Lexploria

AS TO THE ADMISSIBILITY OF

Application No. 12947/87

by the Association of General Practitioners

against Denmark

The European Commission of Human Rights sitting in private

on 12 July 1989, the following members being present:

MM. S. TRECHSEL, Acting President

C. A. NØRGAARD

F. ERMACORA

G. SPERDUTI

E. BUSUTTIL

G. JÖRUNDSSON

A. S. GÖZÜBÜYÜK

A. WEITZEL

J. C. SOYER

H. G. SCHERMERS

H. DANELIUS

G. BATLINER

H. VANDENBERGHE

Mrs. G. H. THUNE

Sir Basil HALL

MM. F. MARTINEZ

C.L. ROZAKIS

Mrs. J. LIDDY

Mr. L. LOUCAIDES

Mr. H. C. KRÜGER, Secretary to the Commission.

Having regard to Article 25 of the Convention for the

Protection of Human Rights and Fundamental Freedoms;

Having regard to the application introduced on 5 May 1987

by the Association of General Practitioners against Denmark and

registered on 22 May 1987 under file No. 12947/87;

Having regard to the report provided for in Rule 40 of the

Rules of Procedure of the Commission;

Having deliberated;

Decides as follows:

THE FACTS

The facts of the case, as submitted by the applicant, may be

summarised as follows:

The applicant is the Danish Association of General

Practitioners (Praktiserende Lægers Organisation) which has its

headquarters in Copenhagen. Before the Commission it is represented by

Mr. Jørgen Grønborg of the law firm Bornstein & Grønborg.

The applicant is in charge of organising the services of all

general practitioners in Denmark, approximately 2,900, who are working

in the primary health care sector. General practice in Denmark is run

as part of the National Health Service (Den offentlige Sygesikring).

All the detailed conditions governing general practice as to

establishment, organisation and administration, services, fees,

discipline and sanctions, etc. are laid down in contracts between the

applicant and the National Health Service.

The contract between the applicant and the National Health

Service at issue (hereafter referred to as "the Contract") was

concluded on 30 March 1976 and approved by the Minister of the

Interior according to section 26 sub-section 2 of the Public Health

Security Act (Lov om Offentlig Sygesikring). The Contract has been

amended a number of times, each time with the approval of the Minister

of the Interior. Of special relevance to this application is the

amendment of 5 January 1984 which was approved by the Minister of the

Interior on 25 April 1984.

The provision of the Contract, which is at issue in this

application, is article 78 dealing with the adjustment of the general

practitioners' basic fees. Article 78 establishes two regulators.

One part, equal to 25% of the basic fee and once considered roughly

to cover the costs of running a practice, is regulated according to

the official price index. The remaining 75%, supposed to be the net

part of the basic fee, is regulated in accordance with the salaries to

public officials holding higher posts. The adjustment becomes

effective every year as of 1 April and 1 October.

The Contract may be terminated according to article 106 by

each party giving at least three months notice to the first day of a

month.

Through 1983 the applicant and representatives of the National

Health Service negotiated a number of amendments to the Contract on

proposals made by each party. Neither of the parties suggested any

amendment to article 78 and the final appendix to the Contract, which

was agreed upon and signed on 5 January 1984, did not include any such

amendment.

In a letter of 25 April 1984 the Minister of the Interior

expressed hesitations as to some of the amendments agreed upon, but

finally, taking it as a whole, approved the appendix of 5 January

1984. However, the Minister informed the parties that the Government

at the same time had introduced a bill, which, if passed by

Parliament, would become effective on 1 June 1984 and from this date

suspend article 78 of the Contract and freeze the fees at the level in

force on 31 March 1984, i.e. before the adjustment of the fees as of 1

April 1984.

The bill was introduced on 26 April 1984 and passed by

Parliament on 23 May 1984 as Act No. 235. The relevant part of the Act

reads as follows:

(Translation)

"Act on the Limitation of increase of Fees and on the Change

in the regulations governing the Adjustment of Fees laid down

in the Public Health Security Agreements, etc.

Section 1. In the agreements reached in pursuance of

section 26 sub-section 2 of the Public Health Security Act

between the negotiating committee of the National Health

Service and the medical associations and others, the

adjustments of fees are annulled which were to be effected

during the period 1 April 1985 to 1 April 1987 as a result of

changes in the wage-regulating index and changes in the

salaries in the civil service sector cf., however, section 2.

