Government Liability in the Netherlands

Dutch authorities cause loss in two very different ways: by acting unlawfully, and by acting lawfully in a way that loads a disproportionate share of a public burden onto one party. Each has its own route, and the choice decides where you file and what you must prove. Since 1 January 2023, when Title 4.5 of the Algemene wet bestuursrecht (Awb) entered into force, the second route has a statutory basis of its own, and since 1 January 2024 planning damage has moved from the Wet ruimtelijke ordening (Wro) to the Omgevingswet.

Two routes, and why the difference matters

The first route is tort. If an authority takes a decision later annulled, or acts unlawfully in fact, the loss is recoverable as damage from an onrechtmatige daad: unlawfulness, attributability, causation, loss — with full compensation in principle.

The second is nadeelcompensatie: compensation for lawful conduct, resting on the égalité devant les charges publiques principle codified in art. 4:126 Awb. An authority that, in the lawful exercise of its public power or task, causes damage exceeding the normal social risk and affecting one party disproportionately compared with others must compensate that party on request. Recovery is never full: a slice of the loss stays with the claimant by design. The routes are not alternatives you may pick freely — they follow the character of the act.

Route one: damages for an unlawful decision

Annulment settles unlawfulness and fault

Once a decision has been annulled by the administrative court, it is unlawful towards the addressee and fault (schuld) is in principle given: the authority cannot escape by pleading good faith or a defensible reading of the law (HR 31 May 1991, ECLI:NL:HR:1991:ZC0261, Van Gog/Nederweert). Withdrawal because the decision was wrong, or an express acknowledgment of unlawfulness, has the same effect. The fight is therefore rarely about wrongdoing; it is about causation and quantum.

Causation is where these claims are won or lost

The standard defence is that the loss would have occurred anyway. If the annulment was for a procedural defect and the authority could lawfully have reached the same negative outcome, there is no causal link and no damages. If the only lawful outcome was a grant, the loss from the refusal or delay is recoverable. Everything turns on reconstructing the lawful decision that should have been made.

Administrative court or civil court

Title 8.4 Awb gives the administrative court its own power to award damages. Under art. 8:88 Awb it may order compensation for loss caused by an unlawful decision, an unlawful act preparing a decision, or a failure to decide in time. Art. 8:89 Awb splits competence: exclusive to the administrative court where the underlying decision falls to the Centrale Raad van Beroep or the tax chamber of the Supreme Court, and otherwise only where the compensation sought is at most €25,000 including interest to the day of the request. Above that, the civil court decides. The threshold follows the amount requested, not the total loss, so a claimant may cap a claim to stay in that forum.

The request is made in writing under art. 8:90 Awb, and at least eight weeks earlier the interested party must have asked the authority to pay. Both forums cannot run on the same claim.

For commercial claims the civil court is usually the right venue: losses from a refused permit or an unlawful closure order comfortably exceed €25,000. It offers full evidentiary procedure and expert appointment, at the price of cost exposure and pace; the administrative route is quicker, cheaper and attaches to the appeal already running.

The finality trap: what happens if you did not appeal

This catches foreign companies more than anything else here. If a decision was open to objection and appeal and you let the period lapse, it becomes final (onherroepelijk), and formele rechtskracht requires the civil court to treat it as lawful in content and preparation. You cannot later sue on the footing that the permit should have been granted. The authority is HR 16 May 1986, ECLI:NL:HR:1986:AC9347 (Heesch/Van de Akker), which supplies the narrow escape: the rule may yield where additional circumstances of sufficient weight exist, such as the authority misleading the party about the route open to it.

Those exceptions rarely succeed. The judgement that “the appeal is not worth the fees” is therefore not neutral: it usually extinguishes the damages claim too. Lodge the objection within six weeks, even if you intend to negotiate in parallel. Note the contrast with nadeelcompensatie, where finality is not an obstacle but a precondition.

Nadeelcompensatie under Title 4.5 Awb

Before Title 4.5 Awb entered into force on 1 January 2023 this was a patchwork: separate schemes in the Wro, water and infrastructure statutes, dozens of local regulations, and the unwritten égalité principle filling the gaps. Title 4.5 Awb replaced it with one regime for all authorities, covering lawful decisions and lawful factual conduct alike.

