Unlawful actions of state or municipal authorities: what damage can be recovered

The public sphere abounds with stories of individuals and businesses suffering harm as a result of unlawful decisions taken by state or municipal authorities.

The situations vary widely – from orders to demolish privately owned residential property constructed on the basis of a building permit that was later revoked, to the sudden suspension of funding or delays in issuing permits upon which business operations or an individual’s quality of life depend.

It is not uncommon for courts to annul an administrative decision or declare it unlawful. While this is a positive outcome, it does not in itself guarantee compensation for the losses incurred. The recovery of damages constitutes a separate and significantly more complex stage, in which every detail becomes crucial: which court has jurisdiction over the dispute, who should be named as the respondent, whether the limitation period has expired, and whether there is sufficient evidence to substantiate both the damage and its causal link to the unlawful actions. In practice, this often entails yet another lengthy and emotionally demanding process.

Is it worth pursuing? Yes. However, additional conditions apply.

Which court has jurisdiction to hear a claim against public authorities?

As a general rule, disputes concerning compensation for damages are civil in nature and are heard by courts of general jurisdiction – either district or regional courts, depending on the nature of the case and the amount claimed. Where the damage is linked to procedural actions of pre-trial investigation officers, prosecutors, judges, or courts, such disputes fall within the jurisdiction of courts of general jurisdiction.

Where damage arises from unlawful administrative decisions or omissions of state or municipal authorities, the dispute falls within the jurisdiction of administrative courts. There are, however, exceptions. Courts, therefore, actively assess the true legal basis of the claimant’s claim and the specific violations alleged. In other words, what matters is not how the dispute is labelled, but from which administrative acts or omissions of public authorities the claimant derives the damage.

What claims may be brought?

An individual who considers that a state or municipal authority has caused damage through its actions or omissions may, within administrative proceedings, defend their rights not only by challenging a specific decision but also by directly seeking monetary compensation. This means that it is not necessary, as a preliminary step, to request the annulment of an administrative decision or to seek a decision obliging the authority to perform certain actions (for example, to respond to a request). Where a person considers that damage has already been sustained, they may immediately bring an independent claim for compensation.

Before an administrative court, it is possible to seek compensation for pecuniary damage, which includes not only direct losses or expenses incurred, but also loss of profit (loss of income), i.e. funds that the person reasonably expected to receive but did not obtain due to the unlawful actions or omissions of the authority. However, such loss must be substantiated by real, proven, and unavoidable circumstances, rather than by purely theoretical assumptions or abstract calculations. It is also possible to claim compensation for non-pecuniary damage, where the actions or omissions of the authority have caused non-material harm, such as emotional distress, reputational damage, or other consequences arising from the infringement of personal rights.

A claimant may also seek interest, which allows recovery not only of the damage itself but also compensation for the entire period during which the funds due were not paid. In administrative proceedings, two types of interest are distinguished: compensatory interest (calculated for the period prior to the initiation of court proceedings) and procedural interest (calculated from the date the case is brought before the court until full enforcement of the judgment, and typically awarded as annual interest on the amount granted – In administrative cases, a rate of 5% per annum is applied).

How to prepare a complaint

Claims for damages before administrative courts are subject to rather specific procedural requirements, which individuals often fail to fully appreciate in advance. As a result, in practice it is not uncommon for a dispute to fail to reach the stage of substantive examination – where a complaint is lodged with deficiencies, the court sets a time limit to remedy them, and if those deficiencies are not cured within the prescribed period, the relevant part of the complaint may be deemed not to have been filed.

To avoid such outcomes, it is important to adhere to several key principles.

Correct identification of the respondent. Where damage arises from unlawful decisions or actions of municipal authorities, liability rests with the municipality itself, and compensation is paid from the municipal budget. In such proceedings, the municipality is represented by the specific municipal authority whose actions (or omissions) caused the damage. This means that the complaint should be brought not against, for example, the municipal administration as a separate entity, but against the municipality as a public legal person. In disputes involving state authorities, the respondent is the State of Lithuania, while the relevant ministry, agency, or other authority acts in the proceedings only as the State’s representative.

Proper substantiation of damage and its amount. Courts expect that, already at the stage of admissibility of the complaint, it is clear which specific actions (or omissions) of the authority caused the damage, what amount of compensation is being claimed, and on what basis that amount is calculated. It is not sufficient to indicate a total amount of pecuniary and non-pecuniary damage without specifying the portion attributable to pecuniary damage and how it has been calculated.

