The Norm, which Defines the Amounts in which the Costs for the Assistance of an Advocate Related to Conducting a Matter are Reimbursed for, is Compatible with the Satversme
On 29 April 2015 the Constitutional Court passed a judgement in Case No. 2014-31-01 “On Compliance of Para 1, Sub-paragraph b) of Section 44 (1) of the Civil Procedure Law (in the wording of 29 November 2012) with Article 1, Article 91, Article 92 and Article 105 of the Satversme of the Republic of Latvia.”
The costs for the assistance of an advocate are to be reimbursed for in accordance with the regulation that is in force at the moment of adopting the ruling
The Contested Norm
Subparagraph b) of Para 1 in Section 44(1) of the Civil Procedure Law: “Costs related to the conducting of a matter shall be reimbursed in the following amounts:
1) costs for the assistance of an advocate:[..]
b) reimbursable expenses for paying for the assistance of an advocate in claims which are financial in nature and the claim sum in which is from 6001 lats up to 40 000 lats – in the actual amount thereof, but not exceeding 2000 lats.”
The Norms of a Higher Legal Force
Article 1 of the Satversme: “Latvia is an independent democratic republic.”
Article 91 of the Satversme: “All human beings in Latvia shall be equal before the law and the courts. Human rights shall be realized without discrimination of any kind.” The Constitutional Court, in view of the limits of the claim, examined the compatibility of the contested norm with the first sentence of this Article. [19]
Article 92 of the Satversme: “Everyone has the right to defend his or her rights and lawful interests in a fair court. Everyone shall be presumed innocent until his or her guilt has been established in accordance with law. Everyone, where his or her rights are violated without basis, has a right to commensurate compensation. Everyone has a right to the assistance of counsel.” The Constitutional Court, in view of the limits of the claim, examined the compatibility of the contested norm with the first sentence of Article 92. [9.1.]
Article 105 of the Satversme: “Everyone has the right to own property. Property shall not be used contrary to the interests of the public. Property rights may be restricted only in accordance with law. Expropriation of property for public purposes shall be allowed only in exceptional cases on the basis of a specific law and in return for fair compensation.”
The Facts
The case has been initiated having regard to a constitutional complaint by Ivo Ržepickis. The applicant had been involved in legal proceedings in 2012 and 2013, where his claim was rejected. Therefore he had the obligation to reimburse to the other party the costs for paying for an advocate’s assistance. Since the court decided on the amount of costs to be reimbursed for after 1 January 2013, it applied the contested norm to determine the amount of costs to be reimbursed for. Therefore the amount of costs for the advocate’s assistance to be reimbursed for increased approximately three and a half times, compared to the previous procedural regulation. The applicant notes that the contested norm violates his fundamental rights guaranteed in Article 91, Article 92 and Article 105 of the Satversme, since it is being applied to the reimbursement of those costs that had originated before its coming into force. The legislator, in increasing the amount of costs to be reimbursed for, allegedly had the obligation to establish a more lenient transition to the new regulation, but this was not done. Therefore, it is alleged that the contested norm is also incompatible with the principle of legal certainty that follows from Article 1 of the Satversme.
Court Findings and Ruling
On the right to a fair court
The Constitutional Court established that the contested norm was a norm of procedural law, [10] pointing that one of the generally recognised principles of procedural law was the rule that litigation in a civil case was regulated by those norms of civil procedure law that were in force at the time of examining the case, performing particular procedural actions or enforcing the court judgement [8.1]. Therefore the contested norm is to be applied also in those cases, where the litigation had been commenced and the costs to be reimbursed occurred before its coming into force [8].
