Decision No. 10 of 29 September 2016 on Constitutional Case No. 3/2016
Referring Authority and Subject Matter of the Case
The case was initiated upon a request submitted by the Ombudsman of the Republic of Bulgaria seeking a declaration of unconstitutionality of the provisions of Article 78, paragraph 8 of the Civil Procedure Code (promulgated in the State Gazette, issue No. 59 of 20 July 2007, last amended in issue No. 43 of 7 June 2016) and Article 161, paragraph 1, sentence 3 of the Tax and Social Insurance Procedure Code (promulgated in the State Gazette, issue No. 105 of 29 December 2005, last supplemented in issue No. 62 of 9 August 2016).
Summary of the Court’s Reasoning
The Civil Procedure Code and the Tax and Social Insurance Procedure Code treat lawyers and in-house legal counsel (jurisconsults) as equivalent in their capacity as duly authorized representatives of the parties in judicial proceedings. Legal entities and sole traders are free to choose whether to engage a lawyer or a jurisconsult for legal services and procedural representation before the courts. Their legal status, the purposes for which they are established, their organizational structure, their participation in economic life, and the complexity of the legal relationships in which they engage justify the need for continuous and immediate (in terms of availability and readiness) on-site legal assistance by a legal professional (jurisconsult), including representation and defence before a court. The legal status of the jurisconsult, although not governed by a specific statute, presupposes the acquisition of certain qualifications (education, professional experience, legal capacity, etc.). An essential requirement for a jurisconsult acting as a procedural representative is that he or she be in an employment or service relationship with the represented party, respectively with the institution where the administrative authority is situated, and be expressly authorized to provide procedural representation in the proceedings. The nature of the legal relationship between the legal entity or sole trader and the jurisconsult is irrelevant to the entitlement to an award of costs; it is sufficient that such a relationship validly exists. Since liability for costs constitutes, by its nature, an obligation arising from procedural law (the Civil Procedure Code or the Tax and Social Insurance Procedure Code), when applying Article 78, paragraph 8 of the Civil Procedure Code, the court awards attorney’s fees not in favour of the jurisconsult, but in favour of the party - the legal entity or sole trader.
Depriving a party in judicial proceedings of the recovery of costs for procedural representation, despite a favorable outcome of the case, solely on the ground that its legal relationship with the procedural representative is one of employment or service - entailing specific features (obligations and expenses) arising from the employer’s role in determining remuneration - would constitute a violation of the right of defence and of the principle of the rule of law. Eliminating the possibility of awarding remuneration in favor of the successful party where it has been represented by a jurisconsult would lead to injustice and would be inconsistent with the principle of equality of arms in judicial proceedings (Article 121, paragraph 1 of the Constitution), effectively resulting in inequality between the parties. This is because the law allows a party in judicial proceedings to obtain legal representation not only by a lawyer but also by a jurisconsult; however, it would be untenable to permit the award of costs in favor of a successful party - whether a natural or legal person - only in cases where procedural representation has been carried out by a lawyer.
Grounds for the Ruling and Disposition
Pursuant to Article 149, paragraph 1, item 2 of the Constitution (the competence to rule on requests for a declaration of unconstitutionality of laws), the Constitutional Court rejects the request of the Ombudsman of the Republic of Bulgaria for a declaration of unconstitutionality of Article 78, paragraph 8 of the Civil Procedure Code and Article 161, paragraph 1, sentence 3 of the Tax and Social Insurance Procedure Code.