Decision No. 11 of 1 July 2024 on Constitutional Case No. 11/2024
Referring Authority and Subject Matter of the Case
The case was initiated upon a request by the Supreme Bar Council seeking a declaration of unconstitutionality of Article 19, Article 20, Article 21, Article 22, Article 23, Article 24, paragraph 1 and Article 25 of the Mediation Act, as well as Article 78a, Article 140a, Article 140b, Article 267, paragraph 3, Article 314a, Article 341a and Article 374a of the Civil Procedure Code. In its request, the petitioner sets out arguments supporting the claim that the cited statutory provisions are in contradiction with Article 56 and Article 117, paragraph 1 of the Constitution (the right to defence and the judiciary as a guarantor of the rights and lawful interests of citizens, legal entities and the State). The petitioner further asserts that the provisions infringe the principles of free access to justice and effective judicial protection, as enshrined in Articles 6 and 13 of the Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR) and Article 47 of the Charter of Fundamental Rights of the European Union (CFREU). It is argued that the unconstitutionality of the contested regulation is “to a large extent predetermined by the distorted transposition by the Bulgarian legislature of Directive 2008/52/EC of the European Parliament and of the Council of 21 May 2008 on certain aspects of mediation in civil and commercial matters,” since, by introducing a “mandatory mediation procedure,” the Bulgarian legislator has substantially departed from the concept underlying the Directive, according to which “mediation is a structured process whereby the parties to a dispute make a voluntary attempt to reach an agreement with the assistance of a mediator.”
Summary of the Court’s Reasoning
The contested statutory framework, which, even after the entry into force of the Law Amending and Supplementing the Mediation Act (LASMA), is technically incorporated into two separate legislative acts - the Civil Procedure Code and the Mediation Act - forms a single normative complex governed by a common purpose and reflecting the concept of mandatory judicial mediation as a tool for out-of-court resolution of civil and commercial disputes. The assessment of its constitutionality requires that the contested statutory provisions be considered in their entirety, taking into account the overarching idea and concept to which they are subordinated.
The model of “mediation in pending court cases” adopted by the Bulgarian legislature, as implemented in the contested provisions of the Civil Procedure Code (CPC) and the Mediation Act (MA), reveals significant characteristics that raise questions regarding the conformity of the statutory framework with the principles and provisions of the Constitution. Above all, this concerns the mandatory nature of participation in a procedure that was conceptually designed as voluntary and entirely regulated as such prior to the amendments introduced by the LASMA. In this context, particular attention must be paid to the regulation of the mediation procedure as part of an already ongoing judicial process. In this sense, the legislative decision to “introduce mandatory judicial mediation in civil and commercial cases, which will form part of the civil proceedings themselves rather than a precondition for filing a claim” is explicitly presented as a key principle in the Concept for the Introduction of Mandatory Judicial Mediation in Civil and Commercial Cases. It is precisely the court, within the framework of ongoing proceedings, that, in cases under Article 140a, paragraph 1 CPC, is obliged to require the parties in certain categories of cases to attend a first mediation session. In cases under paragraph 2, the court has discretion whether to impose participation and is also required to set a timeframe for conducting the procedure. At the same time, because obliging the parties to participate in a mediation procedure presupposes an already ongoing judicial process in which the court is requested to provide protection or assistance in exercising a personal or property right, the question arises whether, in the way it is regulated, mediation in pending court cases is compatible with the constitutionally recognized right of access to a court. Another significant feature of the model is the provision in Article 78a CPC for sanctioning parties who refuse to participate in a mediation procedure by assigning liability for fees and costs, regardless of the outcome of the case.
The mandatory participation of the parties in a first mediation session within the judicial proceedings for the cases specified in Article 140a, paragraphs 1 and 2 CPC raises doubts regarding the timely provision of the protection requested from the court, and such a delay has the potential to deprive the protection itself of substance and render it meaningless.
The conclusion that mediation in pending court cases interferes with the full exercise of the right to judicial protection is further supported by the imposition of an additional financial burden on the parties, who are required to pay the costs of the mediation procedure. According to the provisions, these costs remain the responsibility of the parties regardless of the participation or refusal to participate by the opposing party in the procedure and regardless of the outcome of the judicial proceedings. Such a statutory arrangement, whereby the State compels parties exercising their constitutionally recognized right to seek protection of their rights before a court to incur non-recoverable expenses under the threat of financial sanctions (as established in Article 78, paragraph 2 CPC), is in obvious conflict with the principle of substantive justice as a fundamental characteristic of the rule of law.
The contested provision of Article 78a CPC does not meet the requirements for constitutionality arising from the principle of the rule of law, since, deviating from the general principle established in Article 78 CPC, it conditions liability for procedural fees and costs not on the outcome of the case, but on the party’s participation in the mediation procedure. In this way, the statutory regulation of liability for costs becomes internally contradictory and illogical, as well as inconsistent with the requirement of substantive justice, according to which the payment of costs constitutes a sanction for a party’s wrongful conduct in raising a legal dispute without justification.
The Constitutional Court also notes that the legislature’s approach in determining the cases included within the scope of mediation in pending court cases - whether mandatory by law or by court order - lacks systematic structure and justification due to the absence of clear, logical, and fair criteria relevant to the likelihood of reaching an agreement through the mediation procedure. In this sense, the regulation of the matter is arbitrary and, as such, contrary to the Constitution.
In its case law, the Constitutional Court has established that, for an internal inconsistency in a law to serve as a basis for declaring specific provisions unconstitutional, such inconsistency must affect constitutional values and norms and, as such, is constitutionally intolerable. In the case at hand, the internal contradiction in the main Civil Procedure Code regarding a particularly significant matter - subject to resolution in a wide range of civil and commercial disputes - is so substantial that it calls into question the general reason and logic of liability for costs, placing it (in deviation from the principle enshrined in the existing provision of Article 78 CPC) under the influence of factors unrelated to the court’s assessment of the outcome of the dispute or to the good faith of the parties (considering that Article 78, paragraph 2 CPC provides that, even if the claim is upheld, the claimant bears the costs if the defendant’s conduct did not justify the initiation of proceedings and the defendant admitted the claim). In this sense, the deficiency of the regulation renders it constitutionally intolerable on an independent basis, as it is incapable of serving as a source of clear, logically grounded, fair, and predictable guidance regarding the procedural actions to be taken by the court - and reasonably expected by the parties - in determining liability for costs in civil proceedings.
The Court finds it necessary to emphasize that its conclusions regarding unconstitutionality do not pertain to mediation as a tool for out-of-court resolution of legal disputes or for fostering a culture of dialogue in relations between legal subjects (the introduction of such a mechanism is a matter of legislative policy). Rather, they relate solely to the contested statutory framework as a normative complex, within the interrelation of whose components the above-mentioned violations of constitutional principles and rights are revealed, forming the basis for the conclusion that the regulation, in its entirety, is inconsistent with the Basic Law.
Grounds for the Ruling and Disposition
Pursuant to Article 149, paragraph 1, item 2 of the Constitution (the power to rule on requests for establishing the unconstitutionality of laws), the Constitutional Court declares unconstitutional the provisions of Article 19, Article 20, Article 21, Article 22, Article 23, Article 24, paragraph 1 and Article 25 of the Mediation Act, as well as Article 78a, Article 140a, Article 140b, Article 267, paragraph 3, Article 314a, Article 341a and Article 374a of the Civil Procedure Code.
The decision is adopted with one dissenting opinion.
Председател: Павлина Панова