The applicant is the producer of a certain type of cash-machines- There are numerous situations when we have to deal with the authorities, whose decisions are not always favourable to us. It happened to many of us that our case was not dealt by the authorities fairly. We do not have to leave such actions by the authorities unaddressed, since most administrative decisions can be challenged at court (see paragraph 3, section 4 of the Act I of 2017 on the Code of Administrative Court Procedure). If the courts fail to redress the prejudice caused, we still have an option, since the Fundamental Law itself secures the right to a fair administrative procedure, based on which the Constitutional Court can even quash unfair administrative decisions and the judicial ones approving the former. In its recent decision the Constitutional Court did so and quashed a judgment of the Curia.(Kfv.II.37.070/2016/7).
In the administrative case leading to the constitutional complaint, the Metrology Authority of the Hungarian Trade Licensing Office (hereinafter: the Authority) allowed the distribution of the cash register presented by the applicant. Subsequently, it was raised that the cash register could be used illegally and the Authority appointed an expert ex officio, however, it did not notify the applicant about it.
The opinion of the expert – partially going beyond the inquiry of the Authority – established that the use of cash registers was illegal. Based on the expert’s opinion the Authority banned the distribution of the cash register.
The Applicant could only have access to the documents of the case after the first instance procedure and it was only then when he received the expert’s opinion and its amendment. In other words, he could not make any comments until that moment, despite the fact that this opinion fundamentally influenced the outcome of the proceedings.
Subsequently, the applicant appealed against the decision of the Authority to which it attached a private expert’s opinion. The conclusion of the private expert’s opinion was that the illegal functioning of the cash register could not be established.
The second instance administrative authority upheld the first instance decision. In the reasoning of its decision it established that the expert’s opinion and its amendment proved the illegal functioning of the machine, therefore, it was justified to withdraw the marketing authorisation. In the assessment of the second instance authority, the private expert’s opinion does not challenge the findings of the original expert’s opinion, since the private expert did not carry out a full-scale examination. The second instance authority also added that during the procedure the applicant did not request the appointment of another expert.
The applicant sought judicial review of the second instance administrative decision. The court, accepting his request, declared it a serious breach of procedural rules that in a procedure initiated ex officio the applicant was not informed by the Authority about the launch of the proceedings. In the court’s opinion, it was a serious omission that during the first instance proceedings the applicant could not exercise his right to access and comment on data despite the fact that as a client should have been entitled to it. Moreover, the court established the violation of the applicant’s right to comment and to have legal remedy. These shortcomings affected the merits of the case. The court classified it a breach of procedural rules that the expert amended his opinion without having an explicit court order to do so, overstepping his mandate. The court also declared that by the preparation of the amendment, two contradicting expert opinions were available and the contradiction was never eliminated by the authorities. Lastly, the court declared it a serious breach of procedural rules that the Authority did not deal with the private expert’ opinion, submitted by the applicant.
The Authority lodged a petition for review based on which the Curia quashed the final judgment and refused the applicant’s action. The Curia in its reasoning was of the view that the procedural omissions of the first instance administrative procedure did not affect the merits of the case, since there was a possibility to seek a judicial review of the decision.
Subsequently, the applicant lodged a constitutional complaint against the judgment of the Curia. In the opinion of the Constitutional Court, the applicant’s complaint was justifiable.
The breach of the right to fair administrative procedure
Section 1 of Article XXIV of the Fundamental Law enshrines as an independent right the right to a fair administrative procedure.
The Constitutional Court declared that the right to a fair administrative procedure is linked with the notion of good governance and with the common European principles of administrative procedures (see Article 41 of the Charter of Fundamental Rights of the European Union).
According to the right to a fair administrative procedure, provided for clients in administrative procedures, it is a basic requirement towards the authorities that during their procedures they follow legal provisions and make others do the same. However, it is important to underline that this does not mean that the law is observed and enforced mechanically, although it is in any event an important feature of the assertion of people’s rights.
The Constitutional Court underlined that the right to a fair administrative procedure relates to the quality of the procedure as a whole. In a previous decision the Constitutional Court defined the essence of the right to a fair administrative procedure as “a quality which can be adjudicated by taking into consideration the whole procedure and all the circumstances. Therefore, despite some missing elements and despite following all the detailed rules, a procedure can be classified as “inequitable”, “unjust” or “unfair”. We, however, underline that according to the requirements of necessity-proportionality, certain aspects of this fundamental right can be limited, as long as the procedure as a whole can be deemed fair. The right to a fair administrative procedure includes an unbiased and fair procedure concluded within a reasonable time, the legally prescribed reasoning of the actions of the authorities and the compensation for damages caused by the authorities in their official capacity. As we noted earlier, the authorities should not apply the law mechanically, but they are obliged at all times to respect the rights of the client and ensure that the procedure as a whole remains fair.
The Curia in its judgment was of the view that the irregularities of the administrative procedure leading to the constitutional complaint did not affect the substance of the case, since they could be remedied during the procedure of the Authority, consequently, the breach of the fair administrative procedure could not be established. Contrary to this, the Constitutional Court established numerous violations, which indeed affected the outcome of the case.
As pointed out by the first instance court, by failing to notify the applicant about the launch of the procedure, the Authority seriously restricted his rights of participation, for example his right to observe and comment on the procedural steps, though securing these is an essential minimum requirement for deeming a procedure fair. The breach of the applicant’s rights was aggravated by the fact that in addition to his restricted participation in the proceedings, he had no access to the expert opinion and its amendment, serving as main evidence, before the end of the first instance proceedings.
The Constitutional Court underlined that “The failure to inform the client about the initiation of a procedure and provide the evidence obtained are such breaches of procedural rules that affect the merits of the case. Based on the right to a fair administrative procedure, certain procedural safeguards represent a value, the breach or non-observation of which affect the merits of the case, irrespective of the actual outcome.” The Constitutional Court therefore did not accept the opinion of the Curia according to which the shortcomings of the first instance proceedings could be classified as affecting the merits of the case, since it was possible to review the first instance decision. The Constitutional Court underlined in this respect that the mere possibility of appeal on the applicant’s side against the impugned decision in itself does not render the first instance procedure legal or fair. Although it is true that given the full review power, during the second instance proceedings, most errors of the first instance case can be remedied, however, there are certain violations which per definitionem cannot be redressed. Such breach is for example the failure to inform about the initiation of the proceedings. In addition, the irregularities of producing evidence can be remedied usually in the later stage of the proceedings, since it is possible for the client to know the evidence afterwards. Nevertheless, the breach of the client rights concerning the evidence – like the right to submit comments or motions – cannot be remedied before the second instance procedure, since these actions cannot be carried out in a way that would put the client in a position similar to that of him being able to exercise his rights during the first instance procedure.
The Constitutional Court secured a strong interpretation of the right to fair administrative proceedings. If any aspect of a proceeding, substantial for the outcome of the case, was not dealt with fairly and with respecting the client’s rights, it is unconstitutional. If this shortcoming is not remedied either during the administrative proceedings or during the judicial review, it is worth turning to the Constitutional Court – as we could see, these complaints may be brought to a successful conclusion.