Section 2. As regards the following agreements the

adjustments of fees are annulled which were to be effected

during the period 1 June 1984 to 1 April 1987 as a result of

changes in the wage-regulating index and changes in salaries

in the civil service sector:

(1) the national agreement on general practice of medicine of

30 March 1976 between the negotiating committee of the

National Health Service and the Association of General

Practitioners, as amended latest by agreement of

5 January 1984...

...

After 1 June 1984 and until changed by agreement in accordance

with section 26 sub-section 2 of the Public Health Security

Act, the fees etc. comprised by section 2 sub-section 1 hereof

shall be such amounts as were applicable on 31 March 1984.

Section 3. From 26 April 1984 the agreements referred to

in sections 1 and 2 may be terminated, to expire on

1 April 1985 at the earliest.

Section 4. In the event that the services referred to in

sections 6, 8 and 9 of the Public Health Security Act are not

governed by an agreement between the negotiating committee of

the National Health Service and the relevant associations

approved by the Minister of the Interior, any increase of fees

etc. can, during the period from 26 April 1984 to 1 April

1987, be made solely by entering into an agreement in

accordance with section 26 sub-section 2 of the Public Health

Security Act.

The Minister of the Interior can lay down rules for the

entering into force of the provisions of sub-section 1.

Section 5. Any fixing of fees, etc. in excess of what is

permitted under section 4 sub-section 1 shall be punishable by

fines."

The Government's aim by introducing the above Act was to

reduce the continuing increase of public spending within the sphere of

the National Health Service, in particular in the light of the

country's critical economic situation. It was part of the State's

general policy to reduce public spending, which was implemented by a

whole range of measures.

When the Act entered into force on 1 June 1984 it had

immediate effect as regards the adjustment of fees which had already

become effective as of 1 April 1984. This adjustment was now annulled

with the effect that subsequent fees should be calculated on the basis

of the level prior to the adjustment of 1 April 1984.

The adjustment of 1 April 1984 amounted to 1.75% of the gross

fees in force prior to that date. Applied to the typical example of a

general practitioner, having a 1984 gross income of 700,000 Danish

crowns the adjustment per 1 April 1984 would amount to approximately

12,000 Danish crowns annually for this general practitioner. The

adjustment per 1 October 1984 would have, had it not been annulled,

amounted to 2.5% of the gross income. Applied to the same example the

annual value of the adjustment would have been approximately 17,800

Danish crowns.

At the end of 1984 negotiations were reopened between the

National Health Service and the applicant. On 17 December 1984 an

agreement was reached upon an appendix to the Contract which included

an amendment of article 78 to the effect that the above adjustments of

fees as per 1 April and 1 October 1984 were suspended forever. The

adjustment of the fees would, however, commence again as of 1 April

1985 based upon the level that was "frozen" by Act no. 235 of

23 May 1984, i.e. the level in force before 1 April 1984. Apart from

the fact that the two fee adjustments mentioned above were taken away,

the fee adjustment clause in article 78 was maintained exactly as it

was before, including the split between the cost part and the net part

of the fee and the respective regulators for each part.

The appendix of 17 December 1984 was approved by the Minister

of the Interior on 20 December 1984 in accordance with section 26

sub-section 2 of the Public Health Security Act.

In the meantime, on 17 August 1984, the applicant had brought

a lawsuit against the Ministry of the Interior before the High Court

of Eastern Denmark (Østre Landsret) claiming that the Ministry be

found liable to recognise (anerkendelsessøgsmål) that Act no. 235 of

23 May 1984 constituted an act of expropriation, which could only be

implemented against full compensation, in relation to:

in the first alternative, the adjustment of fees according to

article 78 of the Contract as per 1 April and 1 October 1984, however

confined to the period from 1 June 1984 to 31 March 1985,

in the second alternative, the adjustment of fees according to

article 78 of the Contract as per 1 April 1984, however confined to

the period from 1 June 1984 to 31 March 1985, and

in the third alternative, the adjustment of fees according to

article 78 of the Contract as per 1 April 1984, however confined to

the period from 1 June to 31 July 1984.

