A building is partly destroyed by fire. Before the insurer has paid, a public development agency compulsorily purchases the plots. The transfer of ownership stops everything: the owning company will never rebuild, and the insurance indemnity, computed for a rebuild, will not be paid to it. The Toulouse Court of Appeal adds to the dispossession indemnity a lost chance, set at 95 % of the insurers’ agreed assessment of the damage, 2,620,269.11 € net of depreciation. The acquiring authority objects: the claim was not certain, and the assessment relies on a report dated after the first-instance judgment. On 8 January 2026 the Cour de cassation (the French supreme court for civil matters) dismissed the appeal: the loss of the insurance claim results from the transfer of ownership, it is a direct loss, and to value a claim that arose before the expropriation the court may take into account evidence produced after the first-instance judgment. The ruling describes exactly the valuation work for a damaged property that is expropriated.
The facts
A civil company is compulsorily purchased, by a public development agency, of plots on which stood a building partly destroyed by a fire that occurred before the expropriation order. The insurer covered the fire risk; the owner had no part in the loss and could claim cover for all its damage; the indemnification process was under way, with an appraisal between insurers.
On remittal after a first quashing, the Toulouse Court of Appeal, on 20 December 2023, fixes the dispossession indemnities including the lost chance of receiving the insurance indemnity. It relies on a report of findings on the assessment of damage, signed by the insurers’ experts on 1 March 2022, which sets the damage at 2,620,269.11 € net of depreciation, and puts the lost chance at 95 %. The acquiring authority argues that the court retained an uncertain loss, and used a document dated after the first-instance judgment of 10 December 2020, the date at which property must be valued.
The decision
The third civil chamber dismissed the appeal (Cass. 3e civ., 8 January 2026, no. 24-11.299).
On principle, the Court of Appeal “rightly held that the loss by the expropriated party of an indemnity claim owed by the insurer of a property destroyed by fire before the expropriation order constitutes a direct loss linked to the expropriation, since it results from the transfer of ownership caused by it”. Having found that the insurer covered the risk, that the owner had no part in the loss, that the insurers’ experts agreed on the amount, and “that absent expropriation it would have kept its property, had the building rebuilt and been able to receive an indemnity of that amount”, the Court of Appeal “could infer that, the indemnification process having been unable to run its course because of the expropriation, the loss suffered by the expropriated party amounted to a lost chance, the amount of which it fixed within its sovereign power”.
On the date, “the expropriated party’s indemnity claim having arisen before the expropriation, the Court of Appeal could, in order to value it at the date of the first-instance judgment, take into account valuation evidence established after that date”.
What this changes for valuation
A damaged property is valued as it stands, plus what it would have yielded. At the reference date the building is a partly destroyed shell on a plot: that is the condition the dispossession indemnity retains, land and residual value of the structure. But the owner of an insured property also held a claim against its insurer, often worth more than the shell, and the expropriation makes it lose that claim because a rebuilding indemnity presupposes rebuilding. The ruling accepts that this loss is added to the main indemnity, in the form of a lost chance.
Do not count twice. The valuation report separates three values and explains how they fit together. The market value of the property in its post-fire condition, at the reference date. The value it would have had once rebuilt, which is not owed as such. The insurance indemnity the owner would have received, net of depreciation or at new-for-old value depending on the policy, which represents what the expropriation takes away. The sum of the first and the third must not exceed what the rebuilt building would be worth; if it does, one of the two is miscalculated. That consistency check is what the judge expects from a report on a damaged property.
The lost chance and its rate. The insurance indemnity had not yet been paid; the court could not treat it as acquired, hence a lost chance, whose rate, 95 % here, reflects the near certainty of settlement: cover in place, loss not attributable to the insured, experts agreed on the amount. The valuer supplies the elements of that probability, policy, insurers’ experts’ report, excess, cap, and leaves the rate to the judge.
The valuation date and later evidence. Property is valued at the date of the first-instance decision, a rule recalled in the article on three compulsory purchase rulings. The ruling adds that a claim which arose before the expropriation may be valued, at that date, with documents produced later: here the insurers’ experts’ report of 2022 for a judgment of 2020. The valuation report may therefore rely on the evidence available when it is written, provided it places itself at the valuation date for the value.
Net of depreciation or new-for-old. The amount retained was “net of depreciation”; a new-for-old policy pays the balance after rebuilding. Without rebuilding, that balance is lost to everyone, and there is no point claiming it. The valuer reads the policy before quantifying, as he reads the lease before valuing a rent.
What the valuer takes from it
- The loss of the insurance claim on a property burnt before the expropriation is a direct loss, compensated as a lost chance.
- The report presents the value of the property as it stands, the rebuilt value and the lost insurance indemnity, and checks that the total remains consistent.
- The rate of the lost chance depends on the cover, the attributability of the loss and the experts’ agreement on the amount.
- A claim that arose before the expropriation is valued at the date of the first-instance judgment, with evidence even if later.
- The policy, net of depreciation or new-for-old, sets what could really have been received.
Further reading
The Compulsory purchase and pre-emption page describes the assignment, its timescale and its fee. The glossary entries indemnité principale, date de référence and valeur de reconstruction complement this article. On the same theme: Compulsory purchase: ordered works, common parts, land reserve and Hidden defect known to the seller: market value caps nothing. The decision is available on Légifrance.
What next
A damaged property, a compulsory purchase, and an insurance payout that will never come?
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