The conditions

Art. 4:126 Awb sets two cumulative requirements. The abnormal burden (abnormale last) requires loss going beyond the normal social or business risk. The special burden (speciale last) requires the claimant to be hit disproportionately hard compared with others in a comparable position; where a whole sector or district is affected equally, there is no claim.

The same article keeps four categories with the claimant: accepted risk; loss reasonable measures could have limited; loss otherwise attributable to the claimant’s side; and loss for which compensation is otherwise secured, by insurance or contract. Any advantage the event brought is set off, and compensation may be given in kind.

Normal social risk and how it is quantified

The normal social risk is the threshold below which loss is part of trading in a developed country: roadworks happen, neighbourhoods change, regulation tightens. Quantification is the hardest part of any file, and practice uses two techniques.

• A statutory forfait: a fixed slice of the loss that always stays with the claimant, as a percentage of the value of the property. In the built environment this is 4% under art. 15.7 Ow.
• A case-specific assessment, used above all for turnover and income loss, where no statutory percentage applies. The authority weighs whether the development fits the character of the area and the policy line, how normal the interference is, and how hard this business is hit.

The two are not interchangeable. Under the old Wro the 2% figure in art. 6.2 Wro was a minimum, not the answer (ABRvS 5 September 2012, ECLI:NL:RVS:2012:BX6492). Art. 15.7 Ow does not work that way: the 4% for indirect property damage is a fixed statutory forfait, which the authority may in principle neither raise nor lower. It belongs to the Omgevingswet regime for indirect damage and not to the general rule of art. 4:126 Awb.

Foreseeability: active and passive risk acceptance

Active risk acceptance (art. 15.5 Ow) applies where you bought or invested when a reasonably informed and prudent person, reading published policy documents, could have foreseen the development. The price paid is treated as already reflecting the risk; draft policy notes, structural visions and consultation documents can all start the clock.

Passive risk acceptance (art. 15.6 Ow) applies to development rights you held but never used. Once withdrawal became foreseeable, the holder has a reasonable period to use the right; one who sits still loses the claim for its removal. In ABRvS 28 September 2016, ECLI:NL:RVS:2016:2582 the owner was told in writing years before the new plan was adopted that the residential use would go, took no step, and recovered nothing.

Planning damage in the built environment under the Omgevingswet

The word planschade has gone: Chapter 15 of the Omgevingswet uses nadeelcompensatie throughout, supplementing Title 4.5 Awb for the built environment.

What triggers a claim

Art. 15.1 Ow contains a closed list: a rule in an omgevingsplan or a waterschapsverordening, a maatwerkvoorschrift, an omgevingsvergunning, a projectbesluit and comparable instruments. Being exhaustive, it excludes loss caused by anything outside it. It is wider than the old Wro regime, because it reaches implementation damage: temporary loss from carrying out the activity, such as building works or a road closure.

The shift from the plan to the activity

This is the most important structural change. Under the Wro, indirect planning damage was assessed when the plan became irrevocable, comparing the maximum theoretical build-out of the old plan with that of the new. Values fell on paper the day the plan took effect, built or not.

Under the Omgevingswet assessment moves to the activity. Where a permit is required, art. 15.3 Ow ties assessment to the permit stage; where none is required, art. 15.4 Ow ties the application to notification or to the start of the activity. An omgevingsplan allowing a development never acted on therefore produces no compensable indirect damage: claims mature later, and the reference point is what is done, not what the plan permits in theory.

Direct damage, indirect damage and the 4% forfait

Direct damage is loss from a change to the rules applying to your own property, typically a restriction on what you may build or do. Indirect damage comes from a change on someone else’s land: the housing scheme behind your hotel, the road realignment that removes your passing trade.

The 4% forfait in art. 15.7 Ow applies only to indirect damage consisting of a fall in the value of immovable property, not to direct damage and not to income or turnover loss, which is assessed on its own facts. Art. 15.2 Ow excludes certain heads of loss altogether.

Transitional law: which regime applies to your file

This is where most errors occur, because for a given site the answer may still be the old law. The transitional regime sits in art. 4.17 Invoeringswet Omgevingswet: where the damage-causing decision or plan dates from before 1 January 2024, the old Wro planning-damage rules continue to apply, and that position runs for five years, so up to 1 January 2029. A bestemmingsplan absorbed into the omgevingsplan by operation of law is not itself a fresh cause. For damage caused by decisions taken before 1 January 2024, such as a bestemmingsplan under the old Wet ruimtelijke ordening, the old law of Section 6.1 Wro continues to apply, provided the application is made within five years of the decision becoming irrevocable. For any pre-2024 plan, therefore, check the date first: you may be in a closing window under the Wro, with its own deduction and comparison method.

