Ministerial procedure in the handling of claims for compensation for unlawful rulings

The Defender investigated procedural approaches taken by the Ministry of Justice, the Ministry of Employment and Social Affairs and the Ministry of Transport in accordance with § 14 and § 15 of Law No. 82/1998 Coll.[1] in the handling of claims filed by physical and legal entities as part of the so-called preliminary claim assessment process, which is the compulsory precursor to judicial proceedings. This will be followed by investigations of other ministries.

According to the Defender the preliminary claim assessment process is not governed solely by civil principles, as to a great extent it is still a statutory matter. Compensation is provided as the result of the prior unlawful exercising of public authority by the state, or by a municipal authority.[2] The procedure adopted by the ministries and other central administrative bodies in the preliminary claim assessment process therefore needs to be understood as being the exercising of public administration sui generis. With regard to the provisions of § 177 Paragraph 1 of the Administrative Rules of Procedure it is essential to at least respect the basic principles covering the work of administrative bodies (§ 2 - § 8 of the Administrative Rules of Procedure) [3] and these procedures may also be benchmarked through the principles of good administration[4]. The Defender compiled ten rules of good practice for the assessment of compensation claims, which he published on his website at www.ochrance.cz. 

Procedure adopted by the Ministry of Justice

Based on the results of the investigation the Ministry of Justice adopted the following measures: If the six-month period allocated for the case to be settled out of court in accordance with of Law No. 82/1998 Coll. is exceeded, the claimant will automatically be informed of the reasons for such and, where possible, will be informed approximately when the case can be expected to be settled; the ministry will always react to queries regarding progress with cases and reminders by claimants, except in cases where a final ruling concerning the claim is expected soon after receipt of the claimant’s letter, or cases which patently involve chicanery or are unsubstantiated; in cases which take longer than six months to deal with, the claimant will be informed of progress with the out-of-court settlement within one month. The heads of the compensation department were also requested to check fulfillment of this task.

Procedure adopted by the Ministry of Employment and Social Affairs

According to the Defender the most fundamental shortcomings as regards the settlement of compensation claims included the lack of consistent compensation claim records, inadequate differentiation between entitlement to damage compensation and adequate satisfaction and inadequate reasons given in cases where the voluntary acknowledgment of the claim is rejected. In several cases of clients represented by the same attorney (lawyer) the ministry wholly inappropriately used an attorney from a law office, which is in contravention of the constant jurisprudence of the Constitutional Court. In such cases the courts do not award the state the costs of legal representation, even if the case is won by the state. However, the Defender acknowledged that in some cases of delays with proceedings the ministry had already voluntarily awarded adequate satisfaction. The Defender also called upon the Minister of Employment and Social Affairs to issue a statement on his findings and conclusions and inform him of all remedial measures adopted.

Procedure adopted by the Ministry of Transport

According to the Defender’s findings the Ministry of Transport rejects claims for compensation in all cases (not a single voluntary settlement was found), which is in direct contradiction to the procedure adopted by the other ministries and also with the assurances the Czech government makes to the European Court of Human Rights. The Defender thus has serious doubts as to whether the institute of preliminary claim assessment as practised by the Ministry of Transport really is an effective remedial measure or whether it is merely an unnecessary six-month extension of the judicial compensation procedure. Moreover, rejection rulings are generally insubstantial and not precisely justified in legal terms. Another major factor is evidently the lack of a central claims assessment site, the staff of which would be systematically trained in this agenda, would follow trends in (Czech and international) court practice, and would share the know-how they acquire with the staff of other ministries. The Minister of Transport was requested to issue a statement of these findings and conclusions and present details of remedial measures.

[1] “Section Four – Filing claims§ 14(1) Claims for damage compensation are filed at the office specified in § 6.(2) If a claim is filed with the wrong office, that office must pass on the claim to the appropriate office. In this case the effects of the preliminary claim remain in force.(3) According to this law, the filing of a claim for damage compensation is a prerequisite for filing a claim for damage compensation in court.§ 15(1) If the office in question acknowledges entitlement to damage compensation, the compensation must be provided within six months of the date on which the claim was filed.(2) The aggrieved party may only seek damage compensation through the courts provided that his claim has not been settled in full within six months of the date on which the claim was filed.”[2] A similar philosophy can be found, for example, in Constitutional Court Ruling No. II ÚS 1612/09 of 23.2.2010. .[3] “The basic principles covering the work of administrative bodies specified in § 2 to 8 also apply to public administration in cases where a special law stipulates that the Administrative Rules of Procedure are not applied but which in itself does not contain provisions corresponding to these principles.”[4] § 1 Paragraph 1 of Law No. 349/1999 Coll., the Public Defender of Rights Act, as subsequently amended