Halving of social security: Breach of A1P1
A Hungarian incapacity benefit claimant had her disability pension reduced from 91k forints to nearly 42k forints. This followed a) the introduction of a new non-contribution based social security scheme; and b) a reassessment of her capacity from 41% to 54% following criteria under the new scheme. The court found that the application of the new scheme while seeking a legitimate aim, namely social security reform where a state has a wide margin of discretion, didn’t in this case strike a proportionate balance between the aim pursued and the effect on the claimant’s pension. There was a breach of article 1 of the first protocol (Lengyel v. Hungary Application No. 8271/15, July18 2017 )
Comment: Social security benefits have been recognised as “possessions” for the purposes of the human right to enjoy possessions for many years. This case points out that in particular where the benefits have been earned through national insurance contributions, a state cannot alter entitlement where it would result in a disproportionate loss of benefit. The case followed the earlier Belane Nagy decision in another Hungarian case.
Wrongful diligence : assessment of damages breach of A1P1
In 2000 a Lithuanian utility provider obtained a decree of payment against a debtor. The debtor owned a flat and a plot of land of 0.05 ha. They instructed a bailiff for enforcement who enforced it against the debtor’s flat and not the land. The debtor’s flat was sold to a third party at an auction below valuation. The debtor was unable to find a permanent home. The flat had been re-sold and gifted since then.
Three years after the sale the debtor brought an action for wrongful enforcement against the bailiff claiming damages based on the market value of the flat at the time of the action. The Lithuanian Civil Code provided that the amount of damages should be assessed according to the valid market prices on the day when the court judgment was issued, unless the law or the nature of the obligation required the application of prices which were valid on the day when the damage arose or on the day when the claim was brought. The Lithuanian courts found that the enforcement against the flat and not the land and also by auction was wrongful under Lithuanian law and awarded damages but based on the market value of the flat at the wrongful sale. This the Supreme Court stated, was in line with “the nature of the obligation and the principles of equity, reasonableness and good faith”.
Not content with this the debtor applied to the European Court claiming violation of article 1 of the first protocol.
The Court found that (1) the debtor’s entitlement to compensation for the unlawful sale of his apartment was sufficiently established to constitute a “possession” within the meaning of Article 1 of Protocol No. 1;
(2) compensation terms under the relevant legislation are material to the assessment of whether the contested measure respects the requisite fair balance, and notably whether the measure imposes a disproportionate burden on the applicant;
(3) the Supreme Court did not provide any explanation as to how the principles of equity, reasonableness and good faith applied in the applicant’s case, nor why they justified such a decision in the particular circumstances;
(4) the Supreme Court, when determining the amount of damages to be awarded to the applicant, did not assess the balance between the applicant’s right to the peaceful enjoyment of his possessions and any competing interests;
(5) despite being invited to do so, in its assessment of damages the Supreme Court failed to take account of the applicant’s inability to obtain a new home using the sale values;
(6) the Supreme Court failed to strike a fair balance between the applicant’s right to the peaceful enjoyment of his property and any competing general interest, and in awarding the applicant damages several times below the market value of his apartment at the time when he submitted his claim and which was insufficient for him to obtain a new comparable apartment imposed an individual and excessive burden on him – and thus violated Article 1 of the Protocol No. 1.
Comment: This decision is curious. It is based on the possession for the purposes of A1P1 being the claim for damages. The dispute concerned the size of that possession, namely the value of the claim. The Lithuanian courts determined that size namely the quantum of damages, albeit without, it appears, adequate reasoning. It is difficult to see as a matter of logic how the determination of the size of the possession can itself be a deprivation of possessions under A1P1. On one view this decision expands the scope of A1P1 into the quantification of damages (at the very least for wrongful diligence or damage to possessions), which does appear a new step.
Succession by Illegitimate Children : Breach of art.14 in securing A1P1 right
A German illegitimate child A claimed his father’s estate as sole heir in intestacy. Another German illegitimate child B claimed legal rights (i.e. legitim) from his father’s testate estate under German law. The fathers of both A and B died in 2007 and 2006. At the time of the fathers’ deaths under German law such succession rights of illegitimate children were excluded where they were born before 1 July 1949. A and B were born before 1 July 1949. A’s and B’s claims of heirship and entitlement to legal rights were rejected. In 2011 the law was changed to allow such succession rights to such children irrespective of their date of birth child but only in respect of deaths after 28 May 2009, being the date when the earlier law was found to be discriminatory in relation to the birth dates of the children.
A and B applied to the European court claiming that their human right to enjoy their inheritance under A1P1 had not been secured by virtue of a breach of art. 14 of the Convention which prohibited discrimination on the grounds of birth.
The court found that:
- in cases concerning a complaint under art.14 in conjunction with A1P1 that an applicant has been denied all or part of a particular asset on a discriminatory ground covered by art.14, the relevant test is whether, but for the discriminatory ground about which the applicant complains, he or she would have had a right, enforceable under domestic law, in respect of the asset in question and that in this case A and B would have had the inheritances claimed;
- it was a legitimate aim of reforming legislation to not alter accrued rights of succession but that the question was whether the application of an inflexible cut-off date struck a reasonable relationship of proportionality between the means employed and the legitimate aim pursued or whether it constituted an unjustified discrimination of a child born outside marriage;
- if the inheritance rights of heirs or legatees under the domestic law could no longer be challenged by virtue of prescription, limitation or res judicata, that situation differed from one where such a challenge could still be made;
- in the cases of both A and B their claims were not barred by prescription or limitation at the time that they were made and therefore the competing heirs or legatees had no absolute expectation of inheritance;
- having regard to the paramount importance of eliminating all differences in treatment between children born within and outside marriage, the domestic courts’ application of the cut-off date for deaths based on legal certainty, though being a weighty factor, was not sufficient to override the applicants’ claims to a share in their fathers’ estate under the specific circumstances and there was a breach of art.14 as read with A1P1. (Wolter and Salfert Germany Applications No. 59752/13 and 66277/13, March 23, 2017 )
Comment: Section 21 of the Family Law (Scotland) Act 2006 abolished the status of illegitimacy in Scots law but only with effect from 4 May 2006, by the insertion of a new s.1 into the Law Reform (Parent and Child) (Scotland) Act 1986. However the new s.1(4) of that Act provides that the abolition is not to have any effect in respect of the construction or effect of enactments or deeds made before May 4, 2006. There must be a question over the extent to which section 1(4) can be effective to exclude the abolition of illegitimacy in particular in relation to wills made before May 4, 2006 – especially when the 5 year prescriptive period for recovery of estate from heirs and legatees has not yet expired.