Fitnes club operators are seeking compensation for restrictions on their business operations during the epidemic.
On Thursday, they filed a class action in the Warsaw Regional Court against the government and the minister of health, demanding the court to determine the State Treasury’s liability for damages in connection with administrative bans on the operation of gyms and fitness clubs, i.e. for the lockdown of the fitness industry.
As lawyers of the Łyszyk Wesołowski & Partners law firm representing the claimants indicate, the initiative brings together more than 150 entrepreneurs running a total of approximately 450 fitness clubs across Poland.
They are demanding determination of the State Treasury’s liability for damages caused by unlawful acts and omissions in the exercise of public authority in connection with the Covid-19 pandemic. They were caused by the ban on the operation of fitness clubs and gyms in 2020 and 2021 on the basis of regulations issued by the Minister of Health and the government, which in their opinion, were unlawful.
That is because they were issued without basis (delegation) in the Act on the Prevention and Control of Infections and Infectious Diseases in Humans; they violated the constitutional principle of introducing restrictions only by means of a statute and the prohibition of the annihilation of the essence of the right to economic activity.
According to the authors of the statement of claims, state interference with the right to conduct business activity can be compared to the temporary expropriation of entrepreneurs, which in itself should substantiate the State Treasury’s liability for damages.
In the frames of a possible claim, they seek a declaration of the so-called tort of negligence on the part of the authorities by imposing a ban on the operation of fitness centres and gyms while failing to introduce a state of emergency.
And they point out that the challenged acts are of a lower rank than the statute, so obtaining a Constitutional Tribunal judgment declaring them inconsistent with the Constitution is unnecessary.
Once the court determines the state’s liability, entrepreneurs intend to seek specific compensation in individual lawsuits, including damages for lost profits.
SO FAR – NO EFFECT
Contrary to declarations, for the time being, neither a wave of class actions nor tangible successes have occurred, which the authors of the first few have rather been aware of.
Maciej Dubois, attorney-at-law, whose law firm has already filed three class actions for companies from the tourism sector: clubs and so-called playrooms, told “Rzeczpospolita” that they are the result of desperation because for many months the government did not respond to calls for compensation or talks about support adequate to the losses.
None of the suits have been formally challenged by the court, but no case has yet been scheduled for trial. However, the General Counsel to the Republic of Poland, which represents the state party, indicates that the decision of the Constitutional Tribunal should be awaited.
The Prime Minister believes that Article 4171 § 1 of the Civil Code which grants the right to claim compensation for damage caused by the issuance of a normative act, the so-called lawlessness, is unconstitutional to the extent in which it authorises courts to decide whether a regulation is or is not consistent with the Constitution.
‘Restricting the constitutional economic freedom by the provisions of the regulation is not correct, as was confirmed a few days ago by the Supreme Court in the case of other Covid-related restrictions, so a civil court may independently examine the prerequisites for the State Treasury’s liability for damages,’ assessed Professor Maciej Gutowski, a well-known attorney from Poznań. ‘The threat of liability for damages may therefore be real. But, on the other hand, the courts will bear in mind that the State Treasury is not bottomless.’
Meanwhile, the Sobota Jachira law firm, which already in April intended to file a class action on behalf of entrepreneurs from the catering, hotel, and fitness industry, as its lawyer Szymon Kowalczyk informs, has not yet filed a lawsuit, because as a result of the loosening of restrictions the clients’ interest in initiating such proceedings has declined. Instead, it is considering filing several individual suits.
DOMINIK GAŁKOWSKI, ATTORNEY-AT-LAW, PARTNER AT KUBAS KOS GAŁKOWSKI
Class actions in post-Covid cases are admissible, but it is not clear whether the introduction of sanitary rigours by the government and restrictions on business activity entails as broad a right to compensation as in the event of the application of the Act on the state of emergency, which in any case excludes the claim for lost profits. Not every restriction of rights and freedoms, including the freedom to conduct business activities, gives rise to liability for damages on the part of the State Treasury. An administrative ban on engaging in certain activities does not have to cause all losses incurred by an entrepreneur during a pandemic. The Treasury cannot be treated as insurance against a crisis that occurred on the market regardless of administrative restrictions.
Edited by: Marek Domagalski
Text originally published by: Rzeczpospolita, 9 July 2021