Negative assessment – how to appeal effectively? (part II)

In this blog post, I return to the topic of a negative evaluation of a grant application and the preparation of an effective appeal (or actually a protest, using the language of the Act on the Principles of Implementation of Cohesion Policy Programmes).

To start with, a fundamental question:

Before going on to discuss potential arguments in favour of the appellant and pointing out that the assessment of the project is flawed, it is worth asking whether such an appeal makes any practical sense at all. What does it mean? Such a question may be justified in a situation when we care about time, we know that a new competition will be announced any moment and we prefer e.g. to submit a new application for co-financing instead of exhausting the appeal path. Another, less obvious case is when a negative evaluation of the project concerns one of the earlier stages of assessment, and after a thorough analysis of the application documentation we know that it has other evident faults that could cause that in the next stages of assessment our project would not have a real chance for a favourable evaluation anyway or we simply will not be able to complete it. It may also happen that during the assessment we come to a conclusion that the project in the shape proposed by us is already outdated (e.g. it is no longer innovative or it no longer meets the market needs, it will not allow to generate the planned income, etc.). At the end of the day, submitting an effective protest is most of all aimed at concluding a co-financing agreement, and then at its proper implementation and receiving support. Therefore, it is worth paying attention to what we are actually able to achieve with a submitted protest and possibly further legal measures. In this context, it is worth remembering that in accordance with the Act on the Principles of Implementation of Cohesion Policy Programmes and its predecessor, the Act on the Principles of Development Policy, the appeal procedure does not stop the conclusion of agreements with applicants whose projects have been selected for co-financing. This rule is directly related to the problem of exhausting the allocation, i.e. the budget allocated for a given competition, or more broadly for a measure or priority. If in the course of the appeal procedure the resources are exhausted, even a positive conclusion of the procedure, i.e. finding the evaluation process unlawful, will not cause the project to be reinstated for re-evaluation and, consequently, signing of a grant agreement. A whole group of applicants, submitting applications (and then protests) at the end of the previous perspective in the last competitions, became painfully convinced of this issue. In such a situation, is the applicant really deprived of legal possibilities of protection? I will discuss this issue in a separate post. In the meantime, for the purposes of this entry, however, it is worth remembering that an important factor to be taken into account when assessing the viability of a protest is the expected length of the appeal procedure.

Insofar as we have answered in the affirmative to the question of the practical dimension of the appeal, or at least considered more arguments in favour of lodging a protest, it is necessary to answer what we can allege on appeal at all. The potential arguments are many and we can divide them into several groups. Following the implementation act, the protest may contain objections against the evaluation of specific criteria, as well as objections against the application evaluation process as such. Another division that may be proposed is the one related to charges connected with the defectiveness of the very competition documentation on the basis of which the evaluation is conducted and the defectiveness of the evaluation itself.
In my opinion, the verification of the chances of success of the protest should start with the examination of the process of the competition itself and the competition documentation adopted by the competition host. It may turn out that in the assessment of our project the criteria used are inconsistent with generally applicable regulations, discriminatory or non-transparent, or disproportionate to the assumed goal. Similar flaws may be related to other provisions of the competition documentation, e.g. the provisions of the competition rules, the rules of the evaluation committee, the criteria guide, the template of the application or the business plan, or the instructions to these documents, which may be unclear, imprecise or insufficient. Such an example of a defect in documentation, which I mentioned in one of the previous posts, is the lack of possibility to remove extreme discrepancies in the assessments of individual experts, which results in the project assessment being de facto the result of two fundamentally different partial assessments. The same can be said of regulations that do not specify the way in which experts justify their assessment or even exempt them from such justification. This may concern evaluations formulated within the framework of expert panels.
It is also worth pointing out that defects in documentation sensu largo may also concern guidelines or particular aid programmes, i.e. regulations providing for granting public aid for particular measures.
Particular attention should be paid to the correctness of formulation of project selection criteria by institutions. They should contribute to the selection of the best operations from the point of view of the objectives of a given programme/measure. Therefore, if among the criteria there are some which, being apparently impartial, exclude certain groups of potential applicants from support, while such exclusion does not depend on the public purpose of a given measure, one may accuse those criteria of discrimination. Similarly, such a definition of a criterion which does not contribute to the achievement of the competition’s objectives can be assessed. An important model for the assessment of the correctness and purposefulness of the criteria may also turn out to be – in addition to the normative acts themselves – the individual operational programmes and their details, which define the basic indicators important from the point of view of the public purpose, the achievement of which is to be contributed to by the operations selected under the competition procedure. The fact that the control of the provisions of the competition documentation is not only possible, but should even be a principle in the appeal procedure, has been repeatedly stated by administrative courts (e.g. judgment of the Supreme Administrative Court of 2 March 2011, ref. no. II GSK 177/11).

