Increase of judicial fees in Spain: EU Law to the rescue?

As part of recent Spanish measures to reduce public expenses and increase public income, the Spanish Ley 10/2012 substantially raises judicial fees (a “tasa judicial” is a fee charged when citizens access certain judicial services)[1], a move that has generated a great deal of protests by judges, lawyers and citizens alike. Under the new system, a simple European order for payment procedure will cost 100 euro, and an appeal before the labour courts will now cost between 500 and 10,500 euro, depending on the amount at stake.

The Government of Catalonia has announced that it will challenge the constitutionality of the Ley, on the basis that it is contrary to Article 24 of the Spanish Constitution, which guarantees effective judicial protection. However, in the absence of a system to preventively suspend the application of national laws during unconstitutionality procedures, judicial fees must be paid at the higher rate until the Constitutional Court decides the issue. And here is where European Law may come to the rescue. If the new judicial fees could be considered so high as to clash with the principles of effectiveness and equivalence, EU law would become a useful tool to declare the fees inapplicable.

The Decision

In a concise Decision [2] delivered on 21st November, a Labour Court held that the new judicial fees are contrary to EU law and, consequently, the Labour Court could decline to declare procedures brought by citizens who have not paid the fees as inadmissible.

The Judge considered that the Ley 10/12 violated two European provisions: Directive 93/13/EEC on unfair terms in consumer contracts and Article 47 of the Charter. It is worth noting that the judge ruled out the possibility of a preliminary reference to the CJEU, on the grounds that he is not obliged to do so, applying to the doctrine of the acte clair (see C-283/81 CiLFIT).

With regards to Directive 93/13/ECC, the Judge of First Instance considered that the provision of judicial services fell within the scope of the Directive, the citizen being the service recipient and the State the service provider. Furthermore, he found that the fee structure, which failed to specify how the collected money will be used and how the amount is fixed, rendered the fees abusive.

As far as the Charter is concerned, the Judge held that the establishment of a fee linked to the provision of a public service, the cost of which can reach up to 10,500 euro, constituted an obstacle to the right of effective judicial protection, as it is laid down in Article 47 of the Charter. In order to support his position, the Judge referred to the recent Otis Case (which has also been discussed on this blog).

As a result of all the foregoing, the Labour Court concluded that, given the primacy of EU law over provisions of national law, the national judge is obliged not to apply the new fees.

A short comment

The case presents three controversial and interesting issues: first can the justice service provided by the State be classed as a “consumer contract for the provision of a service” for the purposes of Directive 93/13/ECC; second, was the Charter was correctly applied to the present situation; and third, can Spain invoke the principle of procedural autonomy, so EU law would not be applicable to its judicial fees, unless the principles of equivalence and effectiveness were contravened?

With regards to Directive 93/13/EEC, it is far from evident that a judicial fee paid by a citizen (only natural persons would benefit from the Directive; legal persons would have to pay the higher fees) could constitute a contract for the provision of services between a consumer and the State. Although the Directive does not provide for any definition of “services”, it does establish in Article 2(c) that a seller or supplier is:

“any natural or legal person (…) acting for purposes relating to his trade, business or profession, whether publicly owned or privately owned”.

Only a very radical neoliberal would defend that the provision of justice services constitutes the ordinary “trade, business or profession” of the State. The most logical interpretation consists of acknowledging that the State does not carry out an economic activity when it provides such a service and that it does not expect to recover the costs of the service through judicial fees.

In addition, it is argued that the Directive does not apply to the fee, insofar as the fee is set by law. As it is stated in Article 1(2):

“The contractual terms which reflect mandatory statutory or regulatory provisions (…) shall not be subject to the provisions of this Directive”.

Furthermore, even if the Directive 93/13/EEC applied, unfairness would still need to be investigated. For that purpose, Article 4(2) of the Directive establishes that:

“Assessment of the unfair nature of the terms shall relate neither to the definition of the main subject matter of the contract nor to the adequacy of the price and remuneration (…)”.

In other words, if the problem were just that the fees are set too high, this could not constitute an abusive clause for the purposes of the Directive. Nevertheless, it could be argued that the Decision does not refer to the adequacy of the price of the fee, but to the fee structure (how the amount is set and to what purpose the money is used). In any case, it is doubtful that these defects may constitute unfair terms for the purposes of the Directive.

With regards to the Charter, the Decision did not explain why it applied to the Ley. In principle, the most logical interpretation would be to say that if the Directive on consumer contracts applies, the situation falls within the scope of EU law. As a result, the Charter applies in every judicial instance where the fee is due, regardless to whether EU law is then applied to the case on the merits. Nevertheless, in a recent interview with El País, the Judge opined that:

“My criterion is applicable to every matter where EU law applies, and as a consequence, it would not be applicable to wills and trusts or trade union law, where EU Directives do not apply” (my translation)

Therefore, the Judge’s position is that it is not the provision of a service covered by Directive 93/13 that brings the fees under EU law, but the fact that the national judge applies EU law on the merits of the dispute. The consequence is that the Charter would selectively apply, potentially negating the new judicial fees for non-discrimination cases, but not for probate proceedings. This would result in the fragmentation of judicial fees in a very formalistic manner.

Regarding to the defense of national procedural autonomy that Spain may put forward, the Decision failed to demonstrate how the principles of effectiveness or equivalence of EU law were threatened (see Laurens comment on Meister). In particular, the Labour Court should have shown how the increase of judicial fees renders the exercise of EU rights impossible (effectiveness). Such analysis needs to be carried out on a case-by-case basis, instead of automatically not applying the fees before any particular case is brought. For instance, a 1,000 euro judicial fee might not affect the right of access to justice of a millionaire, but it will indeed render access to justice impossible for someone earning the minimum wage (641.40 euro).

In conclusion, the present Decision, full of controversial elements, does not seem to fall under the doctrine of acte clair at all. On the contrary, many doubts arise as if EU law might be applicable to the case. If it turns out that EU law cannot come to the rescue, there will still remain the possibility for the Spanish Constitutional Court to declare the new fees contrary to the national Constitution.

 


[1] In Spanish “tasas”, (fees) are a type of “tributo”, different from “impuesto” (tax), because a tasa is paid for a specific service that is provided to the citizen and an impuesto is paid for general expenses of the State.

[2]  A “Resolución” (Decision) is an informative note by a judge, not resolving a specific case in particular, but rather telling citizens that his Court will not declare inadmissible any procedures for not paying the new judicial fees.

3 comments

  1. Carlos García Muñoz

    Had that person been not a judge but a student, and reflected such a systematic interpretation on an exam, would he deserve to pass this exam?

  2. Daniel Pérez

    If the exam was about “original legal reasoning”, he would probably pass, but for an EU law exam, I strongly doubt so. I think his intentions are perfectly legitimate and understandable, because the fees are set at a too high level, but as a judge he must abide to the the rules. The correct way to annull these abusive fees is to invoke article 24 of the Constitution before the Spanish Constitutional Court.

Leave a Reply