Expropriation. Attorneys have the right to file a direct action to seek redress and the attorney’s fees.

JUDGMENT

Kandarakis v. Greece 11.06.2020 (no. 48345/12, 48348/12 and 67463/12)

see here

SUMMARY

Payment of legal remuneration and court costs. Right of access. Lawyers’ rights.

Rejection, for lack of active legal standing, of the lawyers claim who represented their clients in a case of expropriation. The lawyers demanded that the debtor company deposit the awarded amounts of attorney’s fees and court costs in favor of the Bar Association of which they were members. The Court has ruled that the rejection of the lawsuit constitutes a restriction on the right of access to a court of lawyers, which conflicts with the principle of proportionality.

Articles 8 and 18 of Law 2882/2001 stipulate that both the court costs and the fees of the attorneys-at-law must be determined by the court which will award compensation for the expropriation and must be deposited in the Deposits and Loans Fund in  the name of the relevant Bar Association. The national courts, by rejecting the action of the lawyers, deprived in violation of 6-1 of the ECHR the right to bring direct action to the members of the Bar Associations-beneficiaries of the fee, given that no provision of the Greek procedural system provides for procedural possibility of the Bar Association to bring an action for the remuneration of its members and on the other hand the non-possibility of a lawyer to bring a direct action for the collection of his remuneration, by depositing the amount in the relevant Bar Association.

According to the ECtHR, the above legal framework and the manner in which it is applied by national courts did not provide applicants with a clear, practical and effective opportunity to claim their claims, as it was not clear who could sue for the amount awarded. attorney’s fee from courts that decide on expropriations.

SThe Court has awarded 20,000 euros in non pecuniary damages to both applicants.

PROVISIONS

Article 6par.1

Article 1 of the First Additional Protocol

PRINCIPAL FACTS

The applicants, Alexandros Kandarakis and Michail Kandarakis, are Greek nationals who were born in
1938 and 1979 respectively and live in Athens.

The case concerned court decisions on the payment of lawyers’ fees in expropriation proceedings.
The applicants, lawyers registered with the Athens Bar Association, represented clients who won
compensation proceedings for expropriated property. The first set of proceedings was held in the
town of Kalavryta, the second in Korinthos, and the third in Athens.

Under the applicable law, the courts had to set costs in such expropriation cases, including lawyers’
fees. The fees were then to be deposited with the Consignment Deposits and Loans Fund, which
passed them on to the lawyers’ bar association, which then paid them to the lawyers, minus a fee.
In the applicants’ case, the ERGOSE AE company, which had been the defendant in the first two
cases, deposited the fees with the Consignment Deposits and Loans Fund for the benefit of the bar
associations of Kalavryta and Korinthos after judgments issued in 2007. In the third case, in which
the compensation judgment was issued in 2002, the fees were deposited with the Fund by the
defendant, the Ministry for the Environment, Regional Development and Public Works, to the
benefit of the Athens Bar Association, but the Fund declined to pass the money on.

The applicants brought proceedings related to the first two cases to have the money deposited to
the benefit of the Athens Bar Association. Their requests were declined on the grounds that they
lacked standing as the bar association itself had to bring the actions, which it duly did.

In the first case, an appeal court in 2017 referred the case to the competent court and a final
decision is still pending. In the second case, the final court decision found in 2018 that the Korinthos
Bar Association had already paid over half of the amount awarded as lawyers’ fees to the Athens Bar
Association and that the claim related to the other half had become time-barred.

In the third case, the applicant challenged the Fund’s refusal to pay the fees to the Athens Bar
Association, but his case was again ultimately unsuccessful on the grounds that only the association
could initiate proceedings. It began such an action in November 2013, which eventually led to the
Fund paying over the required amount.

The applicants complained in particular that the dismissal of their actions against the Consignment
Deposits and Loans Fund to have the amounts fixed as lawyers’ fees deposited to the benefit of the
Bar Association on the grounds that they lacked standing had violated their rights under Article 6 § 1
(access to court).

THE DECISION OF THE COURT…

VIOLATION OF ARTICLE 6

(i)  Preliminary remarks

The Court notes at the outset that apart from the applicants right of access to a court, the parties put forward arguments in respect of the issue of which bar association should be the beneficiary of the amounts fixed as lawyers fees. However, the Courts task in the present case, having regard to the complaints before it, is to review whether the applicants right of access to a court was impeded owing to the rejection of their action by the domestic courts.