The Constitutional Court recognised that the legislator had the right to adopt also amendments with immediate force. I.e., attributing the force of the adopted legal regulation also to such legal relationships that had been initiated before this regulations came into force and that are ongoing at the moment of its coming into force is admissible. However, the legislator, in adopting such norms of procedural law, has the obligation to assess their impact upon the legal relationships that have been already initiated and, if necessary, envisage a more lenient transition to the new regulation to ensure a reasonable balance between persons’ legal certainty and the benefit gained by society. At the same time the Constitutional Court also noted that by comparing the interests of persons and of society, the necessity to have new regulation might be given priority. [9.2]
Hence, the Constitutional Court fist and foremost examined the compliance of the contested norm with Article 1 and the first sentence in Article 92 of the Satversme, in their interconnection. [9.2.]
The Constitutional Court recognised that the contested norm restricted the applicant’s right to a fair court, since the amount of costs to be reimbursed for was increased at the time of hearing the case [11], and examined:
- whether the restriction had been established by law;
- whether the restriction had a legitimate aim;
- whether the restriction was proportional. [12]
The Constitutional Court recognised that the case contained no dispute on whether the restriction had been established by law. [13] Likewise, the Court recognised that the restriction had a legitimate aim – protection of other persons’ rights, i.e., the norm both protects the rights of that party to the case, in whose favour the court ruling is made, and also ensures the effectiveness of the court system. [14]
In examining the proportionality of the restriction upon fundamental rights, the Constitutional Court concluded that the adverse consequences caused to a person were smaller than the benefit that society gained from the adoption of the contested norm, and that it placed proportional restriction upon the applicant’s rights. [18.3]
I.e., it was necessary to adopt the contested norm to guarantee to all persons, in favour of whom a court ruling was made, the right to receive reimbursement of costs in a fair amount. [18.1] Likewise, the Constitutional Court also noted that with regard to the costs to be reimbursed for, which have originated by paying for an advocate’s assistance, an exemption to the principle that the costs linked to conducting a matter are to be reimbursed in full had been made. The Constitutional Court recognised that the restriction established by the contested norm ensured a balance between the interests of both parties in litigation [18.2.2]
In examining, whether the principle of legal certainty had been complied with, the Constitutional Court noted that the previous procedural regulation did not give to the applicant the right to be certain that the legal regulation would not change and, thus, that also the costs of litigation would remain unchanged. [18.2]
The applicant has not been denied access to a court on its merits. Moreover, the legislator has struck a balance between the interests of society and a person’s legal certainty, allowing the court, abiding by the principles of justice and proportionality, to examine the amount of costs to be reimbursed for that are to be enforced, as well as, upon a party’s request, postpone enforcement of the judgment in this part or split it into terms [18.2.3, 18.2.4.]
Thus, the Constitutional Court recognised that the contested norm complied with Article 1 the first sentence of Article 92 of the Satversme. [18.3]
On the compliance of the contested norm with the principle of equality
The Constitutional Court noted that following amendments to legal acts, a situation, where the changes in regulation per se create both two groups of persons and differential treatment of them, always occurred after amending legal acts. This situation as such does not violate the principle of equality; however, it must be assessed, whether the legislator, in amending the regulation, has complied with the principle of legal certainty. [19.2]
Since the Constitutional Court, in examining the compatibility of the contested norm with Article 1 and Article 92 of the Satversme, concluded that the principle of legal certainty had not been violated, it recognised that the contested norm was compatible with the first sentence of Article 91 of the Satversme [19.1]
On the compatibility of the contested norm with Article 105 of the Satversme
The Constitutional Court recognised that the contested norm did not infringe upon the applicant’s right to own property, since the issue of the proportionality of litigation costs must be examined in the scope of Article 92 of the Satversme, as a restriction upon the right to a fair court. Pursuant to the Civil Procedure Law, all persons may freely exercise their subjective rights and use measures for their protection. Thus, any litigation costs are first of all created by the person himself or herself, through their free will, not by an obligation to start litigation established by the State. [20]
Thus, the Constitutional Court terminated legal proceedings in the part regarding compatibility of the contested norm with Article 105 of the Satversme. [20]
The judgement by the Constitutional Court is final and not subject to appeal, it shall come into force on the day it is published.
Linked case: 2014-31-01