Compensation for lawful government action, in Dutch nadeelcompensatie, is compensation for loss suffered through lawful conduct of the authorities where that loss exceeds the normal social risk and affects the claimant disproportionately compared with others.
Legal basis
Title 4.5 of the General Administrative Law Act has contained the general regime since 1 January 2024, entering into force alongside the Environment and Planning Act. Article 4:126 sets the standard: loss caused by the lawful exercise of a public law power or task qualifies for compensation in so far as it exceeds the normal social risk and affects the claimant disproportionately compared with others. The article also lists circumstances that may bar compensation: foreseeability, acceptance of risk, contributory fault and the ability to limit the loss. Article 4:131 sets a five-year limitation period. For loss caused by environmental planning decisions the Environment and Planning Act adds further rules, with a fixed threshold for reductions in property value.
How it works in practice
Typical cases are lost turnover through prolonged roadworks, a fall in property value due to a new plan, and restrictions imposed by a traffic decision. The application must substantiate the loss with figures over several years, so that the difference from normal business development is visible. The body almost always takes advice from an independent committee; that advice can be commented on before the decision is taken.
Where it goes wrong
Businesses apply only once the works are over and by then have no comparison material. A second error is failing to mention the mitigating steps taken, which in fact strengthen the claim. Third, foreseeability is underestimated: someone who bought when the plans were already known receives nothing.
Related terms
Compensation connects to the administrative decision, the environmental permit and the principle of legitimate expectations.
Are you suffering loss from works or a decision? Our administrative law specialists substantiate the application.
