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The state will reimburse attorney’s fees paid by citizens appealing against unlawful penal decrees

By the enacted Interpretative decision № 1/15.03.2017 the Supreme Administrative Court (SAC) of the Republic of Bulgaria decided definitely the question whether attorney’s fees paid by citizens and companies for the appeal against unlawful penal decrees represent direct and immediate consequence within the meaning of art. 4 of Law on the liability of the state and the municipalities for damages (LLSMD) and whether they are subject to reimbursement by the state. The response of the majority is positive.

According to art. 204, para. 1 of the Administrative procedure code (APC), one of the conditions for the admissibility of the claim for the realization of the responsibility of the state and the municipalities in accordance with art. 1, para. 1 of LLSMD, is the revocation of an administrative act under the relevant order, and namely – by its revocation under administrative and/or judicial order. According to the motives of the SAC the appeal does not necessarily have to be performed with attorney assistance, but it would be exceptionally difficult verging on the impossible for citizens to deal with their self defense, especially when the counterparty is a state body possessing public powers, advised and assisted by a team of paid state employees with master’s degree in law – legal advisers.

The conclusion of the chief justices is that when one of the conditions of the APC for the initiation of proceedings under art. 1, para. 1 of LLSMD is that the administrative act is revoked and when during the administrative and/or judicial proceedings the citizen has benefitted from the legal assistance of an attorney-at-law since he could not defend himself, the attorney fee paid to the attorney for the realization of the defense is nothing more than material damage which is in direct causal relation with the revoked unlawful administrative act (penal decree) and is a direct consequence of it, and not an extrinsic and luxury expense. The inextricable relationship between the issued penal decree and the legal assistance demanded by the mandated person is direct and immediate because they are in a relationship determining cause and consequence – the citizen would not look for legal assistance if there wasn’t an issued penal decree against him, damaging his legitimate rights and interests.

Herе‘s an interesting quote from the interpretative case: „ To accept that the attorney fee paid to the attorney for the appeal against the revoked as unlawful penal decree is not material damage for the appellant because the attorney defense on these cases is not legally binding and this fee is paid by free bargaining, and to accept that it is normal for the citizen to defend himself before the court, is like accepting the absurd thesis that the doctor’s or dentist’s fee paid for treatment and examination are a luxury expense and are not material damage for the person to whom the tort has caused physical  injury since medical assistance is not legally binding and doctor’s fees are also freely negotiated and as it is normal for the injured person to cure himself; as here we can mention many other absurd examples.”

 

In their decision, the chief justices have not forgotten to intervene on the question whether the state and the municipalities will be able to contest the amount of the paid attorney’s fees as excessive (arg. Art. 78, para. 5 of CPC):  „Cases for compensation under art. 1, para. 1 from LLSMD  are claims which develop under the rules of CPC as far as the matter is not covered by the APC, and the parties may submit all relevant evidence in support of their statements, to suggest any arguments in their defense, to make objections and defend themselves by all means allowed by the law. The institute of the compensation for tort is not and cannot become means of unjust enrichment and therefore the court observing the principle of fairness and proportionality should award only such amount of compensation that meets the criteria of Art. 36, para 1 of Attorney Law to bereasonable and fair“, i.e. to be proportionate of the performed legal assistance and to compensate the party for the actual damage suffered by it from the tort caused by the state body without violating or favoring the interests of  any party to the proceedings.

 

author: Vesela Velinova, attorney-at-law

Member of “Velinov and partners” Consulting House

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