DLA Piper has successfully represented the Qubus Hotel in its claim for damages from the City of Warsaw resulting from what the firm describes as its "unlawful refusal to issue a building permit for a hotel."
The Court of Appeal in Warsaw ruled in favor of Qubus Hotel Management sp. z o.o. reversing the judgment of the court of first instance and awarding Qubus compensation for lost profits. According to DLA Piper, "the Court confirmed that the City of Warsaw, as the first instance body, is liable for damages due to the issuing of an unlawful administrative decision, even though its decision was not final and was subject to verification by the provincial governor. In this respect, the ruling is precedential, because it destroys the previously commonly accepted thesis that public administration bodies are not liable for damages for non-final administrative decisions."
"In its judgment," DLA Piper explained, "the Court confirmed that if a provincial governor in the course of appeal proceedings upholds an unlawful decision issued by a territorial self-government unit in the first instance, each organ is liable for its own unlawful actions. In this case, the Court awarded damages for lost profits as a result of the blocking of a hotel investment. However, the principle of law confirmed by the Court applies universally to all situations in which an organ in the first instance issues an unlawful decision, which is then upheld upon review. The practical implications are enormous for both commercial entities and for investors - both in terms of claiming damages, and also in mobilizing officials who issue decisions in the first instance to carry out a more in-depth analysis of the grounds for issuing negative decisions that have business implications."
The DLA Piper team was led by Warsaw Co-Managing Partner Krzysztof Kycia, supported by Senior Associates Mikolaj Strojnowski and Monika Leszko and Associate Pawel Bartosiewicz.