Public works, road closures and long construction projects

This is the commonest commercial case: a hotel, restaurant, showroom or retail unit whose access is blocked for months by tram works, bridge replacement or sewer renewal. The loss is turnover, not property value.

The works are lawful, so this is squarely the Title 4.5 Awb route. The special burden is usually satisfied where the obstruction is concentrated on a short stretch and a handful of premises, and much harder where a whole district is equally affected. The abnormal burden is the battleground, because a business must absorb ordinary interference as normal business risk. What pushes loss above that line is duration well beyond what was announced, complete rather than partial loss of access, no practical alternative route or signage, and interference in the season the business depends on. Art. 4:126 Awb also leaves with the claimant the loss reasonable measures would have avoided.

No statutory percentage applies to turnover loss, but the practice is not open-ended either. For indirect loss of this kind the administrative court works with a band: a fall in turnover of between 2% and 5%, measured against the average turnover of the three preceding years, is treated as normal business risk. Within that band, a fixed threshold of 4% is applied to infrastructure measures of ordinary scale, so a business disrupted by a routine reconstruction should expect the first 4% of its turnover loss to stay with it, and an argument for a lower figure has to be built on the facts. This threshold is a matter of practice and should not be confused with the statutory forfait of art. 15.7 Ow, which applies only to a fall in the value of immovable property.

Procedure, time limits, interest and costs

The application and the advisory committee

You apply to the authority responsible for the damage-causing cause; art. 15.8 Ow identifies it for the built environment. Under art. 4:127 Awb the application must identify the event and state the nature of the loss and, so far as reasonably possible, its amount with a specification. Art. 4:128 Awb allows a handling fee capped at €500, refunded if compensation is awarded.

Authorities usually take advice from an independent committee, which inspects, hears the applicant and issues a draft advice for comment. Under art. 4:130 Awb the authority decides within eight weeks, or six months where such a committee is appointed, with one deferral of eight weeks or six months. Where the loss is also caused by a decision still open to appeal, the file may be held until it is irrevocable.

The decision is itself appealable: objection within six weeks, then appeal to the district court and further appeal to the Administrative Jurisdiction Division of the Council of State. Purely factual conduct falls under Title 4.5 Awb, and appeal to the administrative court is open only against the separate decision on compensation itself.

Time limits

Art. 4:131 Awb allows the authority to reject an application where five years have passed since the day after the injured party became aware both of the damage and of the responsible authority, and in any event twenty years after the damage was caused. Where an appealable decision caused the damage, the five years do not begin before that decision is irrevocable.

For the unlawful-act route, art. 8:93 Awb applies the civil limitation rules, but time does not start before the day after the annulment became irrevocable or the authority acknowledged the unlawfulness.

Interest and costs

Art. 4:129 Awb is more generous than many claimants realise. Where compensation is granted, the authority must also pay reasonable costs of preventing or limiting the loss, reasonable costs of professional legal or other expert assistance in establishing the loss, the application fee, and statutory interest from receipt of the application or, if the loss arises later, from that moment. Expert costs being recoverable in principle changes the economics of commissioning a proper valuation or forensic accounting report at the outset.

Evidence: the counterfactual and the accounting record

Every claim here compares the world as it is with the world as it would have been. Building that counterfactual is the job.

• Fix the reference position. For property, a valuation on the correct reference date and legal comparison. For a business, consistently prepared figures for several years beforehand, so the trend line is defensible.
• Separate the government cause from everything else. Authorities routinely argue turnover fell for other reasons; pre-empt this with sector benchmarks, comparable branches elsewhere, and footfall or booking data.
• Work in gross margin, not turnover. Lost turnover carries avoided variable cost; a claim ignoring this invites an across-the-board discount.
• Keep a contemporaneous record — dated photographs of closures, correspondence with the authority and contractor, and the works schedule with every change.
• Document mitigation — what you did, what it cost, why you rejected the alternatives.
• Watch the dates — the six-week objection period against any decision that may cause loss, and the five-year period under art. 4:131 Awb.

These files reward early positioning: the decisive evidence exists only if captured while the event is in progress.