Constitutional Court

KI235/19, Applicant: Insurance Company “Allianz Suisse Versicherungs- Gesellschaft AG” Constitutional review of Judgment [E. Rev. No. 32/2019] of the   Supreme Court, of 31 July 2019

KI235/19, Judgment adopted on 28 April 2021, published on 16 June 2021

Keywords: individual referral, right to fair and impartial trial, consistency of case law, legal certainty, right to a reasoned decision

The circumstances of this case are related to an accident of 2009, in which, the Applicant’s insured, namely Sh.Z., lost her life. Liability for the accident fell on H.K., a BKS insured, who was convicted of the criminal offense of endangering public traffic in 2010. The Applicant compensated the family of the deceased in the amount of 36,000.00 euro. Regarding this amount in 2015, the Applicant addressed the BKS with a request for compensation on the basis of the right to subrogation determined through the LOR, and in the absence of an agreement, addressed the Basic Court by a lawsuit. The Basic Court and the Court of Appeals recognized the right to the Applicant, confirming the obligation of the BKS to compensate the Applicant in the abovementioned amount and also the obligation to pay interest of twelve percent (12%) per year, starting from 5 June 2015 until the final payment. The Supreme Court had also finally confirmed the Applicant’s right to respective compensation on the basis of subrogation, but modified the Judgment of the Basic Court and that of the Court of Appeals, regarding the default interest. The Supreme Court determined that the annual interest rate should be eight percent (8%) per year, based on Article 382 of the LOR and not twelve percent (12%) per year, based on Article 26 of the Law on Compulsory Insurance, as decided by the lower instance courts. This finding of the Supreme Court, regarding the amount of default interest, was challenged by the Applicant before the Court, alleging a violation of Article 31 of the Constitution in conjunction with Article 6 of the ECHR, on the grounds of (i) violation of the principle of legal certainty,  as a result of divergence in the relevant case law of the Supreme Court; and (ii) lack of a reasoned court decision.

The Court assessed the Applicant’s allegations regarding legal certainty and the right to a reasoned decision, as one of the guarantees established in Article 31 of the Constitution in conjunction with Article 6.1 of the ECHR, basing this assessment on the case law of the European Court of Human Rights (hereinafter: the ECtHR). The Court elaborated on the general principles deriving from the ECtHR and its case law regarding judicial consistency and the right to a reasoned decision.

With regard to the allegation of violation of the principle of legal certainty, the Court found: (i) that in the case under review the existence of “profound and long standing” differences regarding the consistency of the case law of the Supreme Court has not been proven; (ii) that there is a mechanism for the proper administration of justice and for reviewing changes in case law; (iii) the Supreme Court on 1 December 2020 issued a “Legal Opinion on Interest on the Applicable Law, Amount and Time Period of Calculation” based on Article 14, paragraph 2, point 10 of the Law on Courts; (iv) that the possibility of conflicting decisions is an inherent trait of any judicial system which is based on a network of basic and appeal courts with authority over the area of their territorial jurisdiction; (v) what law should be applied in the circumstances of the present case is the prerogative and duty of the Supreme Court; and, that (v) the role of the Supreme Court is precisely to resolve such disputes.

Regarding the allegation of violation of the right to a reasoned decision, the Court assessed that the Supreme Court (i) has provided the legal basis and has explained why in the Applicant’s case the norm setting the default interest rate of 8% applies; (ii) the challenged judgment of the Supreme Court contains a logical connection between the legal basis, the reasoning and the conclusions drawn; (iii) as a logical consequence between the legal basis, the reasoning and the conclusions it has resulted that the challenged judgment of the Supreme Court meets the requirement of a reasoned decision; and, (iv) if the Applicant is recognized the right to 12% or 8% of the default interest is a matter of application and interpretation of law and at the Supreme Court’s discretion, and as such, in itself, do not conflict with the right to a fair and impartial trial.

Finally, the Court found that, in the circumstances of the present case, there has been no violation of Article 31 [Right to Fair and Impartial Trial] of the Constitution in conjunction with Article 6.1 (Right to a fair trial) of the ECHR.