In its judgment of 30 May 1985 the High Court ruled in favour

of the Ministry as to the applicant's two first claims but in favour

of the applicant with regard to its third claim. The Court found that

the adjustment of fees, which according to the Contract had already

become effective, should, in respect of the period within which the

Contract could not be terminated by giving notice, be considered as a

possession, protected by Article 73 of the Danish Constitution

(Grundloven), which through the Act had been transferred to the

Public. The Court found that the Act was of an extraordinary

character, that it only affected a small group and should therefore be

considered as being of an expropriative character.

The Ministry of the Interior appealed against the judgment to

the Supreme Court (Højesteret) where the applicant abandoned the first

claim but maintained the two alternative claims.

In its judgment of 10 November 1986 the Supreme Court, sitting

in plenum, ruled unanimously in favour of the Government. The Court

stated that the said Act had to be considered as part of the

legislator's general income policy and that, therefore, there was no

basis for holding that the consequences of this Act amounted to

expropriation. The Supreme Court ordered the applicant to pay costs in

the amount of 250,000 Danish crowns to the Ministry of the Interior.

COMPLAINTS

General

As to the scope of the application the applicant submits that

this is confined to the fee adjustment according to article 78 of the

Contract per 1 April 1984. This is the adjustment, amounting to 1.75%

of the gross fee, which was paid to the general practitioners for the

months of April and May 1984, but then withdrawn as from 1 June 1984.

As to the period in question the applicant maintains that the

deprivation of the right to the above adjustment per 1 April 1984 for

the period of 1 June 1984 to 31 March 1985 constitutes an

expropriation. This submission is based upon the combined effect of

sections 2 and 3 of Act no. 235 of 23 May 1984, depriving the

applicants of their right to the said adjustment as well as of their

right to terminate the Contract before 1 April 1985.

In the alternative the applicant claims that the period from

1 June to 31 July 1984 is the minimum period for which the deprivation

of the adjustment per 1 April should be considered as an

expropriation. The basis for this allegation is that, on 26 April 1984

when the bill was introduced, the National Health Service could have

chosen to give 3 months notice according to article 106 of the

Contract in order to terminate the Contract as of 1 August 1984. The

position of the general practitioners should be no different because

the Government chose to interfere by legislation from the situation

which would have existed if the provisions of the Contract had been

followed.

Article 1 of Protocol No. 1 to the Convention

The applicant is of the opinion that contractual rights,

arising out of continuing contracts, like the Contract in this case,

constitute "possessions" within the meaning of Article 1 para. 1 of

Protocol No. 1 to the Convention and that the general practitioners

have been "deprived" of such possessions within the meaning of the

second sentence of paragraph 1.

The applicant contends that the deprivation of the general

practitioners' rights to an adjustment of fees, which had already

become effective and workable, without even giving notice as agreed

upon in the Contract, and at the same time making the Contract

interminable on the part of the applicant, is an interference which is

not justifiable as being in the public interest.

The Act has a very narrow scope, affecting only 2,900 general

practitioners. It did not form an integral part of an economic reform

policy which would likewise affect other groups in Danish society

whose situation judged upon objective criteria of e.g. income was

comparable to that of the general practitioners. On the contrary the

coinciding interference with the adjustment of salaries to civil

servants and private employees deviated substantially from the

interference with that of the general practitioners, whereas literally

all other groups of self-employed persons, including those in liberal

professions, were not subjected to any measures at all. The withdrawal

by legislation of an adjustment, whether it be a fee or a salary,

which had already become effective, is unprecedented in Danish law.

The only purpose of the interference was to reduce public spending

which cannot in itself justify a breach - without compensation - of a

contract which is legally binding and effective between the parties.

The reasons given by the Government when introducing the bill are

partly manifestly ill-founded, partly just without any serious weight.

There is a lack of proportionality in the unique measure applied,

despite the fact that amendments to the Contract had just been

negotiated and approved by the Ministry of the Interior without any

demand being made for an amendment of the adjustment clause in

article 78.

Taken as a whole the applicant finds that Act no. 235 of 23

May 1984 does not strike a fair balance between the demands of the

general interest of the community and the requirements of the

protection of the individual's fundamental rights. In reaching this

conclusion the applicant is underlining that the Act included no

transitional provisions by which the situation of the general

practitioners could have been modified so as to ensure a fair balance.

Thus, the Government imposed upon the general practitioners an

individual and excessive burden without taking any steps which could

have rendered such burden legitimate.

Article 14 of the Convention

The applicant contends that by sections 2 and 3 of the Act the

general practitioners have been subjected to discrimination without an

objective and reasonable justification.

