I was inspired to write today’s post by a certain ruling of the WSA in Olsztyn (I SA/Ol 861/20), in which the WSA 'closed’ the judicial route in cases of covidium aid granted on the basis of the so-called covidium specustawa, i.e. the Act of 3 April 2020 on special solutions to support the implementation of operational programmes in connection with the occurrence of COVID-19 (Journal of Laws, item 694, as amended, hereinafter: 'specustawa’).
The interpretation made in this ruling led to the fact that decisions on the granting of financial assistance to entrepreneurs from EU funds in connection with covid (i.e. e.g. turnover support) are not subject to judicial review. As the court stated in the justification of the ruling, such an interpretation of the covid spec and the Implementation Act is supported by a 'systemic interpretation’.
This interpretation, which I am yet to write about, led me to a more general reflection on the deepening erosion of the system of judicial control over the distribution of EU funds. A system that started out very well and now, having been truncated of its most important elements, is already a largely flawed system, or perhaps even becoming a façade system?
Today’s post is a post about how things used to be and how, one by one, bricks are being taken out of the foundation of the judicial route in matters of EU funds, with – unfortunately – the approval of much of the case law.
What was it like in the past
It is worth starting from the beginning. At the very beginning, in the first implementation act, i.e. the Act on the National Development Plan (2004), there was no appeal procedure at all against negative application assessments. The very act of awarding a grant was contentious and controversial.
As the regulations did not address basic issues of individual rights, the case law took the matter into its own hands. After a series of court judgments, the Supreme Administrative Court, in a resolution of 22 February 2007, sitting in a panel of 7 judges (II GPS 3/06), determined that„the rejection of an application referred to in Article 26, paragraph 1 of the Act on the National Development Plan [an application for a grant – note by R.P.] takes place in the form of an administrative decision issued on the basis of Article 26, paragraph 2 of the Act„.
Then, in 2008, would-be beneficiaries of EU funds were able to enjoy the 'appeal procedure’ introduced into the Implementation Act, which is not at the same time an appeal procedure within the meaning of the KPA. In accordance with Article 37 of the Implementation Act, the provisions of the Code of Administrative Procedure were not applicable to the competition procedure – instead, the legislator decided to create a quasi-administrative appeal procedure – specific and appropriate only for programmes financed from EU funds.
This procedure was introduced into the Implementation Act as a consequence of the Ombudsman’s motion to the Constitutional Tribunal to examine the compliance of the aforementioned provision with the Constitution of the Republic of Poland. The proceedings were finally discontinued by the Tribunal in decision K 32/07 in connection with the amendment of the Implementation Act .
Nevertheless, it is worth recalling here a significant sentence from the Ombudsman’s motion. In the Ombudsman’s view, the exclusion of the application of the Code of Administrative Procedure to the procedure for granting funding from the Structural Funds does not prejudge the impossibility of classifying a given act as an administrative decision and of classifying this stage of the procedure as an administrative procedure. Taking into account the public-law nature of the procedure and the very act of granting or refusing funding, the exclusion of the provisions on proceedings before administrative courts results in a situation in which the entities participating in these proceedings do not have the possibility to effectively seek judicial protection in the event of possible violations of their rights in these proceedings.
To conclude, it is worth recalling here the interpretation of the concept of „negative project assessment” shaped in the jurisprudence of administrative courts in the initial years of implementation of EU programmes, which caused so many problems for the legislator that it had to be subsequently „rectified” by subsequent amendments to the implementation acts.
Namely, administrative courts, due to ambiguities concerning the notion of a negative evaluation, and also following the resolution of 7 judges of the Supreme Administrative Court issued a few years earlier, adopted the concept of the substantive notion of a „negative evaluation” of a project, according to which whether a given letter or decision is a negative decision (thus providing a substrate for challenging it in court), would be determined by its substantive content, and not its name. Such a view was presented, inter alia, in the decision of the Supreme Administrative Court of 13 January 2011 in case no. II GSK 1495/10 , the verdict of the Supreme Administrative Court of 24 January 2012 in case no. II GSK 1/12, the verdict of the Voivodship Administrative Court in Szczecin of 9 February 2011. case no. I SA/Sz 58/11, verdict of the Supreme Administrative Court of 21 June 2011 in case no. II GSK 1058/11, verdict of the Supreme Administrative Courtof 20 July 2011 in case no. II GSK 1380/11, verdict of the Supreme Administrative Court of 24 March 2010 in case no. II GSK 248/10.