(ii)  The restriction on the applicants right of access to a court

The applicants, after representing certain clients in expropriation proceedings, lodged actions with the domestic courts seeking that the amounts fixed as lawyers fees be deposited by the Consignment Deposits and Loans Fund with the bar association with which they were registered, only to see their actions be rejected for lack of locus standi. The Court notes that the domestic courts dismissal of the applicants actions (on the grounds that they were not entitled to lodge them) clearly amounts to an interference with the applicants right of access to a court. In so doing, the domestic courts cited Articles 8 and 18 of Law no. 2882/2001, which provided that amounts awarded as costs and expenses and as lawyers fees in expropriation proceedings should be deposited in the Consignment Deposits and Loans Fund to the benefit of the relevant bar association. The domestic courts accordingly concluded that only a bar association could bring a direct action, although the applicants could bring a subrogation action.

The Court will examine whether the restriction in question was justified, that is to say, whether it pursued a legitimate aim and it presented a reasonable relationship of proportionality between the means employed and the aim sought to be achieved.

(iii)  Whether the restriction pursued a legitimate aim

The Court observes that, according to the Government, the impugned legislation served the legitimate aim of ensuring that a lawyer would receive his fee and that the bar association would receive the amounts corresponding to the percentage to be distributed to its members. The Court sees no reason to doubt that in rejecting the applicants actions, domestic courts pursued a legitimate aim, namely to secure that both the lawyer in charge of the cases and the bar association would receive the amounts that were due to them pursuant to the legislation. It should thus be ascertained whether, in the light of all the relevant circumstances of the case, there was a reasonable relationship of proportionality between that aim and the means employed to attain it.

(iv)  Whether the restriction was proportionate

In order to assess the proportionality on the applicants restriction of access to a court, the Court will have regard to two criteria, namely a) whether that restriction was foreseeable based on the domestic legal framework and the deriving case-law (see, among other authorities, Lupaş and Others v. Romania, nos. 1434/02 and 2 others, § 69, ECHR 2006 XV (extracts)), b) whether the applicants had other legal remedies to assert their claims (see, mutatis mutandisDimitras v. Greece, no. 11946/11, § 41, 19 April 2018).

The Court notes that it does not have to assess the Greek system governing the payment of lawyers fees in expropriation proceedings; rather, it must confine its attention as far as possible to the issue raised by the specific case before it. It must nevertheless examine the relevant provisions to the extent to which the impediment to the individuals right of access was in fact the result of their being applied (see, mutatis mutandisPhilis, cited above, § 61, and De Geouffre de la Pradelle v. France, 16 December 1992, § 31, Series A no. 253B).

 In this connection, the Court firstly observes that the provisions applicable to the present case refer solely to the lawyers fees in the context of expropriation proceedings and do not concern the general system governing the lawyers fees. In particular, Articles 8 and 18 of Law no. 2882/2001 provided that both court expenses and lawyers fees should be fixed by the court ruling on compensation for the expropriation in question and should be deposited in the Consignment Deposits and Loans Fund to the benefit of the relevant bar association. However, there is no provision explicitly authorising solely a bar association to demand that amount or – for that matter, excluding a party to proceedings or that partys lawyer from demanding it so as to be deposited with the bar association.

In this regard, the Court considers it significant that the applicants actions were aimed at securing the deposit of the relevant amounts with their bar association, pursuant to the domestic legislation. Therefore, their actions aimed at ensuring that the relevant amounts were indeed deposited with their respective bar associations and thus, the laws purpose would have been served if the applicants actions had been allowed. It is not clear from the domestic framework provided why the applicants actions (seeking to have the amounts awarded to their clients as lawyers fees deposited with their respective bar associations) were rejected – especially if one takes into account judgment 25/1993 issued by the Special Supreme Administrative Court by which such a right was recognised in respect of engineers for the recovery of fees against their clients. None of the provisions cited in the domestic judgments explicitly deprived the applicants of the right to bring a relevant action. The Court considers that the present cases and the system governing the lawyers fees in expropriation proceedings differs from the case of engineers, which the Court examined in Philis (cited above) and resulted in the adoption of the aforementioned judgment of the Supreme Administrative Court. However, they share a common feature, given that, in Philisas well as in the present cases, the beneficiaries were denied direct locus standi to assert their claims, in addition to the possibility offered by the domestic law to the relevant professional bodies to lodge a relevant action.

