Disadvantage compensation

Disadvantage compensation

If damage is suffered due to government actions that do not result from a planning decision, the injured party may be eligible for compensation for disadvantage. A right to compensation for disadvantage may arise, for example, in the event that roadworks take place in front of a restaurant, making it more difficult for guests to reach the restaurant.

To receive compensation for disadvantage, a number of conditions must be met. First, it must be unreasonable for the damage to be borne entirely by the injured party. Second, the damage must be disproportionately large. When these conditions are met, the obligation to compensate for the disadvantage arises. A request is submitted to the regional service responsible for claims settlement in the relevant region. If the regional service does not grant the compensation for disadvantage (in full), legal proceedings may be initiated in court. Our lawyers and legal experts are experienced in filing a request for compensation and initiating legal proceedings.

Questions regarding compensation for damages? Contact us.

Compensation for disadvantages within environmental law

Disadvantage compensation is part of Environmental Law. It concerns compensation for damage you suffer as a result of lawful government action: the government is permitted to take the measure, but the consequences must not fall disproportionately on your shoulders. Consider an entrepreneur who loses revenue due to prolonged roadworks, or a company that suffers nuisance from a new infrastructure project. Unlike planning blight , the cause of the damage does not need to stem from a planning decision; it is precisely actual implementation measures that often fall under disadvantage compensation.

At MKB Juristen, lawyers and in-house counsel collaborate on these cases, for both international corporations and the baker on the corner. We assess whether your situation qualifies, substantiate the damages, and, if necessary, conduct proceedings against the administrative body.

Legal framework: Title 4.5 of the General Administrative Law Act and the Environment and Planning Act

The general scheme for compensation for disadvantage is set out in Title 4.5 of the General Administrative Law Act (Articles 4:126 to 4:131 Awb). The core is Article 4:126 Awb: an administrative body awards compensation for damage suffered by the injured party as a result of the lawful exercise of a public law power, insofar as that damage exceeds the normal societal risk and affects the injured party disproportionately severely compared to others. This scheme is based on the égalité: the equality of citizens and businesses regarding public burdens.

Within environmental law, the Environment and Planning Act this regulation. Article 15.1 of the Environment and Planning Act lists exhaustively the causes of damage that can lead to compensation for disadvantage, such as an environmental permit, a project decision, rules with direct effect, and certain customized regulations. If your cause of damage is not listed in that article, there is no entitlement to compensation through this route. In addition, Sections 15.1 and subsequent sections of the Environment and Planning Act contain special provisions that take precedence over the general Administrative Law Act (Awb) regulations.

Conditions for compensation for disadvantage

For a successful request, a number of cumulative conditions must be met:

• Lawful government action that constitutes a cause of damage within the meaning of the law (in the case of environmental damage: included in Article 15.1 of the Environment and Planning Act).
• Abnormal burden: the damage exceeds the normal societal risk or the normal business risk. Consequently, part of the damage remains at the party's own expense; the Administrative Jurisdiction Division of the Council of State accepts that a fixed percentage or flat-rate threshold is deducted.
• Special burden: the damage affects you disproportionately heavily compared to others, such that a limited group of citizens or entrepreneurs is disproportionately burdened.
• Causality: the damage is reasonably attributable to the cause of the damage.

Among other things, indirect damage (damage caused by the mere announcement of a future decision), non-material damage, and damage already insured or compensated in another way are not eligible for compensation. Active and passive acceptance of risk may also preclude compensation.

The procedure: request, objection and appeal

You submit a request for compensation for damages to the responsible administrative body, for example the Municipal Executive (College of Mayor and Aldermen) or the regional service handling the settlement of claims. The requirements regarding the application, the decision period, and the limitation period are regulated in Articles 4:127 to 4:131 of the General Administrative Law Act (Awb). The administrative body makes a decision; if it rejects your request in whole or in part, the usual administrative legal protection is available: first an objection to the administrative body and subsequently an appeal to the District Court, administrative law sector. A careful assessment of damages, substantiated by expert reports, is often decisive in this procedure.

Examples from practice

Disadvantage compensation plays a role in various situations, such as:

• Loss of revenue for a restaurant or shop because the street is closed for months due to roadworks and customers have more difficulty reaching the business.
• Accessibility and collision damage to a company caused by the construction or reconstruction of infrastructure.
• Damage caused by an environmental permit or project decision where the actual consequences disproportionately affect a single undertaking.

Whether it concerns a sole proprietorship or an international group: we assess whether the threshold of normal societal risk is exceeded and whether the damage is special and abnormal enough for compensation. See also our pages on environmental permits and spatial planning.

Frequently asked questions about compensation for disadvantage

What is the difference between disadvantage compensation and planning blight?
Planning blight is damage resulting from a planning decision (such as a zoning plan or environmental plan) and, since the Environment and Planning Act, falls under the broader scheme of disadvantage compensation. Disadvantage compensation is broader: actual, lawful implementation measures such as road works can also lead to compensation.

How much damage will I be compensated for?
Not the full amount. A portion remains at your own expense as a normal societal risk or business risk; only the excess is eligible for compensation. The administrative body and the court often work with a threshold or discount percentage.

To whom do I submit my request?
To the administrative body that caused the damage or that is responsible for settling the claim, usually the municipality or a regional service.

Do I need a lawyer?
It is not mandatory during the objection procedure, but given the legal and financial complexity, professional substantiation is almost always worthwhile. Our lawyers and legal experts guide you through the entire process, from the request to the appeal.

Questions about compensation for damages? Contact us for a no-obligation assessment of your situation.