Current Affairs

Judgment Pl. ÚS 7/19 - Fee for Filing a Complaint with the Office for the Protection of Competition

30 October 2019

 

Headnotes:

The constitutional principle of the rule of law [Art. 1 (1) and Art. 2 (3) of the Constitution of the Czech Republic and Art. 2 (2) of the Charter of Fundamental Rights and Freedoms] directly implies the requirements of predictability and consistency of law and prohibition of arbitrariness; at the same time the principle of primacy of an individual before the State applies, according to which the State serves all citizens, not the other way round. The requirement of unambiguousness of the law and its internal compliance applies even more when the law provides for a fee obligation within the meaning of Article 11 (5) of the Charter. This fee obligation must be stipulated by the law in an unambiguous, comprehensible, consistent and predictable manner.

The provisions of Section 259 of Act No. 134/2016 Coll., on Public Procurement, as amended (hereinafter “Public Procurement Act”), contradict the requirement of predictability and consistency of the law as an essential prerequisite of the rule of law state, as well as the requirement of good administration, based on a forthcoming attitude and communication of administrative authorities with citizens. The payment of the fee thus serves as a condition for the procedure of the administrative authority even if the latter is obliged to initiate proceedings ex officio. It is true that the State is not supposed not to levy a special fee to act where it is required to do so by law.

 

Summary:

I. Transparency International – Česká republika, o. p. s. (Petitioner) filed a complaint with the Office for the Protection of Competition (hereinafter “OPC”) seeking the initiation of an administrative procedure ex officio to review the contracting authority’s actions in the selection of the licence holder and at the same time, it requested information on how its complaint was handled. The OPC responded only upon the reminder that, as the Petitioner had failed to pay a fee of CZK 10,000 for filing a complaint within the time limit, the complaint could not be handled. The Petitioner subsequently filed an  intervention action with the regional court, arguing that, under the general principles and regulations of administrative law, the complaint must always be dealt with and the complainant has a general right to know how the complaint was handled. At the same time, it argued that the provisions of Section 259 of the Public Procurement Act, on the basis of which it was imposed to pay the fee, were unconstitutional and proposed that the case be referred to the Constitutional Court. However, the regional court concluded that the intervention action was ill-founded and, although Section 259 of the contested Act raised some doubts, it was not contrary to the constitutional order. The Petitioner filed a cassation complaint against the regional court’s decision, which was nevertheless dismissed by the Supreme Administrative Court. The Petitioner filed a constitutional complaint against the decisions of the administrative courts (registered under file reference II. ÚS 1270/19), which it associated with the petition seeking the annulment of Section 259 of the Public Procurement Act. In addition to the amount of the fee, the contested provision stipulates, inter alia, that unless the fee is paid, the complaint is not handled, the fee is not refunded and neither an exemption from the fee nor an extension of the time limit for the payment is permissible. The Second Chamber of the Constitutional Court stayed the proceedings on the constitutional complaint and submitted a petition seeking the annulment of the provision concerned to the Plenum of the Constitutional Court.

II. The Constitutional Court concluded that the petition was well-founded. It noted that the constitutional principle of the rule of law [Art. 1 (1) and Art. 2 (3) of the Constitution and Art. 2 (2) of the Charter] directly implies the requirements of predictability and consistency of law and the prohibition of arbitrariness; at the same time, the principle of primacy of an individual before the State applies, according to which the State serves all citizens, not the other way round. The requirement of unambiguousness of the law and its internal consistency applies even more when the law provides for a fee obligation [Art. 11 (5) of the Charter]. This fee obligation must be stipulated by the law in an unambiguous, comprehensible, consistent and predictable manner. 

The problem with the provisions of Section 259 of the Public Procurement Act consists in the consequences of the failure to pay the fee in terms of the OPC’s obligation to initiate proceedings for review of the contracting authority’s acts ex officio pursuant to Section 249 of this Act. The Act foresees, on the one hand, that the OPC will examine all relevant circumstances which might justify the initiation of an ex officio procedure for the review of the contracting authority’s acts, but on the other hand, it excludes, for this purpose, dealing with those complaints for which the fee has not been paid. Thus, there is a considerable contradiction between the two legal obligations of the OPC, and the contested legal provision therefore contradicts the requirement of predictability and consistency of the law as a basic prerequisite for the rule of law state, as well as the requirement of good administration based on forthcoming attitude and communication of administrative authorities with citizens. In fact, the payment of the fee serves as a condition for the procedure of the administrative authority even if the latter is obliged to initiate proceedings ex officio. It is true that the State is not supposed to levy a special fee to act where it is required to do so by law. The absurdity of this fee is also fully reflected in the fact that the public authorities, territorial self-government units, etc. are not exempt from it either. Certainly, it cannot be argued that it is precisely those entities which would intend to unduly burden the Office or the contracting authorities themselves.

The Constitutional Court stated that the legislature also imposed a fee for filing a complaint even in the situation when the State is obliged to carry out one of its statutory obligations. In fact, the consideration in return for the fee merely consists in the certainty that the OPC will proceed in accordance with its constitutional and statutory obligations, which must nevertheless be always guaranteed in the rule of law state. The constitutionality and lawfulness of the OPC’s procedure must not be a factual subject of the fee. The fee cannot be imposed on anyone, and therefore the Constitutional Court did not even consider the amount of the fee in question.

The Constitutional Court concluded that it was impossible to change the aforementioned conclusions by the government’s declared objective of preventing the submission of manifestly ill-founded or frivolous complaints, thus reducing the overall burden of the OPC. Although the number of complaints actually decreased by more than 93% following the introduction of the fee obligation, the complaints serve, in the Constitutional Court’s view, as a completely irreplaceable source of information. Even the best inspection activity cannot in fact replace the interest of entities outside the Office. Thus, the legal regulation fails to create space for more effective handling of well-founded complaints by the Office and even fails to provide meaningful protection of the rights and freedoms of the contracting authorities themselves, and therefore, the possible regulatory function fails to fulfil its purpose anyway.

Thus the Plenum of the Constitutional Court annulled the provisions of Section 259 of Public Procurement Act, due to its inconsistency with Art. 1 (1) and Art. 2 (3) of the Constitution and Art. 2 (2) and Art. 11 (5) of the Charter.

III. The judge-rapporteur in the case was Judge Vojtech Šimíček. A dissenting opinion was submitted by Judge Vladimír Sládeček and a concurring opinion was submitted by Judges Kateřina Šimáčková, Vojtěch Šimíček, and David Uhlíř.