The Court takes note of the Governments argument that the lawyers fees had constituted the largest part of the amounts fixed as costs and expenses and had been awarded to the persons whose property had been expropriated, the applicants clients. The Court observes, however, that that argument is contradicted by the wording of Articles 8 and 18 of Law no. 2882/2001, in which the court expenses are cited separately from the lawyers fees, as well as from the domestic judgments which cited the two amounts separately. In addition, while the domestic courts have ruled that an amount awarded as lawyers fees belongs to the party that wins the proceedings in question, the Court notes that, under the relevant domestic legislation, the beneficiary is considered the respective bar association.

Having regard to what precedes, the Court concludes that the relevant legislative framework and the way it was applied by the domestic courts did not offer to the applicants a clear, practical and effective opportunity to assert their claims, as it did not follow with sufficient clarity who could bring an action seeking the amount awarded as lawyers fees by the courts ruling on the expropriations. In order to conclude, however, that there was a violation of the applicants right of access to a court, the Court has to ascertain whether there were other domestic remedies available to the applicants in order for them to be able to assert their claims.

In this regard, the Court has to examine the other possibilities that the Government alleged that the domestic law offered – namely the possibility to bring a subrogation action and the possibility to bring a direct action against their clients. As regards the subrogation action, the Court notes that it is generally agreed that such an action constitutes a sui generis action aimed at safeguarding the property of a debtor in the interests of a creditor. A person who brings a subrogation action must prove that he is the creditor of a debtor who has neglected to exercise his rights (see Philis, cited above, § 52). However, the Government have not adduced any domestic judgments in which a subrogation action brought by a lawyer seeking to have fees fixed by domestic courts in expropriation proceedings deposited with a bar association have been accepted by the domestic courts. What is more, the provisions relating to the possibility to bring a subrogation action relate to the relationship between a creditor and a debtor; therefore, the interpretation taken by the domestic courts was not easily inferred.

The same considerations apply to a direct action brought by a lawyer against his client. Under the relevant domestic legislation this could constitute an effective remedy in proceedings in which a fee has been agreed upon by a lawyer and his client; however, in expropriation proceedings a lawyers fee is fixed by the court and it appears that the system governing the lawyers fees in expropriations differs from the ordinary system . The Court takes note of the domestic judgments holding that that amount is separate from the actual fee agreed by a lawyer and his client. However, while those judgments affirmed a lawyers right to seek independently and directly his fee from his client (irrespective of what the expropriation court had awarded), the Court has not been apprised of any actual instance of a lawyer successfully bringing such an action following expropriation proceedings. In this regard, the Court reiterates that the Convention is intended to guarantee rights that are practical and effective and not theoretical and illusory (see, among many other authorities, Ibrahim and Others v. the United Kingdom [GC], nos. 50541/08 and 3 others, § 272, 13 September 2016). The fact that there exist some remedies available in theory should not lead the Court to ascertain that they are available in practice, especially when the Government have failed to provide any relevant domestic decision illustrating the effectiveness of such remedy. In the present cases, the domestic decisions adduced by the Government refer to procedures other than expropriation, which, however, as said above, is governed by a different system relating to lawyers fees.

In that regard, the Court reiterates that the authorities should respect and apply domestic legislation in a foreseeable and consistent manner and that the prescribed elements should be sufficiently developed and transparent in practice in order to provide for legal and procedural certainty (see Jovanović v. Serbia, no. 32299/08, § 50, 2 October 2012).

Having regard to the above, the Court concludes that the restriction imposed on the applicants right of access to a court was not proportionate. In particular, the Court is not satisfied that the relevant rules applicable in the present case met the quality-of-law requirement under the Convention and were sufficiently foreseeable. The applicants were entitled to expect a coherent system based on a clear, practical and effective opportunity to assert their claims, which was not the case here. The above-mentioned conclusions are not contradicted by the fact that the applicants in the end received some, or even all, the fees awarded in the respective cases, following the actions brought by the Athens Bar Association. The applicants were still faced with the lack of a coherent system to assert their claims, namely to request that the amounts fixed as lawyers fees by the courts ruling on expropriation be deposited to the Bar Association with whom they were registered, and, in the absence of an alternative domestic remedy, could claim to be victims of a violation of their right of access to a court.

In view of the foregoing, the Court dismisses the Governments objections concerning the applicants lack of victim status and the non-exhaustion of domestic remedies. It accordingly concludes that there has been a violation of the applicants right of access to a court.

There has accordingly been a violation of Article 6 of the Convention.

ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1 TO THE CONVENTION

The applicants complained that the dismissal of their actions by the domestic courts had violated their right to the peaceful enjoyment of property, as provided in Article 1 of Protocol No. 1 to the Convention, which reads as follows:

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”

The Court notes that the Government have submitted various objections concerning the admissibility of the present complaints. In this connection, the Court considers it opportune here to distinguish the applications.

  1. Application no. 67463/12

 As regards application no. 67463/12the Court considers that, for the reasons set out below, there is no objective justification for continuing to examine this complaint and that it is thus appropriate to apply Article 37 § 1 of the Convention.

In order to ascertain whether Article 37 § 1 (b) applies to the present case, the Court must answer two questions in turn: first, whether the circumstances complained of directly by the applicant still obtain and, second, whether the effects of a possible violation of the Convention on account of those circumstances have also been redressed (see Pisano v. Italy (striking out) [GC], no. 36732/97, § 42, 24 October 2002and El Majjaoui and Stichting Touba Moskee v. the Netherlands (striking out) [GC], no. 25525/03, § 30, 20 December 2007).

In respect of the first criterion, it is not in doubt that the circumstances complained of by the applicant do not anymore obtain. In particular, following an action brought by the Athens Bar Association, the applicant received the amount that was awarded as lawyers fees in the expropriation proceedings in which he represented his client. In addition, having regard to the nature of the alleged violation, the Court considers that the effects of the possible violation have also been addressed by the applicant having received the relevant amount. The Court finds therefore that both conditions for the application of Article 37 § 1 (b) of the Convention are met. The matter giving rise to the applicants complaints can therefore now be considered to be “resolved” within the meaning of Article 37 § 1 (b). Finally, no particular reason relating to respect for human rights as defined in the Convention requires the Court to continue its examination of the application under Article 37 § in fine. Consequently, the case should be struck out of the list in so far as the complaint under Article 1 of Protocol No. 1 to the Convention is concerned.

  1. Applications no. 48345/12 and 48348/12

Turning to the circumstances of the present cases, the Court notes that the applicants brought actions in the domestic courts seeking that the relevant fees that had been awarded as lawyers fees in expropriation proceedings in which they had represented certain clients be deposited with their bar association. The Court notes that in none of their actions did the applicants expressly rely on or raise an issue under Article 1 of Protocol No. 1 to the Convention. Moreover, the applicants did not raise any specific arguments about an alleged violation of their right to the peaceful enjoyment of their property (even in substance) before the domestic courts. Instead, the applicants confined themselves to challenging the domestic courts interpretation of the relevant domestic legislation as regards their locus standi.

In this connection, the Court notes that it follows from its case-law that the mere fact that an applicant has submitted his or her case to the relevant court does not of itself constitute compliance with the requirements of Article 35 § 1 of the Convention, as even in those jurisdictions where the domestic courts are able, or even obliged, to examine the case of their own motion, applicants are not dispensed from the obligation to raise before them a complaint subsequently made to the Court. Thus, in order properly to exhaust domestic remedies it is not sufficient for a violation of the Convention to be “evident” from the facts of the case or the applicants submissions. Rather, the applicant must actually have complained (expressly or in substance) about it in a manner that leaves no doubt that the same complaint that is subsequently submitted to the Court was indeed raised at the domestic level (ibid.; see also Peacock v. the United Kingdom (dec.), no. 52335/12, § 38, 5 January 2016).

In the case at issue, for the reasons set out above, it cannot be accepted that the applicants raised their complaints under Article 1 of Protocol No.1 to the Convention before the domestic courts prior to raising that complaint before the Court.

 In these circumstances, the Court takes the view that the applicants did not properly exhaust domestic remedies and thus did not provide the national authorities with the opportunity – which is in principle intended to be afforded to Contracting States under Article 35 § 1 of the Convention – of addressing (and thereby preventing or putting right) the particular Convention violation alleged against them.

The Court therefore finds that the applicants in applications nos. 48345/12 and 48348/12 have failed to exhaust domestic remedies in respect of their complaints under Article 1 of Protocol No. 1 to the Convention and that these complaints must therefore be rejected as inadmissible under Article 35 §§ 1 and 4 of the Convention.

Violation of Article 6 § 1

Just satisfaction: 10,000 euros (EUR) each to Alexandros Kandarakis and Michail Kandarakis (nonpecuniary damage) and EUR 1,500 to the applicants jointly (costs and expenses)


ECHRCaseLaw

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