The treatment of the general practitioners differed

substantially from the treatment of other groups in Danish society who

were in analogous situations such as dentists, midwives and others,

who were covered by section 1 of the Act only, but not by sections 2

and 3.

Furthermore, since 1961 the contracts between the applicant

and the National Health Service had included adjustment provisions

like article 78 of the Contract which made an adjustment of the net

part of the fees dependent on and closely related to increases in the

salaries of higher salaried public officials and at the same time

allowed full price index based adjustment of the cost part, thus

establishing a complete analogy between the general practitioners and

e.g. a head of section as to income adjustment. This analogy was

confirmed by the legislator in 1979. Nevertheless Act no. 235 of 23

May 1984 treated a general practitioner totally differently from a

head of section in as far as the latter's salary was not decreased nor

was he deprived of any right at all to future adjustments and he

retained his right to full compensation for increase in cost related

to the work.

The applicant maintains that no reasonable and objective

justification for this difference of treatment exists and that there

is no relationship of proportionality between the means employed and

the aim sought to be realised.

THE LAW

1. The applicant has complained that the introduction in 1984 of

the legislation in Denmark concerning the limitation of increase in

fees etc. laid down in agreements between the National Health Service

and itself involves a breach of Article 1 of Protocol No. 1 (P1-1) to

the Convention which reads:

"Every natural or legal person is entitled to the peaceful

enjoyment of his possessions. No one shall be deprived of his

possessions except in the public interest and subject to the

conditions provided for by law and by the general principles of

international law.

The preceding provisions shall not, however, in any way

impair the right of a State to enforce such laws as it deems

necessary to control the use of property in accordance with the

general interest or to secure the payment of taxes or other

contributions or penalties."

Under Article 25 para. 1 (Art. 25-1) of the Convention the

Commission can receive an application from a person, non-governmental

organisation or group of individuals only if such person,

non-governmental organisation or group of individuals can claim to be

a victim of a violation by one of the High Contracting Parties of the

rights set forth in the Convention. Moreover, the Commission is

competent to examine the compatibility of domestic legislation with

the Convention only with respect to its application in a concrete

case, while it is not competent to examine in abstracto its

compatibility with the Convention (cf. for example No. 11045/84, Dec.

8.3.85, D.R. 42 p. 247).

In the present case the question arises whether the applicant

may claim to be a victim within the meaning of Article 25 (Art. 25) of

the Convention although the legislation does not deprive the applicant

itself of any possessions (cf. No. 9900/82, Dec. 4.5.83, D.R. 32 p.

261 and No. 9939/82, Dec. 4.7.83, D.R. 34 p. 213). However, the

Commission does not find it necessary to determine this issue since

the complaints submitted are in any event manifestly ill-founded for

the following reasons.

The applicant submits that the contractual rights obtained in

this case constitute a possession within the meaning of Article 1 of

Protocol No. 1 (P1-1) to the Convention and that the general practitioners

have been deprived of their possessions when their right to an

adjustment of their fees was annulled by the legislation in question.

Furthermore the applicant maintains that the interference with this

property right was not justifiable as being in the public interest.

The Commission recalls that the applicant subsequently

negotiated an agreement with the National Health Service which inter

alia included an adjustment of the fees twice a year, 1 April and

1 October. For the year 1984 these adjustments were annulled whereas

the agreement reached continued as from 1 April 1985. Furthermore it

recalls that the Contract contained in article 106 a clause by which

it could be terminated by either side, giving three months notice. In

determining the scope of this case the Commission thus finds that the

general practitioners had no legitimate expectation of any adjustment

of fees going beyond, in the present case, 31 July 1984. As the

general practitioners in fact received the adjusted fees for the

months of April and May 1984 they were accordingly deprived of a sum

of money equivalent to 1/6 of 1.75% of their gross salary, which in

the example submitted would amount to approximately 2.000 Danish

crowns.

The Commission would not exclude that the contractual right to

this amount was a possession within the meaning of Article 1 of

Protocol No. 1 (P1-1) to the Convention and it must therefore be

determined whether the deprivation of the property was "in the public

interest" and "subject to the conditions provided for by law" and "by

the general principles of international law".

As regards the general principles of international law, the

Commission recalls that this condition does not apply to the taking by

a State of the property of its own nationals (Eur. Court H.R., Lithgow

and Others judgment of 8 July 1986, Series A No. 102, p. 50, para.