As it turned out, these views caused a lot of problems for institutions – according to the above-mentioned interpretation, any information provided by an institution refusing to grant a project – including refusal to grant a project due to lack of funds or failure to meet certain formal conditions, or refusal to grant a project at the stage preceding conclusion of an agreement – was a negative assessment.
Extinction of the judicial route - with concrete example
The judicial path in matters of EU funds in successive implementation laws has been increasingly long. While at the beginning there was still no shortage of courageous rulings on the grounds of the Act on the National Development Plan, which led to a wide opening of the judicial path in matters of EU funds, as well as to positive changes in successive implementation laws, at present the role of administrative courts largely boils down to approval of many misguided solutions leading to dilution or deprivation of the rights of participants in competitions.
In turn, it can be seen here that – contrary to the substantive definition of the concept of a negative assessment – the legislator first:
(a) excluded the possibility to effectively complain about negative decisions caused by exhaustion of funds (Article 30i of the Implementation Act of 2007, Article 66 of the Implementation Act of 2014), then.
(b) ruled out the judicial route in cases of out-of-competition projects (Article 53(1) of the Implementation Act of 2014) to then
(c) also excluded the possibility of appealing against decisions on rejection of applications due to failure to meet formal conditions (Articles 43(1) and 53(1) of the Implementation Act.
In all these situations, the introduced legislative solutions – contrary to the previously presented views on the material meaning of the notion of „negative assessment” – were subsequently approved in the jurisprudence of the administrative courts.
Thus, in the case of exhaustion of allocations, a significant example is the line of jurisprudence approving the provisions of Article 66 of the Implementation Act, which was formed despite the mass issuance of decisions towards the end of the 2007-2013 perspective on leaving a number of protests unprocessed due to exhaustion of funds. Importantly, this occurred as a result of many protests being held over the statutory deadline for their consideration.
The new provisions on the exhaustion of allocations also lived to see a judgment of the Constitutional Court, which also approved them in the legal system, although in my opinion, which I still maintain there are no rational and axiological arguments in favour of this construction. For more on this topic, see the entry Roma locuta causa finita? Not for me. and also in the entry Exhaustion of allocations as a reason for refusal of funding – EU funding – Krzysztof Brysiewicz Blog (kbrysiewicz.pl)
In the case of appealing against decisions on the rejection of applications due to failure to meet formal conditions, there are also a number of judgments in legal circulation approving these provisions.
How it is with this Olszty
At this point I would like to refer to the ruling of the WSA in Olsztyn itself. What was behind the ruling on the lack of a court route for the covidian unfortunates? What axiological arguments? What specific provisions? Why can’t people who didn’t receive covid support go to court to review the denial of support?
One argument – a systemic one – has decided everything:
The application for co-financing submitted under Article 10 of the Act of 3 April 2020 on special solutions to support the implementation of operational programmes in connection with the occurrence of COVID-19 (Journal of Laws, item 694, as amended, hereinafter: 'specustawa’) is not an application submitted under the competition mode in the sense of the Implementation Act. This mode results from a separate act, i.e. the specustawa, to a small extent referring to the application of the Implementation Act. It follows from art.1, sec. 1 and 2 of the specustawa that it defines specific solutions related to the implementation or settlement of operational programmes in relation to the occurrence of an infectious disease caused by the SARS-CoV-2 virus and that within the scope not regulated in the act, the provisions of the Implementation Act apply. The Specustawa does not provide for an appeal procedure for the extraordinary procedure of selecting projects for co-financing. Since also the Implementation Act does not provide for the possibility of lodging a protest and then a complaint to the court for all forms of assessing applications for co-financing, but only in relation to the competition mode of project assessment, there are no grounds for concluding that this procedure can be applied within the framework of selecting for co-financing projects aimed at limiting the occurrence of negative effects of COVID-19, i.e. in the mode referred to in Article 10(1) of the Specustawa.
