Study on Loss of Necessary Benefit in Administrative Compensation

Abstract

On March 21, 2022, the Supreme People’s Court issued the Judicial Interpretation on Administrative Compensation, expanding the scope of direct losses under the State Compensation Law. This landmark development extends the definition of actual losses in administrative compensation litigation from direct damages to include lost expected benefits—a milestone in China’s administrative legal reform. For decades, theoretical and practical circles have debated the concept of “expected benefits” in administrative compensation. Through this judicial interpretation, we examine the current challenges in determining actual losses within China’s compensation framework, including inconsistent standards, diverse calculation methods, and complex procedures. By integrating the State Compensation Law with administrative regulations and judicial interpretations, this study clarifies the theoretical foundations and practical criteria for assessing actual losses, delineates the boundaries between direct and indirect losses, and incorporates property depreciation and lost expected benefits resulting from administrative actions into the compensation scope.