Compliance with limitation periods. Claims for damages are subject to a three-year limitation period. The commencement of this period is linked to the moment when the person became aware, or ought to have become aware, of the infringement of their rights. In cases of a continuing violation – where an authority, over a period of time, fails to perform actions it is obliged to perform or continuously engages in unlawful conduct – the limitation period is calculated separately for each day of such violation. It is not sufficient for the claimant merely to state when they believe they became aware of the infringement. These circumstances must be substantiated by evidence.

What must be proven

In these cases, state or municipal liability is governed by a strict (no-fault) civil liability regime. This means that the court primarily examines three classical elements of civil liability: unlawful acts (or omissions), damage, and a causal link between the unlawfulness and the damage, while the fault of a specific official is not a necessary condition. The burden of proving these elements lies with the claimant, and failure to establish at least one of them will result in the dismissal of the claim.

When assessing the element of unlawfulness, the court first determines what legal obligation the authority had and whether it was objectively fulfilled. In practice, this means that the claimant must identify the specific legal provisions governing the authority’s activities and explain precisely how those provisions were breached in their case.

With regard to damage and causation, the court examines whether the damage was actually sustained, what it consists of, and its amount, as well as whether the authority’s breach of duty objectively caused the negative consequences or at least materially contributed to their occurrence. The causal link may not only be direct but also indirect: it is sufficient that the unlawful actions were not the sole cause but a sufficiently significant cause of the damage. In cases involving omissions by authorities, a particular feature is that the court often assesses whether the authority had a duty to act but failed to do so, and whether such failure materially contributed to the damage.

In practice, the evidentiary burden on the claimant varies depending on the type of damage claimed. In the case of pecuniary damage, a higher standard of proof applies: the damage must be calculated with precision and substantiated by documentary evidence. Accordingly, the claimant must submit calculations, invoices, contracts, or other data enabling verification of the amount claimed.

In the case of non-pecuniary damage, such precision is often impossible, as it concerns physical or emotional harm and internal experiences that cannot typically be measured with exactitude. Courts note that non-pecuniary damage cannot be fully compensated in objective terms. Rather, a fair monetary satisfaction is awarded to compensate, as far as possible, for the suffering experienced.

Accordingly, courts assess circumstances demonstrating a real adverse impact – for example, unjustified restrictions on liberty, inadequate conditions of detention, humiliation, discomfort, or other forms of distress. In such cases, the claimant’s own statements may also be relevant, provided they are corroborated by other evidence in the case.

The form and amount of compensation for non-pecuniary damage fall within the discretion of the court.

Typical categories of compensation claims

It is useful to review compensation claims through typical examples examined by the courts. In practice, disputes most frequently arise in relation to public funding, spatial planning and construction, as well as the consequences of decisions adopted in the fields of migration, administrative offences, and other areas.

For example, in one case, an educational service provider sought to obtain funding from the municipal budget under a financing scheme approved by the municipality itself. The municipality had calculated specific amounts to be allocated and indicated that they would be transferred. However, it subsequently failed to conclude the funding agreement and did not disburse the funds. The court characterised this as unlawful inaction and a failure to honour assumed obligations, in breach of the principles of legitimate expectations, legal certainty, and good administration. More than EUR 100 000 in pecuniary damages, along with 5% annual interest, was awarded.

In another case, a business company incurred losses because authorities had approved spatial planning documents and issued permits that were later declared unlawful by the courts. As a result of these decisions, the company was unable to lawfully use its property and suffered substantial financial losses. The court found that the authorities had breached mandatory legal provisions and that the damage arose directly from those unlawful acts. Accordingly, more than EUR 1.5 million in pecuniary damages, along with 5% annual interest, was awarded.

In a similar construction-related case, an individual lost a structure built based on decisions that were subsequently annulled. The court of first instance awarded more than half a million euros. However, the case was remitted for reconsideration due to insufficient substantiation of the amount of damages.

Compensation claims are also brought in migration cases. For instance, in a case concerning the removal of individuals despite a final court order suspending enforcement of the decision, the court found a clear disregard of the authority’s obligations and awarded EUR 500 to one applicant and EUR 700 to a vulnerable individual. However, in other migration cases where only a procedural violation was established (for example, failure to comply with the time limit for examining an asylum application), but no actual and sufficiently serious damage or causal link was proven, the courts limited themselves to recognising the violation and did not award monetary compensation.

Similarly, in the field of administrative offences, the mere discontinuation of proceedings does not in itself imply that the authorities acted unlawfully. If no negligence, superficial handling, or manifest exceeding of the limits of the authority’s discretion is established, damages are not awarded. However, in cases where it is demonstrated that the authority acted unlawfully and that the individual suffered real adverse consequences (for example, unjustified detention or the use of physical coercion), compensation for non-pecuniary damage may be granted.