Loss of revenue in the event of harmful traffic decisions: what to do?

Boards of mayor and aldermen can decide to rearrange traffic flows in a municipality in order to, for example, promote traffic flow or improve safety. The municipality then takes a so-called traffic decree that causes traffic to be handled differently at the location indicated in the decree.

However, such a traffic decision can also be detrimental to entrepreneurs who depend on good accessibility for business. The moment you, as a business owner, are adversely affected by such a decision, for instance because you are more difficult to reach, you can apply for compensation for loss.

The college must then go and see whether compensation should be offered. To this end, the college then commissions a research agency to investigate the extent of permanent damage you suffer as a business owner.

For example, a snack bar owner from Geertruidenberg was confronted with a traffic decision by the municipality in which a cut-off had been made in the traffic situation at the location, making it harder to reach the snack bar. There was no longer a through route to the snack bar for motorised traffic. In the changed situation, customers actually had to detour to reach the snack bar and would pass alternative eating places. The business owner in question was left with a permanent drop in turnover and thus damages.

This case was ultimately adjudicated by the Administrative Law Division of the Council of State, with the Division Judge clearly indicating how to deal with the calculation of loss compensation:

• In the case of annual, indefinitely recurring income losses, income losses should be capitalised in accordance with the systematics of expropriation law. By paying out a sum of money in one lump sum, the aim is to compensate for the losses that the aggrieved person will suffer in the course of future years. Capitalisation is done by multiplying the amount of the average annual net income loss by a capitalisation factor.
• A capitalisation factor of 10 is applied to calculate the owner/user’s income loss. This follows from established case law of the Administrative Law Division of the Council of State.
• At what point the damage arises is calculated using the reference date. The reference date for calculating the damage is the moment when there is actual income damage suffered and to be suffered, i.e. the moment when the traffic decision is actually realised (e.g. by a physical road closure / changed signage).
• The extent of the damage is estimated by comparing:

• The (actual) situation in which the applicant found himself as a result of the damaging decision
• The (hypothetical) situation the applicant would have been in if the damaging event had not occurred.

• When determining the extent, all the circumstances of the concrete case must be taken into account.

There is often some time between the college’s traffic decision and the actual implementation of the traffic decision. The question then arises whether – if an aggrieved entrepreneur was able to continue operating unchanged in that interim period – that affects the amount of the capitalisation factor. The Geertruidenberg municipal council thought so, the snack bar owner did not. On this, the Divisional Court said:

‘If there is income in the period located after the moment the damaging (traffic) decree came into force and before the reference date, this does not lead to an adjustment of the capitalisation factor to be applied’.

Want to read the ruling yourself? You can read the ruling here.

Are there changes in the traffic flows near your business that cause you to suffer damage and do you need help to get your disadvantage compensated? Contact us.