European Court of Human Rights

Information Note on the Court’s case-law No. 175

June 2014

Azienda Agricola Silverfunghi S.A.S. v. Italy - 48357/07, 52677/07, 52687/07 et al.

Judgment 24.6.2014 [Section II] See: [2014] ECHR 650

Article 6

Civil proceedings

Article 6-1

Fair hearing

Legislative interference in pending judicial proceedings through retroactive legislation: violation

Article 1 of Protocol No. 1

Article 1 para. 2 of Protocol No. 1

Control of the use of property

Legislative interference with property right through retroactive legislation aimed at decreasing public expenditure: no violation

Facts - In the 1980s the Italian legislature passed laws providing agricultural firms with a two-fold reduction, through concessions and exemptions, of the social-security contributions which they paid for their employees. In July 1988 the Italian disbursement authority (INPS) issued a circular stating that the concessions and exemptions were alternative, not cumulative. The applicants, four agricultural companies, instituted proceedings against INPS in 2000 and 2002. In line with the prior jurisprudence of the Italian courts including the Court of Cassation, the first-instance and appellate courts ruled in the companies’ favour, holding that the two benefits were cumulative. However, in November 2003 the Italian legislature passed Law no. 326, which expressly provided that the concessions and exemptions were alternative, not cumulative. Thereafter, INPS appealed to the Court of Cassation, which allowed the appeals on the basis of Law no. 326. In 2006 the Constitutional Court upheld that law, stating that outside the criminal sphere the legislature could enact laws with retroactive effect in so far as such retroactivity was reasonably justified and not in conflict with the Constitution. More recently, in 2008 the Court of Cassation reversed its earlier position and held that even without Law no. 326, the concession and exemptions would not be cumulative because the original intention of the legislature had been to make them alternative.

Law - Article 6 § 1: The applicant companies complained that Law no. 326 constituted a legislative interference in judicial proceedings in breach of their right to a fair trial. The Court recalled that Article 6 precluded legislative interference in pending judicial proceedings, except for compelling public interest reasons. In the present case, Law no. 326 had had a definitive impact on the outcome of pending litigation, and there was no compelling public interest reason for its retroactive application. Financial considerations could not by themselves warrant the legislature substituting itself for the courts.

Conclusion: violation (unanimously).

Article 1 of Protocol No. 1: The applicant companies complained that Law no. 326 amounted to an interference with their property right, as it retroactively extinguished their claims over amounts unlawfully withheld by INPS. The Court noted that, in evaluating whether this interference struck a fair balance between the public interest and the protection of property, a wide margin of appreciation had to be afforded to States in the area of general measures of economic strategy. Since the legislature’s policy choice was not “manifestly without reasonable foundation” but rather sought to decrease public expenditure, the Court found that Law no. 326 conformed to the lawfulness requirement of Article 1 of Protocol No. 1. Moreover, the impugned measure did not impose an excessive burden on the applicant companies, as they could still run their businesses, had opted to forfeit cumulative benefits for a certain number of years and were still beneficiaries of one of the benefits.

Conclusion: no violation (five votes to two).

Article 41: EUR 44,900 to the first applicant, EUR 106,900 to the second applicant, EUR 54,400 to the third applicant and EUR 42,200 to the fourth applicant in respect of pecuniary damage; EUR 1,000 to each applicant in respect of non-pecuniary damage.(See also Maggio and Others v. Italy, 46286/09 et al, 31 May 2011, Information Note 141; and Arras and Others v. Italy, 17972/07, 14 February 2012, Information Note 149).

 

 

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