. The measures imposed on 13 March 2020 (temporary restriction of movement within the territory of the country, as well as temporary suspension or restriction of the operation or mode of operation of public and / or other venues or services provided to citizens) are included in the powers of the Minister of Health with the amendment of the Health Act, made by the State of Emergency Act, promulgated on 24 March 2020. Given the timeline, this part of the order should be void due to lack of competence. As concerns the specific legal dispute, the court will also have to determine whether the retroactive effect of the Act remedies the lack of competence of the Minister of Health. The court will also have to answer the question whether the retroactive effect laid down in the State of Emergency Act complies with the requirements of the Statutory Instruments Act (SIA), which permits retroactivity in exceptional circumstances concerning substantive rules of law. Retroactivity is inapplicable to rules of law containing sanctions, unless it concerns implementation of new sanctions which are lighter than the revoked ones. The new epidemiological measures introduced by the Health Act in essence constitute restrictions on rights, seeing as such measures did not exist in the Health Act prior to its amendment with the State of Emergency Act. The provision which is the basis for the new anti-epidemic sanction measures does not conform to the exception noted in SIA and it should not be possible to give it retroactive effect as of the date when the Minister of Health imposed the measures. Therefore, it is arguable whether the court would accept that the retroactivity envisioned in the Health Act occurred regarding the newly imposed measure.

In the proceedings during a case for damages, the court will have to assess what kind of administrative act is the issued order, and whether the measures are subject to appeal. At present, court practice for complaints against epidemiological measures under the Health Act consistently accepts that the epidemiological measures themselves are not subject to appeal, whereas the enforced compulsory administrative measures are. Regardless of the fact that the order is for imposing measures, considering the nature of the measures, it should be accepted that the order of the Minister of Health constitutes an administrative act which is subject to review of legality under the Administrative Procedure Code, and not part of a proceedings for enforcing compulsory administrative measures. Considering the contents of the order, it can be regarded as a general administrative act – its legal effects are limited in time and create rights and obligations and directly affect the rights, freedoms or legitimate interests of an indefinite number of persons. In the proceedings for a claim for damages under the State Liability Act, the court will also rule on the legality of the administrative act, and the unlawfulness, respectively the more serious defect – the voidness, are the first prerequisite to successfully prove the claim.

The second prerequisite is an injurious result, i.e. the existence of real injury (material and / or non-material), which occurred to the claimant. The injury can be a loss or loss of profit. Loss occurs when there is reduction to the property of the claimant, and loss of profit occurs when there is loss of a future increase which was certain. Injuries can be material and non-material, the former being proved in size by all admissible means of proof, and the latter determined by the court in equity.

The last constitutive element of liability under the State Liability Act is the existence of a causal link between the unlawful administrative act, action or inaction and the incurred injuries. Court practice accepts that for the purposes of the law, the existence of a mere link is not sufficient, but that is should be direct and immediate. Direct injury is a typical, normally occurring in time and place consequence of the unlawful act, action or inaction.

In the proceedings during a case for damages under the State Liability Act, other questions might arise and demand to be answered, besides the competence of the Minister of Health, the retroactive effect of the amendment to the Health Act, and the kind of act the order is, such as the admissibility of imposing restrictive measures on the basis of a decision by the National Assembly for declaring a state of emergency, and the character of the measures themselves – epidemiologic or compulsory administrative measures.

On the other hand, other acts and actions of administrative bodies and entities carrying out administrative activity unlawfully may also be the basis for liability. Whether in a state of emergency, or not, governmental powers are always exercised on the basis and in the implementation of the law, and when these powers are exercised in conditions of discretionary autonomy, it is done in compliance with the principle of proportionality. The principle of proportionality prohibits an administrative act and its implementation from affecting rights and legitimate interests more than it is necessary for the purpose. When administrative acts interfere with rights or create obligations for citizens or organizations, those measures that are more favorable to them are applied, if they also achieve the purpose of the law. Last but not least, the law obliges administrative bodies to refrain from acts and actions that may cause harm clearly disproportionate to the purpose pursued.