The Legal Impacts of COVID-19 in the Travel, Tourism and Hospitality Industry

13 Thus, the jurisprudence applies a strict approach here. 44 The direct causal link is much more than a simple consequence. The damage has to be closely linked to the occurrence, in the present case the pandemic and the curfew, sanitary or quarantine measures trying to limit the impact and the further spread of it. The change in clients’ behaviour, e.g. not flying during the holiday period even if it is not forbidden, is not sufficient to prove the direct causal link 45 . A good example for the direct causal link are damages suffered due to forbidding the operation of flights to and from certain States, closing borders, forbidding to hold events above a set number of participants, obliging citizens (employees) to stay at home or similar lockdowns. The third condition is about how to quantify the damage suffered. Obviously, the compensation cannot go beyond the amount of damages, otherwise it would result in undue advantage, which is incompatible with the internal market. Therefore, Member States are required to present their calculation methodology in the notification. Using the terminology of the civil law’s extracontractual liability both the incurred expenses ( damnum emergens ) and the foregone revenue ( lucrum cessans ) can be covered. The whole calculation is about avoiding overcompensation. Consequently, operating costs not incurred due to the pandemic have to be disregarded and deducted from the damages. The other vital part of the notification in this respect is the explanation of the evidence what the Member State would accept as a proof for the damage. This can be an expert report, an auditor’s statement, etc. For COVID-19 measures, the Commission usually requires the comparison of the pre-pandemic reference period during which the beneficiary operated business as usual with the months under the lockdown measures. Once the amount of the damage per beneficiary is established with the methodology approved by the Commission, the Member State can compensate up to 100% of the damage, but they can set a lower threshold as they see reasonable. 44 See the judgment in case T-268/06 Olympiaki Aeroporia Ypiresies v Commission, paragraph 46. 45 Nevertheless, State aid still can be compatible in these cases under Article 107 (3)(b) TFEU.