After the WWII, the newly formed communist authorities in Poland issued a number of laws on the nationalization of industry in Poland, upon which nearly all major businesses were taken over by the state. The most important of the new laws was the Law on Nationalization of the Core Branches of National Economy dated 3 January 1946. Step by step, the communist government was taking over factories and enterprises. Each takeover required a formal protocol of delivery of what was actually seized and then a Minister’s decision on the nationalization. Within few years almost entire industry in Poland's economy became state-owned.
In the days of stalinization of half of Europe, a decision to nationalize the industry was nothing out of the ordinary, especially that the nationalization was supposed be accompanied by proper and just compensation. On paper, everything looked fine. The official reasoning for the decision to take over the industry was to facilitate the reconstruction of the destroyed economy, which was partially true. In practice, it was a daylight robbery. The compensation was never paid.
Despite Poland’s transformation in 1989 and the end of communist rule, the 1946 Law remains in force. All takeovers which took place in the years 1946–1950 are valid, although compensation for the seized property was never paid (apart from few examples). Recently, more and more people are interested in studying their own identity and looking into their past including the lost factories. The heirs are learning about their family members and are discovering the painful truth about confiscated wealth. There is a need to learn more which is fully understandable.
Again and again we are being asked by our clients: ‘Grzegorz, is there any chance that we can still apply for compensation for the seized factory?’. This is an important question because the deadline for ‘re-activation’ of the pre-war companies passed on 31 December 2015, so the assets (or compensation) is the only possible target.
My answer is: ‘Yes, you can!’. Standing up for what’s right is vital. The justice requires that if the property was taken by the state without paying any money to the owners, proper compensation should be paid.
But it is not so simple.
Theoretically, the rightful heirs have a claim for compensation. They are even allowed to sue the government in the case of refusal but such legal action requires a preliminary decision confirming the breach of law by the state. And there’s the rub – how can we get the preliminary decision if it’s the state who is actually reviewing itself?
Firstly, to obtain the preliminary decision confirming the breach of law, the nationalization decision has to be challenged under the general provisions. To do so, one must file a motion to declare the decision null and void by a Minister. If the decision cannot be declared null and void, for example because of the time passed, it can be still declared a breach of law.
Secondly, when the decision is found null and void, the property should be returned. If it’s impossible to declare the decision null and void, but only a breach, or to return the property, a proper compensation should be paid. The amount of compensation is decided by the civil court on the grounds of the preliminary decision confirming the breach of law.
The court should appoint an external appraiser to calculate the value of the property at the time of the takeover. Many issues should be factored in, in particular the change of currency which took place in the 1950s. Basing on these calculations, the court should award the amount of compensation for the damage it finds proper.
For more than 25 years there has not been a comprehensive legal solution for complex cases of property restitution. That often makes the whole process complicated, money- and time-consuming. There are no clear rules to follow and a really experienced lawyer is needed to apply the general rules to the case correctly. That uncertainty causes trouble not only to the rightful heirs, but also to the Polish state. The time to pass a comprehensive legislation to clear the matter is really high.
Nevertheless, those who could prove the family links to the pre-war owners and present appropriate evidence for the illegality of the takeover now have a chance to succeed. It’s a good moment to take a well-prepared advice on the opportunities to stand up for what’s right and get back what was lost a long time ago.
Back to list
January 14, 2021
The United Kingdom left the EU on 31 January 2020, and the Brexit transition period came to an end on 31 December 2020. Shortly before the transition...Read more
January 13, 2021
No one could have predicted what was on the horizon as we entered 2020.The COVID-19 pandemic has had a sudden and profound impact on investment...Read more
January 08, 2021
The COVID-19 pandemic has had a sudden and profound impact on investment decisions all over the world, including Poland.
For a number...Read more