If, as a result of the examination, we ascertain that, at least at first glance, there are no grounds to raise allegations against the competition documentation, then we should analyse the correctness of the evaluators’ assessment of the project, as well as the manner in which the evaluation of particular criteria was justified and the subsumption of the evaluation made by the institution in the information sent to us about the negative evaluation. In this respect, there is a significant number of potential allegations that we can raise. For example, one standard allegation is that the justification for a negative evaluation is flawed. It may result from insufficient description of the evaluation by the evaluator (e.g. „expenditure is unreasonable”, „experience is insufficient”, „the project is not feasible”, etc.), reference to unspecified data sources coming from outside the competition documentation, reference to indicators not specified in the competition documentation, etc., or even sometimes copying evaluations from other evaluators. Finally, the evaluator’s interpretation of a given criterion or a fragment of the competition dossier may turn out to be defective – although here it is worth bearing in mind that if the provisions of the competition dossier require further interpretation beyond the linguistic one, this may be evidence of its defectiveness. Then the accusation of lack of precision related to this documentation would be justified.
An important issue is the possibility to question the 'expert’ assessment of a given issue by an expert. There is a persistent belief that there is little that can be done with such an assessment, especially at the judicial stage. Meanwhile, it should be noted that the mere fact of being an „expert” does not exempt such a person from properly justifying his or her assessment. The applicant has the possibility to argue with the expert’s views on the knowledge from a specialised field, but it is worth remembering in such situations to justify the protest carefully – and where justified, it may be advisable to seek an additional opinion of an external expert and attach it to the protest. What is more, when a particular issue requires special knowledge in a given field, the institution assessing the appeal may itself decide to appoint an expert.
Contrary to appearances, the assessment of an expert – despite the view presented in some judgements of administrative courts that the court is not an expert and cannot verify such an assessment – may also be challenged in administrative court proceedings. In some judgments the courts pointed out that the expert’s assessment is also subject to the criteria of reliability and transparency, and those elements of the assessment for which general and not special knowledge is necessary may also be subject to examination within the framework of court proceedings.
Additionally, it is worth pointing out that an assessment limited to random fragments of the application documentation, without taking into account all of its contents, will be flawed. Obviously, the application and appendices should be filled out in an appropriate way, as indicated in the instructions, however – especially in the case of the descriptive parts of the justification – the evaluation of certain criteria should be based on the reading of the entire application.
Defective evaluation may also violate such principles of project evaluation as transparency, reliability, equal access to aid, proportionality or the ban on worsening the situation of participants after the announcement of the competition (including the ban on changing the competition documentation in a way that is disadvantageous for the participants). Therefore, raising objections related to the violation of the above-mentioned principles will usually be combined with objections directly related to the evaluation itself and its justification.

Another group of failures in the evaluation process are formal failures of all kinds. A formal infringement may be a breach of impartiality by persons participating in the evaluation process, i.e. a general prohibition on participation in the evaluation by persons who may even potentially favour or discriminate against the project of a given entrepreneur. In terms of provisions related to impartiality, the new Implementation Act remains at least as strict as its predecessor. Of course, before making such an allegation, it is worth answering the question described in the first point: what will it do for me? After all, the mere allegation of a breach of impartiality, not combined with allegations related to the defect of the evaluation, may in practice only lead to the fact that the project will be evaluated in an analogous way by another expert. Another significant formal defect may be the institution’s failure to subsume the evaluation and limiting itself to sending, for example, anonymised partial evaluation sheets instead of making its own information about a negative evaluation. A formal defect may also be the failure to ask for clarification of the content of the application or the failure to correct a given mistake if it is obvious. It is worth pointing out in this context that such a regulation concerning elimination of deficiencies has now appeared at the level of the Act, which is, to a certain extent, a result of views expressed in the jurisprudence indicating the legitimacy of such a procedure in the case where the deficiencies of the application are indeed of an obvious nature and should be removed by way of appropriate corrections/clarifications. In my opinion, a group of allegations related to formal defects makes practical sense only if the given defect actually had a real impact on the assessment itself – for example, if the application was assessed by a person related to our market competitor, and their arguments supporting the assessment justification were not correct. Therefore, allegations of formal defects will generally accompany allegations from the other groups.

In a nutshell, this is the practical aspect of protests against negative results of evaluations of applications for support from European funds. Of course, one should be aware that this is only an outline of this problem, not taking into account e.g. requirements to be met by a given appeal, time limits, the way of formulating particular charges, etc. Additionally, when constructing a protest, it is worth remembering about the direction of interpretation of particular principles of the competition procedure, e.g. the principle of proportionality, transparency or the principle of not worsening the situation of applicants during the call for proposals.
Finally, I have also omitted here the issue of the court-administrative procedure and various traps related to this procedure, as well as procedural tricks, which make it possible to effectively refute the arguments of the other party or even to block these arguments. It is therefore possible that the subject of appeal proceedings (sensu largo) will return in future posts.