In December 2014, the Supreme Administrative Court of Lithuania approved settlement agreements in two lawsuits against the Republic of Lithuania for compensation of damages, in which COBALT acted for two plaintiffs – manufacturers of orthopaedic equipment. Under the settlement agreements the State undertook to compensate to the clients EUR 1.6 million and EUR 3.2 million, respectively, in damages.
This represents an uncommon outcome in Lithuanian case-law, because settlement agreements with the State admitting virtually all of its liabilities, particularly in high-value proceedings, so far have been very rare.
The dispute arose as the State refused to cover its debt liabilities having resulted due to the so-called "waiting line": without waiting for payment from the State, the companies used to manufacture and issue orthopaedic equipment to patients, and the State used to cover its earliest liabilities first. Certain orders of the Minister of Healthcare adopted in 2011 and 2012 introduced a prohibition of settlement of liabilities attributable to earlier periods from the current year budget, which also affected the procedure for payment for orthopaedic equipment. Despite of the Supreme Administrative Court having invalidated and annulled such orders, the State still denied its liability. As a result, orthopaedic equipment manufacturers filed a lawsuit seeking compensation of damages sustained due to refusal by the State to cover its liabilities.
COBALT work included drafting procedural documents and representing the clients in all pre-trial and litigation procedures. The team was led by Dr Rimantas Simaitis, Partner at COBALT, and Associate Milda Markevičiūtė.