119). Consequently, this condition is not applicable in the present

case. Furthermore it is clear that the deprivation of the possession

was provided for by law, namely Act No. 235 of 23 May 1984, and it

thus remains to be determined whether the deprivation of the property

was in the public interest.

The Commission recalls that the taking of property in

pursuance of legitimate social, economic or other policies may be in

the public interest, even if the community at large has no direct use

or enjoyment of the property (see Eur. Court H.R., James and Others

judgment of 21 February 1986, Series A no. 98, p. 32, para. 45). In

the James and Others judgment, the Court also made the following

statement as to the Convention organs' supervision of the condition

"in the public interest" (p. 32, para. 46):

"Because of their direct knowledge of their society and its

needs, the national authorities are in principle better placed

than the international judge to appreciate what is 'in the

public interest'. Under the system of protection established

by the Convention, it is thus for the national authorities to

make the initial assessment both of the existence of a problem

of public concern warranting measures of deprivation of

property and of the remedial action to be taken (see, mutatis

mutandis, the Handyside judgment of 7 December 1976, Series A

No. 24, p. 22, para. 48). Here, as in other fields to which the

safeguards of the Convention extend, the national authorities

accordingly enjoy a certain margin of appreciation.

Furthermore, the notion of 'public interest' is necessarily

extensive. In particular, as the Commission noted, the

decision to enact laws expropriating property will commonly

involve consideration of political, economic and social issues

on which opinions within a democratic society may reasonably

differ widely. The Court, finding it natural that the margin

of appreciation available to the legislature in implementing

social and economic policies should be a wide one, will

respect the legislature's judgment as to what is 'in the

public interest' unless that judgment be manifestly without

reasonable foundation."

In the present case the Commission finds it established that

the background and purpose of the enactment of the legislation

complained of was the State's wish to reduce public spending. This may

in principle be considered to be in the public interest. There must,

however, also be a reasonable relationship of proportionality between

the means employed and the aim sought to be realised and in this

respect the Commission finds that the sum of money involved was not

disproportionate to this aim.

Consequently, the Commission considers that the respondent

State cannot be said to have gone beyond its margin of appreciation

when it withdrew the April 1984 fee adjustment in the interest of

reducing public spending. This measure was in the public interest and

did not violate the principle of proportionality.

It follows that this part of the application is manifestly

ill-founded within the meaning of Article 27 para. 2 (Art. 27-2) of the

Convention.

2. The applicant has also complained that the general

practitioners have been subjected to discrimination without an

objective and reasonable justification and referred in this respect to

Article 14 (Art. 14) of the Convention which reads:

"The enjoyment of the rights and freedoms set forth in

this Convention shall be secured without discrimination

on any ground such as sex, race, colour, language,

religion, political or other opinion, national or social

origin, association with a national minority, property,

birth or other status."

The Commission finds that it is not every distinction which

amounts to discrimination and in particular it is not sufficient for

an applicant to complain merely that he, rather than others, has been

affected, but he must show that the burden in question operates to

distinguish between him and others on discriminatory grounds.

Furthermore, as indicated above, in the field of social, economic or

other policies it is for the national authorities to make the initial

assessment of the aims and the means by which they are pursued. Their

margin of appreciation must be wider in such areas than it is in many

others.

In this case the Commission recalls that the background for

the measures taken was the aim of reducing public spending. Not only

the general practitioners were affected thereby, although the

implementation could create marginal situations, but their burden was

one part of a whole range of measures implemented by the State in

order to achieve this aim. Their situation should also be seen in the

light of their special position within the Danish society.

In view of this and the above general considerations the

Commission finds that the measure in question can be said to fall

within the margin of appreciation accorded to the national

authorities; that the difference in treatment, as complained of by the

applicant in the present case, had an objective and reasonable

justification in the aim pursued by the State; and that the test of

proportionality is satisfied.

It follows that this part of the application is also

manifestly ill-founded within the meaning of Article 27 para. 2

(Art. 27-2) of the Convention.

For these reasons, the Commission

DECLARES THE APPLICATION INADMISSIBLE

Secretary to the Commission Acting President of the Commission

(H. C. KRÜGER) (S. TRECHSEL)

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ASSOCIATION OF GENERAL PRACTITIONERS v. DENMARK

ASSOCIATION OF GENERAL PRACTITIONERS v. DENMARK

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