The criterion of financial nature, defined in Section 4641 (3) of the Civil Procedure Law complies with the first sentence of Article 91 and the first sentence of Article 92 of the Satversme

13.03.2020.

On 12 March 2020, the Constitutional Court passed the judgement in case No. 2019-11-01 “On Compliance of Section 4641 (3) of the Civil Procedure Law with the First Sentence of Article 91 and the First Sentence of Article 92 of the Satversme of the Republic of Latvia”.

The Contested Norm

 On 9 June 2016, the Saeima adopted amendments to the Civil Procedure Law, adding the third part to Section 4641 of the Law. The amendments entered into force on 13 July 2016.

Section 4641(3) of the Civil Procedure Law (hereafter – the contested norm) provides: “If a cassation complaint formally complies with the requirements referred to in Paragraph one of this Section and if the court has not breached the provisions of Section 452, Paragraph three of this Law and the case to be examined has no significant meaning for ensuring a unified case-law or further formation of law, the judicial collegium may refuse to initiate cassation proceedings also in disputes of a financial nature, if the part thereof, in which the judgment is appealed, is less than EUR 2000.”

 Norms of Higher Legal Force

 The first sentence of Article 92 of the Satversme of the Republic of Latvia (hereafter– the Satversme): “Everyone has the right to defend his or her rights and lawful interests in a fair court.”

The first sentence of Article 91 of the Satversme: “All human beings in Latvia shall be equal before the law and the courts.”

 The Facts

Applicant Mihails Kondakovs holds that the contested norm is incompatible with the right to a fair trial enshrined in the first sentence of Article 92 of the Satversme as well as the principle of equality included in the first sentence of Article 91 of the Satversme. I.e., it is alleged that the contested norm places disproportional restrictions on access to the cassation instance court for those persons, who appeal in the cassation procedure against a court’s judgment in a dispute of financial nature in the part thereof that is less than 2000 EUR. The Applicant had submitted a cassation complaint regarding a judgement by the appellate instance court in a dispute of financial nature in a civil case.

The Senate of the Supreme Court, on the basis of the contested norm, had refused to initiate cassation legal proceedings. The Applicant believes that by this he had been denied access to the cassation instance court; i.e., the case had not been examined in the cassation instance on its merits.

The Applicant also holds that the restriction on initiating cassation legal proceedings envisages differential treatment, based on a characteristic of financial nature. Allegedly, establishing of differential treatment like this is unjustifiable.

The Court’s Findings

On the existence of a restriction on fundamental rights

The institution, which issued the contested act, – the Saeima – requests terminating legal proceedings in the case being of the opinion that the contested norm does not restrict the Applicant’s right to a fair trial envisaged in the first sentence of Article 92 of the Satversme as well as the right to equal treatment included in the first sentence of Article 91 of the Satversme.

To clarify, whether legal proceedings in the case should be continued, the Constitutional Court, first of all, established, whether the contested norm fell within the scope of the fundamental rights defined by the first sentence of Article 92 of the Satversme and whether it infringed upon the Applicant’s fundamental rights envisaged in the Satversme. [9.]

The Constitutional Court found that the State enjoyed discretion in defining the scope in which the right to a fair trial was exercised as regards access to the appellate instance courts; however, the State was not allowed to exercise its discretion in a way that substantially denied the right to a fair trial.

Hence, the legislator may establish procedural order and conditions for access to the cassation instance court; however, this procedure and conditions must comply with the principle of the rule of law, aimed at ensuring justice. [10.]

It was found that the contested norm had been applied to the Applicant and that, in his legal situation, it restricted the rights, the protection of which fell within the scope of the first sentence of Article 92 of the Satversme. [11.]

On whether the restriction on fundamental rights had been established by law, whether it has a legitimate aim and whether the measure chosen by the legislator is appropriate for reaching the legitimate aims

Assessing the proportionality of the restriction on the accessibility of cassation instance court in civil procedure, included in the contested norm, the Constitutional Court verified, whether the measure introduced by the legislator for reaching the legitimate aim was necessary and reasonable, whether it ensured fair administration of justice in a democratic state governed by the rule of law, respecting a court’s independence and discretion. [12.]

The Constitutional Court recognised that the restriction of fundamental rights that followed from the contested norm had been established by law and its legitimate aim was to protect the order of a democratic state governed by the rule of law. [14.]

 The Constitutional Court found that the discretion granted to the Senate to decide, abiding by the conditions set in the restricted norm, on the issue of compliance of a cassation complaint with the principle of cassation, was necessary and reasonable in a democratic state governed by the rule of law. [15.]

As regards the alleged incompatibility of the contested norm with the principle of equal treatment, the Constitutional Court found that the contested norm did not establish a criterion that had to be applied imperatively to a person or a group of persons. The judicial collegium decides on the matter of initiating cassation legal proceedings, within the framework of discretion granted to it by the legislator, by applying the criteria set in the contested norm to a particular category of cases rather than a particular person. I.e., the judicial collegium may apply these criteria to disputes of civil law nature of a certain kind and scope, in each particular case, considering, whether the case under review would be significant in ensuring uniform-case law or the development of law but always striving for justice, which is the ultimate purpose of the legal system of a democratic state governed by the rule of law. The criterion of financial nature, included in the contested norm, per se cannot be considered as being a characteristic, by which a group of persons should be identified in the meaning of Article 91 of the Satversme. Hence, the groups of persons identified by the Applicant are not comparable from the perspective of the equality principle. [16.]

The Constitutional Court held:

 to recognise Section 4641 (3) of the Civil Procedure Law as being compatible with the first sentence of Article 91 and the first sentence of Article 92 of the Satversme of the Republic of Latvia.

The judgement by the Constitutional Court is final and not subject to appeal, it shall enter into force on the day it is published. The judgement will be published in the official journal “Latvijas Vēstnesis” within the term set in Section 33 (1) of the Constitutional Court Law.

The text of the judgement in Latvian is available on the homepage of the Constitutional Court: http://www.satv.tiesa.gov.lv/web/viewer.html?file=/wp-content/uploads/2019/07/2019-11-01_Spriedums.pdf#search=

Linked case: 2019-11-01