Negative assessment – How to appeal effectively? (Part I)

In the current financial perspective 2014-2020, the first calls for proposals have already started. I think this is a good moment to devote a few sentences to the functioning of the appeal and judicial-administrative procedure against negative project assessments, which has been in place for almost seven years now.

The essence of the competition procedure is that not all applicants who apply for funds will be able to count on support from the funds. Such support will be granted to the best ones, i.e. those whose projects will contribute most to the achievement of the public objectives set out in the support programmes, and therefore those who receive positive project assessments. The verification of the projects by the evaluators should come down precisely to determining which of the projects will contribute most to the achievement of these objectives. This should also be the assumption of the Monitoring Committee, whose task it is to define the criteria for selecting projects. Unfortunately, even the best system of evaluation, as well as the highest quality of experts, do not guarantee that the best ones will always be selected for funding. And it is difficult to consider the Polish system of project selection as an exemplary one… The experience of the previous perspective shows that the selection system does not always select the best projects for co-financing, which is confirmed by numerous decisions on the return of funds justified not only by defects in the procurement, but also, among others, by poor project preparation or unrealistic assessment of indicators.
What to do, then, when the system has rejected what we believe is a good project, stating that it does not meet the criteria? Appeal, of course. And while I have mentioned several times in earlier posts the flaws in the system that might indicate that it is not very effective, I would now like to make the case for why it is nevertheless worth appealing. This post is the first part of a broader topic: „How to appeal effectively?”. In this section, I will try to answer the question „Is it worthwhile to appeal a negative evaluation?”.

Let’s start with some statistics. From December 20, 2008 (i.e., when the appeal procedure was introduced into the Act on the principles of development policy) to June 30, 2014, applicants filed as many as 68,751 appeals. The percentage of appeals that were upheld in the first instance ranged from 24% in PO IG to 40% in PO RPW. In the second instance, the highest percentage of appeals upheld was recorded in the Infrastructure and Environment Operational Program (PO IiŚ) – 42%, while the lowest percentage of appeals upheld in the second instance was recorded in the Human Capital Operational Program (PO IG) – 7%.

As regards administrative court proceedings, by June 30, 2014, applicants had lodged a total of 2,253 complaints with provincial administrative courts (WSA), with the highest number of complaints lodged under Regional Operational Programs (1,577). The percentage of cases decided in favor of beneficiaries (finding that the assessment was unlawful) ranged from 26% under the OP IE and ROP to 36% under the OP HC.

As regards proceedings before the Supreme Administrative Court, by June 30, 2014, a total of 570 cassation appeals had been lodged with the Supreme Administrative Court, of which 433 were lodged by potential beneficiaries and 137 by institutions. Slightly more than a quarter of all appeals (27%) were upheld by the Supreme Administrative Court. (source: Administrative Potential of the Institutional System of the National Strategic Reference Framework for 2007-2013, pp. 69-72 – as of June 30, 2014).

What conclusions can be drawn from these statistics? First of all, that applicants are not without a chance in their dealings with institutions, not only in appeal proceedings but also in administrative court proceedings. Nearly a quarter of court complaints decided in favor of beneficiaries show that institutions are not infallible and that properly applied arguments can result in a project being deemed unlawful. Of course, one could say that I am an incorrigible optimist if I consider that a quarter of cases decided in favor of beneficiaries is an argument in favor of appealing. However, I think that in the case of the distribution of European funds, this statistic may be such an argument, as it is widely believed that the appeal procedure is doomed to failure and each “won” case is treated as a rare occurrence.

Undoubtedly, significant importance should also be attached to the quality of the arguments presented at the appeal stage preceding administrative court proceedings, since at this stage, in some programs, up to 40% of appeals are upheld.

It is also worth noting that the percentage of complaints brought before the court in relation to the number of appeals is only about 3%. Even if we assume that half of the appeals lodged are decided in favor of the applicants, the number of applicants who decide not to pursue administrative court proceedings after exhausting the appeal procedure is still surprisingly low in relation to the number of negative decisions.

It is worth noting that an important advantage of appeal and administrative court proceedingsis that (unlike, for example, civil proceedings) they generate very low costs for applicants – appeals to the Provincial Administrative Court and cassation appeals to the Supreme Administrative Court are subject to a fixed fee of PLN 200 and PLN 100, respectively, and the appeal procedure is free of charge. Of course, there may be potential expenses for advisors or lawyers preparing an appeal or complaint if the applicant decides not to draft them themselves – however, even in this case, applicants can increasingly pass on part of the costs to advisors, making their remuneration dependent on the success of the measure. This method of remuneration also ensures that the applicant is confident that they are not lodging an appeal for the sake of it, but that it has a real chance of success.

Furthermore (at least in theory), appeal and administrative court proceedings should not take too long – an appeal (protest) should be considered within a maximum of approximately 90 days (21 days for the so-called self-review by the institution that conducted the assessment, 30 days for the institution considering the appeal to consider the protest – although in justified cases this period may be extended to 60 days). Administrative court proceedings are also subject to short time limits – both the Provincial Administrative Court and the Supreme Administrative Court have 30 days to consider a case from the date of receipt of the complaint (these time limits are set out in the Act on the implementation of cohesion policy programs). Of course, it should be borne in mind that theory may differ from practice, especially when it comes to pre-trial proceedings. The deadlines indicated are indicative, and exceeding them, even in flagrant cases, does not justify the unlawfulness of the assessment process. (A similar position is presented by the Supreme Administrative Court in its judgments: II GSK 2535/14, II GSK 2667/14, II GSK 2668/14).

In my opinion, pure statistics alone suggest that appeals can be considered cost-effective. Since there is (on average) a 1/4 chance that the appeal procedure will ultimately result in a positive assessment of the project, and at the same time it does not generate significant costs for the applicant, and its duration (at least in theory) indicates that we can expect a relatively quick examination of the case, then it can be considered that it is worth using this procedure. This conclusion is particularly justified in cases where the applicant is no longer able to submit a revised application in the next competition. In my next post, I will discuss the chances of success of an appeal in a given case, as well as the potential arguments that applicants may raise in the appeal proceedings.