The systemic interpretation made in this judgment is quite different from the one made only a few years ago by the administrative courts in cases involving European measures, which were unanimous in seeking and allowing the broadest possible remedies. Moreover, already from the quoted fragment of the text deficiencies emerge – what does it mean that the reference to the Implementation Act has a „very small scope”, after all, a sentence later the WSA itself indicates that the reference covers all matters not regulated in the specustaw.
Additionally, what does it mean that the provisions of the Implementation Act on protests and complaints to the administrative court do not apply? Just because the covid speculation specifies that the selection of projects is made under the „extraordinary mode”? Does 'extraordinary mode’ preclude the holding of a competition just by virtue of its name?
After all, the very institutions organising covid application calls use the term competition interchangeably.
Working capital competition: list of applications to be assessed – Wrota Podlasia
Łódzkie dla biznesu – a service for entrepreneurs from the Łódzkie Region (lodzkie.pl)
Also in the SME Ombudsman’s report we find the nomenclature „competition”.
Is the procedure for the award of revolving grants that different from a typical call for proposals? What then of the criteria for 'competitions’?
What about the interpretation of the provision of Article 10 of the Covidium Act by the Ministry of Funds and Regional Policy where it is explicitly indicated:
Significantly, the WSA in Olsztyn was not tempted to indicate another, appropriate mode in which decisions on aid for entrepreneurs could be reviewed by the court.
I am omitting here such „obvious” issues as the right to a judicial procedure resulting directly from the Charter of Fundamental Rights (Article 47 of the CFR) or the CJEU jurisprudence, for example the judgment of the Court of Justice of the European Union C-562/12, which is crucial for the interpretation of the notion of a judicial procedure and which I wrote about, inter alia, in the post What słychać na sąsiednim poletku.– EU measures – Krzysztof Brysiewicz Blog (kbrysiewicz.pl).
Thus, the judicial route has been closed to the applicants „for amen”, at least until this order is overturned.
It used to be bette
While in most areas of life, time means constant progress, when it comes to EU funding I sometimes cannot help feeling subjectively that things were better in the past. What I am referring to here is not so much the quality of the legislation, but above all its judicial review.
The rulings on the notion of a negative assessment I cited above or the resolution of 7 judges of the Supreme Administrative Court resolving on the administrative nature of the activity of granting subsidies on the grounds of the Act on NPR can be treated, in my opinion, as exemplary decisions.
These types of rulings are not only of significant value in a specific case, but they are important for the coherence of the legal system they control. The role of jurisprudence in lawmaking is counter-intuitively crucial – wise court rulings that condemn legislative errors should lead to the elimination and reduction of errors. On the other hand, tolerating legislative errors or, what is worse, sometimes looking for a „systemic” justification for certain defects in legislation leads, in the long run, to a significant deterioration of the law, emboldening the legislator to adopt regulations that are increasingly unfavourable to the participants in trading.
Such action, as in the judgment of the WSA in Olsztyn, emboldens the legislator to introduce new, more far-reaching restrictions on the rights of participants in competitions, as exemplified by the provisions from the justification of the draft of the new Implementation Act (known only to a select few because they were sent for informal consultation almost a year ago). The proponent does not even try to respect the case law of the courts, but directly points out that the provisions (which further restrict the court route in the case of exhausting the allocation) are issued„in connection with the emerging decisions of administrative courts, concerning this issue, resolving it in a manner contrary to the assumptions of the implementation of EU funds” (Sic!). It would be difficult to find a more obvious example of the disregard for the case law of the courts by the drafters of the legislation.


To conclude this entry, I would like to refer to a very apt sentence expressed in a somewhat old decision of the Supreme Administrative Court, I GSK 746/09 , in a state of law, consistency of the legal system should be maintained and defective normative acts should be eliminated.
It would be worthwhile for this motto to once again guide judges reviewing the actions of the administration in cases involving not only EU funds. Turning a blind eye to obvious flaws in the legal system and tolerating them leads to further flaws in that system.
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