COVID-19:

Corona pandemic induces state compensation obligations

23 March 2020

Claim for compensation due to event prohibitions and business closures

The numerous officially prescribed measures to control corona infection have largely shut down public life in Germany. Events of any size are prohibited, and businesses that do not offer products of daily use have to close on a temporary basis. The same applies to facilities such as cinemas, theatres, bars or clubs. Many of those affected take these decrees to the edge of their economic existence. In view of the considerable threat posed by the coronavirus and the danger situation derived from it, the chance of successfully taking action against the orders by way of interim legal protection is small. The question of whether the addressees can demand compensation from the state is all the more urgent.

 

Business owners and organizers are considered as non-disturbers (Nichtstörer)

The majority of authorities base their orders on section 28 para. 1 of the German Protection Against Infection Act (Infektionsschutzgesetz - IfSG). If sick individuals, suspected illnesses, suspected infectious diseases or eliminators are detected, the competent authority shall take the necessary protective measures in accordance with this provision to the extent and for as long as necessary to prevent the spread of communicable diseases. In the absence of special provisions, general principles of police and regulatory law should be applied to determine whether the claim induces compensation. According to these, all addressees who are claimed as non-disturbers (Nichtstörer) can claim compensation for adverse effects if the persons actually responsible are not liable. This claim is granted by the police and public laws of the federal states as well as the Federal Police Act (Bundespolizeigesetz) in accordance with section 70 Para. 1 Preuß. PVG. In these cases, the business owners and organisers of major events may be considered as non-disturbers (Nichtstörer): They are not responsible for the infection of uninvolved visitors by visitors infected with the coronavirus, which the authorities have assessed as a danger to the general public. This classification is also in line with the case law of the administrative courts. For example, in a decision of 13 April 2012 (4 Bs 78/12), the higher administrative court of Hamburg approved FC St. Pauli as a non-disturber (Nichtstörer). At that time, the soccer club was officially prohibited from selling tickets to guest fans of Hansa Rostock. The public authorities wanted to prevent expected violent riots in advance.

Compensation is granted based on police and regulatory law, for example in North Rhine-Westphalia, for the financial losses incurred. For loss of profit exceeding the loss of normal earnings or usage fees, and for pecuniary disadvantages which are not directly linked to the measure to be compensated, compensation is only payable if and to the extent that this appears necessary to avert undue hardship. Similar regulations are also found in other federal states.

In individual cases special regulations of the German Protection Against Infection Act (Infektionsschutzgesetz - IfSG) apply

Occasionally, section 16 para. 1 IfSG also appears as the basis for the prohibitions. The problem is that this provision does not actually apply. It allows the authorities to take measures if facts are established which could lead to the occurrence of a communicable disease. The aim is therefore to prevent the first appearance of diseases. Covid-19 has long since passed this stage in Germany. So if the authorities base their measures on section 16 IfRS, they are actually unlawful.

However, addressees can/should leave this unobjected. Indeed, in such cases it would be possible to base compensation on the regulations of the IfRS. Insofar as a measure pursuant to section 16 IfSG induces a not only insignificant pecuniary disadvantage, according to section 65 para. 1 sentence 1 IfSG, compensation shall be paid in the form of money. The federal state in which the damage was caused is obliged to pay. However, as with section 28 IfSG, it is a prerequisite that the claimants are considered to be non-disturbers (Nichtstörer).

Those affected must act quickly

Anyone affected by business closures or event prohibitions should not proceed timidly. Which claims are actually available to those affected should always be assessed with regard to the specific measure. However, as soon as claims for compensation have been determined, they should be submitted in writing at short notice.

Dr. Andreas Graef is also partner at our Cooperationspartner BDO Legal. His main focus of consulting is in the area of public commercial law.