The Essence of Inverse Condemnation
Inverse condemnation is the situation where the state does not expropriate or take property, but an act lawfully issued by it produces the result that substantial damage befalls a private person or a group of persons. The general part of administrative procedure answers precisely this case with an obligation of compensation: where an administrative-legal act issued in accordance with Georgian legislation for public necessity causes, contrary to the principle of equality, substantial damage to only one private person or group of persons, the state organ or the municipality is obliged to compensate the damage inflicted by that act. Three elements are decisive here: the lawfulness of the act on the ground of public necessity, the substantiality of the damage, and its attachment to a separate private person or group — contrary to the principle of equality, that is, the damage is not distributed across society but shifted one-sidedly onto someone. Such a burden typically accompanies infrastructural, planning or environmental decisions, where the public benefit is real but its price falls disproportionately on one neighbour or one business. This is precisely what distinguishes the condemnation claim from damage caused by an unlawful act: in the first case the act remains in force and compensation is sought, in the second the unlawfulness of the act itself is the core of the claim.
The Extent of Compensation and the Balance of Interests
The extent of compensation for the damage is determined on the basis of an assessment of the interests of the public and the private person — this is the special measure of damages peculiar to lawful acts. For the claimant it means that the claim must show not only the computation of the loss but also the disproportion: that the benefit serving the public interest is built on the sacrifice of a single private subject. The obligation to compensate rests on the state organ or the municipality and not on a particular official — the liable subject is the public formation itself. For the claimant this matters for solvency as well: the claim is directed at a budget-bearing subject and not at an individual official whose property may not suffice to satisfy it.