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

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

For the second time in the history of our recent democracy, a state of alarm was decreed, this time in order to stop the coronavirus infections that grew 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 on the need to address the serious and exceptional situation arising from the pandemic, for which it was necessary to adopt a set of essential, proportionate, extraordinary measures, among which were, among others, the limitation to wander on public roads and the suspension of the opening to the public of premises and retail businesses, with the exception of the activity declared essential.

This set of measures, which in its maximum rigor involved the confinement of the population, was in force until 00:00 hours 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 confinement had for our companies and businesses, and that in macroeconomic terms led to a 21.6% drop in Gross Domestic Product during the second quarter of 2020.

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

This makes that, one year later, it is questioned whether or not the decisions taken by the Government were appropriate, and if, consequently, the set of losses suffered can be demanded from the State, more so taking into account that article 3.2 of Organic Law 4/1981, of June 1, 1981, on states of alarm, emergency and siege, which develops article 116 of our Constitution, obliges the State to compensate those who have suffered damages directly, or in their property or rights, due to acts that are not attributable to them, as a consequence of the application of the acts and provisions adopted during the validity of that law, in accordance with the provisions of the laws, and that in our law, it can take two routes, expropriation or patrimonial liability.

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

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

• Existence of an event attributable to the Administration in the normal or abnormal operation of a public service.
• Injury suffered by individuals in their patrimony or rights; unlike damage, the injury implies not only the existence of patrimonial detriment, but also that the same be antijuridical, that is to say, that there is no legal obligation to bear it, and it must also be effective, economically assessable and individualized.
• Causal relationship between the fact and the injury produced, or in other words, the existence of objective factors whose hypothetical non-existence would have prevented the injury.
• Absence of force majeure, understood as an extraordinary and unavoidable event, beyond any foreseeable circumstances. This requirement is reinforced by the provisions of Article 34.1 of Law 40/2015, LRJAP according to which "Damages arising 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 production of those, all without prejudice to the assistance or economic benefits that the laws may establish in such cases, shall not be compensable".

Once these requirements have been fulfilled, the liability is promoted directly by the interested party, accompanied by the evidence supporting the same, giving rise to an administrative proceeding/proceeding that must be resolved within six months. Once the liability has been expressly denied by the administration or by negative administrative silence, if this period elapses without a response, a review by the contentious-administrative Courts and Tribunals is opened, which will decide in the last instance.

The period for filing the claim is one year from the date of the event or act giving rise to the compensation, although, in the case of continuing damages, this period begins when the harmful result can be definitively assessed, which has led case law to indicate that the statute of limitations for the action for financial liability in this type of case does not begin to run until the harmful effects of the causal event have ceased to exist.

In view of the foregoing, the purpose of any claim for compensation for the damages suffered by Royal Decree 463/2020 must be to prove the assumptions of pecuniary liability.

However, we are not in the presence of an activity of the administration without more; the causative event is not strictly speaking a public service that has been provided abnormally, or an administrative act, but the injury suffered derives directly from a regulation, Royal Decree 463/2020, which declares a state of alarm, the nature of which is not that of a regulation, despite emanating from the Government, but of a law, a normative rank that was already recognized by the Constitutional Court in the STC 83/2016 (and already before in the ATC 7/2012), in relation to the state of alarm decreed in 2010 because of the air traffic controllers' crisis.

This introduces another element in the requirements to be taken into account to determine the attribution of liability to the State, i.e., whether a law can give rise to liability, which leads us to consider the so-called patrimonial liability of the legislating State.

Although, traditionally, it was being denied the recognition of the patrimonial liability to the economic injuries caused by law, inasmuch as it is a manifestation of the principle of sovereignty, subsequently such statement has been qualified by the most recent doctrine, and found its legislative embodiment in Article 32.3 and 4 of Law 40/2015, LRJAP, where the following attributions of liability can be distinguished:

• Patrimonial liability for legislative acts of a non-expropriatory nature of rights that citizens have no 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 term to be able to demand it would begin from the date of publication of the judgment declaring the unconstitutionality.

To these categories should be added, finally, the rules with the rank of law with materially expropriatory content, against which, if the procedure for compensation of rights is not determined, the administrator may demand liability as an alternative to the request for an appraisal.

Having set out the regime that would be applicable to the damages in our case, we cannot deny that the issue is sufficiently complex 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 proceedings would depend either on the declaration of unconstitutionality of Royal Decree 463/2020, or on considering that it is a materially expropriatory rule, since the closures decreed really constituted an expropriation of rights, since otherwise, since no specific regime has been established to compensate the damages caused to property by the state of alarm, the possibility of claiming compensation for such damages would be closed.

With regard to the unconstitutionality proceedings, we must not forget that the interested parties have directly closed the way, since only the President of the Government, the Ombudsman, fifty Deputies, or fifty Senators have standing to file an appeal of unconstitutionality within three months of publication, which has not been done in relation to Royal Decree 463/2020.

An alternative would be for the interested party, within the procedure, in the face of a hypothetical resolution contrary to recognizing the State's financial liability, in review before the contentious-administrative jurisdiction, to file a question of unconstitutionality, the Court accepts it, the question is raised before the Constitutional Court and the latter declares the unconstitutionality of the rule. Even so, the approach would have to go through two types of trials, that of procedurality of the question on the part of the Court in charge of hearing the case, and that of unconstitutionality on the part of the Constitutional Court.

And even so, after all this procedural mess about the constitutionality or not of the Royal Decree 463/2020, it could happen that the Court would understand that the defendant had the obligation to bear the damage, or that we are in the presence of a case of force majeure, excluding the patrimonial responsibility, with the risk included that in judicial proceedings there could be an eventual sentence in costs due to the rejection of the appeal.

On this last aspect, we cannot lose sight of the Judgment of the Administrative Chamber of the National Court of Appeals of April 15, 2013, which, in the air traffic controllers' strike of December 3-5, 2010, confirmed the exclusion of liability of the Ministry of Public Works and AENA on the grounds that there was force majeure given that there was "(...) an absolutely exceptional, serious, unforeseeable and unavoidable situation, generated in a premeditated and voluntary manner by the air traffic controllers with the purpose of collapsing the airspace (...)".) an absolutely exceptional, serious, unforeseeable and unavoidable situation, generated in a premeditated and voluntary manner by the air traffic controllers with the purpose of collapsing the airspace (...)".

If this was the pronouncement on an event in which there was a component of voluntariness on the part of a body of civil servants attached to the State administration, in my opinion, it will be much easier for the courts now to dress as force majeure much of what happened in those days of March and April 2020, because after all, the measures taken to curb a virus of which hardly anything was known at the time, were similar in other countries, and the 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 patrimonial liability to the State; it is necessary to locate the event causing the damage, verify case by case which administration or power of the State would be responsible, and based on this, claim through the appropriate channel; on the contrary, it is easy to get involved in legal debates, which do not benefit the possible injured parties and from which no categorical conclusion can be drawn.

Therefore, it is essential that the interested party who initiates this type of procedure be advised and be aware of the complexity and real viability of the same in order to successfully carry out the claim raised, at the risk of investing time and money in a procedure, driven by the need to recover what was lost with the state of alarm of a year ago, and of which there is no certainty as to the result.

Hortensio Santos (T&L Lawyer)