PwC Legal has successfully represented the interests of the West Tallinn Central Hospital in a public procurement-related financial correction dispute.
According to PwC Legal, “the circuit court annulled a recovery claim of EUR 270,000 submitted to the hospital by the State Shared Services Centre.”
“A financial correction is a percentage of structural assistance that has been paid to the recipient,” PwC Attorney Erki Fels explained. “If such assistance was given for the construction of a hospital or an academic building, one might have received millions of euros in assistance. This means in practice that disproportionate financial corrections may be ordered for infringements that did not, in all likelihood, cause any damage to anyone.”
“No entity that has received EU funds wants to hear the phrase 'financial correction,' because this means that one would have to go up against unseen forces,” said Fels. “While it is customary that the party claiming damages must prove both the existence and the amount of damages, this is not required in the case of a financial correction. An auditor need not prove the amount or even feasibility of damages.”
According to PwC Legal, “the circuit court explained in the judgment that a mere breach of public procurement norms was not enough to make a financial correction. An auditor must assess whether damaging the EU budget is likely. One must consider in this assessment the probability of the harmful consequence on the budget.”
PwC Legal’s team included Fels and Attorney Priit Latt.