This must be a typical Dutch case. Mr. H. applies for a permit to exploit prostitution premises in the Amsterdam red light district. The local authorities inform him that they will inquire into his background and antecedents, before deciding on the permit. This inquiry proves time consuming. Eventually, the permit is granted, but late, beyond the decision-making term. Mr. H. claims damages, in relation to the delay. He is joined by the owners of the premises, who agreed to rent the premises to Mr. H. at a rate of EUR 1,627.50 per week ‘as of the date the prostitution permit is granted’. Can they successfully sue the City of Amsterdam?
A simple case, a simple question and, in essence, a simple answer as well. In an earlier case, the Dutch Supreme Court established as a criterion that the mere violation of a decision-making term does not suffice for assuming public authority liability. On the basis of concomitant circumstances, a violation of a duty of care by a public authority has to be established. In this case, the Court of Appeal felt such circumstances could justify the assumption of liability. Yet according to the Supreme Court it failed to sufficiently take into account the circumstances of the case including, amongst other things, the fact that Mr. H. was himself late in providing certain information and that the Mayor of Amsterdam was entitled – although he did not do so – to extend the decision-making term, possibly allowing for the permit to be granted on time.
Technically, things turn out to be complicated. First of all, it is not evident that it is up to the Supreme Court as a civil court to judge whether exceeding a decision-making term is to result in public authority liability, without a previous judgment on the validity of the eventual decision by an administrative court. In the aforementioned previous case, though, the Supreme Court accepted an exception to that extent in the distribution of competences of the civil and administrative courts. In this case, the Supreme Court is taking the next step. It indicates that a public authority could also be liable towards – in this case – the owners of the premises, even though they did not apply for the permit themselves and could not contest decision-making on the permit before an administrative court.
Secondly, the Supreme Court’s criterion that the mere violation of a decision-making term does not result in liability was criticized. In the end, it is a statutory provision. In this case, the Supreme Court clarifies that this is a matter of its protective scope. A decision-making term purports ‘in the first place’ to speed up public authorities and provide clarity for those involved in the decision-making process and does not purport to offer inevitable protection against damages in the event the term is exceeded.
Apparently, also the Supreme Court struggles to strike a balance between assuming public authority liability for any damages, resulting from any violation of a decision-making term – which most people probably feel would go too far – and keeping some pressure on public authorities to decide on time, as well as to fit its own criterion into the system of tort law.